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Health care expenditures in the United States currently exceed $3 trillion with almost 1/3rd paid by the federal government. With the rising costs of health care, policymakers are increasingly concerned about the value of expenditures. In particular, a high degree of variation in expenditures in the post-acute care setting has led many to believe that post-acute care may be the next frontier in controlling health care expenditures, and nursing homes account for about half of all post-acute care expenditures. Furthermore, policymakers are skeptical about the dramatic improvements in nursing home quality following the release of 5-star rating system in 2008, with some questioning if the improvements are real. Finally, there are concerns about health inequalities between different caste/ethnicity groups and potential repercussions in developing countries. This dissertation informs these concerns by exploring the following three specific questions: 1) do patients admitted to high-spending skilled nursing facilities (SNFs) for their post-acute care needs have improved health outcomes and expenditures?, 2) are the improvements in reported staffing quality corroborated by increases in nursing home expenditures following the release of 5-star rating system?, and 3) what are the trends in malnutrition inequalities between the marginalized communities (Dalits) and non-marginalized communities (non-Dalits) in Nepal and what factors, if any, account for the malnutrition inequalities? We use several data sources and advanced econometric methods to answer different questions in this dissertation. In Chapter 2, we identify Medicare fee-for-service patients admitted to SNFs using Medicare claims data. Using differential distance as an instrument to account for patient selection into high-spending vs. low-spending SNFs, we estimate the causal effect of admission to high-spending SNFs on patient outcomes and expenditures. We find that patients admitted to high-spending SNFs are significantly less likely to be rehospitalized within 30, 90, and 180 days following the SNF admission but there is no difference in mortality. Despite a reduction in rehospitalization, total SNF and hospital expenditures during the 30, 90, and 180 days are higher for those admitted to high-spending SNFs vs. low-spending SNFs; the increased spending for the post-acute care stay more than offsets the reduction in spending from fewer hospitalizations. While there may be other outcomes of interest including changes in functional status that patients care about, from Medicare’s perspective, the returns to additional expenditures on post-acute care in SNFs appear low in terms of rehospitalization and mortality. In Chapter 3, we obtain publicly available data on nursing home expenditures and previously unreleased data on nursing home staffing from the CMS to analyze the relationship between expenditures and staffing. Using facility and year fixed-effects regressions, we estimate the relationship between changes in expenditures and changes in staffing scores within facilities pre. vs. post-5-star period. We find that the relationship between expenditures and licensed practical nurses (LPN) staffing is weaker in the post-5-star period in the overall sample, as well as across multiple subgroups. In addition, we observe a weaker relationship between expenditures and registered nurses (RN) staffing among for-profit facilities with a high share of Medicaid residents in the post-5-star period. Weaker relationship between expenditures and staffing in the post-5-star era is concerning as it suggests the potential for gaming of self-reported staffing scores. While the Centers for Medicare and Medicaid Services (CMS) has instituted a more robust reporting system for staffing through the payroll system in recent years to address potential gaming, our findings suggest a need to continue monitoring staffing data in nursing homes. Finally, in Chapter 4 we use data on children below the age of 5 from the Demographic and Health Survey for Nepal for 2006, 2011, and 2016 to examine malnutrition inequalities between marginalized communities (Dalits) and non-marginalized communities (non-Dalits). We find that malnutrition inequality between Dalits and non-Dalits has declined substantially from 2006 to 2016. Furthermore, using Blinder-Oaxaca decomposition techniques, we find that the differences in family education and wealth account for most of the difference in malnutrition inequality across all years. Although it is encouraging that malnutrition inequality between these two groups has declined in recent years, differences in the levels of education and wealth remain. Policies designed to narrow the gaps in education and wealth are important if we are to further address malnutrition inequalities between Dalit and non-Dalit groups in Nepal.


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