| This dissertation investigates the effects of Medicare's Prospective Payment System (PPS) for skilled nursing facilities (SNFs) on quality of care and access to care. Since implementation of the PPS system in 1998, a number of providers have blamed the new payment system for serious financial troubles and have warned that rates are inadequate to provide a sufficient level of care for some residents. The government responded by temporarily increasing rates, providing a natural experiment to test how Medicare payment affects nursing home behavior. In this dissertation, Minimum Data Set (MDS) assessment data from 1995 through 2000 for the states of Ohio, Kansas, South Dakota, Mississippi and Maine were linked with Online Survey, Certification and Reporting (OSCAR) data to form a panel data set. Resident-level data were used to measure changes in outcomes of care, represented by fractures, urinary tract infections, pressure sores, and unexpected weight loss. A difference-in-difference model was used to investigate the facility-level effects of PPS and subsequent rate changes, a design that allows the separation of the policy effects from general industry trends. Results show that quality was adversely affected by the funding cut implemented with the new system, and that subsequent rate increases mitigated the adverse effects to some extent. Access to care for Medicare beneficiaries appears not to have been affected, with the possible exception of access to hospital-based facilities. Findings from this investigation could help to guide payment and policy modifications that support the provision of quality nursing home care. |
