The Effect of State Policies on Nursing Home Resident Outcomes

OBJECTIVES To test the effect of changes in Medicaid reimbursement on clinical outcomes of long-stay nursing home (NH) residents. DESIGN Longitudinal, retrospective study of NHs, merging aggregated resident-level quality measures with facility characteristics and state policy survey data. SETTING All free-standing NHs in urban counties with at least 20 long-stay residents per quarter (length of stay > 90 days) in the continental United States between 1999 and 2005. PARTICIPANTS Long-stay NH residents INTERVENTIONS Annual state Medicaid average per diem reimbursement and the presence of case-mix reimbursement in each year. MEASUREMENTS Quarterly facility-aggregated, risk-adjusted quality-of-care measures surpassing a threshold for functional (activity of daily living) decline, physical restraint use, pressure ulcer incidence or worsening, and persistent pain. RESULTS All outcomes showed an improvement trend over the study period, particularly physical restraint use. Facility fixed-effect regressions revealed that a $10 increase in Medicaid payment increased the likelihood of a NH meeting quality thresholds by 9% for functional decline, 5% for pain control, and 2% for pressure ulcers but not reduced use of physical restraints. Facilities in states that increased Medicaid payment most showed the greatest improvement in outcomes. The introduction of case-mix reimbursement was unrelated to quality improvement. CONCLUSION Improvements in the clinical quality of NH care have been achieved, particularly where Medicaid payment has increased, generally from a lower baseline. Although this is a positive finding, challenges to implementing efficient reimbursement policies remain.