Regulation and reimbursement in the long-term health care industry: The case of New York State

This thesis explores incentives provided under economic regulation and examines the long-term health care sector. Current provision of long-term health care in the United States is largely financed through state Medicaid programs. The methods by which state authorities regulate and reimburse long-term care facilities have come under public scrutiny as cost of care has become prohibitively high. In evaluating the current situation, several federal agencies have indicated that the relatively advanced New York State system of Medicaid reimbursement may be looked at as a potential model for other states to follow in controlling costs. This study points out, however, that major structural and performance problems exist in the current New York system. Given the problems and weaknesses inherent in the current system, this study reconstructs the regulatory and reimbursement system in New York State. Reimbursement policy and performance incentives are based on a method of incremental cost pricing. Factors affecting the costs of providing care are estimated. Actual reimbursement incentives and ultimate industry performance approximate that which is inherent in a competitive market structure. (Abstr. Health Care Mgmt. Stud., 1981)