To estimate the effect of a nursing home's share of residents with a serious mental illness () on the quality of care.
Secondary nursing home level data over the period 2000 through 2008 obtained from the Minimum Data Set, OSCAR, and Medicare claims.
We employ an instrumental variables approach to address the potential endogeneity of the share of residents in nursing homes in a model including nursing home and year fixed effects.
An increase in the share of nursing home residents positively affected the hospitalization rate among non‐ residents and negatively affected staffing skill mix and level. We did not observe a statistically significant effect on inspection‐based health deficiencies or the hospitalization rate for residents.
Across the majority of indicators, a greater share resulted in lower nursing home quality. Given the increased prevalence of nursing home residents with , policy makers and providers will need to adjust practices in the context of this new patient population. Reforms may include more stringent preadmission screening, new regulations, reimbursement changes, and increased reporting and oversight.