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 care quality. We find that nursing homes exhibit strong responses to the inspection in multiple core dimensions. 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, they nonetheless predict nursing homes’ relative quality: admission to higher-rated nursing homes lowers patient mortality.

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
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