Use of resident-origin data to define nursing home market boundaries

Nursing Home Competition, Prices and Quality: A Scoping Review and Policy Lessons

BACKGROUND AND OBJECTIVES

In recent years, countries have increasingly relied on markets to improve efficiency, contain costs, and maintain quality in aged care. Under the right conditions, competition can spur providers to compete by offering better prices and higher quality of services. However, in aged care, market failures can be extensive. Information about prices and quality may not be readily available and search costs can be high. This study undertakes a scoping review on competition in the nursing home sector, with an emphasis on empirical evidence in relation to how competition affects prices and quality of care.

RESEARCH DESIGN AND METHODS

Online databases were used to identify studies published in English language between 1988 and 2020. A total of 50 studies covering nine countries are reviewed.

RESULTS

The review finds conflicting evidence on the relationship between competition and quality. Some studies find greater competition leading to higher quality, others find the opposite. Institutional features such as the presence of binding supply restrictions on nursing homes and public reporting of quality information are important considerations. Most studies find greater competition tends to result in lower prices, although the effect is small.

DISCUSSION AND IMPLICATIONS

The literature offers several key policy lessons, including the relationship between supply restrictions and quality which has implications on whether increasing subsidies can result in higher quality and the importance of price transparency and public reporting of quality.

Incentivizing Better Quality of Care: The Role of Medicaid and Competition in the Nursing Home Industry

This paper develops a model of the nursing home industry to investigate the quality effects of policies that either raise regulated reimbursement rates or increase local competition. Using data from Pennsylvania, I estimate the parameters of the model. The findings indicate that nursing homes increase the quality of care, measured by the number of skilled nurses per resident, by 8.7% following a universal 10% increase in Medicaid reimbursement rates. In contrast, I find that pro-competitive policies lead to only small increases in skilled nurse staffing ratios, suggesting that Medicaid increases are more cost effective in raising the quality of care.

Medicaid and Nursing Home Choice: Why Do Duals End Up in Low-Quality Facilities?

We provide empirical evidence on the relative importance of specific observable factors that can explain why individuals enrolled in both Medicare and Medicaid (duals) are concentrated in lower quality nursing homes, relative to those not on Medicaid. Descriptive results show that duals are 9.7 percentage points more likely than nonduals to be admitted to a low-quality (1-2 stars) nursing home. Using the Blinder-Oaxaca decomposition approach in a multivariate framework, we find that 35.4% of the difference in admission to low-quality nursing homes can be explained by differences in the distribution of observable characteristics. Differences in education and distance to high-quality nursing homes are important drivers, as are health status and race. Our findings highlight the need for creative policy solutions targeting the modifiable factors to reduce the disparity.

Malpractice Environment vs Direct Litigation: What Drives Nursing Home Exit?

An ongoing concern about medical malpractice litigation is that it may induce provider exit, potentially affecting consumer welfare. The nursing home sector is subject to substantial litigation activity but remains generally understudied in terms of the effects of litigation, due perhaps to a paucity of readily available data. In this article, we estimate the association between litigation and nursing home exit (closure or change in ownership), separating the impact of malpractice environment from direct litigation. We use 2 main data sources for this study: Westlaw's Adverse Filings database (1997-2005) and Online Survey, Certification and Reporting data sets (1997-2005). We use probit models with state and year fixed effects to examine the relationship between litigation and the probability of nursing home closure or change in ownership with and without adjustment for malpractice environment. We examine the relationship on average and also stratify by profit status, chain membership, and market competition. We find that direct litigation against a nursing home has a nonsignificant effect on the probability of closure or change in ownership within the subsequent 2 years. In contrast, the broader malpractice environment has a significant effect on change in ownership, even for nursing homes that have not been sued, but not on closure. Effects are stronger among for-profit and chain facilities and those in more competitive markets. A high-risk malpractice environment is associated with change of ownership of nursing homes regardless of whether they have been directly sued, indicating that it is too blunt an instrument for weeding out low-quality nursing homes.

The Effects of Medicare Advantage Contract Concentration on Patients' Nursing Home Outcomes

OBJECTIVE

The Medicare Modernization Act of 2004 allowed Medicare Advantage (MA) contracts to form provider networks in order to concentrate their patients among preferred providers. We focus on the skilled nursing facility (SNF) industry to assess patients' health when treating SNFs concentrate more patients from the same MA contract.

DATA SOURCES/STUDY SETTING

We use Medicare Beneficiary Summary File and Health, HEDIS, and the Minimum Data Set for patient attributes and OSCAR, LTCfocus.org, and Nursing Home Compare for SNF attributes. We include 1,069,436 MA enrollees newly admitted to SNF between 2012 and 2014.

STUDY DESIGN

Using a MA contract fixed-effect model, we examine the effect of prevalence of a patient's MA contract in the treating SNF on patient's health outcomes including 180-day survival, 30-day hospital readmission, 30-day home discharge, and nursing home length of stay. We use an Instrumental Variable (IV), the expected share of admissions in a SNF from patient's MA contract calculated using a McFadden choice model.

PRINCIPAL FINDINGS

We find no relationship between SNF contract concentration and patients' outcomes after applying the IV.

CONCLUSIONS

While MA plans appear to steer patients to specific SNFs, we do not observe significant returns to patient outcomes related to concentration.

The eldercare landscape: Evidence from California

Although the literature suggests that nursing home location is instrumental to the efficient functioning of the long-term care industry, there has been little research directly focused on the spatial distribution of nursing homes. We discuss factors that may influence nursing home location choice, emphasizing agglomeration economies around hospitals. We estimate econometric models of location using information on all freestanding, MediCal-licensed long-term care facilities in the state of California. We find that nursing homes are more likely to locate in the same Census tract as a hospital and are more likely to locate in tracts nearer to those containing a hospital.

The Effects of Chains on the Measurement of Competition in the Nursing Home Industry

Consistently accounting for more than 50% of the nursing homes in the United States, corporate chains have played an important role in the industry for several decades. However, few studies have explicitly considered the role of chains in measuring competition in nursing home markets. In this study, we use a newly developed database tracking common ownership over a period of nearly two decades to compare chain-adjusted and unadjusted measures of competition at the county and 25 km fixed-radius levels and explore how the differences would affect the assessment of local market structure. On average, the chain-adjusted Herfindahl–Hirschman Indexes (HHIs) are about 0.02 higher than the unadjusted HHIs. Each year, about 20% to 22% of the counties would appear more concentrated when recalculating HHIs accounting for common ownership. Evidence suggests that nursing home chains tend to focus more on expanding access to new markets within a state than to increasing market power within a smaller local market.

Market Conditions and Performance in the Nursing Home Compare Five-Star Rating

Previous studies have documented that market conditions affect nursing home performance; however, the evidence is inconsistent and conflicting. This study introduces three groups of county market conditions and a peer effect variable, and tests their impacts on the Nursing Home Compare (NHC) Five-Star overall rating. Indiana nursing home data and county characteristics are taken mainly from the NHC and Census Bureau websites. The result of the ordered logistic regression analysis indicates that nursing homes in excess demand markets, namely those that are highly concentrated and have fewer nursing homes, tend to perform better than their counterparts in both excess supply and balanced markets. In addition, a peer effect variable, measured as the average overall rating of the competitors, promotes performance improvement. These findings imply that small markets enable consumers to be well informed about a provider's reputation for quality, consequently enhancing performance. Furthermore, not only consumers but also providers seem to seek performance information on the report card to understand their relative position in the market, which thus affects their market strategies and subsequently performance.

Nursing Home Deficiency Citations for Medication Use

Deficiency citations for medication use in nursing homes, including those for psychoactive drug use, are examined. The variables of interest include eight structural and market factors. Data primarily came from the 1997 through 2003 Online Survey, Certification and Recording data and the 2004 Area Resource File. Multivariate logistic regression analyses were used with generalized estimating equations and multinomial logistic regression models with Huber-White robust estimation. Smaller nursing homes and high Medicaid reimbursement rates were consistently significantly associated with fewer deficiency citations in general and fewer repeat deficiency citations. For the other structural and market factors, varying results were identified depending on whether the deficiency citation was specifically for psychoactive drugs, medication errors, or medication administration. Relatively few facilities received psychoactive-specific deficiency citations, whereas numerous facilities were identified with medication error deficiency citations and medication administration deficiency citations. In addition, a relatively large number of facilities received these same citations repeatedly.

Competitive Spillovers and Regulatory Exploitation by Skilled Nursing Facilities

Typically, research on the effect of ownership has considered health care providers in isolation of competitive interaction from other firms. This analysis considers how the selection of Medicare reimbursement codes for skilled nursing facilities varies by ownership and is influenced by the competitive spillovers from market dominance of for-profit institutions. We find evidence that not-for-profits are less likely to code patients into the highest reimbursement categories. Further, as the market becomes dominated by for-profits, both for-profit and not-for-profits increase the share of patients in these high reimbursement categories.

Impacts of Geographic Distance on Peritoneal Dialysis Utilization: Refining Models of Treatment Selection

OBJECTIVE

To examine the relationship between distance to dialysis provider and patient selection of dialysis modality, informed by the absolute distance from a patient's home and relative distance of alternative modalities.

DATA SOURCES

U.S. Renal Data System.

STUDY DESIGN

About 70,131 patients initiating chronic dialysis and 4,795 dialysis facilities in 2006. The primary outcome was patient utilization of peritoneal dialysis (PD). Independent variables included absolute distance between patients' home and the nearest hemodialysis (HD) facility, relative distance between patients' home and nearest PD versus nearest HD facilities, and their interaction. Logistic regression was used to model distance on PD use, controlling for patient and market characteristics.

PRINCIPAL FINDINGS

Nine percent of incident dialysis patients used PD in 2006. There was a positive, nonlinear relationship between absolute distance to HD services and PD use (p < .0001), with the magnitude of the effect increasing at greater distances. In terms of relative distance, odds of PD use increased if a PD facility was closer or the same distance as the nearest HD facility (p = .006). Interaction of distance measures to dialysis facilities was not significant.

CONCLUSIONS

Analyses of patient choice between alternative treatments should model distance to reflect all relevant dimensions of geographic access to treatment options.

Public Reporting and Demand Rationing: Evidence from the Nursing Home Industry

This paper examines an under-explored unintended consequence of public reporting: the potential for demand rationing. Public reporting, although intended to increase consumer access to high-quality products, may have provided the perverse incentive for high-quality providers facing fixed capacity and administrative pricing to avoid less profitable types of residents. Using data from the nursing home industry before and after the implementation of the public reporting system in 2002, we find that high-quality nursing homes facing capacity constraints reduced admissions of less profitable Medicaid residents while increasing the more profitable Medicare and private-pay admissions, relative to low-quality nursing homes facing no capacity constraints. These effects, although small in magnitude, are consistent with provider rationing of demand on the basis of profitability and underscore the important role of institutional details in designing effective public reporting systems for regulated industries.

Higher Medicare SNF care utilization by dual-eligible beneficiaries: can Medicaid long-term care policies be the answer?

OBJECTIVE

To examine outcomes associated with dual eligibility (Medicare and Medicaid) of patients who are admitted to skilled nursing facility (SNF) care and whether differences in outcomes are related to states' Medicaid long-term care policies.

DATA SOURCES/COLLECTION

We used national Medicare enrollment data and claims, and the Minimum Data Set for 890,922 community-residing Medicare fee-for-service beneficiaries who were discharged to an SNF from a general hospital between July 2008 and June 2009.

STUDY DESIGN

We estimated the effect of dual eligibility on the likelihood of 30-day rehospitalization, becoming a long-stay nursing home resident, and 180-day survival while controlling for clinical, demographic, socio-economic, residential neighborhood characteristics, and SNF-fixed effects. We estimated the differences in outcomes by dual eligibility status separately for each state and showed their relationship with state policies: the average Medicaid payment rate; presence of nursing home certificate-of-need (CON) laws; and Medicaid home and community-based services (HCBS) spending.

PRINCIPAL FINDINGS

Dual-eligible patients are equally likely to experience 30-day rehospitalization, 12 percentage points more likely to become long-stay residents, and 2 percentage points more likely to survive 180 days compared to Medicare-only patients. This longer survival can be attributed to longer nursing home length of stay. While higher HCBS spending reduces the length-of-stay gap without affecting the survival gap, presence of CON laws reduces both the length-of-stay and survival gaps.

CONCLUSIONS

Dual eligibles utilize more SNF care and experience higher survival rates than comparable Medicare-only patients. Higher HCBS spending may reduce the longer SNF length of stay of dual eligibles without increasing mortality and may save money for both Medicare and Medicaid.

Are dual eligibles admitted to poorer quality skilled nursing facilities?

BACKGROUND

Dual eligibles, persons who qualify for both Medicare and Medicaid coverage, often receive poorer quality care relative to other Medicare beneficiaries.

OBJECTIVES

To determine whether dual eligibles are discharged to lower quality post-acute skilled nursing facilities (SNFs) compared with Medicare-only beneficiaries.

RESEARCH DESIGN

Following the random utility maximization model, we specified a discharge function using a conditional logit model and tested how this discharge rule varied by dual-eligibility status.

SUBJECTS

A total of 692,875 Medicare fee-for-service patients (22% duals) who were discharged for Medicare paid SNF care between July 2004 and June 2005.

MEASURES

Medicare enrollment and the Medicaid Analytic Extract files were used to determine dual eligibility. The proportion of Medicaid patients and nursing staff characteristics provided measures of SNF quality.

RESULTS

Duals are more likely to be discharged to SNFs with a higher share of Medicaid patients and fewer nurses. These results are robust to estimation with an alternative subsample of patients based on primary diagnoses, propensity of being dual eligible, and likelihood of remaining in the nursing home.

CONCLUSIONS

Disparities exist in access to quality SNF care for duals. Strategies to improve discharge planning processes are required to redirect patients to higher quality providers, regardless of Medicaid eligibility.

Dual Eligibility, Selection of Skilled Nursing Facility, and Length of Medicare Paid Postacute Stay

Medicare and Medicaid dual-eligible beneficiaries use more medical care and experience worse health outcomes than Medicare-only beneficiaries. This article points to a possible inefficiency in the skilled nursing facility (SNF) admission process, specifically that patients and SNFs are partially matched based on dual-eligibility status, and investigates its influence on patients' SNF length of stay. Using a set of fee-for-service beneficiaries newly admitted for Medicare-paid SNF care, we document two findings: (1) compared with Medicare-only patients, dual-eligibles are more likely to be discharged to SNFs with low nurse-to-patient ratios and (2) dual-eligibles are more likely to become long-stay nursing home residents than Medicare-only beneficiaries if treated in SNFs with low nurse-to-patient ratios. We conclude that changes in the current SNF care referral process have the potential to reduce excess SNF utilization by dual-eligible beneficiaries and could help reduce spending by both Medicare and Medicaid.

Effect of nursing home ownership on hospitalization of long-stay residents: an instrumental variables approach

Hospitalizations among nursing home residents are frequent, expensive, and often associated with further deterioration of resident condition. The literature indicates that a substantial fraction of admissions is potentially preventable and that nonprofit nursing homes are less likely to hospitalize their residents. However, the correlation between ownership and hospitalization might reflect unobserved resident differences rather than a causal relationship. Using national minimum data set assessments linked with Medicare claims, we use a national cohort of long-stay residents who were newly admitted to nursing homes within an 18-month period spanning January 1, 2004 and June 30, 2005. After instrumenting for ownership status, we found that IV estimates of the effect of nonprofit ownership on hospitalization are at least as large as the non-instrumented effects, indicating that selection bias does not explain the observed relationship. We also found evidence suggesting the lower rate of hospitalizations among nonprofits was due to a different threshold for transfer.

An instrumental variables approach to post-acute care nursing home quality: is there a dime's worth of evidence that continuing care retirement communities provide higher quality?

For the affluent elderly, continuing care retirement communities (CCRCs) have become a popular option for long term care and other health care needs related to aging. While CCRCs have experienced significant growth over the last few decades, very little is known about the quality of care CCRCs provide. This paper is the first to rigorously study CCRCs on a national scale and the only study that focuses on nursing home quality. Using a national sample from 2005, we determine if the quality of post-acute care provided by CCRC nursing homes is superior to traditional nursing homes. To mimic randomization of patients, instrumental variables analysis is used with relative distance as an exclusion restriction to handle the endogeneity of the type of facility where care is provided. After adjusting for endogeniety, we find that CCRC nursing homes provide post-acute care quality that is similar or lower to traditional nursing homes, depending on the quality measure.

Nursing home prices and market structure: the effect of assisted living industry expansion

Since the 1990s, there has been substantial expansion of facility-based alternatives to nursing home care, such as assisted living facilities. This paper analyzes the relationship between expansion of the assisted living industry, nursing home market structure and nursing home private pay prices using a two-year panel of nursing homes in the State of Ohio. Fixed effect regressions suggest that the expansion of assisted living facilities are associated with increased nursing home concentration, but find no effect on private pay nursing home prices. This would be consistent with assisted livings reducing demand for nursing homes by delaying entry into a nursing home, though assisted livings are not direct competitors of nursing homes.

Making difficult decisions: the role of quality of care in choosing a nursing home

OBJECTIVES

We investigated how quality of care affects choosing a nursing home.

METHODS

We examined nursing home choice in California, Ohio, New York, and Texas in 2001, a period before the federal Nursing Home Compare report card was published. Thus, consumers were less able to observe clinical quality or clinical quality was masked. We modeled nursing home choice by estimating a conditional multinomial logit model.

RESULTS

In all states, consumers were more likely to choose nursing homes of high hotel services quality but not clinical care quality. Nursing home choice was also significantly associated with shorter distance from prior residence, not-for-profit status, and larger facility size.

CONCLUSIONS

In the absence of quality report cards, consumers choose a nursing home on the basis of the quality dimensions that are easy for them to observe, evaluate, and apply to their situation. Future research should focus on identifying the quality information that offers the most value added to consumers.

Effect of nursing home ownership on the quality of post-acute care: an instrumental variables approach

Given the preferential tax treatment afforded nonprofit firms, policymakers and researchers have been interested in whether the nonprofit sector provides higher nursing home quality relative to its for-profit counterpart. However, differential selection into for-profits and nonprofits can lead to biased estimates of the effect of ownership form. By using "differential distance" to the nearest nonprofit nursing home relative to the nearest for-profit nursing home, we mimic randomization of residents into more or less "exposure" to nonprofit homes when estimating the effects of ownership on quality of care. Using national Minimum Data Set assessments linked with Medicare claims, we use a national cohort of post-acute patients who were newly admitted to nursing homes within an 18-month period spanning January 1, 2004 and June 30, 2005. After instrumenting for ownership status, we found that post-acute patients in nonprofit facilities had fewer 30-day hospitalizations and greater improvement in mobility, pain, and functioning.

Serious mental illness and nursing home quality of care

OBJECTIVE

To estimate the effect of a nursing home's share of residents with a serious mental illness (SMI) on the quality of care.

DATA SOURCES

Secondary nursing home level data over the period 2000 through 2008 obtained from the Minimum Data Set, OSCAR, and Medicare claims.

STUDY DESIGN

We employ an instrumental variables approach to address the potential endogeneity of the share of SMI residents in nursing homes in a model including nursing home and year fixed effects.

PRINCIPAL FINDINGS

An increase in the share of SMI nursing home residents positively affected the hospitalization rate among non-SMI residents and negatively affected staffing skill mix and level. We did not observe a statistically significant effect on inspection-based health deficiencies or the hospitalization rate for SMI residents.

CONCLUSIONS

Across the majority of indicators, a greater SMI share resulted in lower nursing home quality. Given the increased prevalence of nursing home residents with SMI, policy makers and providers will need to adjust practices in the context of this new patient population. Reforms may include more stringent preadmission screening, new regulations, reimbursement changes, and increased reporting and oversight.

The impact of hospital-based skilled nursing facility closures on rehospitalizations

OBJECTIVE

To examine the effect of reductions in hospital-based (HB) skilled nursing facility (SNF) bed supply on the rate of rehospitalization of patients discharged to any SNF from zip codes that lost HB beds.

DATA SOURCE

We used Medicare enrollment records, Medicare hospital and SNF claims, and nursing home Minimum Dataset assessments and characteristics (OSCAR) to examine nearly 10 million Medicare fee-for-service hospital discharges to SNFs between 1999 and 2006.

STUDY DESIGN

We calculated the number of HB and freestanding (FS) SNF beds within a 22 km radius from the centroid of all zip codes in which Medicare beneficiaries reside in all years. We examined the relationship between HB and FS bed supply and the rehospitalization rates of the patients residing in corresponding zip codes in different years using zip code fixed effects and instrumental variable methods including extensive sensitivity analyses.

PRINCIPAL FINDINGS

Our estimated coefficients suggest that closure of 882 HB homes during our study period resulted in 12,000-18,000 extra rehospitalizations within 30 days of discharge. The effect was largely concentrated among the most acutely ill, high-need patients.

CONCLUSIONS

SNF patient-based prospective payment resulted in closure of higher cost HB facilities that had served most postacute patients. As other, less experienced SNFs replaced HB facilities, they were less able to manage high acuity patients without rehospitalizing them.

Use of chiropractic spinal manipulation in older adults is strongly correlated with supply

STUDY DESIGN

Retrospective cross-sectional analysis of administrative data.

OBJECTIVE

To examine the relationship between regional chiropractic supply and both use and utilization intensity of chiropractic services among Medicare beneficiaries.

SUMMARY OF BACKGROUND DATA

Numerous studies have documented trends and patterns in the utilization of chiropractic services in the United States, but little is known about geographic variation in the relationship between chiropractic supply and utilization.

METHODS

We analyzed Medicare claims data for services provided by chiropractic physicians in 2008. We aggregated the data to the hospital referral region level and used small area analysis techniques to generate descriptive statistics. We mapped geographic variations in chiropractic supply, use and utilization intensity (treatments per user), and quantified the variation by coefficient of variation and extremal ratio. We used Spearman rank correlation coefficient to correlate use with supply. We used a logistic regression model for chiropractic use and a multiple linear regression model for chiropractic utilization intensity.

RESULTS

The average regional supply of chiropractic physicians was 21.5 per 100,000 adult capita. The average percentage of beneficiaries who used chiropractic was approximately 7.6 (SD, 3.9). The average utilization intensity was 10.6 (SD, 1.8). Regional chiropractic supply varied more than 14-fold, and chiropractic use varied more than 17-fold. Chiropractic supply and use were positively correlated (Spearman ρ, 0.68; P < 0.001). A low back or cervical spine problem was strongly associated with chiropractic use (odds ratios, 21.6 and 14.3, respectively). Increased chiropractic supply was associated with increased chiropractic use (odds ratio, 1.04) but not with increased chiropractic utilization intensity.

CONCLUSION

Both the supply of chiropractors and the utilization of chiropractic by older US adults varied widely by region. Increased chiropractic supply was associated with increased chiropractic use but not with increased chiropractic utilization intensity. Utilization of chiropractic care is likely sensitive to both supply and patient preference.

The effect of state regulatory stringency on nursing home quality

OBJECTIVE

To test the hypothesis that more stringent quality regulations contribute to better quality nursing home care and to assess their cost-effectiveness.

DATA SOURCES/SETTING

Primary and secondary data from all states and U.S. nursing homes between 2005 and 2006.

STUDY DESIGN

We estimated seven models, regressing quality measures on the Harrington Regulation Stringency Index and control variables. To account for endogeneity between regulation and quality, we used instrumental variables techniques. Quality was measured by staffing hours by type per case-mix adjusted day, hotel expenditures, and risk-adjusted decline in activities of daily living, high-risk pressure sores, and urinary incontinence.

DATA COLLECTION

All states' licensing and certification offices were surveyed to obtain data about deficiencies. Secondary data included the Minimum Data Set, Medicare Cost Reports, and the Economic Freedom Index.

PRINCIPAL FINDINGS

Regulatory stringency was significantly associated with better quality for four of the seven measures studied. The cost-effectiveness for the activities-of-daily-living measure was estimated at about 72,000 in 2011/ Quality Adjusted Life Year.

CONCLUSIONS

Quality regulations lead to better quality in nursing homes along some dimensions, but not all. Our estimates of cost-effectiveness suggest that increased regulatory stringency is in the ballpark of other acceptable cost-effective practices.

Nursing homes appeals of deficiencies: the informal dispute resolution process

OBJECTIVE

Nursing homes that are not meeting quality standards are cited for deficiencies. Before 1995, the only recourse for a nursing home was a formal appeal process, which is lengthy and costly. In 1995, the Centers for Medicare & Medicaid Services instituted the Informal Dispute Resolution (IDR) process. This study presents for the first time national statistics about the IDR process and an analysis of the factors that influence nursing homes' decisions to request an IDR.

DESIGN

Retrospective study including descriptive statistics and multivariate logistic hierarchical models.

SETTING

US nursing homes from 2005 to 2008.

PARTICIPANTS

Participants were 15,916 Medicaid- and Medicare-certified nursing homes nationally, with 94,188 surveys and 9388 IDRs.

MEASURES

The unit of observation was an annual survey or a complaint survey that generated at least one deficiency. The dependent variable was dichotomous and indicated whether the annual or a complaint survey triggered an IDR request. Independent variables included characteristics of the nursing home, the deficiency, the market, and the state regulatory environment.

RESULTS

Ten percent of all annual surveys and complaint surveys resulted in IDRs. There was substantial variation across states, which persisted over time. Multivariate results suggest that nursing homes' decisions to request an IDR depend on their assessment of the probability of success and assessment of the benefits of the submission.

CONCLUSIONS

Nursing homes avail themselves of the IDR process. Their propensity to do so depends on a number of factors, including the state regulatory system and the market environment in which they operate.

Geographic variations in availability and use of chiropractic under medicare

OBJECTIVE

The purpose of this study was to measure geographic variations in the availability and use of chiropractic under Medicare.

METHODS

A cross-sectional design was used to analyze a large nationally representative sample of Medicare data. Data from a 20% representative sample of all paid Medicare Part B fee-for-service claims for 2007 were merged with files containing beneficiary and provider data. The sample was restricted to adults aged 65 to 99 years. Measures of chiropractic availability and use were described and selectively mapped by state. Geographic variations were quantified. Spearman test was used to evaluate for correlation between chiropractic availability and use.

RESULTS

The average number of doctors of chiropractic (DC) by state was 1135; average DC per 1000 beneficiaries was 2.5 (SD, 1.1). The average number of chiropractic users by state was 34,502 (SD, 30,844); average chiropractic users per 1000 beneficiaries was 76 (SD, 41). Chiropractic availability by state varied 6-fold, and chiropractic use varied nearly 30-fold. Availability was strongly correlated with use (Spearman ρ, 0.86; P < .001). Expenditures per DC were highest in the upper Midwest and lowest in the far West; expenditures per user were highest in New England and New York, and lowest in the West.

CONCLUSION

Chiropractic availability and use by older adults under Medicare predominated in rural states in the North Central United States. Expenditures were higher in the East and Midwest and lower in the far West. Chiropractic availability and use by state were highly correlated. Future analyses should use small-area analysis and statistical modeling to identify factors predictive of chiropractic use.

Geographic Market Definition: The Case of Medicare-Reimbursed Skilled Nursing Facility Care

Correct geographic market definition is important to study the impact of competition. In the nursing home industry, most studies use geopolitical boundaries to define markets. This paper uses the Minimum Data Set to generate an alternative market definition based on patient flows for Medicare skilled nursing facilities. These distances are regressed against a range of nursing home and area characteristics to determine what influences market size. We compared Herfindahl-Hirschman Indices based on county and resident-flow measures of geographic market definition. Evidence from this comparison suggests that using the county for the market definition is not appropriate across all states.

State regulatory enforcement and nursing home termination from the medicare and medicaid programs

OBJECTIVES

Nursing homes certified by the Medicare and/or Medicaid program are subject to federally mandated and state-enforced quality and safety standards. We examined the relationship between state quality enforcement and nursing home terminations from the two programs.

STUDY DESIGN

Using data from a survey of state licensure and certification agencies and other secondary databases, we performed bivariate and multivariate analyses on the strength of state quality regulation in 2005, and nursing home voluntary terminations (decisions made by the facility) or involuntary terminations (imposed by the state) in 2006-2007.

PRINCIPAL FINDINGS

Involuntary terminations were rarely imposed by state regulators, while voluntary terminations were relatively more common (2.16 percent in 2006-2007) and varied considerably across states. After controlling for facility, market, and state covariates, nursing homes in states implementing stronger quality enforcement were more likely to voluntarily terminate from the Medicare and Medicaid programs (odds ratio = 1.53, p = .018).

CONCLUSIONS

Although involuntary nursing home terminations occurred rarely in most states, nursing homes in states with stronger quality regulations tend to voluntarily exit the publicly financed market. Because of the consequences of voluntary terminations on patient care and access, state regulators need to consider the effects of increased enforcement on both enhanced quality and the costs of termination.

The costs of turnover in nursing homes

BACKGROUND

Turnover rates in nursing homes have been persistently high for decades, ranging upwards of 100%.

OBJECTIVES

To estimate the net costs associated with turnover of direct care staff in nursing homes. DATA AND SAMPLE: Nine hundred two nursing homes in California in 2005. Data included Medicaid cost reports, the Minimum Data Set, Medicare enrollment files, Census, and Area Resource File.

RESEARCH DESIGN

We estimated total cost functions, which included in addition to exogenous outputs and wages, the facility turnover rate. Instrumental variable limited information maximum likelihood techniques were used for estimation to deal with the endogeneity of turnover and costs.

RESULTS

The cost functions exhibited the expected behavior, with initially increasing and then decreasing returns to scale. The ordinary least square estimate did not show a significant association between costs and turnover. The instrumental variable estimate of turnover costs was negative and significant (P = 0.039). The marginal cost savings associated with a 10% point increase in turnover for an average facility was $167,063 or 2.9% of annual total costs.

CONCLUSION

The net savings associated with turnover offer an explanation for the persistence of this phenomenon over the last decades, despite the many policy initiatives to reduce it. Future policy efforts need to recognize the complex relationship between turnover and costs.

The market for long-term care services

Although a large literature has established the importance of market and regulatory forces within the long-term care sector, current research in this field is limited by a series of data, measurement, and methodological issues. This paper provides a comprehensive review of these issues with an emphasis on identifying initiatives that will increase the volume and quality of long-term care research. Recommendations include: the construction of standard measures of long-term care market boundaries, the broader dissemination of market and regulatory data, the linkage of survey-based data with market measures, the encouragement of further market-based studies of noninstitutional long-term care settings, and the standardization of Medicaid cost data.

Long-term care market competition and nursing home dementia special care units

BACKGROUND

The proliferation of noninstitutional long-term care (LTC) alternatives, particularly assisted living (AL), raises questions about how the nursing home (NH) industry is affected. Dementia special care units (SCUs), which provided NHs a competitive edge in the past, are of interest because they have traditionally served residents who now have other options.

OBJECTIVES

To quantify the effect of LTC competition on the odds of SCU presence in a NH; among those NHs with an SCU, to quantify the effect of competition on overall acuity.

RESEARCH DESIGN

Cross-sectional with LTC market defined as the NH's county.

SUBJECTS

Nine hundred forty-two NHs, 88 with an SCU, in 122 Texas counties during 2004.

MEASURES

LTC competition was measured by a NH's share of beds, the presence of another NH SCU, the presence of AL, the presence of dementia care in AL, and the presence of home health in the market. The outcomes were the presence of an SCU in a NH and the average level of resident acuity on those SCUs.

RESULTS

Competition from another NH-based SCU was associated with the presence of an SCU in a NH [adjusted odds ratio, 3.3; 95% confidence interval (CI), 1.6-6.6] but there were no associations with other measures. Within NH-based SCUs, mean acuity was higher when there was AL in the market (beta, 1.6; 95% CI, 0.4-2.7), but there was no additional effect of AL dementia beds (beta, 1.6; 95% CI, 0.2-3.0).

CONCLUSIONS

A NH's investment in specialized dementia care is influenced by the behavior of nearby NHs but not yet by other forms of LTC; however, the profile of residents served by SCUs is affected by AL competition.

Hospitalization of nursing home residents: the effects of states' Medicaid payment and bed-hold policies

OBJECTIVE

Hospitalizations of nursing home residents are costly and expose residents to iatrogenic disease and social and psychological harm. Economic constraints imposed by payers of care, predominantly Medicaid policies, are hypothesized to impact hospitalizations.

DATA SOURCES/STUDY SETTING

Federally mandated resident assessments were merged with Medicare claims and eligibility files to determine hospitalizations and death within 150 days of baseline assessment. Nursing home and market characteristics were obtained from the Online Survey Certification and Reporting, and the Area Resource File, respectively. States' average daily Medicaid nursing home payments and bed-hold policies were obtained independently.

STUDY DESIGN

Prospective cohort study of 570,614 older (> or =65-year-old), non-MCO (Medicare Managed Care), long-stay (> or =90 days) residents in 8,997 urban, freestanding nursing homes assessed between April and June 2000, using multilevel models to test the impact of state policies on hospitalizations controlling for resident, nursing home, and market characteristics.

PRINCIPAL FINDINGS

Overall, 99,379 (17.4 percent) residents were hospitalized with rates varying from 8.4 percent in Utah to 24.9 percent in Louisiana. Higher Medicaid per diem was associated with lower odds of hospitalizations (5 percent lower for each $10 above average $103.5, confidence intervals [CI] 0.91-0.99). Hospitalization odds were higher by 36 percent in states with bed-hold policies (CI: 1.12-1.63).

CONCLUSIONS

State Medicaid bed-hold policy and per-diem payment have important implications for nursing home hospitalizations, which are predominantly financed by Medicare. This study emphasizes the importance of properly aligning state Medicaid and federal Medicare policies in regards to the subsidy of acute, maintenance, and preventive care in the nursing home setting.

Hospitalization of nursing home residents: the effects of states' Medicaid payment and bed-hold policies

OBJECTIVE

Hospitalizations of nursing home residents are costly and expose residents to iatrogenic disease and social and psychological harm. Economic constraints imposed by payers of care, predominantly Medicaid policies, are hypothesized to impact hospitalizations.

DATA SOURCES/STUDY SETTING

Federally mandated resident assessments were merged with Medicare claims and eligibility files to determine hospitalizations and death within 150 days of baseline assessment. Nursing home and market characteristics were obtained from the Online Survey Certification and Reporting, and the Area Resource File, respectively. States' average daily Medicaid nursing home payments and bed-hold policies were obtained independently.

STUDY DESIGN

Prospective cohort study of 570,614 older (> or =65-year-old), non-MCO (Medicare Managed Care), long-stay (> or =90 days) residents in 8,997 urban, freestanding nursing homes assessed between April and June 2000, using multilevel models to test the impact of state policies on hospitalizations controlling for resident, nursing home, and market characteristics.

PRINCIPAL FINDINGS

Overall, 99,379 (17.4 percent) residents were hospitalized with rates varying from 8.4 percent in Utah to 24.9 percent in Louisiana. Higher Medicaid per diem was associated with lower odds of hospitalizations (5 percent lower for each $10 above average $103.5, confidence intervals [CI] 0.91-0.99). Hospitalization odds were higher by 36 percent in states with bed-hold policies (CI: 1.12-1.63).

CONCLUSIONS

State Medicaid bed-hold policy and per-diem payment have important implications for nursing home hospitalizations, which are predominantly financed by Medicare. This study emphasizes the importance of properly aligning state Medicaid and federal Medicare policies in regards to the subsidy of acute, maintenance, and preventive care in the nursing home setting.

Have Nursing Home Compare quality measure scores changed over time in response to competition?

BACKGROUND

Currently, the Centers for Medicare and Medicaid Services report on 15 Quality Measures (QMs) on the Nursing Home Compare (NHC) website. It is assumed that nursing homes are able to make improvements on these QMs, and in doing so they will attract more residents. In this investigation, we examine changes in QM scores, and whether competition and/or excess demand have influenced these change scores over a period of 1 year.

METHODS

Data come from NHC and the On-line Survey Certification And Recording (OSCAR) system. QM change scores are calculated using values from January 2003 to January 2004. A series of regression analyses are used to examine the association of competition and excess demand on QM scores.

RESULTS

Eight QMs show an average decrease in scores (ie, better quality) and six QMs show an average increase in scores (ie, worse quality). However, for 13 of the 14 QMs these average changes averaged less than 1%. The regression analyses show an association between higher competition and improving QM scores and an association between lower occupancy and improving QM scores.

CONCLUSION

As would be predicted based on the market-driven mechanism underlying quality improvements using report cards, we show that it is in the most competitive markets and those with the lowest average occupancy rates that improvements in the QM scores are more likely.

Is a public reporting approach appropriate for nursing home care?

Publicizing quality information has been used as a quality improvement strategy in the acute care sector for more than a decade. Despite research showing mixed results of these efforts, publicly reporting quality measures is currently being pursued as a quality improvement strategy for nursing homes. Designed to empower consumers to make informed choices and to stimulate provider competition on quality, nursing home public reporting began in 1998 with the Nursing Home Compare Web site and has received greater emphasis in the 2002 Nursing Home Quality Initiative, both directed by the federal government. Focusing on the response of three key stakeholder groups across settings of care-consumers, providers, and purchasers-I identify several challenges that nursing home reporting must overcome to be successful. I conclude that publicly reporting quality measures for nursing homes will have a harder time promoting quality improvement than for acute care settings, where results have been disappointing thus far. In addition to the conceptual analysis, I evaluate whether the quality information reported on Nursing Home Compare had any impact on nursing home occupancy rates following its release. Using a pre/post-release design, I find that the effect of public reporting on nursing home occupancy rates has been minimal thus far. Although some estimates of effect are statistically significant and in the hypothesized direction, they all suggest very small effect sizes. It is unclear whether the absence of a larger reporting effect to date is specific to Nursing Home Compare or whether it inheres to the broader task of using quality information to promote change in the nursing home care sector.

Prospective effect of community distress and subcultural orientation on mortality following life-threatening diseases in later life

We conducted a prospective and contextual study to examine the effects of community social-economic-physical distress and subcultural orientation on mortality following onset of 13 life-threatening diseases in later life. We also examined the inter-relationship between the effects of community social, economic and physical distress (i.e. poverty, physical disorder and low collective efficacy) and subcultural orientation (i.e. anomie and tolerance of risk behaviour) on the survival chances of seriously ill older patients. Three data sources were combined to construct the working sample: 1990 Census data, the 1994-95 PHDCN-CS, and the COSI data. Fifty-one ZIP code areas in Chicago and 12,672 elderly patients were studied. Community distress (HR = 1.04; 95% CI = (1.01, 1.07)) and anomie (HR = 1.26; 95% CI = (1.02, 1.54)) are found to be significantly and positively associated with a higher hazard of death. Moreover, community anomie contributes to the effect of community distress on post-hospitalisation mortality. The social, economic, physical and cultural environment in which people live appears to exert a significant impact on whether older people facing life-threatening illness live or die.

Effect of educational level and minority status on nursing home choice after hospital discharge

OBJECTIVES

The movement to publicly report data on provider quality to inform consumer choices is predicated on assumptions of equal access and knowledge. We examine the validity of this assumption by testing whether minority/less educated Medicare patients are at greater risk of being discharged from a hospital to the lowest-quality nursing homes in a geographic area.

METHODS

We used the 2002 national Minimum Data Set to identify 62601 new Medicare admissions to nursing homes in 95 hospital service areas with at least 4 freestanding nursing homes and at least 50 African Americans aged 65 years or older with Medicare admissions to nursing homes.

RESULTS

The probability of African Americans' being admitted to nursing homes in the lowest-quality quartile in the area was greater (relative risk [RR]=1.26; 95% confidence interval [CI]=1.0, 8.45) in comparison with Whites. Individuals without a high-school degree were also more likely to be admitted to a low-quality nursing home (RR=1.22; 95% CI=1.0, 1.46).

CONCLUSIONS

African American and poorly educated patients enter the worst-quality nursing facilities. This finding raises concerns about the usefulness of the current public reporting model for certain consumers.

Nursing home closures, changes in ownership, and competition

This research examines the relationship of competition among nursing homes and the likelihood of their closure or change in ownership. The study uses nationally representative data from the 1992-1998 Online Survey, Certification, and Reporting system, and is supplemented with several other primary and secondary data sources. It is hypothesized that facilities located in more competitive environments will be more likely to close. Multinomial logistic regression analyses are employed to examine this hypothesis in a model containing organizational and aggregate resident characteristics, and market factors. The Herfindahl index is used as a measure of competition. The descriptive analysis shows that 621 nursing homes closed and 6,471 changed ownership from 1992 to 1998. The incidence rate of closures was .7% of facilities per year. The multivariate analysis shows that facilities located in more competitive environments were significantly more likely to close.

Effect of specific aspects of community social environment on the mortality of Individuals diagnosed with serious illness

The purpose of this study was to examine the prospective and contextual effects of urban community environment on mortality among Medicare beneficiaries who were 67 years old or older in 1993, lived in the city of Chicago, and were hospitalized for one of 13 serious diseases. As expected, we found that advantageous socioeconomic context helps lower mortality risk among elderly patients over and above individual demographic and health background. We also found that collective efficacy was a health-enhancing social resource whereas criminal and violent activities in the community appeared to be deleterious. Inconsistent with our hypotheses, community social network density (measured by the size of social network and frequency of social interaction) was not protective but detrimental. Moreover, social support and the civic involvement of residents in the community do not seem to affect mortality. The complex relationship between community social environment and health found in this study may suggest that community-level social interventions based on social capital/social cohesion models are not likely to achieve fruitful results without concomitant effort in the economic and health care realm, at least in terms of influences on the health of older people once they are already ill.

Nursing home spending patterns in the 1990s: the role of nursing home competition and excess demand

OBJECTIVE

To examine nursing home expenditures on clinical, hotel, and administrative activities during the 1990s and to determine the association between nursing home competition and excess demand on expenditures.

DATA SOURCES/STUDY SETTING

Secondary data sources for 1991, 1996, and 1999 for 500 free-standing nursing homes in New York State.

STUDY DESIGN

A retrospective statistical analysis of nursing homes' expenditures. The dependent variables were clinical, hotel, and administrative costs in each year. Independent variables included outputs (inpatient and outpatient), wages, ownership, New York City location, and measures of competition and excess demand.

DATA COLLECTION/EXTRACTION METHOD

Variables were constructed from annual financial reports submitted by the nursing homes, the Patient Review Instrument and Medicare enrollment data.

PRINCIPAL FINDINGS

Clinical and administrative costs have increased over the decade, while hotel expenditures have declined. Increased competition was associated with higher clinical and administrative costs while excess demand was associated with lower clinical and hotel expenditures.

CONCLUSIONS

Nursing home expenditures are sensitive to competition and excess demand conditions. Policies that influence competition in nursing home markets are therefore likely to have an impact on expenditures as well.

The Employment of Nurse Practitioners and Physician Assistants in U.S. Nursing Homes

PURPOSE

Nursing facilities with nurse practitioners or physician assistants (NPs or PAs) have been reported to provide better care to residents. Assuming that freestanding nursing homes in urban areas that employ these professionals are making an investment in medical infrastructure, we test the hypotheses that facilities in states with higher Medicaid rates, and those in more competitive markets and markets with higher managed care penetration, are more likely to employ NPs or PAs.

DESIGN AND METHODS

The Online Survey Certification and Reporting System (OSCAR) database, Area Resource File, and information from surveys of state policies from 1993 to 2002 are used to study the employment of NPs or PAs, using a cross-sectional time-series generalized estimating equation model with surveys nested within facilities, testing several market and state-policy effects while controlling for facility and market characteristics.

RESULTS

Throughout the 1990s the proportion of nursing facilities with NPs or PAs doubled, from less than 10% to over 20%. Facilities in states in the upper quartile of Medicaid reimbursement rates were 10% more likely to employ NPs or PAs. Facilities in more competitive markets, and in markets with higher managed care penetration, were more likely to employ NPs or PAs (adjusted odds ratio = 1.27, 1.20 respectively).

IMPLICATIONS

More generous state Medicaid nursing home reimbursement and higher competition may advance the investment in medical infrastructure, which in turn may positively affect the quality of care provided to nursing home residents.

Neighborhood effects on posthospitalization mortality: a population-based cohort study of the elderly in Chicago

CONTEXT

Place of residence is associated with health outcomes.

OBJECTIVE

To examine neighborhood effects on mortality after the onset of serious disease and to assess whether these effects vary for different sociodemographic or diagnostic subgroups.

DESIGN, SETTING, PATIENTS

Our sample consists of a complete cohort of 10,557 elderly Medicare beneficiaries throughout the city of Chicago newly diagnosed and hospitalized for the first time with one of five common serious diseases in 1993 (stroke, myocardial infarction, congestive heart failure, hip fracture, and lung cancer) followed until 1999. Attributes of 51 zip code neighborhoods were obtained both from census data (1990) and from a comprehensive social survey of neighborhood residents (1994-1995). Cox proportional hazards models with robust standard errors were specified.

MAIN OUTCOME MEASURE

Survival after hospitalization.

RESULTS

People who lived in neighborhoods with higher socioeconomic status (SES) or with a better social environment had significantly longer survival after disease onset. We evaluated the differential impact of neighborhood attributes on survival depending on gender, race, and poverty using interaction terms. Only the interaction terms between neighborhood social-structural factors and individual poverty were significant, suggesting that neighborhood SES and social environment were especially helpful for people with higher income. Neighborhood attributes did not differ in their impact depending on the race or sex of the subjects. Analyses of cause-specific mortality showed that myocardial infarction was the primary force driving the associations between neighborhood attributes and mortality.

CONCLUSIONS

Where people live matters with respect to posthospitalization mortality, but how neighborhoods affect this outcome depends on individual demographic and diagnostic characteristics. Myocardial infarction in particular may be a "neighborhood sensitive" condition. Individuals' health may depend not just on individuals' characteristics but also on their neighborhoods'.

Continuous quality improvement as an innovation: which nursing facilities adopt it?

PURPOSE

We identify environmental and organizational predictors that best discriminate between formal continuous quality improvement (CQI) adopters and nonadopters in nursing homes (NHs) and create a diagnostic profile for facility administrators and policy makers to promote CQI.

DESIGN AND METHODS

We performed a cross-sectional survey of licensed NH administrators in New Jersey in 1999, using The Nursing Care Quality Improvement Survey ( Zinn, Weech, & Brannon, 1998) and The New Jersey NH Profiles Chart. We also performed a discriminant analysis. Of 350 NHs, 46% returned completed questionnaires.

RESULTS

Using variance innovation, resource dependence, and institutional perspectives for our framework, we found that new requirements, environmental competition, organizational time and structural facilitators, and manager training made statistically significant contributions to discriminating between formal CQI adopters and nonadopters.

IMPLICATIONS

Regardless of size, NHs adopt formal CQI to meet external expectations of new regulations and accreditation criteria. CQI adoption is facilitated by information systems, flexible use of personnel, and team supports, as well as CQI training for managers. This profile of adopters can guide administrators and policy makers in promoting CQI for NHs, and it can help NHs already interested in CQI focus internal resources on key facilitators.

The influence of rural location on utilization of formal home care: the role of Medicaid

PURPOSE

This research examines the impact of rural-urban residence on formal home-care utilization among older people and determines whether and how Medicaid coverage influences the association between rural-urban location and risk of formal home-care use.

DESIGN AND METHODS

We combined data from the 1998 consolidated file of the Medical Expenditure Panel Survey Household Component with data from the Area Resource File to generate the analytical data set. We established two measures of formal home-care utilization: home care reimbursed through any source, and Medicare-reimbursed home health care. Our measures of rural-urban residence included metropolitan counties, nonmetropolitan counties having towns of at least 10,000 people, and nonmetropolitan counties with no towns of 10,000 people. We used logistic regression analyses to examine main effects and interaction effects of Medicaid coverage and residence on the two types of formal home care under controls for person-level characteristics and state fixed effects.

RESULTS

The unadjusted logistic analyses demonstrate that older people who reside in the most rural counties (nonmetropolitan counties having no town of 10,000) are significantly more likely than metropolitan residents to use any formal home care and Medicare home health care. The fully adjusted logistic analysis results point to an interplay between residential status and Medicaid coverage with regard to formal home-care use. In comparison with metropolitan residents covered by Medicaid, the adjusted relative risk of any formal home-care use is significantly higher for Medicaid enrollees residing in nonmetropolitan counties having no town of 10,000 people. Use of Medicare home health care is significantly greater for residents of the most rural counties, irrespective of their Medicaid coverage, as well as Medicaid-covered residents of nonmetropolitan counties having a town of at least 10,000 people.

IMPLICATIONS

In nonmetropolitan areas, Medicaid may be an important mechanism for linking older individuals with formal home care, especially Medicare home health care, and with the services that generate formal home care. Formal home care, including Medicare home health care, may substitute for less available forms of care in the most rural of nonmetropolitan areas. Therefore, policies that limit access to formal home care could lead to increased service-related vulnerabilities among older rural residents.

Does quality influence consumer choice of nursing homes? Evidence from nursing home to nursing home transfers

We estimated Cox proportional hazards models using assessment data from the Minimum Data Set to test whether nursing home residents and their proxies respond to quality of care by changing providers. Various indicators of poor quality increased the likelihood of transfer. Residents of for-profit homes or homes with excess capacity also were more likely to transfer. Inability to participate in care decisions and factors indicating frailty limited residents' ability to transfer. The apparent responsiveness to quality is encouraging. Nonetheless, because the absolute transfer rate is low, significant barriers to movement among nursing homes still may exist.

Primary care service areas: a new tool for the evaluation of primary care services

OBJECTIVE

To develop and characterize utilization-based service areas for the United States which reflect the travel of Medicare beneficiaries to primary care clinicians.

DATA SOURCE/STUDY SETTING

The 1996-1997 Part B and 1996 Outpatient File primary care claims for fee-for-service Medicare beneficiaries aged 65 and older. The 1995 Medicaid claims from six states (1995) and commercial claims from Blue Cross Blue Shield of Michigan (1996).

STUDY DESIGN

A patient origin study was conducted to assign 1999 U.S. zip codes to Primary Care Service Areas on the basis of the plurality of beneficiaries' preference for primary care clinicians. Adjustments were made to establish geographic contiguity and minimum population and service localization. Generality of areas to younger populations was tested with Medicaid and commercial claims.

DATA COLLECTION/EXTRACTION METHODS

Part B primary care claims were selected on the basis of provider specialty, place of service, and CPT code. Selection of Outpatient File claims used provider number, type of facility/service, and revenue center codes.

PRINCIPAL FINDINGS

The study delineated 6,102 Primary Care Service Areas with a median population of 17,276 (range 1,005-1,253,240). Overall, 63 percent of the Medicare beneficiaries sought the plurality of their primary care from within area clinicians. Service localization compared to Medicaid (six states) and commercial primary care utilization (Michigan) was comparable but not identical.

CONCLUSIONS

Primary Care Service Areas are a new tool for the measurement of primary care resources, utilization, and associated outcomes. Policymakers at all jurisdictional levels as well as researchers will have a standardized system of geographical units through which to assess access to, supply, use, organization, and financing of primary care services.

The economic implications of case-mix Medicaid reimbursement for nursing home care

In recent years, there has been large growth in the nursing home industry in the use of case-mix adjusted Medicaid payment systems that employ resident characteristics to predict the relative use of resources in setting payment levels. Little attention has been paid to the access and quality incentives that these systems provide in the presence of excess demand conditions due to certificate-of-need (CON) and construction moratoria. Using 1991 to 1998 panel data for all certified U.S. nursing homes, a fixed-effects model indicates that adoption of a case-mix payment system led to increased access for more dependent residents, but the effect was modified in excess demand markets. Quality remained relatively stable with the introduction of case-mix reimbursement, regardless of the presence of excess demand conditions. These results suggest that CON and construction moratoria are still important barriers within the nursing home market, and recent quality assurance activities related to the introduction of case-mix payment systems may have been effective.