Study of the Relevance of the Quality of Care, Operating Efficiency and Inefficient Quality Competition of Senior Care Facilities

The purpose of this research is to examine the relation between operating efficiency and the quality of care of senior care facilities. We designed a data envelopment analysis, combining epsilon-based measure and metafrontier efficiency analyses to estimate the operating efficiency for senior care facilities, followed by an iterative seemingly unrelated regression to evaluate the relation between the quality of care and operating efficiency. In the empirical studies, Taiwan census data was utilized and findings include the following: Despite the greater operating scale of the general type of senior care facilities, their average metafrontier technical efficiency is inferior to that of nursing homes. We adopted senior care facility accreditation results from Taiwan as a variable to represent the quality of care and examined the relation of accreditation results and operating efficiency. We found that the quality of care of general senior care facilities is negatively related to operating efficiency; however, for nursing homes, the relationship is not significant. Our findings show that facilities invest more in input resources to obtain better ratings in the accreditation report. Operating efficiency, however, does not improve. Quality competition in the industry in Taiwan is inefficient, especially for general senior care facilities.