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Do Report Cards Predict Future Quality? The Case of Skilled Nursing Facilities

Author

Listed:
  • Portia Y. Cornell
  • David C. Grabowski
  • Edward C. Norton
  • Momotazur Rahman

Abstract

Report cards on provider performance are intended to improve consumer decision-making and address information gaps in the market for quality. However, inadequate risk adjustment of report-card measures often biases comparisons across providers. We test whether going to a skilled nursing facility (SNF) with a higher star rating affects outcomes for a patient. We exploit variation over time in the distance from a patient’s residential ZIP code to SNFs with different ratings to estimate the causal effect of admission to a higher-rated SNF on health care outcomes, including mortality. We found that patients who go to higher-rated SNFs experience lower mortality, fewer days in the nursing home, and fewer hospital readmissions.

Suggested Citation

  • Portia Y. Cornell & David C. Grabowski & Edward C. Norton & Momotazur Rahman, 2019. "Do Report Cards Predict Future Quality? The Case of Skilled Nursing Facilities," NBER Working Papers 25940, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25940
    Note: AG HC HE
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    References listed on IDEAS

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    1. Joseph J. Doyle, Jr. & John A. Graves & Jonathan Gruber, 2017. "Evaluating Measures of Hospital Quality," NBER Working Papers 23166, National Bureau of Economic Research, Inc.
    2. Edward C. Norton, 1992. "Incentive Regulation of Nursing Homes: Specification Tests of the Markov Model," NBER Chapters, in: Topics in the Economics of Aging, pages 275-304, National Bureau of Economic Research, Inc.
    3. repec:eee:jhecon:v:61:y:2018:i:c:p:259-273 is not listed on IDEAS
    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. Norton, Edward C., 1992. "Incentive regulation of nursing homes," Journal of Health Economics, Elsevier, vol. 11(2), pages 105-128, August.
    6. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    7. 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.
    8. Norton, Edward C. & Li, Jun & Das, Anup & Chen, Lena M., 2018. "Moneyball in Medicare," Journal of Health Economics, Elsevier, vol. 61(C), pages 259-273.
    9. Gowrisankaran, Gautam & Town, Robert J., 1999. "Estimating the quality of care in hospitals using instrumental variables," Journal of Health Economics, Elsevier, vol. 18(6), pages 747-767, December.
    10. 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.
    11. Werner, Rachel M. & Norton, Edward C. & Konetzka, R. Tamara & Polsky, Daniel, 2012. "Do consumers respond to publicly reported quality information? Evidence from nursing homes," Journal of Health Economics, Elsevier, vol. 31(1), pages 50-61.
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    More about this item

    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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