Equilibrium Quality Choices in Nursing Homes

This dissertation examines the resulting equilibrium quality for nursing homes from changes in the Medicaid reimbursement rate. The first chapter summarizes and evaluates the current literature on nursing homes. The second chapter builds upon the model in the present literature by allowing Medicaid patients to value quality regardless of market conditions. In addition, the occupancy of the home and the mix of patients (private-pay or Medicaid) are included in the empirical work to determine their effects on quality from changes in the Medicaid rate. This second chapter shows that if Medicaid patients are allowed to value quality, an increase in the Medicaid rate will lead to an increase in the quality that a home provides regardless of the market conditions. Furthermore, its also shown that the quality increase will be larger for homes with a higher percentage of private-pay patients and a higher occupancy. In the third chapter, a new model of nursing home behavior is developed to include rivalry. This model tries to closer match reality and shows that as the greater importance that private-pay patients place on quality relative to price the more nursing homes will compete in quality. Thus, nursing homes will increase quality from increases in the Medicaid rate, and homes will match other homes' increases in quality. The increase in quality from increases in the Medicaid rate is shown to hold even when private-pay patients place a greater importance on price relative to quality.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Economics

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2015

Author dc:creator

• Copeland, Craig Stanton

Contributors dc:contributor

• Arnould, Richard J.

• Economics, Theory

Language dc:language

eng

Identifier

(MiAaPQ)AAI9737081

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/85611