Excess demand and cost relationships among Kentucky nursing homes.
Davis, Mark A
Date of Pub
Freeman, James W
This article examines the influence of excess demand on nursing home costs. Previous work indicates that excess demand, reflected
in a pervasive shortage of nursing home beds, constrains market competition and patient care expenditures. According to this
view, nursing homes located in underbedded markets can reduce costs and quality with impunity because there is no pressure
to compete for residents. Predictions based on the excess demand argument were tested using 1989 data from a sample of 179
Kentucky nursing homes. Overall, the results provide partial support for the excess demand argument. Factors that may counteract
the influence of excess demand are considered. Finally, the role of competition in nursing home markets and difficulties associated
with making it operational are discussed.
Bed Occupancy : Cost Allocation : Data Collection : Economic Competition : Health Care Costs/statistics & numerical data :
Health Facility Size : Health Services Needs and Demand/economics/statistics & numerical data : Health Services Research :
Kentucky : Medicaid : Nursing Homes/economics/statistics & numerical data/standards/utilization : Policy Making : Quality
of Health Care : Regression Analysis : United States