Incentivizing Better Quality of Care: The Role of Medicaid and Competition in the Nursing Home Industry

46 Pages Posted: 19 Dec 2017

See all articles by Martin B. Hackmann

Martin B. Hackmann

University of California, Los Angeles (UCLA); National Bureau of Economic Research (NBER)

Date Written: December 2017

Abstract

This paper develops a model of the nursing home industry to investigate the quality effects of policies that either raise regulated reimbursement rates or increase local competition. Using data from Pennsylvania, I estimate the parameters of the model. The findings indicate that nursing homes increase the quality of care, measured by the number of skilled nurses per resident, by 8.8% following a universal 10% increase in Medicaid reimbursement rates. In contrast, I find that pro-competitive policies lead to only small increases in skilled nurse staffing ratios, suggesting that Medicaid increases are more cost effective in raising the quality of care.

Suggested Citation

Hackmann, Martin B., Incentivizing Better Quality of Care: The Role of Medicaid and Competition in the Nursing Home Industry (December 2017). NBER Working Paper No. w24133. Available at SSRN: https://ssrn.com/abstract=3089529

Martin B. Hackmann (Contact Author)

University of California, Los Angeles (UCLA) ( email )

8283 Bunche Hall
Mail Stop: 147703
Los Angeles, CA 90095
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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