The Effect of Business Operating Systems on Nursing Home Termination

Objectives: Nursing home terminations have increased worldwide due to rising costs, staffing shortages, and the coronavirus disease pandemic. However, little is known about the impact that business operating systems have on nursing home termination. Methods: This study used the National Long-term Care database, which comprised 7,842 operating nursing homes in January 2018. Nursing home termination was identified when nursing homes discontinued provision of long-term care services to all residents between January 2018 and December 2020. Business operating systems that were reimbursed by the LTC insurance system were the exposure of interest. The logistic regression model for nursing home termination included a series of organizational, internal, and external factors as covariates. Results: From 2018 to 2020, 83 (1.1%) nursing homes were terminated. The proportion of reimbursed nursing homes varied greatly depending on the type of business operating systems. Implementing physical function training and improving working conditions were significantly associated with a lower risk of nursing home termination. Conclusion: Financial incentives to several business operating systems are an effective way to build a sustainable environment for nursing homes to continue to exist.