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Determinants of nursing home choice: Does reported quality matter?
Hendrik Schmitz1,2, Magdalena A Stroka-Wetsch2,3
1Department Economics, Paderborn University, Germany.
Health Economics
|April 16, 2020
Summary
Report cards aim to improve nursing home quality, but this study found reported quality did not significantly influence consumer choice. Factors like distance and price were more impactful in selecting a nursing home.
Area of Science:
- Health Economics
- Health Services Research
- Gerontology
Background:
- Information asymmetry in healthcare markets necessitates strategies like quality report cards.
- Policymakers utilize report cards to enhance care quality, particularly for older adults.
- Nursing home report cards were introduced in Germany starting in 2009.
Purpose of the Study:
- To examine the impact of nursing home report cards on consumer choice.
- To investigate the relationship between reported quality, price, location, and nursing home selection.
- To assess the effectiveness of quality information in the German nursing home market.
Main Methods:
- Utilized individual-level data from a large German sickness fund merged with institutional data.
- Analyzed a 2010 sample including nursing homes evaluated before and after report card introduction.
- Distinguished between above-average, below-average, and non-rated nursing homes.
Main Results:
- Nursing home choice probability decreased with increasing distance and price.
- No economically significant effect of reported quality on individuals' nursing home choices was found.
- Report cards did not demonstrably influence consumer selection despite policy intentions.
Conclusions:
- Current nursing home report cards may not effectively guide consumer decisions.
- Price and location remain primary drivers in nursing home selection over reported quality.
- Further research is needed to understand how to make quality information more influential in healthcare choices.
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