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Do Minimum Quality Standards Improve Quality? A Case Study of the Nursing Home Industry

  • Haizhen Lin

    (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)

This article estimates the impact of minimum staffing requirements on the nursing home market using a unique national panel over the 1996-2005 period. This study reveals that, given a half-hour increase in the minimum nursing hours per resident day for licensed nurses, quality of patient care increases by 25 percent. This quality-increasing effect is mainly driven by low-quality nursing homes increasing their quality of care to meet the new standards. By contrast, minimum staffing requirements for direct-care nurses do not have any significant impact on quality. This lack of impact may be explained by nursing home providers circumventing this regulation by hiring less expensive and less skilled laborers as substitutes for direct-care nurses.

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Paper provided by Indiana University, Kelley School of Business, Department of Business Economics and Public Policy in its series Working Papers with number 2010-01.

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Date of creation: Jan 2010
Date of revision:
Handle: RePEc:iuk:wpaper:2010-01
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  17. Wiggins, Steven N, 1981. "Product Quality Regulation and New Drug Introductions: Some New Evidence from the 1970s," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 615-19, November.
  18. Naoto Jinji & Tsuyoshi Toshimitsu, 2004. "Minimum Quality Standards under Asymmetric Duopoly with Endogenous Quality Ordering: A Note," Journal of Regulatory Economics, Springer, vol. 26(2), pages 189-199, 09.
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  22. V. Joseph Hotz & Mo Xiao, 2005. "The Impact of Minimum Quality Standards on Firm Entry, Exit and Product Quality: The Case of the Child Care Market," Working Papers 05-28, Center for Economic Studies, U.S. Census Bureau.
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