Out-of-pocket nursing home costs grew as much as 30% between 2005 and 2010, according to new research from Georgetown University.
The study, published in Medical Care Research and Review, examined prices in eight states and found that they rose faster than the national inflation rate and, in most cases, overall medical care costs.
Regulations that reduce capacity constraints and allow more competition could help contain soaring long-term care prices, said Sean Huang, Ph.D., assistant professor in the School of Nursing & Health Studies at Georgetown University Medical Center. His team found prices varied substantially across states and among for-profit and non-profit provider chains.
Even when adjusting for geography and staffing levels, Huang said for-profit nursing home chains charged the lowest prices, and nonprofit nursing home chains provided the most expensive care at a price differential of about $4,160, or 6%, annually. That finding did not hold true for independently operated nursing homes.
While the study controlled for direct care nurse staffing levels, it did not take into account ancillary services staff or amenities. Huang told McKnight’s that might be one driver of higher prices at non-profit chains.
The researchers also found that areas with higher market concentration of nursing homes — meaning less competition — have higher prices.
The study found the highest increases over time were in California, Florida and Vermont, where out-of-pocket prices jumped by about 30% over six years. Those were followed by Ohio at 22.6%, New York at 21.8% and Texas at 15.2%
During the same time period, medical care inflation hit 20.2%, while the consumer price index was at 11.7%.
Huang’s data set included about 3,900 nursing homes per year studied, or 27% of the U.S. marketplace. He looked for price differences among states but also within them.
“Prices are also higher among nursing homes that have higher occupancy rates,” Huang said. “Therefore, regulations to ease capacity constraints and allow more competition to some extent might be able to contain prices.”
While Huang’s study did not examine causality, he wants it to bring more transparency to the issue both for consumers and policy makers. He said consumers should be able to consider both price and quality when choosing nursing homes, and that the addition of price information to the Nursing Home Compare system would be “a nice addition.”
“Very few people have studied this topic, so it required building the largest dataset on nursing home prices to date,” he said. “This kind of information is very valuable to potential consumers of this care.”