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The Impact of Asymmetric Information and Ownership on Nursing Home Access

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  • Eric Christensen
  • Richard Arnould

Abstract

A consistent pattern in the nursing home industry is that non-profit institutions serve a lower proportion of Medicaid patients than do for-profit facilities. This is contrary to the expectation that non-profit, altruistically motivated firms should serve a larger proportion of the less profitable Medicaid patients than proprietary firms. The literature confirms this pattern empirically, but provides no theoretical basis for it, which is the contribution of this paper. Specifically, we show theoretically that information disparities between providers and consumers regarding quality fosters an environment in which the percentage of uninformed consumers is a key factor in determining public-private patient mix. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Eric Christensen & Richard Arnould, 2005. "The Impact of Asymmetric Information and Ownership on Nursing Home Access," International Journal of Health Economics and Management, Springer, vol. 5(3), pages 273-297, September.
    • Handle: RePEc:kap:ijhcfe:v:5:y:2005:i:3:p:273-297
    DOI: 10.1007/s10754-005-1796-1
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    References listed on IDEAS

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    1. Ettner, Susan L., 1993. "Do elderly Medicaid patients experience reduced access to nursing home care?," Journal of Health Economics, Elsevier, vol. 12(3), pages 259-280, October.
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    13. Harrington, C. & Woolhandler, S. & Mullan, J. & Carrillo, H. & Himmelstein, D.U., 2001. "Does investor ownership of nursing homes compromise the quality of care?," American Journal of Public Health, American Public Health Association, vol. 91(9), pages 1452-1455.
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