Enhancing nursing home efficiency and productivity is a challenging task for health policy makers due to population ageing trends and increasing health care costs. In this study, we analyze nursing home efficiency and productivity using data from the universe of Swiss nursing homes for the period 2007-2015. We estimate a translog cost frontier via generalized true random effects models, which allow to disentangle the transient and the persistent components of inefficiency. In particular, we apply the simulated maximum likelihood approach proposed by Filippini and Greene (2016), and then improve our estimates with a Mundlak correction. We find that total factor productivity change has dropped in recent years, and both efficiency components show scope for improvement. However, the marginal gains from transient efficiency measures are potentially larger, and could provide a more valid contribution to reverse the decreasing trend in total factor productivity change.