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Ownership Status and Length of Stay in Skilled Nursing Facilities

Ownership Status and Length of Stay in Skilled Nursing Facilities In 1998, Medicare implemented the Prospective Payment System for post-acute care provided by skilled nursing facilities. This system paid a fixed price per day above the cost of care, creating an incentive to provide longer length of stays to increase revenues. In this paper, we examine whether there are systematic differences in length of stay for post-acute care patients between for-profit and not-for-profit skilled nursing facilities. Based on the financial incentives inherent in the reimbursement system, we develop a conceptual framework that argues for-profits will provide a greater number of days of care to increase profits relative to not-for-profits. We find significant differences in length of stay by ownership, but once patient selection into a facility is accounted for using two-staged residual inclusion, there is no statistical differences in length of stay between for-profit and not-for-profit facilities. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Applied Gerontology SAGE

Ownership Status and Length of Stay in Skilled Nursing Facilities

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References (31)

Publisher
SAGE
Copyright
© The Author(s) 2015
ISSN
0733-4648
eISSN
1552-4523
DOI
10.1177/0733464815570670
pmid
25698720
Publisher site
See Article on Publisher Site

Abstract

In 1998, Medicare implemented the Prospective Payment System for post-acute care provided by skilled nursing facilities. This system paid a fixed price per day above the cost of care, creating an incentive to provide longer length of stays to increase revenues. In this paper, we examine whether there are systematic differences in length of stay for post-acute care patients between for-profit and not-for-profit skilled nursing facilities. Based on the financial incentives inherent in the reimbursement system, we develop a conceptual framework that argues for-profits will provide a greater number of days of care to increase profits relative to not-for-profits. We find significant differences in length of stay by ownership, but once patient selection into a facility is accounted for using two-staged residual inclusion, there is no statistical differences in length of stay between for-profit and not-for-profit facilities.

Journal

Journal of Applied GerontologySAGE

Published: Mar 1, 2016

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