New OHE Seminar Briefing: Interventions that Encourage High-value Nursing Home Care: Lessons for the UK

This OHE Seminar Briefing summarises a seminar given by Professor David Grabowski, which provided a health economics perspective on how payment and delivery interventions can encourage high-value nursing home care.

A new OHE Seminar Briefing has just been published entitled: Interventions that Encourage High-value Nursing Home Care: Lessons for the UK. This briefing summarises a seminar given by Professor David Grabowski from Harvard University.

In this briefing Professor Grabowski explains that both the US and UK devote significant financial resources to nursing home care, and both have relied on regulation to ensure quality of care. Neither country, however, delivers high-quality long-term care.

Professor Grabowski explores why the market cannot fix this problem. He highlights that the standard economic model of quality competition assumes that: prices are set in the market; no barriers exist to entry and exit; consumers are rational, well-informed, and can reliably gauge the quality of the various providers; and the system is well coordinated, without cost spillovers or cost shifting. Both the US and the UK markets fall far short of exhibiting the characteristics of this model: pricing is not free; consumers with dementia and cognitive impairment are not be full informed; supply is constrained; and the system is fragmented.

However, the US is beginning to embrace market-based approaches to providing positive incentives for improving care. Three of the most important are:

1. Paying for outcomes rather than paying for the number of days of care, i.e. pay-for-performance (P4P).
2. Providing consumers with better information for comparing quality through the use of “report cards” for every nursing home provider; these must be easily accessible online and include comparisons of several dimensions of care.
3. Integrating care by paying not by provider but by service, whether that service is delivered in a nursing homes, another long-term care facility or by other health care providers.

• Low payment as a cause of lower quality may be addressed through P4P, whilst;
• Incomplete information may be best addressed through report cards;
• Coordination of care at the system, or national, level is essential for both the effective coordination of care and the best use of financial resources.

Access the full briefing here.