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Effect of nursing home ownership on the quality of post-acute care: An instrumental variables approach

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  • Grabowski, David C.
  • Feng, Zhanlian
  • Hirth, Richard
  • Rahman, Momotazur
  • Mor, Vincent

Abstract

Given the preferential tax treatment afforded nonprofit firms, policymakers and researchers have been interested in whether the nonprofit sector provides higher nursing home quality relative to its for-profit counterpart. However, differential selection into for-profits and nonprofits can lead to biased estimates of the effect of ownership form. By using “differential distance” to the nearest nonprofit nursing home relative to the nearest for-profit nursing home, we mimic randomization of residents into more or less “exposure” to nonprofit homes when estimating the effects of ownership on quality of care. Using national Minimum Data Set assessments linked with Medicare claims, we use a national cohort of post-acute patients who were newly admitted to nursing homes within an 18-month period spanning January 1, 2004 and June 30, 2005. After instrumenting for ownership status, we found that post-acute patients in nonprofit facilities had fewer 30-day hospitalizations and greater improvement in mobility, pain, and functioning.

Suggested Citation

  • Grabowski, David C. & Feng, Zhanlian & Hirth, Richard & Rahman, Momotazur & Mor, Vincent, 2013. "Effect of nursing home ownership on the quality of post-acute care: An instrumental variables approach," Journal of Health Economics, Elsevier, vol. 32(1), pages 12-21.
  • Handle: RePEc:eee:jhecon:v:32:y:2013:i:1:p:12-21
    DOI: 10.1016/j.jhealeco.2012.08.007
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    References listed on IDEAS

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    1. Sloan, Frank A., 2000. "Not-for-profit ownership and hospital behavior," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 21, pages 1141-1174 Elsevier.
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    1. repec:bla:ijhplm:v:31:y:2016:i:4:p:e290-e301 is not listed on IDEAS
    2. Bowblis John R. & Brunt Christopher S. & Grabowski David C., 2016. "Competitive Spillovers and Regulatory Exploitation by Skilled Nursing Facilities," Forum for Health Economics & Policy, De Gruyter, vol. 19(1), pages 45-70, June.
    3. Morrison, Geoffrey M. & Lin Lawell, C.-Y. Cynthia, 2016. "Driving in force: The influence of workplace peers on commuting decisions on U.S. military bases," Journal of Economic Behavior & Organization, Elsevier, vol. 125(C), pages 22-40.
    4. Rahman, Momotazur & Norton, Edward C. & Grabowski, David C., 2016. "Do hospital-owned skilled nursing facilities provide better post-acute care quality?," Journal of Health Economics, Elsevier, vol. 50(C), pages 36-46.
    5. Herr, A. & Saric, A., 2016. "The Welfare Effects of Single Rooms in German Nursing Homes: A Structural Approach," Health, Econometrics and Data Group (HEDG) Working Papers 16/23, HEDG, c/o Department of Economics, University of York.
    6. Di Giorgio, L. & Filippini, M. & Masiero, G., 2015. "Structural and managerial cost differences in nonprofit nursing homes," Economic Modelling, Elsevier, vol. 51(C), pages 289-298.
    7. Magdalena A. Stroka, 2016. "Drug overprescription in nursing homes: an empirical evaluation of administrative data," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(3), pages 257-267, April.
    8. repec:eee:hapoch:v1_951 is not listed on IDEAS
    9. L. Di Giorgio & M. Filippini & G. Masiero, 2016. "Is higher nursing home quality more costly?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(8), pages 1011-1026, November.
    10. Richard Hirth & David Grabowski & Zhanlian Feng & Momotazur Rahman & Vincent Mor, 2014. "Effect of nursing home ownership on hospitalization of long-stay residents: an instrumental variables approach," International Journal of Health Economics and Management, Springer, vol. 14(1), pages 1-18, March.
    11. Yaa Akosa Antwi & John R. Bowblis, 2016. "The Impact of Nurse Turnover on Quality of Care and Mortality in Nursing Homes: Evidence from the Great Recession," Upjohn Working Papers and Journal Articles 16-249, W.E. Upjohn Institute for Employment Research.
    12. Kinge, Jonas Minet, 2015. "Body mass index and employment status: a new look," HERO On line Working Paper Series 2015:3, Oslo University, Health Economics Research Programme.
    13. Kinge, Jonas Minet, 2016. "Body mass index and employment status: A new look," Economics & Human Biology, Elsevier, vol. 22(C), pages 117-125.
    14. Bowblis, John R. & McHone, Heather S., 2013. "An instrumental variables approach to post-acute care nursing home quality: Is there a dime's worth of evidence that continuing care retirement communities provide higher quality?," Journal of Health Economics, Elsevier, vol. 32(5), pages 980-996.
    15. Martin, Cécile, 2014. "Concurrence, prix et qualité de la prise en charge en EHPAD en France : Analyses micro-économétriques," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/13712 edited by Dormont, Brigitte, October.

    More about this item

    Keywords

    Ownership; Nursing homes; Quality; Post-acute care;

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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