Abstract
Because minimum government standards for quality regulate only part of the market failure, they may have unintended effects. We present a general theory of how government regulation of quality of care may affect different market segments, and test the hypotheses for the nursing home market. OBRA 1987 was a sweeping government reform to improve the quality of nursing home care. We study how the effect of OBRA on the quality of nursing home care, measured by resident outcomes, varied with nursing home profitability. Using a semi-parametric method to control for the endogenous effects of regulation, we found that this landmark legislation had a negative effect on the quality of care in less profitable nursing homes, but improved the quality in more profitable nursing homes during the initial period after OBRA. But, this legislation had no statistically significant effect in the later period when the regulation was weakly enforced.
Publication types
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Research Support, Non-U.S. Gov't
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Research Support, U.S. Gov't, Non-P.H.S.
MeSH terms
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Aged
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Facility Regulation and Control / legislation & jurisprudence*
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Female
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Government Regulation*
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Health Care Reform / economics
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Health Care Reform / legislation & jurisprudence*
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Health Care Sector / legislation & jurisprudence*
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Humans
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Income / statistics & numerical data
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Income / trends
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Law Enforcement
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Longitudinal Studies
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Male
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Medicaid / legislation & jurisprudence*
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Medicaid / standards
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Middle Aged
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Models, Econometric
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National Academies of Science, Engineering, and Medicine, U.S., Health and Medicine Division
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Nursing Homes / economics
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Nursing Homes / legislation & jurisprudence*
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Nursing Homes / standards
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Outcome Assessment, Health Care / statistics & numerical data
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Poverty
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Quality Indicators, Health Care
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Quality of Health Care / economics
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Quality of Health Care / legislation & jurisprudence*
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Quality of Health Care / trends
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United States