The Balanced Budget Act (1997) and the supply of nursing home subacute care

Academic Article

Abstract

  • This article examines the impact of the Medicare prospective payment system (PPS) on the supply of subacute care services by nursing homes. A quasi-experimental interrupted time-series design using Heckman's two-stage regression model is employed to test for changes before and after the implementation of Medicare PPS. Our findings suggest that the change in Medicare reimbursement from cost-based to PPS under the Balanced Budget Act of 1997 resulted in a decrease of 1.7 percent in the supply of subacute care beds by nursing homes. However, this was a one-time, short-term negative effect. The supply of nursing home subacute care remained stable in the long-term. Other environmental factors, such as Medicare hospital discharges, hospital-based subacute care, Medicare managed care penetration, availability of home health, and per capita income were associated with nursing home subacute care supply. Organizational-level factors, such as occupancy rate, RN staff mix, and Medicare payer mix were also predictors of nursing home subacute care supply. © 2007 Aspen Publishers, Inc.
  • Published In

    Author List

  • Qaseem A; Weech-Maldonado R; Mkanta W
  • Start Page

  • 38
  • End Page

  • 47
  • Volume

  • 34
  • Issue

  • 2