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A Longitudinal Study of Medicaid Payment, Private-Pay Price and Nursing Home Quality

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  • David C. Grabowski

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Abstract

Quality of care problems have persisted for decades within U.S. nursing homes. A potential state-level policy towards addressing this concern is the level of Medicaid payment. However, a number of studies have found that an increase in Medicaid payment is associated with lower quality in the presence of certificate-of-need (CON) laws and bed construction moratorium regulations, which serve as barriers to entry within the nursing home industry. Instead of relying on potentially confounded cross-sectional comparisons, this study presents novel, panel-based evidence that incorporates aggregate private-pay price data. These estimates almost uniformly indicate that an increase in the Medicaid payment rate raises nursing home quality. When compared to the earlier literature, these new findings are attributed to changes over time in the market for nursing home care related to the growth in nursing home substitutes.

Suggested Citation

  • David C. Grabowski, 2004. "A Longitudinal Study of Medicaid Payment, Private-Pay Price and Nursing Home Quality," International Journal of Health Economics and Management, Springer, vol. 4(1), pages 5-26, March.
  • Handle: RePEc:kap:ijhcfe:v:4:y:2004:i:1:p:5-26
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    Citations

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    Cited by:

    1. Reichert, Arndt R. & Stroka, Magdalena A., 2014. "Nursing Home Prices and Quality of Care - Evidence from Administrative Data," Ruhr Economic Papers 470, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Laura Di Giorgio & Massimo Filippini & Giuliano Masiero, 2014. "The relationship between costs and quality in nonprofit nursing homes," IdEP Economic Papers 1402, USI Università della Svizzera italiana.
    3. Arndt R. Reicher & Magdalena Stroka, 2014. "Nursing Home Prices and Quality of Care - Evidence from Administrative Data," Ruhr Economic Papers 0470, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    4. 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.
    5. David C. Grabowski & Edward C. Norton, 2012. "Nursing Home Quality of Care," Chapters,in: The Elgar Companion to Health Economics, Second Edition, chapter 29 Edward Elgar Publishing.
    6. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2012. "Can competition reduce quality?," NIPE Working Papers 05/2012, NIPE - Universidade do Minho.
    7. John Bowblis & Judith Lucas, 2012. "The impact of state regulations on nursing home care practices," Journal of Regulatory Economics, Springer, vol. 42(1), pages 52-72, August.
    8. Zhao, Xin, 2016. "Competition, information, and quality: Evidence from nursing homes," Journal of Health Economics, Elsevier, vol. 49(C), pages 136-152.
    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. Haizhen Lin, 2010. "Do Minimum Quality Standards Improve Quality? A Case Study of the Nursing Home Industry," Working Papers 2010-01, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    11. Grabowski, David C. & Gruber, Jonathan, 2007. "Moral hazard in nursing home use," Journal of Health Economics, Elsevier, vol. 26(3), pages 560-577, May.
    12. Siciliani Luigi, 2013. "The Economics of Long-Term Care," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(2), pages 343-375, August.
    13. Bergman, Mats A. & Johansson, Per & Lundberg, Sofia & Spagnolo, Giancarlo, 2016. "Privatization and quality: Evidence from elderly care in Sweden," Journal of Health Economics, Elsevier, vol. 49(C), pages 109-119.
    14. David C. Grabowski & Jonathan Gruber & Joseph J. Angelelli, 2006. "Nursing Home Quality as a Public Good," NBER Working Papers 12361, National Bureau of Economic Research, Inc.
    15. Davis, Jullet A. & Weech-Maldonado, Robert & Lapane, Kate L. & Laberge, Alex, 2014. "Contextual determinants of US nursing home racial/ethnic diversity," Social Science & Medicine, Elsevier, vol. 104(C), pages 142-147.
    16. Haizhen Lin, 2014. "Revisiting the relationship between nurse staffing and quality of care in nursing homes: An instrumental variables approach," Working Papers 2014-01, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    17. Lin, Haizhen, 2014. "Revisiting the relationship between nurse staffing and quality of care in nursing homes: An instrumental variables approach," Journal of Health Economics, Elsevier, vol. 37(C), pages 13-24.
    18. David C. Grabowski & Jonathan Gruber, 2005. "Moral Hazard in Nursing Home Use," NBER Working Papers 11723, National Bureau of Economic Research, Inc.
    19. repec:zbw:rwirep:0470 is not listed on IDEAS
    20. Wang, Yongjin & Zhao, Laixun, 2015. "Saving good jobs from global competition by rewarding quality and efforts," Journal of International Economics, Elsevier, vol. 96(2), pages 426-434.
    21. Forder, Julien & Allan, Stephen, 2014. "The impact of competition on quality and prices in the English care homes market," Journal of Health Economics, Elsevier, vol. 34(C), pages 73-83.

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