The Growth and Geographical Variation of Nursing Home Self-Pay Prices

Sean Shenghsiu Huang, Richard A. Hirth, Jane Banaszak-Holl and Stephanie Yuan
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Sean Shenghsiu Huang: Georgetown University
Richard A. Hirth: University of Michigan
Jane Banaszak-Holl: University of Michigan
Stephanie Yuan: Georgetown University

Working Papers from University of Michigan, Michigan Retirement Research Center

Abstract: Nursing home care is arguably the largest financial risk for the elderly without private or social insurance coverage. The annual out-of-pocket expenditure can easily exceed $70,000. Despite the substantial financial burdens on the elderly, the understanding of nursing home self-pay prices is rather sparse due to data limitation. To bridge the gap in the literature, we collected a unique and longitudinal price dataset from eight states, spanning from 2005 to 2010, to advance the understanding of the determinants and geographical variations of nursing home price and price growth. Overall, nursing home prices have consistently outpaced the inflation of consumer prices, particularly in California and Oregon. We also see faster price growth in markets where they face stricter capacity constraints and have higher for-profit market shares. Organizational structures are also significantly associated with price variations. We find that nonprofit nursing homes have higher prices than for-profit nursing homes and that chain-affiliated nursing homes charge higher prices than nonchains counterparts.

Pages: 25pages
Date: 2017-10
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