Hospitalizations in nursing homes: does payer source matter? Evidence from New York State.

The objective of this study was to examine the reasons for different hospitalization rates between Medicaid and private-pay nursing home residents-to disentangle within-facility differences from across-facility variations in hospitalizations between these two types of residents. Multiple data sources (2003) for New York State were linked. Hospitalization was the dependent variable. Individual payer status was the main independent variable. Facilities were stratified into four groups by ownership status and bed-hold payment eligibility. We found both within-facility (Medicaid residents were more likely to be hospitalized than private-pay residents within a facility) and across-facility differences (facilities with a higher concentration of Medicaid residents were more likely to hospitalize their residents) controlling for individual and facility characteristics. The magnitude of within-facility differences varied with facility ownership and bed-hold eligibility. To reduce hospitalizations of Medicaid residents and to improve both quality of care and costs, policymakers may need to align Medicaid's and Medicare's incentives.