Do report cards predict future quality? The case of skilled nursing facilities

Publication Abstract

Cornell, Portia Y., David C. Grabowski, Edward Norton, and Momotazur Rahman. 2019. "Do report cards predict future quality? The case of skilled nursing facilities." Journal of Health Economics, 66: 208-221.

Report cards on provider performance are intended to improve consumer decision-making and address information gaps in the market for quality. However, inadequate risk adjustment of report-card measures often biases comparisons across providers. We test whether going to a skilled nursing facility (SNF) with a higher star rating leads to better quality outcomes for a patient. We exploit variation over time in the distance from a patient's residential ZIP code to SNFs with different ratings to estimate the causal effect of admission to a higher-rated SNF on health care outcomes, including mortality. We found that patients who go to higher-rated SNFs achieved better outcomes, supporting the validity of the SNF report card ratings.

10.1016/j.jhealeco.2019.05.008

Keywords:
Skilled nursing facility Post-acute care Instrumental variables Nursing home quality of care Star ratings

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