The Determinants and Variation of Nursing Home Private-Pay Prices

Organizational and Market Structure

Sean Shenghsiu Huang, Jane Banaszak-Holl, Stephanie Yuan, Richard A. Hirth

Research output: Contribution to journalArticleResearchpeer-review

Abstract

Nursing home (NH) care is arguably the most significant financial risk faced by the elderly without long-term care insurance or Medicaid coverage. Annual out-of-pocket expenditures for NH care can easily exceed $70,000. However, our understanding of private-pay prices is limited by data availability. Utilizing a unique data set on NH prices from 2005 through 2010 across eight states, we find that NH price growth has consistently outpaced growth in consumer and medical care prices. After adjusting for geographical and facility differences, for-profit chains charge the lowest prices, independently operated for-profit and nonprofit NHs have similar prices, and nonprofit chains charge the highest prices. Adjusted prices are also likely to be higher when NHs have higher occupancy rates and markets are more concentrated. The significant differences in price across organizational and market structures suggest private-pay prices can be an important factor when evaluating and comparing the value of NH care.

Original languageEnglish
Pages (from-to)1-16
Number of pages16
JournalMedical Care Research and Review
DOIs
Publication statusAccepted/In press - 20 Jun 2019

Keywords

  • market structure
  • medical expenditure
  • nursing home
  • organizational structure
  • price
  • price variation

Cite this

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abstract = "Nursing home (NH) care is arguably the most significant financial risk faced by the elderly without long-term care insurance or Medicaid coverage. Annual out-of-pocket expenditures for NH care can easily exceed $70,000. However, our understanding of private-pay prices is limited by data availability. Utilizing a unique data set on NH prices from 2005 through 2010 across eight states, we find that NH price growth has consistently outpaced growth in consumer and medical care prices. After adjusting for geographical and facility differences, for-profit chains charge the lowest prices, independently operated for-profit and nonprofit NHs have similar prices, and nonprofit chains charge the highest prices. Adjusted prices are also likely to be higher when NHs have higher occupancy rates and markets are more concentrated. The significant differences in price across organizational and market structures suggest private-pay prices can be an important factor when evaluating and comparing the value of NH care.",
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The Determinants and Variation of Nursing Home Private-Pay Prices : Organizational and Market Structure. / Huang, Sean Shenghsiu; Banaszak-Holl, Jane; Yuan, Stephanie; Hirth, Richard A.

In: Medical Care Research and Review, 20.06.2019, p. 1-16.

Research output: Contribution to journalArticleResearchpeer-review

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