Producing Health capital: Value Added in Nursing Home


Industrial Organization Seminar

United States

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Abstract: Using detailed data on the health of almost 6 million nursing home (SNF) patients, we construct a one-dimensional index of their health at different points of their nursing-home stay. We then develop a stylized model that allows us to estimate a SNF-specific value-added measure for each of the 14,000 SNFs in our data. The value-added estimates account for patient selection into SNFs and selection of patients out of the SNFs. Finally, we use these value-added estimates to quantify the heterogeneity in SNF health capital production across and within markets, and contrast it with the current star systems that is widely used to assess SNF performance.

*joint with Amy Finkelstein and Neale Mahoney

Liran Einav

Liran Einav

Stanford University