David C. Grabowski is the principal investigator on this project and is the project contact.

Substandard nursing home quality has been a persistent policy issue over the last three decades. Similarly, low staffing has also been an important concern, with two recent calls by independent expert panels for a more stringent minimum staffing standard in US nursing homes. Given that Medicaid accounts for roughly two-thirds of all patient days spent in nursing homes, some states have mandated that larger payments be allocated to increased staffing to reach new required staffing levels. Medicaid accounts for about 20% of states’ spending, and Medicaid spending growth has outpaced national health spending since the late 1980s. Not surprisingly, many states have identified nursing home spending cuts as a potential means toward addressing widening state budget shortfalls over the past several years.

The effect these budgetary cuts may have on nursing home quality is unclear, because the empirical literature has not always provided a definitive picture regarding the interrelationship of factors such as Medicaid payment levels, staffing, and nursing home quality. In order to address this issue, this study merges resident-level minimum dataset (MDS) assessments for the years 1998-2004, from all 48 contiguous states with facility-level Online Survey Certification Automated Records (OSCAR), Area Resource File market information, and data on state policies collected as part of this project. By using recent data from every Medicaid and Medicare certified nursing facility in the United States over multiple years, this study will greatly increase our understanding of the role of Medicaid reimbursement and staffing in encouraging the provision of high-quality care in nursing homes. Moreover, because nearly every state made cuts in Medicaid expenditures in their recent budgets, our analyses will cover an important period of decline in the generosity of state Medicaid payment systems.