3 states limit nursing home profits in effort to improve quality of care 

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Kaiser Health News reported Oct. 25 that Massachusetts, New Jersey and New York have set requirements for how much nursing homes must spend on residents’ direct care and imposed limits on what they can spend elsewhere in an attempt to improve the quality of care. 

"If they’re not able to pull so much money away from care and spend it on staffing and actual services, it should make a big difference," said Charlene Harrington, professor emeritus at the University of California-San Francisco’s School of Nursing. "I would expect the quality of care would improve substantially."

New York’s nursing facilities will have to spend at least 70 percent of their total revenue on resident care. At least 40 percent of direct-care spending must pay for staff members involved in hands-on care. 

Nursing homes in Massachusetts have to spend at least 75 percent of all revenue on residents’ care. 

New Jersey nursing homes are to spend at least 90 percent of revenue on patient care. 

Experts, however, are divided on whether the moves will have their intended effect.

"The actual effect will be just the opposite," Andrew Aronson, president and CEO of the Health Care Association of New Jersey, told Kaiser Health News. "By trying to force providers to put more money into direct care, you’re creating a disincentive for people to invest in their buildings, which is going to drive the quality down." 

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