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Nursing Home Discharges and Exhaustion of Medicare Benefits

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  • Alan M. Garber
  • Thomas E. MaCurdy

Abstract

The price sensitivity of demand for nursing home care is a subject of considerable policy interest. Standard methods for measuring price responsiveness are difficult to apply to nursing home care, since accurate price information is usually unavailable and prices may reflect unmeasured quality characteristics. We estimate price sensitivity by exploiting the dynamic price variation implicit in Medicare payment rules for nursing home care. We determine whether the hazard rate for nursing home discharge shifts in response to the price changes that occur when Medicare coverage diminishes or ends. Our findings provide strong evidence that the duration of nursing home admissions is sensitive to price.

Suggested Citation

  • Alan M. Garber & Thomas E. MaCurdy, 1991. "Nursing Home Discharges and Exhaustion of Medicare Benefits," NBER Working Papers 3639, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3639
    Note: AG EH
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    References listed on IDEAS

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    1. Phelps, Charles E & Newhouse, Joseph P, 1974. "Coinsurance, the Price of Time, and the Demand for Medical Services," The Review of Economics and Statistics, MIT Press, vol. 56(3), pages 334-342, August.
    2. Nyman, John A., 1989. "The private demand for nursing home care," Journal of Health Economics, Elsevier, vol. 8(2), pages 209-231, June.
    3. Joseph P. Newhouse & Charles E. Phelps, 1976. "New Estimates of Price and Income Elasticities of Medical Care Services," NBER Chapters, in: The Role of Health Insurance in the Health Services Sector, pages 261-320, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Andrew Dick & Alan M. Garber & Thomas MaCurdy, 1992. "Forecasting Nursing Home Utilization of Elderly Americans," NBER Working Papers 4107, National Bureau of Economic Research, Inc.
    2. David M. Cutler & Louise Sheiner, 1994. "Policy Options for Long-Term Care," NBER Chapters, in: Studies in the Economics of Aging, pages 395-442, National Bureau of Economic Research, Inc.
    3. David M. Cutler, 1993. "Why Doesn't the Market Fully Insure Long-Term Care?," NBER Working Papers 4301, National Bureau of Economic Research, Inc.
    4. Andrew Dick & Alan M. Garber & Thomas E. MaCurdy, 1994. "Forecasting Nursing Home Utilization of Elderly Americans," NBER Chapters, in: Studies in the Economics of Aging, pages 365-394, National Bureau of Economic Research, Inc.

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