Patient versus Provider Incentives in Long-Term Care

Martin B. Hackmann (), Vincent Pohl () and Nicolas Ziebarth ()
Additional contact information
Martin B. Hackmann: NBER
Vincent Pohl: Mathematica

No 16165, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: How do patient and provider incentives affect the provision of long-term care? Our analysis of 551 thousand 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, when facility capacity binds, nursing homes shorten Medicaid stays to admit more profitable out-of-pocket private payers. Third, providers react more elastically to financial incentives than patients. Thus, targeting provider incentives through alternative payment models, such as episode-based reimbursement, is more effective than increasing patient cost-sharing in facilitating transitions to community-based care and generating long-term care savings.

Keywords: cost-sharing; provider incentives; patient incentives; nursing homes; long-term care; episode-based reimbursement; Medicaid (search for similar items in EconPapers)
JEL-codes: H51 H75 I11 I13 I18 J14 (search for similar items in EconPapers)
Pages: 93 pages
Date: 2023-05
New Economics Papers: this item is included in nep-age and nep-mfd
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Published - published in: American Economic Journal: Applied Economics , 2024, 16 (3), 178–218

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Related works:
Journal Article: Patient versus Provider Incentives in Long-Term Care (2024)
Working Paper: Patient versus provider incentives in long-term care (2023)
Working Paper: Patient Versus Provider Incentives in Long Term Care (2018)
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