David C. Grabowski is the principal investigator and contact person for this grant.

Historically, nursing homes predominantly provided custodial care to a long-stay, chronically ill population. However, a series of policy changes greatly expanded the post-acute, Medicare-financed side of the market. The Centers for Medicare & Medicaid Services also introduced a national nursing home report card initiative with the intention of using market incentives to improve sector performance. Medicare’s entry into this market presents an opportunity to address the longstanding issue of low quality among the chronic care nursing home population. Despite important differences in the needs of chronic and post-acute nursing home populations, quality of care within a facility has characteristics of a “public good” shared across all residents. The central implication of this observation is that Medicare resources—and policies directed at improving care for Medicare residents—may spill over to other residents. This project develops and applies a framework for evaluating the implications of Medicare’s increasing involvement in this market.

By examining the link between post-acute Medicare nursing home policy and outcomes of care for the custodial nursing home population, this study provides an opportunity to improve the quality of care for the millions of Americans receiving care in the nursing home setting. This study will also provide nursing home researchers with a new framework for jointly analyzing the provision of post-acute and chronic nursing home services. Thus, the information derived from this study has the potential to make important research and policy-relevant contributions.