Predicting lawsuits against nursing homes in the United States, 1997-2001

Health Services Research, Dec, 2004 by Christopher E. Johnson, Aram Dobalian, Janet Burkhard, Deborah K. Hedgecock, Jeffrey Harman

Residents requiring tube-feeding and catheters had opposite impacts on the number of lawsuits. Facilities with more tube-feeding residents saw a 5 percent increase in their total lawsuits incidence rate. Nursing homes with higher new catheter residents experienced a 4 percent decrease in the rate of lawsuits. The significant results of the year control variables confirm some of the trends shown in Figure 1. Each year in the model was significantly higher in litigation activity compared to 1997. The strength of these relationships almost mirrors the lawsuit activity trend lines.

DISCUSSION

The results from this research are generally consistent with previous work examining litigation activity in Florida at both the state and county level. A 30county Florida sample found that quality indicators and resource variables were impacting litigation rates in the state. This national sample found similar results with the exception that being a member of a multifacility chain was significant and reduced lawsuits against facilities in this sample. The relationship between size and higher numbers of lawsuits was consistent with our previous work and continues to reflect the greater exposure that larger nursing homes have compared to smaller facilities with fewer residents. However, this effect is small compared to other resource variables in the model. The relationship between for-profit ownership and lawsuit activity is consistent with our Florida work. The empirical question remains unanswered as to whether quality of care explains the filing of a lawsuit or if lawyers target for-profit homes because of their ability to pay settlements or judgments.

This study confirms the quality indicator results from our previous Florida study. High numbers of deficiencies appear to trigger greater litigation activity, although there is only a 3 percent increase in the incidence rate ratio. There are two potential interpretations of this result. The first explanation is that these indicators represent a minimum level of quality that, if not met, will lead to higher litigation activity against the home. Another explanation is that the legal community is aware of the nursing homes that have high numbers of survey deficiencies and target these homes since this information is available to the public. Which explanation is closer to the truth is the subject of further empirical analysis.

The data in this study provide comprehensive insights about litigation activity against nursing homes in the United States. While the Westlaw database is extensive, there is a high probability that we are undercounting the total number of lawsuits filed against nursing homes. The number of homes in our study reflects the experience of facilities in primarily urban counties in 45 states, but these results may not be general enough to be applied to rural parts of the country. The robustness of our quality and resource explanatory variables represents the best that were available to this study, but they are not a perfect set. The reliability and sensitivity of the OSCAR data and the variation in nursing home quality inspections have been questioned in national studies (Centers for Medicare and Medicaid Services 2001). Good financial data about nursing homes at the national level is not released to researchers or the public in any meaningfully way except through SEC reports for those homes and chains required to file those reports. Despite these limitations, what can be said is that (1) stuffing- and deficiency-related quality indicators significantly impacted litigation in the United States, (2) multistate membership lowered lawsuit activity while size and for-profit ownership saw higher numbers of lawsuits, and (3) nursing homes located in a resident rights state that allows for individual causes of action experienced higher litigation activity while the mean number of complaints and time associated with complaint investigation lowered lawsuit activity. It does not appear that decisions to sue nursing homes are driven by the specific clinical outcome-related quality indicators used in this analysis, nor does targeting homes with fewer Medicaid residents drive them.