Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278863 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16165
Publisher: 
Institute of Labor Economics (IZA), Bonn
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.
Subjects: 
long-term care
nursing homes
patient incentives
provider incentives
cost-sharing
episode-based reimbursement
Medicaid
JEL: 
H51
H75
I11
I13
I18
J14
Document Type: 
Working Paper

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