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Nonprofit and Voluntary Sector Quarterly, Vol. 35, No. 4, 631-667 (2006)
DOI: 10.1177/0899764006289770

Comparative Performance and Quality Among Nonprofit Nursing Facilities in Texas

Kris Joseph Knox

Texas A&M University, Galveston

Eric C. Blankmeyer

Texas State University-San Marcos

J. R. Stutzman

Texas State University-San Marcos

Researchers have given little attention to relative economic efficiency among nonprofit nursing facilities. Presumably, religious-affiliated, government, and private secular nonprofit facilities pursue similar objectives, perform similarly, and receive tax exemptions accordingly. Using modified, translog cost-and profit-function regression analyses, this article rejects the hypothesis of homogeneous performance. In Texas, private secular nonprofit nursing homes are the most cost-efficient, followed by religious-affiliated and then government nursing facilities. When allocation efficiency is also considered, government and private secular facilities have similar overall economic efficiency; religious-affiliated and government facilities are similar as well; however, private secular facilities are significantly more efficient than religious-affiliated homes. Quality appears to be homogeneous among facility classifications. Given these significant differences, policy makers may want to consider the role of relative economic performance when granting nonprofit status to nursing facilities because nonprofit governance boards may allow their organizations to pursue the "socially superior" goal somewhat divergently.

Key Words: nonprofit nursing facilities • comparative economic efficiency • governance

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