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The cost of regulation: More stringent staff regulations and nursing home financial performance

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  • John Bowblis

Abstract

The implementation of regulation in the health care sector is often motivated by assuring a minimum level of quality, but there is little understanding of the cost of this regulation. This paper explores the cost of regulation in the nursing home industry. Using panel data on the same nursing homes from 1999 to 2004, this paper examines how financial performance is impacted by regulations that increased the minimum number of nurses that provide direct care to residents. While nursing homes attempt to increase revenues and mitigate the cost of responding to more stringent regulation, various measures of profitability show nursing homes are worse off financially. In fact, more stringent staffing regulations cause some nursing homes to lose money providing services. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • John Bowblis, 2015. "The cost of regulation: More stringent staff regulations and nursing home financial performance," Journal of Regulatory Economics, Springer, vol. 47(3), pages 325-338, June.
    • Handle: RePEc:kap:regeco:v:47:y:2015:i:3:p:325-338
    DOI: 10.1007/s11149-015-9269-z
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    References listed on IDEAS

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    1. Patricia K. Tong, 2011. "The effects of California minimum nurse staffing laws on nurse labor and patient mortality in skilled nursing facilities," Health Economics, John Wiley & Sons, Ltd., vol. 20(7), pages 802-816, July.
    2. John R. Bowblis & Christopher S. Brunt, 2014. "Medicare Skilled Nursing Facility Reimbursement And Upcoding," Health Economics, John Wiley & Sons, Ltd., vol. 23(7), pages 821-840, July.
    3. David Grabowski & John Bowblis & Judith Lucas & Stephen Crystal, 2011. "Labor Prices and the Treatment of Nursing Home Residents with Dementia," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 18(2), pages 273-292.
    4. Haizhen Lin, 2014. "Revisiting the relationship between nurse staffing and quality of care in nursing homes: An instrumental variables approach," Working Papers 2014-01, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    5. Lin, Haizhen, 2014. "Revisiting the relationship between nurse staffing and quality of care in nursing homes: An instrumental variables approach," Journal of Health Economics, Elsevier, vol. 37(C), pages 13-24.
    6. John R. Bowblis, 2011. "Ownership conversion and closure in the nursing home industry," Health Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 631-644, June.
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    Cited by:

    1. John R. Bowblis & Andrew Ghattas, 2017. "The Impact of Minimum Quality Standard Regulations on Nursing Home Staffing, Quality, and Exit Decisions," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 50(1), pages 43-68, February.

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    More about this item

    Keywords

    Regulation; Minimum staffing; Financial performance; Nursing homes; Profitability; I18; L51;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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