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The relationship between nursing home quality and costs: Evidence from the VA

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  • Kathleen Carey
  • Shibei Zhao
  • A Lynn Snow
  • Christine W Hartmann

Abstract

Ensuring quality of care in nursing homes is a public health priority, yet how nursing home quality relates to cost is not well understood. This paper addresses this relationship for 132 VA community living centers (nursing homes), for fiscal years 2014 and 2015. We estimated cost models using the VA Decision Support System which tracks total direct costs and nursing direct costs for individual resident segments of care. We summed residents’ total costs and nursing costs to the community living center level for each year. Annual facility costs then were regressed on quality of care measured with composite scores based on 13 distinct adverse events. Results indicated that higher quality was associated with higher predicted cost. However, we did not find evidence that higher costs were driven by high nurse staffing levels.

Suggested Citation

  • Kathleen Carey & Shibei Zhao & A Lynn Snow & Christine W Hartmann, 2018. "The relationship between nursing home quality and costs: Evidence from the VA," PLOS ONE, Public Library of Science, vol. 13(9), pages 1-9, September.
    • Handle: RePEc:plo:pone00:0203764
    DOI: 10.1371/journal.pone.0203764
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    References listed on IDEAS

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    1. Kathleen Carey & Theodore Stefos, 2011. "Controlling for quality in the hospital cost function," Health Care Management Science, Springer, vol. 14(2), pages 125-134, June.
    2. Grabowski, David C., 2001. "Medicaid reimbursement and the quality of nursing home care," Journal of Health Economics, Elsevier, vol. 20(4), pages 549-569, July.
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    4. Cohen, Joel W. & Spector, William D., 1996. "The effect of Medicaid reimbursement on quality of care in nursing homes," Journal of Health Economics, Elsevier, vol. 15(1), pages 23-48, February.
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    Cited by:

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