Government Monitoring of Health Care Quality: Evidence from the Nursing Home Sector

Yiqun Chen and Marcus Dillender

No 34037, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In contracting out, monitoring is an important policy tool to extract information on firm quality and incentivize quality provision. This paper examines a central quality inspection of nursing homes, a sector with significant welfare implications but widespread public concerns about the quality of care. Using data on nursing homes across the US, we find that nursing homes exhibit strategic responses to the inspection in multiple core dimensions. Nursing homes increase the quantity and quality of labor inputs, reduce admissions, increase temporary discharges, and improve patient care in response to the inspection. However, nearly all responses drop immediately once the inspection is completed. While inspection ratings are unlikely to reflect nursing homes’ absolute quality given the strategic responses, we find that they nonetheless predict nursing homes’ relative quality: using a quasi-experimental research design, we find that staying at higher-rated nursing homes lowers patient mortality. Finally, we examine the role of the inspection in incentivizing sustained nursing home quality improvements through quality deficiency citations, finding mixed effects.

JEL-codes: D22 I11 I18 L21 L23 L51 L88 (search for similar items in EconPapers)
Date: 2025-07
New Economics Papers: this item is included in nep-hea, nep-ind and nep-lab
Note: AG EH PE
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w34037.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:34037

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w34037
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().