homes with different initial staffi ng levels, and in fact the increase is fi rst discernible between 1998 and 1999, before the staffi ng legislation was passed.
19
For RNs, there is an evident reduction in the average hours worked across all fi rms, but the reduc-
tions are largest among those fi rms that had the highest initial staffi ng levels. Thus, the coeffi cients on GAP in Table 2 in Models 1 and 2 suggest that the law may have
increased RN staffi ng by about 10.5 percent for the homes initially out of compli- ance with the law but this should be understood as the law preventing a decline in
these hours in an absolute sense. But, these results are not robust to the inclusion of a control for HPRD, and an analysis of preperiod trends shows that the change had
already become apparent before the law had passed. Other research has suggested that a switch to Medicare prospective payment for skilled nursing homes in the Balanced
Budget Act of 1997 may have created fi nancial pressure beginning in July of 1998 for nursing homes to substitute away from RNs in favor of LVNs Konetzka, Norton,
Sloane, Kilpatrick, and Stearns 2006.
20
It may be that fi rms with low staffi ng levels were more constrained in their ability to do this, producing the patterns in staffi ng by
occupation observed.
B. Patient Outcomes and Facility Defi ciencies
Figure 3 presents changes in two important patient outcomes as a function of their preperiod staffi ng levels. Changes in the fraction of patients with pressure sores not
present on admission are presented in the top panel, and changes in the fraction of contractures not present at admission are displayed in the lower panel. Recall that both
of these outcomes are believed to be preventable with regular assistance with mobility, the type of care generally provided by nurse aides. If increased nurse aide hours reduce
the prevalence of these outcomes, we would expect to see patterns that are a mirror image refl ected around the X- axis of those found for nurse aide hours worked in the
top panel of Figure 2. That is, we would expect that the prevalence of such outcomes changes relatively little for fi rms with the highest initial staffi ng levels, and then ex-
hibits greater and greater declines for fi rms with initial staffi ng levels further below the 3.2 threshold. No such patterns are evident in the data for either outcome, suggesting
little impact of the staffi ng legislation.
Table 3 tells this story with more precision. Panel A presents the results for pressure sores Columns 1 to 3 and contractures Columns 4 to 6, with the coeffi cient on
GAP estimated using the three specifi cations described above for Table 2. For pres-
sure sores, the point estimates of GAP are positive across each model suggesting an adverse impact on patient outcomes. The effects are never statistically distinguishable
from zero, however, and are small in magnitude.
21
In Panel B, I present tests of the common trends assumption by estimating the relationship between GAP and changes
in the outcomes in the preperiod 1996–99. In each specifi cation, there is no evidence
19. See Figure 3 of the Appendix. 20. There was also some concern that repeal of the Boren amendment in 1997 may also have led states to cut
Medicaid rates, but Grabowski, Feng, Intrator, and Mor 2004 documents that Medicaid reimbursements did not change much over the time period.
21. Recall from Table 1 that the average rate of patients with pressure sores not present on admission is 3.9 percent. An “average” out- of- compliance fi rm is predicted to have an increase of 0.5 × 0.0077, or about
0.0038.
of differential trends in the preperiod, supporting the validity of the research design used here.
Columns 4 to 6 in Table 3 show similar results for the fraction of residents with contractures not present on admission. The point estimates on GAP are positive in
all specifi cations, but none are statistically signifi cant. Again, the magnitudes of the estimates are small in an economic sense as well, and there is no evidence in Panel B
of the table that differential trends in the fraction of patients with contractures were present before passage of the law.
Total defi ciency citations during yearly certifi cation inspections are often used in the nursing home quality literature as an overall proxy for the quality of care provided
by a facility. Table 4 examines whether the staffi ng legislation had an impact on this
Figure 3 Effects of Minimum Staffi ng Legislation on Patient Outcomes 3- Year Moving
Averages
Notes: Each fi gure displays the change in the fraction of patients with pressure sores top panel or contractures bottom not present at admission as a function of pre- period staffi ng level for each nursing
home in the sample. The dashed line plots the fi tted values from a regression of this change on GAP and a constant term as described in the text, and the solid line shows the fi t of a local linear regression through
these points using a triangular kernel and bandwidth of 0.05 HPRD.
Pressure Sores Not Present at Admission
Facilities with extreme values are omitted for presentation purposes. Data for 915 of 963 facilities shown in fi gure.
Coeff on GAP: .004 .0038 1999 Average: .034
-.1 -.05
.05
Change: 1999 to 2004
2 2.5
3 3.5
4 4.5
1997-98 Ave. HPRD
indicator of quality, as well as a subset category capturing “quality of care” defi cien- cies that may more directly depend on nurse labor. There is some signifi cant evidence
that the staffi ng legislation decreased overall defi ciency citations in Columns 1 to 3. For example, the coeffi cient on GAP in Column 2 suggests an average fi rm with low
initial staffi ng levels might have improved by about 0.27 citations relative to an aver- age across fi rms of 11.4. That fi nding, however, is sensitive to inclusion of the HPRD
control. For “quality of care defi ciencies,” the magnitudes of the effect are small and statistically insignifi cant.
C. Factor Substitution
