Medicaid nursing facility rates, capacity, and utilization: a structural analysis

This analysis extends earlier work using national data to examine Medicaid nursing facility (NF) utilization (participants per aged population) and its interrelationships with Medicaid per diem NF reimbursement rates and NF bed capacity, using state-level data over 19 years to estimate two-stage structural equations. Findings demonstrate complex relationships among these factors. Reimbursement rates showed no demonstrable impact on utilization but positive effects on beds. Beds, in turn, positively predict utilization and negatively predict rates. Findings suggest that policy makers might focus on constraining Medicaid NF costs through controlling bed stock rather than by keeping rates lower, which can have untoward effects on quality and equity.