This study reports that despite much concern in the media and among policy makers, only 56 California nursing facilities closed between 1997 and 2001. Statistical analysis of these closures shows that hospital-based facilities are 600 percent more likely to close than are free-standing homes; (2) reducing bed size by 52 beds increases the risk of closure by 460 percent; (3) facilities with losses of 5 percent or worse are more than twice as likely to close; and (4) a one standard deviation increase in county competition raises the risk of facility closure by 140 percent.

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