236826 Costs of quality regulations in nursing homes

Monday, October 31, 2011: 10:48 AM

Dana B. Mukamel, PhD , Department of Medicine, Health Policy Research Institute, University of California, Irvine, Irvine, CA
Yue Li, PhD , Department of Community and Preventive Medicine, University of Rochester Medical Center, Rochester, NY
Charlene Harrington, PhD , Social and Behavioral Sciences, University of California San Francisco, San Francisco, CA
William D. Spector, PhD , Agency for Healthcare Research & Quality, Rockville, MD
David L. Weimer, PhD , LaFollette School of Public Affairs, University of Wisconsin - Madison, Madison, WI
Lauren Bailey, MS , Health Policy Research Institute, University of California, Irvine, Irvine
Quality of nursing-home care is regulated by federal and state governments through the survey process. This study was designed to estimate the costs that quality regulations impose on nursing-homes. Data included information about 11,168 free standing nursing-homes nationally in 2004-2006 from the Medicare cost reports, the MDS, OSCAR and a survey of States' Certification and Licensing Offices conducted by the authors. We created variables measuring total annual expenditures, outputs (case-mix adjusted days), wages, competition, geographically adjusted deficiency citations, ownership, state fixed-effects, and an index of each state's regulatory stringency. We estimated hybrid cost functions that, in addition to the typical variables included in nursing home cost functions, included the regulatory stringency index and state fixed effects. The regulation stringency index averaged -0.21 with a standard deviation of 2.48. The stringency index was positively and significantly (p<0.01) associated with costs, indicating that nursing homes located in states with more stringent regulatory requirements face higher costs, ceteris paribus. The average incremental costs of a one standard deviation increase in the stringency index resulted in a 1.1% increase in costs, or $78,500 per year. These costs should be evaluated against the benefits they confer, i.e. the impact of regulations on quality of care.

Learning Areas:
Public health or related public policy

Learning Objectives:
Discuss the cost implications of quality regulations in nursing homes.

Keywords: Nursing Homes, Regulations

Presenting author's disclosure statement:

Qualified on the content I am responsible for because: I have been working for over 20 years in the field of aging and public health related to the topic of my presentation and I was the lead researcher on this study, responsible for data acquisition and analysis.
Any relevant financial relationships? No

I agree to comply with the American Public Health Association Conflict of Interest and Commercial Support Guidelines, and to disclose to the participants any off-label or experimental uses of a commercial product or service discussed in my presentation.