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Staffing subsidies and the quality of care in nursing homes

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  • Foster, Andrew D.
  • Lee, Yong Suk

Abstract

Concerns about the quality of state-financed nursing home care has led to the wide-scale adoption by states of pass-through subsidies, in which Medicaid reimbursement rates are directly tied to staffing expenditure. We examine the effects of Medicaid pass-through on nursing home staffing and quality of care by adapting a two-step FGLS method that addresses clustering and state-level temporal autocorrelation. We find that pass-through subsidies increases staffing by about 1% on average and 2.7% in nursing homes with a low share of Medicaid patients. Furthermore, pass-through subsidies reduce the incidences of pressure ulcer worsening by about 0.9%.

Suggested Citation

  • Foster, Andrew D. & Lee, Yong Suk, 2015. "Staffing subsidies and the quality of care in nursing homes," Journal of Health Economics, Elsevier, vol. 41(C), pages 133-147.
    • Handle: RePEc:eee:jhecon:v:41:y:2015:i:c:p:133-147
    DOI: 10.1016/j.jhealeco.2015.02.002
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    3. Kondo, Ayako, 2019. "Impact of increased long-term care insurance payments on employment and wages in formal long-term care," Journal of the Japanese and International Economies, Elsevier, vol. 53(C), pages 1-1.
    4. Furtado, Delia & Ortega, Francesc, 2020. "Does Immigration Improve Quality of Care in Nursing Homes?," IZA Discussion Papers 13552, Institute of Labor Economics (IZA).
    5. Kai Fischer, 2023. "Skilled Labour Migration and Firm Performance: Evidence from English Hospitals and Brexit," CESifo Working Paper Series 10747, CESifo.

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    More about this item

    Keywords

    Medicaid; Wage pass-through; Nursing home; Quality of care; FGLS;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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