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Explaining Differences in Remuneration Rates of Nursing Homes in Germany

  • Roman Mennicken

    ()

  • Boris Augurzky
  • Heinz Rothgang
  • Jürgen Wasem

Remuneration rates of German nursing homes are prospectively negotiated between long-term care insurance (LTCI) and social assistance on the one side and nursing homes on the other. They diff er considerably across regions while there is no evidence for substantial differences in care provision. This paper explains the differences in the remuneration rates by observable characteristics of the nursing home, its residents and its region with a special focus on the largest federal state North-Rhine-Westphalia, in which the most expensive nursing homes are located. We use data from the German Federal Statistical Office for 2005 on all nursing homes that off er full-time residential care for the elderly. We find that differences in remuneration rates can partly be explained by exogenous factors. Controls for residents, nursing homes, and district characteristics explain roughly 30% of the price difference; 40% can be ascribed to a regionally different kind of negotiation between nursing homes and LTCI. 30% of the raw price difference remains unexplained by observable characteristics.

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Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0215.

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Length: 17 pages
Date of creation: Oct 2010
Date of revision:
Handle: RePEc:rwi:repape:0215
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  1. repec:rwi:materi:068 is not listed on IDEAS
  2. Dana Mukamel & William Spector, 2002. "The competitive nature of the nursing home industry: price mark ups and demand elasticities," Applied Economics, Taylor & Francis Journals, vol. 34(4), pages 413-420.
  3. Kris Knox & Eric Blankmeyer & J. Stutzman, 1999. "Relative economic efficiency in Texas nursing facilities: A profit function analysis," Journal of Economics and Finance, Springer, vol. 23(3), pages 199-213, September.
  4. Nyman, John A, 1994. "The Effects of Market Concentration and Excess Demand on the Price of Nursing Home Care," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 193-204, June.
  5. repec:rwi:materi:044 is not listed on IDEAS
  6. Eichhorst, Werner & Hinz, Tina & Marx, Paul & Peichl, Andreas & Pestel, Nico & Siegloch, Sebastian & Thode, Eric & Tobsch, Verena, 2012. "Report No. 47: Geringfügige Beschäftigung: Situation und Gestaltungsoptionen," IZA Research Reports 47, Institute for the Study of Labor (IZA).
  7. Wasem, Jürgen & Rothgang, Heinz & Greß, Stefan, 2005. "Vergütungsfindung auf dem stationären Pflegemarkt in Nordrhein-Westfalen: Bestandaufnahme und Alternativen," IBES Diskussionsbeiträge 144, University of Duisburg-Essen, Institute of Business and Economic Studie (IBES).
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