Long-term care market competition and nursing home dementia special care units.

Background: The proliferation of noninstitutional long-term care (LTC) alternatives, particularly assisted living (AL), raises questions about how the nursing home (NH) industry is affected. Dementia special care units (SCUs), which provided NHs a competitive edge in the past, are of interest because they have traditionally served residents who now have other options.
Objectives: To quantify the effect of LTC competition on the odds of SCU presence in a NH; among those NHs with an SCU, to quantify the effect of competition on overall acuity.
Research Design: Cross-sectional with LTC market defined as the NH's county.
Subjects: Nine hundred forty-two NHs, 88 with an SCU, in 122 Texas counties during 2004.
Measures: LTC competition was measured by a NH's share of beds, the presence of another NH SCU, the presence of AL, the presence of dementia care in AL, and the presence of home health in the market. The outcomes were the presence of an SCU in a NH and the average level of resident acuity on those SCUs.
Results: Competition from another NH-based SCU was associated with the presence of an SCU in a NH [adjusted odds ratio, 3.3; 95% confidence interval (CI), 1.6-6.6] but there were no associations with other measures. Within NH-based SCUs, mean acuity was higher when there was AL in the market (beta, 1.6; 95% CI, 0.4-2.7), but there was no additional effect of AL dementia beds (beta, 1.6; 95% CI, 0.2-3.0).
Conclusions: A NH's investment in specialized dementia care is influenced by the behavior of nearby NHs but not yet by other forms of LTC; however, the profile of residents served by SCUs is affected by AL competition.