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APHA Scientific Session and Event Listing

[ Recorded presentation ] Recorded presentation

Impact of Medicare Reimbursement Changes on Nursing Home Efficiency

Ning Jackie Zhang, MD, PhD, Lynn Unruh, PhD, RN, and Thomas Wan, PhD. Department of Health Administration, University of Central Florida, 3280 Progress Drive, Orlando, FL 32826, 407-823-3344, nizhang@mail.ucf.edu

Prior studies regarding impacts of the Balanced Budget Act in nursing homes have examined the issue of quality, but not efficiency. This study assesses the impact of recent Medicare reimbursement changes on efficiency in nursing homes when efficiency is adjusted for quality. Research questions are: 1) Has the implementation of a Medicare prospective payment system under the 1997 BBA improved efficiency in U.S. nursing homes when efficiency is adjusted for quality? 2) Has the implementation of the 1999 Balanced Budget Reconciliation Act or the 2000 Benefits Improvement and Protection Act counteracted BBA when efficiency is adjusted for quality? 3) Have other market and facility factors influenced efficiency? Data were from the On-Line Survey Certification and Reporting System for nursing facilities, Medicare Cost Report, and Area Resource Files for the years 1997-2003. The efficiency variable is a ratio of quality-adjusted total resident days to total costs for each facility. Trend analysis was conducted to find the changing pattern of efficiencies. The impacts of the policies on efficiency were estimated using generalized repeated-measure mixed model. Approximately 7,000 Medicare-certified homes were studied each year. Trend analysis shows that mean values for quality-adjusted efficiency decreased and the standard deviation narrowed over time. Results show that the BBA was significantly negatively related to quality-adjusted efficiency. Licensed nurses per resident days, facility size, percent Medicaid patients, non-profit status, and area competition were positively related to efficiency. When efficiency is adjusted for quality, efficiency-oriented policy changes, such as the BBA, may have unintended opposite affects on efficiency.

Learning Objectives:

Keywords: Health Care Reform, Health Care Delivery

Presenting author's disclosure statement:

Any relevant financial relationships? No

[ Recorded presentation ] Recorded presentation

The Economics of Health and Health Services I

The 134th Annual Meeting & Exposition (November 4-8, 2006) of APHA