Medicaid expenditures for nursing facility care has put major strains on state finances for many years. Previous research has addressed the explanation of expenditures, and of utilization and other factors associated with expenditures, but major policy and economic shifts in recent years necessitates a revisiting of the question. Using state data for a 19-year period, 1979-1997, two-stage/least-squares structural equations were estimated for four endogenous factors: Medicaid NF expenditures per state aged population, NF beds per aged population, Medicaid NF recipients per aged population, and the natural log of the average Medicaid NF per diem rates. Monetary factors were CPI-adjusted to a common year. The Medicaid NF expenditures measure was logged to achieve a less-skewed measure. Random-effects panel models were estimated, with adjustment for autocorrelation. In agreement with earlier study, numbers of NF beds showed the strongest direct influence on expenditures, positive as expected, while reimbursement rates failed to show any direct effects. Beds per aged population showed a negative direct influence on reimbursement rates, as expected; but contrary to hypotheses, both utilization and expenditures showed positive direct effects on rates. Control of bed stocks continues to show up as the state's strongest policy option in controlling Medicaid nursing facility expenditures. The lack of a showing of a direct effect of rates on expenditures (the strongest link being indirectly through beds) suggests that experiments with reimbursement strategies (such as pass-through of increased funding for staff) might not result in higher expenditures so long as bed stock is controlled.
Learning Objectives: Participants should be able to: recognize factors important to nursing facility policy, capacity, utilization, and expenditures; identify interactions among these factors; and consider implications for state Medicaid nursing facility policy, in light of possibly-conflict goals of quality, access, and cost constraint.
Keywords: Nursing Homes, Financing
Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: None
Disclosure not received
Relationship: Not Received.