Patient versus provider incentives in long-term care

Hackmann, Martin B. ; Pohl, Vincent ; Ziebarth, Nicolas R.

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URN: urn:nbn:de:bsz:180-madoc-663889
Document Type: Working paper
Year of publication: 2023
The title of a journal, publication series: ZEW Discussion Papers
Volume: 23-055
Place of publication: Mannheim
Publication language: English
Institution: School of Law and Economics > Sonstige - Fakultät für Rechtswissenschaft und Volkswirtschaftslehre
Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: H51 , H75 , I11 , I13 , I18 , J14,
Keywords (English): long-term care, nursing homes, patient incentives , provider incentives , cost-sharing , episode-based reimbursement , medicaid
Abstract: How do patient and provider incentives affect the provision of long-term care? Our analysis of 551 thousand nursing home stays yields three main insights. First, Medicaid-covered residents prolong their stays instead of transitioning to community-based care due to limited cost-sharing. 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

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