The effects of acuity and utilization on nursing home costs

David I. Rosenbaum, Charles F. Lamphear, Ken Rebeck

Research output: Contribution to journalArticlepeer-review

1 Scopus citations


Recent proposals aim to relocate relatively healthy residents from nursing homes to lower-cost assisted care facilities. Such a move would have impacts on nursing home costs for two main reasons. It would decrease utilization rates and increase patient care needs, or acuity. A translog cost model is used to examine the impact that acuity and utilization have on nursing home costs. Results indicate that decreasing utilization will reduce total costs for nursing homes. However, increasing acuity will increase total costs. The total effect on nursing home costs of the change in policy is to decrease nursing home total costs but increase nursing home average costs per patient day.

Original languageEnglish (US)
Article number316651
Pages (from-to)279-294
Number of pages16
JournalReview of Industrial Organization
Issue number3
StatePublished - 2001


  • Acuity
  • Nursing home costs
  • Translog cost function
  • Utilization

ASJC Scopus subject areas

  • Economics and Econometrics
  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation


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