The effect of case-mix reimbursement on nursing home spenddown in New York

Date of Award


Degree Type


Degree Name

Doctor of Philosophy (PhD)


Social Sciences


Vernon Greene



Subject Categories

Business Administration, Management, and Operations


In recent years state and federal policymakers have become concerned about the effect of the high costs of nursing home care on both individual patients and public budgets. Initial reports of the potentially catastrophic financial impact of nursing home care on a high proportion of the elderly were subsequently brought into question by studies using national samples. State specific studies of spenddown, however, suggest that the national studies may have underestimated the extent of the problem. Neither national or state-specific studies have related the occurrence of spenddown to specific reimbursement methodologies. Using a random sample of 3366 patients admitted to New York nursing homes as private payers during the period 1985 through 1988, this study documents the prevalence of spenddown in New York and uses event history methods to test hypotheses regarding changes in risk for spenddown following the start of New York's case-mix reimbursement system, and regarding the effect of nursing home and market characteristics on spenddown risk. It was found that (1) spenddown in New York is substantially higher than reported in other state and national studies; (2) subjects admitted in the years following the start of RUG-II were significantly less likely to convert to Medicaid; and (3) during the years 1985 through 1988 there was a dramatic decrease in Medicaid admissions and a corresponding increase in Medicare admissions.


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