Staffing Subsidies and the Quality of Care in Nursing Homes

Yong Suk Lee and Andrew Foster
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Andrew Foster: Brown University

No 2013-16, Department of Economics Working Papers from Department of Economics, Williams College

Abstract: Concerns about the quality of state-financed nursing home care has led to the wide-scale adoption by states of pass-through subsidies, in which Medicaid reimbursement rates are directly tied to staffing expenditure. We examine the effects of Medicaid pass-through on nursing home staffing and quality of care by adapting a two-step FGLS method that addresses clustering and state-level temporal autocorrelation. We find that pass-through increases staffing by 4.4% in higher quality nursing homes and improves quality of care in lower quality nursing homes by an amount equivalent to one sixth the inter-quartile range of the quality distribution.

Keywords: Medicaid; wage pass-through; nursing home; direct care staff; quality of care; FGLS (search for similar items in EconPapers)
JEL-codes: C23 H51 I18 J20 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2013-06
New Economics Papers: this item is included in nep-hea
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Journal Article: Staffing subsidies and the quality of care in nursing homes (2015)
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