Incentivizing Better Quality of Care: The Role of Medicaid and Competition in the Nursing Home Industry

Hackmann, Martin B.

doi:10.1257/aer.20151057

Cited by 57 publications

(28 citation statements)

References 44 publications

(57 reference statements)

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“… 17 On average, nursing homes with a higher percentage of residents on Medicaid tend to be of lower quality, and increasing Medicaid rates has been shown to increase quality. 18 , 19 …”

Section: Key Problems With the Current Financing And Payment System For Ltcmentioning

confidence: 99%

Reimagining Financing and Payment of Long-Term Care

Werner

Konetzka

2022

Journal of the American Medical Directors Association

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The COVID-19 pandemic revealed fundamental problems with the structure of long-term care financing and payment in the United States. The piecemeal system that exists suffers from several key problems, including underfunding, fragmentation across types and sites of care, and substantial variation in payment across states and populations. These problems result in inefficient allocation of resources, limited access to care, substandard quality, and inequities in both access and quality. We propose a new federal benefit for long-term care, most likely as part of the Medicare program. Essential features of this benefit include taxpayer subsidies, along the lines of other Medicare benefits, and coverage across the range of long-term care services, including both residential and home- and community-based care. A new federal benefit has the most potential to break down administrative barriers and improve resource allocation, to ensure adequate payment rates across all states, to expand access to care by spreading risk across the entire Medicare population, and to improve equity by extending coverage to all Medicare beneficiaries who want it. A new federal benefit is politically challenging, requiring bold action by Congress, and entails the risks of administrative challenges and unintended consequences. However, in this case, retaining the status quo remains the far greater risk.

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“… 17 On average, nursing homes with a higher percentage of residents on Medicaid tend to be of lower quality, and increasing Medicaid rates has been shown to increase quality. 18 , 19 …”

Section: Key Problems With the Current Financing And Payment System For Ltcmentioning

confidence: 99%

Reimagining Financing and Payment of Long-Term Care

Werner

Konetzka

2022

Journal of the American Medical Directors Association

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“…Indeed, inadequate staffing ratios are an important reason for quality shortfalls in nursing homes (Harrington et al, 2016(Harrington et al, , 2020. We follow Hackmann (2019) and Lin (2014) and measure care quality by case-mix weighted certified staffing ratios. The case-mix weight is necessary since individuals with a higher care level require more care than individuals with a lower care level.…”

Section: Literature On Quality Of Care and Certified Nurse Staffing R...mentioning

confidence: 99%

“…Looking at Medicaid reimbursement rates in the US both Cohen and Spector (1996) and Grabowski (2001) find a positive impact of prices on staffing ratios. Similarly, a recent study by Hackmann (2019), which uses a structural model of the nursing home industry in the US state of Pennsylvania, shows that a 10% increase in the Medicaid reimbursement rate leads to an 8.7% increase in registered nurse staffing ratios. Moreover, it shows that this would also increase overall welfare, despite the higher costs.…”

mentioning

confidence: 93%

“…Since certified staffing ratios are shown to be a good indicator of care quality (Campbell et al, 2000;Konetzka et al, 2008;Lin, 2014), higher prices may increase care quality thanks to higher nurse staffing ratios. We follow Hackmann (2019) and Lin (2014) by measuring care quality by case-mix weighted certified nurse staffing ratios, that is, the number of certified nurses divided by the number of residents.…”

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confidence: 99%

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Paying for the view? How nursing home prices affect certified staffing ratios

2022

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Many countries limit public and private reimbursement for nursing care costs for social or financial reasons. Still, quality varies across nursing homes. We explore the causal link between case‐mix adjusted nurse staffing ratios as an indicator of care quality and different price components in Swiss nursing homes. The Swiss reimbursement system limits and subsidizes the care price at the cantonal level, which implicitly limits staffing ratios, while the residents cover the nursing home‐specific lodging price privately. To estimate causal effects, we exploit (i) the exogeneity of the Swiss care price regulation, (ii) nursing‐home fixed effects estimations and (iii) instrumental variables for the lodging price. Our estimates show a positive impact of prices on certified staffing ratios. We find that a 10% increase in care prices increases certified staffing ratios by 3–4%. A comparable 10% increase in lodging prices raises certified staffing ratios by 1.5–10% (depending on the model). Our findings highlight that price limits for nursing care impose a limit on staffing ratios. Furthermore, our results indicate that providers circumvent price limits by increasing lodging prices that are privately covered. Thus, this cost shifting implicitly shifts the financial burden to the residents.

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“…Also, our study contributes to the literature on nursing homes and the economics of automation for labor providing longterm care services. Our empirical work brings Japanese data to expand and test hypotheses and trends documented in the US and Europe regarding nursing home staffing (Hackmann 2019, Chen et al 2020, facility characteristics (e.g. Banaszak-Holl et al 2018) and quality of care (Castle 2008;Zhang and Grabowski 2004), as well as the parallel literature on skilled nursing facilities (e.g.…”

Section: Introductionmentioning

confidence: 96%