Selective Admissions in Nursing Homes: Evidence from a Randomized Audit Study

It has been widely documented that patients in the US who are associated with disadvantaged demographics receive care at lower quality nursing homes. To understand the role that selective admissions may play in contributing to this pattern, we conducted a nationwide audit study of the impact of patient race, payer, and medical condition on responses to about 5,500 availability inquiries sent to about 3,000 nursing homes. We find 10-15% lower availability for Medicaid patients compared to private-pay patients and for patients with Alzheimer’s disease compared to those without; these availability gaps generally increase with nursing home quality. We find no statistically significant evidence of differential availability by race. To quantify the implications of these selective admissions practices, we embed the audit study results in a model of constrained nursing home choice. We estimate that if, counterfactually, Medicaid patients had the same choice sets as their private-pay counterparts, they would attend higher quality nursing homes on average, but the private-Medicaid gap in quality would be reduced by only 5-10%. Our results suggest that supply-side availability differences by payer are widespread, but that they are unlikely to be the primary factor behind the observed gap in quality of nursing homes attended.