Abstract
Shortfalls in nursing home employment have been exacerbated by the COVID-19 pandemic and are projected to worsen with a rapidly aging population. Wage pass-through policies have been enacted by some states to address this problem by requiring nursing homes to demonstrate that they have used increased Medicaid reimbursement to raise compensation for direct care workers. Low wages relative to job demands have been cited as a primary contributor to persistently inadequate nursing home staffing, which contributes to poor outcomes for workers and patients. Prior literature indicates that wage pass-through can have a modest impact on wages and staffing for nursing home workers. The theory of oligopsony suggests that wage pass-throughs would be effective at raising wages by counteracting employers' power to maximize profits through low wages. Efficiency wage theory posits that paying workers higher wages can lead to higher productivity, job performance, and retention. A recent study found that wage pass-throughs helped narrow the wage gap between nursing assistants in nursing homes and other similar entry-level workers. However, research on wage pass-throughs has been needed on other outcomes in the current policy environment.This dissertation used a natural experiment to assess the impact of wage pass-throughs on nursing assistant-related outcomes, as reported by the Center for Medicaid & Medicare Services (CMS), including a newly available data source – the Payroll-Based Journal Data. Connecticut is the treatment state, which implemented a series of wage pass-throughs since November 2018.
Multi-interrupted time series models evaluate changes in the level and trend of outcomes after each intervention, in the single-treatment state, and relative to a control group (if the parallel trends assumption held). The first aim of the study was to assess the impact of wage pass-throughs on staffing outcomes: Certified Nursing Assistant (CNA) hours per resident day, the proportion of CNA hours per resident day filled by contract CNAs, and Registered Nurse skill mix. The second aim was to assess the policy impact on care-related patient outcomes: the percentage of high-risk, long-stay residents with pressure ulcers, and the number of outpatient emergency department visits and hospitalizations per 1,000 long-stay resident days.
The results indicate that Connecticut’s wage pass-throughs may have accelerated the trend in CNA hours per resident day, particularly after the most recent wage pass-through in 2021, which included a higher reimbursement rate. The findings on patient outcomes suggest that Connecticut nursing homes had a slightly lower percentage of high-risk long-stay residents with pressure ulcers after the first two wage pass-through policy treatment times – the first quarter of 2019 and the fourth quarter of 2020 – and a deceleration in the trend after the wage pass-through in the third quarter of 2021. This study adds to the literature suggesting that wage pass-throughs may be effective in increasing CNA staffing levels and related quality outcomes. Further research is needed, especially outside the context of the COVID-19 pandemic. Additionally, future studies should re-evaluate these outcomes, as well as wages, using more recent wage pass-through policies and include an assessment of nursing home finances to better understand the mechanisms by which wage pass-through improves staffing and patient outcomes.