Nursing Home Discharges and Exhaustion of Medicare Benefits

• Published in: Journal of the American Statistical Association Vol. 88; no. 423; pp. 727 - 736
• Main Authors: Garber, Alan M., MaCurdy, Thomas E.
• Format: Journal Article
• Language: English
• Published: Alexandria, VA Taylor & Francis Group 01.09.1993; American Statistical Association; Taylor & Francis Ltd
• Subjects: Applications and Case Studies; Biological and medical sciences; Copayments; Dementia; Entitlement programs; Exhaustion; General aspects; Health care expenditures; Health care payments; Health policy; Health systems. Social services; Institutional care; Long-term care; Medicaid; Medical sciences; Medicare; Nursing homes; Polynomials; Price effects; Prices; Public health. Hygiene; Public health. Hygiene-occupational medicine; Statistics; United States; North America; America; Human; Polynomial; Health system; Health insurance; Price; Health economy; Financing; Homes for the aged; Mathematical model; Elderly; Public health
• ISSN: 0162-1459; 1537-274X
• DOI: 10.1080/01621459.1993.10476333

The relationship between the utilization of nursing home care and its price is a subject of considerable policy interest. We assess price sensitivity by developing and applying "overlap polynomials" as a method to exploit the temporal price variation implicit in Medicare payment rules for nursing home care. Standard methods for measuring price responsiveness are inappropriate for measuring the effects of temporal price variation, and unmeasured quality variation often confounds cross-sectional price variation. Our empirical analysis assesses the magnitude of shifts in nursing home discharge rates attributable to the price changes that occur when Medicare coverage diminishes or ends. Our findings provide strong evidence that the duration of nursing home stays is sensitive to price in the population examined here.