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Incentive Design and Quality Improvements: Evidence from State Medicaid Nursing Home Pay-for-Performance Programs

Author

Listed:
  • R. Tamara Konetzka

    (Department of Public Health Sciences, University of Chicago)

  • Meghan M. Skira

    (Department of Economics, University of Georgia Author email: skira@uga.edu)

  • Rachel M. Werner

    (Division of General Internal Medicine, University of Pennsylvania; Center for Health Equity Research and Promotion, Crescenz VA Medical Center)

Abstract

Pay-for-performance (P4P) programs have become a popular policy tool aimed at improving health-care quality. We analyze how incentive design affects quality improvements in the nursing home setting, where several state Medicaid agencies have implemented P4P programs that vary in incentive structure. Using the Minimum Data Set and the Online Survey, Certification, and Reporting data from 2001 to 2009, we examine how the weights put on various performance measures that are tied to P4P bonuses, such as clinical outcomes, inspection deficiencies, and staffing levels, affect improvements in those measures. We find larger weights on clinical outcomes often lead to larger improvements, but small weights can lead to no improvement or worsening of some clinical outcomes. We find a qualifier for P4P eligibility based on having few or no severe inspection deficiencies is more effective at decreasing inspection deficiencies than using weights, suggesting simple rules for participation may incent larger improvement.

Suggested Citation

  • R. Tamara Konetzka & Meghan M. Skira & Rachel M. Werner, 2018. "Incentive Design and Quality Improvements: Evidence from State Medicaid Nursing Home Pay-for-Performance Programs," American Journal of Health Economics, University of Chicago Press, vol. 4(1), pages 105-130, Winter.
    • Handle: RePEc:ucp:amjhec:v:4:y:2018:i:1:p:105-130
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    More about this item

    Keywords

    pay-for-performance; nursing home quality; long-term care; incentive design;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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