American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Patient versus Provider Incentives in Long-Term Care
American Economic Journal: Applied Economics
vol. 16,
no. 3, July 2024
(pp. 178–218)
Abstract
How do patient and provider incentives affect the provision of long-term care? Our analysis of 551,000 nursing home stays yields three main insights. First, due to limited cost-sharing, Medicaid-covered residents prolong their nursing home stays instead of transitioning to community-based care. Second, when facility capacity binds, nursing homes shorten Medicaid stays to admit more profitable out-of-pocket private payers. Third, providers react more elastically to financial incentives than patients. Thus, targeting provider incentives through alternative payment models, such as episode-based reimbursement, is more effective than increasing patient cost sharing in facilitating transitions to community-based care and generating long-term care savings.Citation
Hackmann, Martin B., R. Vincent Pohl, and Nicolas R. Ziebarth. 2024. "Patient versus Provider Incentives in Long-Term Care." American Economic Journal: Applied Economics, 16 (3): 178–218. DOI: 10.1257/app.20210264Additional Materials
JEL Classification
- H51 National Government Expenditures and Health
- H75 State and Local Government: Health; Education; Welfare; Public Pensions
- I11 Analysis of Health Care Markets
- I13 Health Insurance, Public and Private
- I18 Health: Government Policy; Regulation; Public Health
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
- L84 Personal, Professional, and Business Services
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