David C. Grabowski is the principal investigator and contact person for this grant.

The quality of care delivered to frail elders residing in nursing homes remains an important and perplexing issue in American health policy.  Given the preferential tax treatment afforded nonprofit firms, there has been much interest among policymakers and researchers alike in examining whether the nonprofit sector provides higher quality relative to its for-profit counterpart. A large literature examines this issue, but the vast majority of the existing studies have taken a cross-sectional approach to compare for-profit and nonprofit quality.  However, the type of consumer who chooses a nonprofit facility may be quite different in many unobserved ways from the consumer who selects a for-profit facility.  If so, simple comparisons of quality in for-profits and nonprofits, controlling for observable characteristics, may yield misleading estimates.  By using "differential distance" to the nearest nonprofit nursing home relative to the nearest for-profit nursing home as an “instrument” for nursing home selection, we can mimic randomization of residents into more or less "exposure" to nonprofit homes when estimating the effects of ownership on quality of care.  As such, relative to the existing literature, this research can bet address the issue of selection in comparing quality of care across nonprofit and for-profit nursing homes.