Table 3.

The Regression Results of the Nursing Home Cost Function Estimation (Dependent Variable: Logarithm of Total Cost; n = 4,635)

Variable	Coefficient	T-statistics
Intercept	7.04***	14.47
Medicare days	0.0007***	9.92
(Medicare days) 2	−1.16E−7***	−4.64
(Medicare days) 3	1.23E−11***	6.28
Medicaid days	0.000006	1.49
(Medicaid days) 2	−4.73E−12**	−2.39
(Medicaid days) 3	6.93E−19***	2.78
Private days	−0.00002	−1.39
(Private days) 2	2.52E−9***	4.38
(Private days) 3	−2.84E−14***	−4.55
(Medicare days) (Medicaid days)	−2.85E−9***	−3.41
(Medicare days) (private days)	−1.04E−8**	−2.15
(Medicaid days) (private days)	3.73E−10***	2.59
Logarithm of wage	0.73***	14.07
(Care personnel ratio) (total days)	1.56E−9*	1.68
(Life personnel ratio) (total days)	−6.11E−10	−0.78
(Catheterization rate) (total days)	2.0E−7***	2.93
(Physical restraint rate) (total days)	−6.27E−8***	−3.17
(Drug error rate) (total days)	3.36E−7**	2.41
(Group organization indicator) (total days)	6.72E−7***	4.09
(# of regulatory deficiencies) (total days)	1.20E−7***	2.90
(ADL indicator) (total days)	1.46E−7	1.59
Profit ownership	−0.26***	−7.37
Nonprofit ownership	0.02	0.42
Urban located	0.03	0.79
Metropolitan located	0.06*	1.73
Hospital-based	−1.09***	−42.25
Chain-owned	0.17	1.04
(Chain-owned) (profit ownership)	−0.09	−0.55
(Chain-owned) (nonprofit ownership)	−0.20	−1.20
Herfindahl concentration index	−0.15***	−6.43
Combination	0.02	0.77
Facility-specific PPS	−0.03	−1.00
Class PPS	−0.07	−1.50
New England	0.11***	3.22
Mid-Atlantic	0.20***	5.98
South Atlantic	0.20***	6.01
East North Central	0.07***	2.62
East South Central	0.18***	4.84
West North Central	0.0007	0.02
West South Central	0.05	1.31
Mountain	0.08**	2.30
R2	0.77
F statistics	376.34***

Note:

^*Significant at p <0.10

^**Significant at p <0.05

^***Significant at p <0.01.

Catheterization rate, physical restraint rate, drug error rate, and regulatory deficiencies are transformed into negative values so that greater values indicate higher quality.