Ashvin Gandhi

Health care facilities considering mandating staff vaccination face a difficult tradeoff. While additional vaccination coverage will directly reduce disease transmission within the facility, the imposition of a mandate may also cause vaccine-hesitant staff to quit, which could harm patient care.

To study this tradeoff, authors leverage comprehensive administrative data covering virtually all U.S. nursing homes, including payroll-based records on approximately 500 million daily nurse shifts and weekly data on COVID transmission and mortality at each facility. Authors use a difference-in-differences framework to estimate the impact of employer-imposed vaccine mandates at 581 nursing homes on disease spread, employment outcomes, and several patient care metrics.

Findings: While mandates did slightly increase staff turnover, the effects were concentrated on staff working less than 20 hours per week, and resulted in a reduction of less than two minutes per patient-day. Furthermore, there is only limited evidence of lower levels of care at mandate facilities in typically-monitored conditions such as patient falls, pressure ulcers, or urinary tract infections.

In contrast, implementing a vaccine mandate led to large increases in staff vaccinations at mandate facilities, which directly led to less transmission of and lower patient mortality from COVID. Researchers estimate that vaccine mandates saved one patient life for every two facilities that enacted a mandate, a large effect given the typical facility has around 100 beds.

These results suggest that the health benefits of mandates far outweigh the costs in terms of reduced patient care from staff turnover.
 

Health care firms are filing for Chapter 11 bankruptcy at record rates. Authors find that bankruptcies increase health care staff turnover, worsen care, and ultimately harm patients. Using a difference-in-differences design, authors estimate that a bankruptcy filing immediately increases staff turnover and worsens performance on unannounced inspections. Next, using a patient-distance-to-facility instrument, they document that bankruptcies cause alarming harm to patient health: bankruptcies increase hospitalizations, physical-restraint use, and bedsores. Finally, the authors employ a randomized survey experiment of nursing home staff to confirm that bankruptcy filings increase voluntary departures and that replacement hires are likely to be less effective and harm patients.

Summary: This study examines “tunneling” practices through which health care providers covertly extract profit by making inflated payments for goods and services to commonly-owned related parties. Masking profits as costs, thereby obscuring true profitability, may dissuade regulators from imposing stricter quality standards and encourage public payers to increase reimbursement rates.

Authors analyze the use of related party transactions as a form of profit extraction in the nursing home industry. Using a stacked difference-in-differences approach, authors document that services purchased from related parties are substantially inflated.

Findings: Researchers find evidence of widespread tunneling through inflated rents and management fees paid to related parties. Extrapolating these markups to all firms’ related party transactions, their estimates suggest that in 2019, 63% of nursing home profits were hidden and tunneled to related parties through inflated transfer prices.

These study findings have far-reaching policy implications. The calculations of hidden profit suggest that firms may be substantially understating their profitability. This has implications for the design of quality regulations as well as reimbursement schemes that rely on a cost-plus basis. Additionally, findings suggest that related party transactions can make litigation against health care providers less attractive by hiding or shielding assets from potential claimants.

Collecting detailed data on related party transactions and making those data subject to potential audit are for policymakers, regulators, and stakeholders to understand the financial dynamics within the health care industry and to formulate policies that promote financial integrity and transparency.

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• Report: Tunneling and Hidden Profits in Health Care

​Summary: Despite widespread adoption of surveillance testing for coronavirus disease 2019 (COVID-19) among staff members in skilled nursing facilities, evidence is limited regarding its relationship with outcomes among facility residents. Using data obtained from 2020 to 2022, authors performed a retrospective cohort study of testing for severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) among staff members in 13,424 skilled nursing facilities during three pandemic periods: before vaccine approval, before the B.1.1.529 (omicron) variant wave, and during the omicron wave. They assessed staff testing volumes during weeks without COVID-19 cases relative to other skilled nursing facilities in the same county, along with COVID-19 cases and deaths among residents during potential outbreaks (defined as the occurrence of a case after 2 weeks with no cases). Authors reported adjusted differences in outcomes between high-testing facilities and low-testing facilities. The two primary outcomes were the weekly cumulative number of COVID-19 cases and related deaths among residents during potential outbreaks.

Findings: During the overall study period, 519.7 cases of COVID-19 per 100 potential outbreaks were reported among residents of high-testing facilities as compared with 591.2 cases among residents of low-testing facilities. During the same period, 42.7 deaths per 100 potential outbreaks occurred in high-testing facilities as compared with 49.8 deaths in low-testing facilities. Before vaccine availability, high- and low-testing facilities had 759.9 cases and 1,060.2 cases, respectively, per 100 potential outbreaks, along with 125.2 and 166.8 deaths. Before the omicron wave, the numbers of cases and deaths were similar in high- and low-testing facilities; during the omicron wave, high-testing facilities had fewer cases among residents, but deaths were similar in the two groups.

Greater surveillance testing of staff members at skilled nursing facilities was associated with clinically meaningful reductions in COVID-19 cases and deaths among residents, particularly before vaccine availability.

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• Journal Article: COVID-19 Surveillance Testing and Resident Outcomes in Nursing Homes