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Staffing Subsidies and the Quality of Care in Nursing Homes

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Abstract

Concerns about the quality of state-financed nursing home care has led to the wide-scale adoption by states of pass-through subsidies, in which Medicaid reimbursement rates are directly tied to staffing expenditure. We examine the effects of Medicaid pass-through on nursing home staffing and quality of care by adapting a two-step FGLS method that addresses clustering and state-level temporal autocorrelation. We find that pass-through increases staffing by 4.4% in higher quality nursing homes and improves quality of care in lower quality nursing homes by an amount equivalent to one sixth the inter-quartile range of the quality distribution.

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  • Yong Suk Lee & Andrew D. Foster, 2013. "Staffing Subsidies and the Quality of Care in Nursing Homes," Department of Economics Working Papers 2013-16, Department of Economics, Williams College.
    • Handle: RePEc:wil:wileco:2013-16
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    File URL: https://web.williams.edu/Economics/wp/NHpaper-06122013.pdf
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    Keywords

    Medicaid; wage pass-through; nursing home; direct care staff; quality of care; FGLS;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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