Access Type

Open Access Dissertation

Date of Award

January 2014

Degree Type

Dissertation

Degree Name

Ph.D.

Department

Economics

First Advisor

Gail Jensen

Abstract

ECONOMIC DETERMINANTS OF QUALITY OF CARE IN NURSING HOMES

This dissertation examines the factors that will affect nursing home quality of care using several national data sources on market regulation, county demographic characteristics, market structural and the characteristics of different types of long-term care providers in 2010.

The first study examines how nine different measures of nursing home care quality respond to the greater levels of local market competition from these alternative providers of long-term care, as well as other nursing homes. Findings reveal that faced with greater competition from assisted living facilities, nursing homes are left to care for more disabled, less healthy patients. Although the nursing home's staff-to-bed ratios rise in response, other measures of care quality decline, such as more process- and outcome-based measures. Competition from home health agencies likewise has mixed effects on nursing home care quality, and competition from other nursing homes in a market tends to decrease care quality. These finding suggest that care quality in nursing homes may continue to erode as the market for alternative, community-based long-term care services expands.

The second study examines the Medicare regulation effects on nursing home quality controlling for the whole long-term care market competition structure. In many local markets nursing homes now compete with assisted living facilities for residents, yet most previous studies of the effects of Medicaid nursing home reimbursement policies on care quality have analyzed nursing homes in isolation, ignoring the presence of nearby competitor firms, and how state regulation of assisted living facilities might also affect care quality in nursing homes. This study uses a richer model specification that accounts for a much broader range of state long-term care regulations as well as the structure of a nursing home's local market. Findings reveal that a higher Medicaid reimbursement rate leads to significant improvements in nine different aspects of nursing home quality, while state certificate-of-need programs for nursing homes lead to a decline in several (but not all) dimensions of it. A large presence of assisted living beds in a local market also tends to reduce nursing home quality, and state regulations regarding assisted living facilities indirectly affect nursing home care quality by altering the nature of local market competition. Overall, these results suggest that state laws related to all long-term care providers, not just nursing homes, are important determinants of nursing home care quality.

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