Working Paper: NBER ID: w30228
Authors: Liran Einav; Amy Finkelstein; Neale Mahoney
Abstract: We develop a stylized model that allows us to estimate a value-added measure for nursing homes (“SNFs”) which accounts for patient selection both into and out of a SNF. We use the model, together with detailed data on the physical and mental health of about 6 million Medicare SNF patients between 2011 and 2016, to estimate the value added for about 14,000 distinct SNFs. We document substantial heterogeneity in value added. Nationwide, compared to a 10th percentile SNF, a 90th percentile SNF is able to discharge a patient at the same health level about a week sooner, which is about one third of the median length of stay. Heterogeneity in value added within a market is almost as large as it is nationwide. Our results point to the potential for substantial gains through policies that encourage reallocation of patients to higher-quality SNFs within their market.
Keywords: nursing homes; value added; health economics; Medicare
JEL Codes: I1; I11; I15; I8; L88
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Nursing home quality (90th percentile) (I18) | Health index (community discharge probability) (I12) |
| Health index (I14) | Length of stay in nursing home (C41) |
| Nursing home quality (90th percentile) (I18) | Length of stay in nursing home (C41) |
| Nursing home quality (90th percentile) (I18) | Medicare savings (H51) |
| Nursing home value added (J17) | CMS star ratings (Y10) |