Published: July 18, 2019
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This paper examines firms’ strategic responses to reputational pressures in a critical healthcare domain—the U.S. nursing home industry. We investigate whether organizations improved in terms of care quality following an exogenous change in the required number of nursing hours associated with star-based ratings to which nursing homes are subject. We show that although firms at risk of losing a star tended to self-report higher staffing levels after the policy change, these reported increases were not associated with improvements in an important patient outcome—bedsores. These findings are consistent with false reporting of staffing data, or insufficient or ineffective hiring practices. Although we cannot definitively establish the existence of false reporting, supplementary analyses offer little support for the latter two possibilities.

Ody‐Brasier, Amandine, and Amanda Sharkey. “Under Pressure: Reputation, Ratings, and Inaccurate Self‐reporting in the Nursing Home Industry.” Strategic Management Journal, vol. 40, no. 10, 2019, pp. 1517–44. Crossref, onlinelibrary.wiley.com/doi/abs/10.1002/smj.3063.