Intellectual Merit of Project According to the Centers for Medicare and Medicaid (CMS), national health expenditures for nursing home care in 2000 were $98,911 million. Federal and State Medicaid payments accounted for 48 percent of these expenditures, private payment accounted for 40 percent while Medicare accounted for 10 percent of the total. Television commercials tell us of the abuse that continues to occur in nursing homes. And the aging of the population is a reality that tells us many people will need the services of a nursing home at some point in their lives. Certificate-of-need (CON) policies were originally established as an attempt to contain escalating health care costs and to increase the accessibility of care to those most in need and to improve the quality of health services. In general, a CON program involves the regulation of the building, expansion, and modernization of health care facilities and capital equipment on the part of institutional health care providers. However, no regulation comes without a cost. With respect to the nursing home industry, it is not clear that over the last 26 years since the passage of The National Health Planning and Resources Development Act and its subsequent repeal that the continued use of CON policies by States has achieved its intended purposes of improved quality of nursing home care, increased accessibility to nursing home care for those most in need, or the containment of public expenditures on nursing home care. This project will create a database that will contain observations on all Medicaidcertified nursing homes from 1981-2003. The database will provide information on facility and resident characteristics, Medicaid reimbursement methods and rates, as well as the presence or absence of CON policies in the state in which the nursing home is located. Three econometric models will be estimated to test whether or not there is a difference in the quality of care, the access to care, and the cost of care between those States that have eliminated CON policies and those States that still retain CON policies. These models will allow the hypotheses that quality of care is better in States that have eliminated CON policies, that access to care for Medicaid patients is greater in States that have eliminated CON policies, and that Medicaid nursing home costs will be higher in those States that have eliminated CON policies. Broader Impacts Resulting from Proposed Activity This project will create a database that not only will answer the questions of interest specific to this proposal but will include information sufficient to answer many other questions concerning the nursing home industry such as the effect of staffing on nursing home quality, the effect of ownership on quality and cost, and the effect of reimbursement rates on quality. This database will provide the opportunity for collaboration with other researchers whose interests lie in the workings of the nursing home industry. With many States facing budget limitations and continued concerns over the rising costs of Medicaid payments, results may prove useful for policymakers concerning the efficient use of resources.
