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M-THAC Project

Project Title: Estimating Operational Efficiencies of Long-Term Care Facilities in Ontario

Research Team:
Berta, W.
Laporte, A.
Valdmanis, V.

Ontario's long-term care facilities provide care for individuals who are unable to live independently in their own homes, even with assistance from community support services, and who require 24-hour nursing services to meet their nursing and personal care needs. The provincial Ministry of Health is responsible for funding and monitoring approximately 500 long-term care facilities. Their payments to long-term care facilities are based on a resident needs-based formula and cover nursing and personal care, quality of life programs, food, and accommodation costs.

Over the next few decades, Canada will experience enormous growth in demand for health services in the long-term care sector. In Ontario alone, an estimated 20,000 long-term care beds will be added to Ontario's current capacity by 2004. Since 1993, changes in the policies and system used to decide upon funding levels for Ontario long-term care have led to profound changes in the long-term care (LTC) marketplace, with a greater emphasis now on community-based care that promotes independence among the frail elderly population and a shift to providing care for higher acuity residents in institutional care settings. In long-term care, there is a tension between - and considerable debate over - maintaining acceptable levels of quality of care and adequate services while operating cost-efficiently in environments that are increasingly cost-constrained, complex, competitive and uncertain.

This study furthered our understanding of the relationship between facility-level cost allocations -- assuming these are influenced by policy -- and facility-level performance (operational efficiency) in order to anticipate what the impact of future policies intended to curb or direct expenditures in the long-term care sector might be. The aims of this project were:

  1. To demonstrate the variation in operational efficiencies across long-term care facilities that exist in Ontario,
  2. To measure the relative operational efficiencies of Ontario's nursing homes as against the best practice standard identified amongst the facilities in the market, and
  3. To identify significant regulatory, environmental, facility and resident-level factors that explain variation in operational efficiencies.

In this project, we define LTC facility performance as operational efficiency, which involves defining outputs (e.g., patient days) as a function of a host of inputs relevant to the provision of LTC services (e.g., personnel involved in the direct care of residents, personnel involved in the delivery of general services). The research:

  1. Demonstrated the variation in operational efficiencies across long-term care facilities that exist in Ontario and
  2. Identified significant regulatory, environmental, facility and resident-level factors that explain this variation.

It used an existing longitudinal data set of long-term care facilities developed by Statistics Canada, which enables us to study the intermediate-term impacts on operational efficiency imposed by changes in factors that are exogenous and endogenous to long-term care facilities.

This project was awarded seed funding in the Research Opportunities Competition. The M-THAC funding was applied toward the development of an operating research grant for SSHRC, and to purchase data from Statistics Canada. We were awarded funding for 3 years by SSHRC in early 2003.

Selected Publications: