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Nursing home prices and market structure: the effect of assisted living industry expansion

Published online by Cambridge University Press:  26 July 2013

John R. Bowblis
John R. Bowblis*
Affiliation:
Department of Economics and Scripps Gerontology Center, Miami University, Oxford, OH, USA
*
*Correspondence to: John R. Bowblis, Department of Economics, Farmer School of Business, Miami University, 800 E. High Street, Oxford OH, USA. Email: jbowblis@miamiOH.edu
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Abstract

Since the 1990s, there has been substantial expansion of facility-based alternatives to nursing home care, such as assisted living facilities. This paper analyzes the relationship between expansion of the assisted living industry, nursing home market structure and nursing home private pay prices using a two-year panel of nursing homes in the State of Ohio. Fixed effect regressions suggest that the expansion of assisted living facilities are associated with increased nursing home concentration, but find no effect on private pay nursing home prices. This would be consistent with assisted livings reducing demand for nursing homes by delaying entry into a nursing home, though assisted livings are not direct competitors of nursing homes.

Type
Articles
Information
Health Economics, Policy and Law , Volume 9 , Issue 1 , January 2014 , pp. 95 - 112
Copyright
Copyright © Cambridge University Press 2013 

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