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Nursing Home Costs Outpace Inflation, Other Medical Care

FRIDAY, June 28, 2019 -- Out-of-pocket costs for nursing home (NH) care are high and rising faster than other medical care and consumer prices, according to a study published online June 20 in Medical Care Research and Review.

Sean Huang, Ph.D., from the Georgetown University Medical Center in Washington, D.C., and colleagues used a unique dataset on NH prices from 2005 through 2010 across eight states to better understand private-pay prices.

The researchers found that NH price growth consistently outpaced growth in consumer and medical care prices. For-profit chains charged the lowest prices, individually operated for-profit and nonprofit NHs had similar prices, and nonprofit chains charged the highest prices after adjustment for geographical and facility differences. The difference in price between for-profit and nonprofit chains was about $4,160 annually, or 6.2 percent of the average price of for-profit NHs. There was also substantial geographic pricing variation, with the lowest average NH out-of-pocket costs of $131 a day in Texas in 2010 versus $334 per day in New York. Higher adjusted prices were more likely when NHs had higher occupancy rates and markets were more concentrated.

"The significant differences in price across organizational and market structures suggest private-pay prices can be an important factor when evaluating and comparing the value of NH care," the authors write.

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Posted: June 2019

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