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This paper examines the impacts of health care provider exits on patient outcomes and
displacement. Leveraging data on the universe of long-stay nursing home patients, I estimate
the mortality effects of 1,104 nursing home closures using a difference-in-differences approach.
Displaced residents face a substantial short-run increase in mortality, with this disruption effect
strongest among older and frailer patients. However, surviving patients tend to transfer to
higher-quality providers. I find suggestive evidence that for certain subgroups this reallocation
may lead to improved long-term survival, net of the initial disruption effect. The findings highlight
the immediate health risks of displacement and the potential for quality-driven reallocation
to mitigate them.
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