 The principal–agent problem and owner‐managers: An instrumental variables application to nursing home qualitySean Shenghsiu Huang and John Bowblis Health Economics, 2018, vol. 27, issue 11, 1653-1669 Abstract: The literature on provider ownership has primarily focused broadly on for‐profits compared with nonprofits and chains versus nonchains. However, the understanding of more nuanced ownership arrangements within individual facilities is limited. Utilizing the principal–agent and managerial control frameworks, we study the role of managerial ownership and its relationship to quality among for‐profit nursing homes (NHs). We identify NH administrators with more than 5% ownership (owner‐manager) from Ohio Medicaid Cost Reports (2005–2010) and link these data to long‐stay resident records in the Minimum Data Set. Using differential distance to the nearest NHs with a salaried manager relative to an owner‐manager, we address the differential selection into these two types of NHs. After instrumenting for admissions to owner‐managed NHs, quality among long‐stay residents at owner‐managed NHs is generally better than NHs with salaried managers. We find suggestive evidence that the magnitudes of quality difference are larger when the principal–agent problem is likely more pronounced, such as when NHs that are part of a multifacility chain and located in more concentrated markets. Date: 2018 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:27:y:2018:i:11:p:1653-1669 Access Statistics for this article Health Economics is currently edited by Alan Maynard, John Hutton and Andrew Jones More articles in Health Economics from John Wiley & Sons, Ltd. |
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