“What would nursing homes do with more money?” – Journalist’s Resource

nursing home

by Chloe Reichel

“As Medicaid reimbursement rates increase, nursing homes add more licensed staff per resident, improving quality of care, a new model suggests.

“he issue: As baby boomers age, they are bound to put more strain on nursing homes. A report to Congress prepared by the Center for Medicare and Medicaid Services estimates that over 91 percent of nursing homes are staffed below the level that is minimally necessary to provide all needed care.

“The challenge of staffing is linked to economic and regulatory barriers. Nursing care is a costly national expense–in 2016, total expenditures stood at $163 billion, with Medicaid contributing $50 billion to this sum, according to data from CMS. States determine their own rates for nursing home reimbursements under Medicaid, balancing desires to achieve particular outcomes related to quality of and access to care with the need to meet budgetary requirements. New research produced by Martin Hackmann, an economist at UCLA, looks at how small changes in Medicaid reimbursements might improve quality of care.

“An academic study worth reading:Incentivizing Better Quality of Care: The Role of Medicaid and Competition in the Nursing Home Industry.”

This study found “Combining detailed industry data from Pennsylvania with a model of demand and supply, … that low Medicaid reimbursement rates are a key contributor to quality shortfalls in this industry.”

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