A June 21 article about racial disparities in nursing homes misstated the number of facilities reviewed in a study. The study involved about 14,000 nursing homes, not about 140,000. The article also incorrectly suggested that the Centers for Medicare and Medicaid Services gives incentive payments to top-rated nursing homes. The incentive payments are currently available only to hospitals. (Published 6/25/04)

African Americans are four times as likely as white Americans to reside in understaffed and poorly funded nursing homes that offer substandard care, according to a study being published today in the Milbank Quarterly, a health policy journal.

The study also describes a two-tier nursing home system with widespread racial and socioeconomic disparities. Nationwide, 40 percent of African American nursing home residents live in lower-tier nursing homes, compared with just 9 percent of all white nursing home residents.

A "lower-tier" facility is defined as having a high concentration of Medicaid residents (85 percent or more) and very limited resources. Many of these facilities are located in southern states, including Louisiana, Mississippi and Georgia, but also operate in economically distressed communities across the country.

African American nursing home residents are much more likely to live in a lower-tier nursing facility in nearly every state, the study said. In Missouri, for example, 33 percent of African American nursing home residents are in lower-tier facilities, while only 5 percent of whites are in lower-tier facilities.

According to the study, lower-tier nursing homes have trouble retaining staff and attracting proactive administrators, and often are too strapped or ill-equipped to try new programs. Such facilities are more likely to restrain patients.

"It becomes a vicious cycle," said Vincent Mor, the study's lead author and a professor at Brown University's medical school. "Nursing homes are local. You rely on nursing homes that are near you. In a poor neighborhood, you can't attract richer people, so only poor people come to the nursing home. You have a harder time paying staff and you have a higher turnover rate. Care becomes substandard."

The study, funded by the Robert Wood Johnson Foundation, reviewed more than 140,000 non-hospital-based Medicare- and Medicaid-certified nursing homes.

To combat the unevenness in nursing home care, last year the Centers for Medicare and Medicaid Services (CMS) began issuing quality ratings for nursing homes and posting the results on the Internet. The idea was to reward top performers with bonuses in hopes that free-market competition would raise the standards of overall care.

But the public report card is having some unintended consequences, according to the Milbank Quarterly study.

Nursing homes scoring lower ratings do not have the resources to compete in a free-market setting. Dependent on reimbursements from the government, some nursing homes are unable to boost their level of care enough to score higher ratings. They are vulnerable to closing, or worse: offering substandard care to the residents who have the least means to care for themselves. Residents of such settings, the study shows, overwhelmingly are poor minorities.

Larry Minnix, president and chief executive of the American Association of Homes and Services for the Aging, a Washington-based group representing 5,600 nonprofit aging services organizations, says the report illuminates the growing division between the haves and the have-nots among nursing home residents.

"Middle- and upper-income people are seeing more options in terms of continuing care retirement communities and assisted living," Minnix said. "These are packages of services that range from independent living to nursing homes, all located on one campus and under one financing plan."

"But the poor, sick and old are winding up in the nursing homes similar to those 'low-tier' facilities described in this report," Minnix said. "The Medicaid situation has gotten to the crisis point. The feds need to rethink what standardized benefits are, and what does a basic level of care cost."

The study outlines some broad recommendations for reducing the inequities. On the federal level, the government should work more closely toward improving conditions at nursing homes that receive low CMS quality ratings. At the state level, monitoring at nursing homes with the highest concentrations of Medicaid patients should be more proactive rather than responding to violations that surface on annual inspections. Third, before a nursing home is shut down for providing substandard care, leaving poor elderly citizens without a local facility, the government should intervene to find other management to keep the facility operating and improving.

Mor said the free-market approach that CMS has undertaken in the last year is similar to No Child Left Behind, President Bush's initiative to improve school performance by raising standards of accountability and giving parents more flexibility on where to send their child.

"Like the schools, you are trying to get nursing homes to compete on quality," Mor said. "It's a very admirable idea. It's just that in some neighborhoods, some nursing homes will be bearing the brunt of the failures. What are we prepared to do about this?"

Ann Allenbrand, left, and Eileen Jarrett talk in the French Bistro at the Sweet Life at Rosehill in Shawnee, Kan. The skilled nursing residence offers private suites, a movie theater, gourmet meals and an on-site rehabilitation center.