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The Impact of Asymmetric Information and Ownership on Nursing Home Access

Author

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  • Eric Christensen
  • Richard Arnould

Abstract

A consistent pattern in the nursing home industry is that non-profit institutions serve a lower proportion of Medicaid patients than do for-profit facilities. This is contrary to the expectation that non-profit, altruistically motivated firms should serve a larger proportion of the less profitable Medicaid patients than proprietary firms. The literature confirms this pattern empirically, but provides no theoretical basis for it, which is the contribution of this paper. Specifically, we show theoretically that information disparities between providers and consumers regarding quality fosters an environment in which the percentage of uninformed consumers is a key factor in determining public-private patient mix. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Eric Christensen & Richard Arnould, 2005. "The Impact of Asymmetric Information and Ownership on Nursing Home Access," International Journal of Health Economics and Management, Springer, vol. 5(3), pages 273-297, September.
  • Handle: RePEc:kap:ijhcfe:v:5:y:2005:i:3:p:273-297
    DOI: 10.1007/s10754-005-1796-1
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    References listed on IDEAS

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    1. William D. Spector & Thomas M. Selden & Joel W. Cohen, 1998. "The impact of ownership type on nursing home outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 7(7), pages 639-653.
    2. Cohen, Joel W. & Spector, William D., 1996. "The effect of Medicaid reimbursement on quality of care in nursing homes," Journal of Health Economics, Elsevier, vol. 15(1), pages 23-48, February.
    3. repec:mes:jeciss:v:11:y:1977:i:3:p:601-634 is not listed on IDEAS
    4. Hirth, Richard A., 1999. "Consumer information and competition between nonprofit and for-profit nursing homes," Journal of Health Economics, Elsevier, vol. 18(2), pages 219-240, April.
    5. Grabowski, David C. & Hirth, Richard A., 2003. "Competitive spillovers across non-profit and for-profit nursing homes," Journal of Health Economics, Elsevier, vol. 22(1), pages 1-22, January.
    6. repec:aph:ajpbhl:2001:91:9:1452-1455_3 is not listed on IDEAS
    7. Nyman, John A. & Connor, Robert A., 1994. "Do case-mix adjusted nursing home reimbursements actually reflect costs? Minnesota's experience," Journal of Health Economics, Elsevier, vol. 13(2), pages 145-162, July.
    8. Ettner, Susan L., 1993. "Do elderly Medicaid patients experience reduced access to nursing home care?," Journal of Health Economics, Elsevier, vol. 12(3), pages 259-280, October.
    9. Russell Cooper & Thomas W. Ross, 1984. "Prices, Product Qualities and Asymmetric Information: The Competitive Case," Review of Economic Studies, Oxford University Press, vol. 51(2), pages 197-207.
    10. Asher Wolinsky, 1983. "Prices as Signals of Product Quality," Review of Economic Studies, Oxford University Press, vol. 50(4), pages 647-658.
    11. Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, Oxford University Press, vol. 98(4), pages 659-679.
    12. repec:aph:ajpbhl:1977:67:4:337-344_3 is not listed on IDEAS
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