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Patient vs. Provider Incentives in Long-Term Care

Martin Hackmann and R. Vincent Pohl ()

No 7373, CESifo Working Paper Series from CESifo

Abstract: How do patient and provider incentives affect mode and cost of long-term care? Our analysis of 1 million nursing home stays yields three main insights. First, Medicaid-covered residents prolong their stays instead of transitioning to community-based care due to limited cost-sharing. Second, nursing homes shorten Medicaid stays when capacity binds to admit more profitable out-of-pocket payers. Third, providers react more elastically to financial incentives than patients, so moving to episode-based provider reimbursement is more effective in shortening Medicaid stays than increasing resident cost-sharing. Moreover, we do not find evidence for health improvements due to longer stays for marginal Medicaid beneficiaries.

Keywords: long-term care; nursing homes; patient incentives; provider incentives; cost-sharing; episode-based reimbursement; medicaid (search for similar items in EconPapers)
JEL-codes: H51 H75 I11 I13 I18 J14 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-age, nep-hea and nep-ias
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