Inequality in nursing home care: The direct and indirect effects of payment type

Christopher Donoghue, Fordham University


The goal of this research was to examine the effects of an individual's payment type on the quality of care received in American nursing homes. The analysis utilized national random samples of nursing homes, current residents and recent discharges from the 1999 National Nursing Home Survey. A facility-level test was first conducted to confirm the negative association between a home's percentage of beds designated for Medicaid and the registered nurse to patient ratio, that had been found in previous research. Recently admitted elderly nursing home patients were found more likely to reside in homes with higher nursing ratios if they paid privately instead of relying on Medicaid, except when controlling for one's living arrangements immediately prior to admission. Patients who had been admitted from home or assisted living were found more likely than those admitted from inpatient facilities to pay privately at admission and to reside in a home with a higher nursing ratio. In a larger sample of current elderly patients, it was further revealed that those who paid privately were not more likely to utilize more health services than Medicaid recipients at the bivariate level, but a test for interaction indicated that privately paying patients utilized more health services than Medicaid recipients when they experienced higher levels of functional disability. Recently discharged elderly patients who paid privately were also found significantly less likely than Medicaid recipients to be discharged due to death or hospitalization. The results of this analysis also demonstrated expected links between structural, process and outcome quality indicators. Overall, the results suggest that low public reimbursement rates place Medicaid recipients at a disadvantage to privately paying patients. The findings further indicate that regulatory strategies such as CON measures and Construction Moratorium have not limited the nursing home industry's ability to build new homes to target privately paying patients. The results also justify concerns that nursing homes favor patients who pay privately, despite federally mandated restrictions against preferential treatment based on payment type.

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Recommended Citation

Donoghue, Christopher, "Inequality in nursing home care: The direct and indirect effects of payment type" (2004). ETD Collection for Fordham University. AAI3116862.