Do case-mix adjusted nursing home reimbursements actually reflect costs? Minnesota's experience

John A. Nyman, Robert A. Connor

Research output: Contribution to journalArticlepeer-review

10 Scopus citations


Some states have adopted Medicaid reimbursement systems that pay nursing homes according to patient type. These case-mix adjusted reimbursements are intended in part to eliminate the incentive in prospective systems to exclude less profitable patients. This study estimates the marginal costs of different patient types under Minnesota's case-mix system and compares them to their corresponding reimbursements. We find that estimated costs do not match reimbursement rates, again making some patient types less profitable than others. Further, in confirmation of our estimates, we find that the percentage change in patient days between 1986 and 1990 is explained by our profitability estimates.

Original languageEnglish (US)
Pages (from-to)145-162
Number of pages18
JournalJournal of Health Economics
Issue number2
StatePublished - Jul 1994

Bibliographical note

Funding Information:
*Corresponding author. This research was made possible by grant HS 07018-01 from the Agency for Health Care Policy and Research. The authors wish to thank Willard Manning, Joseph Newhouse, and two anonymous referees for helpful suggestions, Anindya Sen and Craig Bass for their research assistance, and Care Providers of Minnesota for providing the data.


  • Access
  • Case-mix reimbursement
  • Medicaid
  • Nursing homes
  • Profitability


Dive into the research topics of 'Do case-mix adjusted nursing home reimbursements actually reflect costs? Minnesota's experience'. Together they form a unique fingerprint.

Cite this