Incentivizing Better Quality of Care: The Role of Medicaid and Competition in the Nursing Home Industry
American Economic Review
vol. 109,
no. 5, May 2019
(pp. 1684-1716)
(Complimentary)
Abstract
This paper develops a model of the nursing home industry to investigate the quality effects of policies that either raise regulated reimbursement rates or increase local competition. Using data from Pennsylvania, I estimate the parameters of the model. The findings indicate that nursing homes increase the quality of care, measured by the number of skilled nurses per resident, by 8.7 percent following a universal 10 percent increase in Medicaid reimbursement rates. In contrast, I find that pro-competitive policies lead to only small increases in skilled nurse staffing ratios, suggesting that Medicaid increases are more cost effective in raising the quality of care.Citation
Hackmann, Martin B. 2019. "Incentivizing Better Quality of Care: The Role of Medicaid and Competition in the Nursing Home Industry." American Economic Review, 109 (5): 1684-1716. DOI: 10.1257/aer.20151057Additional Materials
JEL Classification
- I11 Analysis of Health Care Markets
- I13 Health Insurance, Public and Private
- I18 Health: Government Policy; Regulation; Public Health
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
- J14 Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination
- L13 Oligopoly and Other Imperfect Markets