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Increasing Medicaid reimbursement to nursing homes slightly improves quality of care

Although many nursing homes provide good care, the quality of care in Government-certified nursing homes has concerned consumers, health care professionals, and policymakers for over 25 years. Medicaid—the dominant payer for nursing home services in the United States—reimburses nursing homes for care of impoverished individuals.

An increase in Medicaid reimbursement to New York State and all U.S. nursing homes in 1996 resulted in a small decrease in the likelihood of pressure sores. Depending on the model used, an increase in reimbursement of $1 was associated with between a 0.9969 (for all U.S. markets) and a 0.9983 (for New York State) lower likelihood (1 is equal likelihood) of a resident developing pressure sores, a frequently used indicator of nursing home quality of care.

A weakness of this quality of care measure is that 96 percent of residents do not have facility-acquired pressure sores. Future research with alternative outcome-based quality measures like pressure sores is needed to determine the exact gains in quality of care from increased Medicaid reimbursement, says David C. Grabowski, Ph.D., of the University of Alabama at Birmingham. In the study, which was supported in part by the Agency for Healthcare Research and Quality (National Research Service Award training grant T32 HS00084), he analyzed data from State surveys of all federally certified nursing homes to determine the impact of Medicaid reimbursement on the rate of pressure sores. These sores, which are preventable and treatable, range from persistent skin redness to large open lesions that can expose tissue and bone.

Previous studies have generally measured nursing home care quality using either input-based measures (nurse-to-patient ratio) or regulatory violations. When the investigators in this study used the nurse-to-patient quality measure, they found a slight increase in the nurse-to-patient ratio with a $1 increase in Medicaid reimbursement. These findings contradict puzzling findings from earlier studies showing that increased Medicaid reimbursement decreased the level of nursing home quality in the presence of certificate-of-need and construction moratorium regulations.

See "Medicaid reimbursement and the quality of nursing home care," by Dr. Grabowski, in the Journal of Health Economics 20, pp. 549-569, 2001.

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