Abstract
This study was part of a major review of long-term care policy in the state of Ohio. The authors analyzed 1532 cost reports filed by nursing homes in 1975-1976 with the Ohio Medical Assistance (Medicaid) program. The objective was to guide policy on size (economies of scale), ownership, certification status, and reimbursement. Economies of scale were not found important: skilled nursing facilities (SNFs) offered the only evidence of operation below optimal scale, and the savings attributable to achieving optimal scale (increasing average bed size from 108 to 143) amounted to only $0.20 per patient day. Proprietary facilities were consistently less costly than voluntary or governmental facilities; however, quality measures were not available, and the largest cost differential was in direct cost where quality might be affected. Hypothesized greater efficiency in proprietary facilities could not be rejected--if accurate, the cost savings were very large ($3.92 to $9.14 per patient day for all homes together). As expected, skilled facilities were more costly than intermediate care facilities (ICFs), and the differential ($3.31 per patient day) was large enough to suggest transfer of misplaced patients. High proportional Medicaid utilization of a home tended to reduce cost, possibly because of the very low ceiling rates paid by the Ohio Medicaid program during the period of this study (1975-76 data). High utilization in general reduced average cost, presumably by spreading fixed cost.
Full text
PDF
Selected References
These references are in PubMed. This may not be the complete list of references from this article.
- Bishop C. E. Nursing home cost studies and reimbursement issues. Health Care Financ Rev. 1980 Spring;1(4):47–64. [PMC free article] [PubMed] [Google Scholar]
- Gibson R. M., Mueller M. S. National health expenditures, fiscal year 1976. Soc Secur Bull. 1977 Apr;40(4):3–22. [PubMed] [Google Scholar]
- Levey S., Stotsky B. A., Kinloch D. R., Ruchlin H. S., Oppenheim W. Nursing homes in Massachusetts: industry in transition. Am J Public Health. 1975 Jan;65(1):66–71. doi: 10.2105/ajph.65.1.66. [DOI] [PMC free article] [PubMed] [Google Scholar]
- Ruchlin H. S., Levey S. Nursing home cost analysis: a case study. Inquiry. 1972 Sep;9(3):3–15. [PubMed] [Google Scholar]
- Scanlon W. J. A theory of the nursing home market. Inquiry. 1980 Spring;17(1):25–41. [PubMed] [Google Scholar]
- Smith H. L., Fottler M. D. Costs and cost containment in nursing homes. Health Serv Res. 1981 Spring;16(1):17–41. [PMC free article] [PubMed] [Google Scholar]
- Weissert W. G. Costs of adult day care: a comparison to nursing homes. Inquiry. 1978 Mar;15(1):10–19. [PubMed] [Google Scholar]
- Winn S. Assessment of cost related characteristics and conditions of long-term care patients. Inquiry. 1975 Dec;12(4):344–353. [PubMed] [Google Scholar]