1 / 12

The Market for Nursing Home Quality

The Market for Nursing Home Quality. David Grabowski University of Alabama at Birmingham. Background. The standard economic model of quality competition assumes: Privately purchased care Perfectly informed consumers Choice across providers No government intervention

trang
Download Presentation

The Market for Nursing Home Quality

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Market for Nursing Home Quality David Grabowski University of Alabama at Birmingham

  2. Background • The standard economic model of quality competition assumes: • Privately purchased care • Perfectly informed consumers • Choice across providers • No government intervention • The NH market clearly deviates from all of these assumptions

  3. History • In the 1970s, states generally paid for NH care on a cost-based basis • Little information typically available to potential NH consumers • Certificate-of-need and construction moratoria often created excess demand for services • Occupancy rates were above 95%

  4. Current Market (Times Have Changed) • States generally pay for care on a case-mix adjusted prospective basis • Public quality reporting now available • CON/moratoria no longer relevant in many NH markets due to the growth in assisted living • Occupancy rates now around 87% • One-third of facilities that call themselves "assisted living" have been in business for five or fewer years, and 60% have been in operation for ten or fewer years (Hawes et al., 1999)

  5. Examples: Market for Quality • Beverly Enterprises, Inc. • Currently experimenting with model of “resident-centered” care in 10 NHs in order to gain competitive advantage • Wellspring Innovative Solutions, Inc. • 11 NHs formed alliance to compete on the basis of quality for managed care business • Philadelphia/Buffalo LTC markets • Philadelphia has experienced growth in CCRCs due to increased housing wealth; Buffalo has experienced growth in assisted living due to large pensions of retired factory workers

  6. Research: Market for Quality • Innovation • Competition among nursing homes associated with more Alzheimer’s and sub-acute care units (Banaszak-Holl et al., 1996) • Facility closures • High deficiency facilities more likely to voluntarily exit the market (Angelelli et al., 2003) • Response to Medicaid Payment Changes • Higher Medicaid payment rates are associated with better quality (Grabowski, 2001)

  7. Grabowski & Angelelli, in press HSR Effect of Medicaid Payment on patient-level risk-adjusted pressure ulcer incidence Elasticity All Markets - 0.16* High Occupancy Markets - 0.06 High Medicaid Homes - 0.31* * = statistically significant at the 1% level

  8. Research Needs 1) What are the returns to greater competition in today’s marketplace? • Earlier work finds that more concentrated markets achieve better outcomes (Zinn, 1994) • I/O theory generally holds that when market share is concentrated in a few large firms, competition is diminished • In health care markets, concentration may diminish the effect of information asymmetry, which could increase competition (Pauly and Satterthwaite, 1981) • Need to update this work with more recent data and better quality measures

  9. Research Needs 2) Can we adjust Medicaid payment policy to better harness market forces? • Why not reward high quality providers with higher Medicaid payment rates? • Demonstration-based evidence supports such a payment system (Norton 1992) • Additional demonstrations… • Tradeoffs of investment in NH and other LTC settings

  10. Research Needs (cont.) 3) Will greater consumer information create greater quality competition? • We need more research on the relationship between consumer information and consumer choice. • Limited knowledge of how hospital discharge planners influence process

  11. Research Needs (cont.) 4) What is the return to increased NH regulation? • State and Federal governments both are discussing increased minimum staffing standards • Federal government continues to use costly survey and certification process • Are there market-based alternatives that may encourage more efficient outcomes?

  12. Research Needs (cont.) 5) What is the role of assisted living and other NH substitutes towards encouraging good outcomes? • There is no research tying growth in assisted living market to NH quality • Very limited government intervention in assisted living markets in most states • Thus, no systematic data • However, some states have put assisted living providers under CON

More Related