The relationship between costs and quality in nonprofit nursing homes

Laura Di Giorgio (), Massimo Filippini and Giuliano Masiero
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Laura Di Giorgio: Institute of Economics (IdEP), University of Lugano, Switzerland; Institute for Health Metrics and Evaluation (IHME), University of Washington, Seattle, USA

IdEP Economic Papers from USI Università della Svizzera italiana

Abstract: We investigate the relationship between costs and quality in nonprofit nursing homes, a key issue in the present context of cost containment measures. In accordance with the economic theory of production, we estimate a three-inputs total cost function for nursing home services using data from 45 nursing homes in Switzerland between 2006 and 2010. Quality is measured by means of clinical indicators regarding process and outcome derived from the Minimum Data Set. We consider both composite and single quality indicators. Contrary to previous studies, we use panel data and control for unobserved heterogeneity. This allows to capture nursing homes specific features that may explain differences in structural quality or costs levels. We find evidence that poor levels of quality regarding outcome, as measured by the prevalence of severe pain and weight loss, lead to higher costs. Our results are robust to quality endogeneity concerns.

Keywords: nursing home costs; nonprofit; quality indicators; cost-quality tradeoff (search for similar items in EconPapers)
JEL-codes: I10 L3 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2014-03
New Economics Papers: this item is included in nep-eff, nep-eur, nep-ger and nep-hea
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:lug:wpidep:1402

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