The effects of Medicaid reimbursement on nursing home services

This study investigated state Medicaid reimbursement incentives for services provided in skilled nursing homes. The product is discussed in some detail, and a model of competition in the industry is developed. Nursing home operators are found to respond to higher levels of reimbursement for routine care by providing more services to Medicaid-supported patients. The evidence supports the proposition that these increased services are provided to more seriously incapacitated patients. While cost-related and flat-rate payment systems are shown to provide different incentives for the delivery of patient services, these differences are empirically small. Finally, minimum requirements are shown to act like increased factor prices, reducing the quantity of services provided to patients. (Abstr. Health Care Mgmt. Stud., 1981)

Overview