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Explaining differences in remuneration rates of nursing homes in Germany

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Abstract

Remuneration rates of German nursing homes are prospectively negotiated between long-term care insurance (LTCI) and social assistance on the one side and nursing homes on the other. They differ considerably across regions while there is no evidence for substantial differences in care provision. This article explains the differences in the remuneration rates by observable characteristics of the nursing home, its residents and its region with a special focus on the largest federal state of North Rhine Westphalia, in which the most expensive nursing homes are located. We use data from the German Federal Statistical Office for 2005 on all nursing homes that offer full-time residential care for the elderly. We find that differences in remuneration rates can partly be explained by exogenous factors. Controls for residents, nursing homes and district characteristics explain roughly 30 % of the price difference; 40 % can be ascribed to a regionally different kind of negotiation between nursing homes and LTCI. Thirty percent of the raw price difference remains unexplained by observable characteristics.

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Notes

  1. The LTC reform in 2008 (Pflegeweiterentwicklungsgesetz 2008) has increased transparency with regards to quality. From 2009 on, every nursing home is assessed yearly by the Medical Review Board of the Statutory Health Insurance Funds. Results are presented as school grades in so-called “transparency reports” and are publicly available.

  2. In Germany, employees earning less than 400 € per month are referred to as so-called “mini-jobbers”. People working in a “mini-job” do not need to pay income tax or social insurance. On average, persons having a mini-job are working around 10 h per week [14].

  3. These interviews were conducted by a consulting agency and co-author Heinz Rothgang in 2007.

  4. Full results of these interviews are presented elsewhere [15].

  5. See e.g. Weibler-Villabos and Röhrig (2010) for a comprehensive discussion of the “transparency reports” [20].

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Acknowledgments

We thank L. Borchert, R. Deppisch, S. Krolop, M. Preuss and M. Stocker-Müller. Furthermore, we thank the employees of the Forschungsdatenzentrum for a nice working atmosphere at the Regional Statistical Office in Düsseldorf. We acknowledge partial financial support from the Ministry of Labour, Health and Social Welfare of North Rhine-Westphalia (MAGS NRW).

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Authors and Affiliations

  1. RWI, Hohenzollernstraße 1-3, 45128, Essen, Germany

    Roman Mennicken & Boris Augurzky

  2. University Duisburg-Essen, Essen, Germany

    Jürgen Wasem

  3. ZES, Bremen, Germany

    Heinz Rothgang

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  1. Roman Mennicken
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  2. Boris Augurzky
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  3. Heinz Rothgang
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  4. Jürgen Wasem
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Correspondence to Roman Mennicken.

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Mennicken, R., Augurzky, B., Rothgang, H. et al. Explaining differences in remuneration rates of nursing homes in Germany. Eur J Health Econ 15, 401–410 (2014). https://doi.org/10.1007/s10198-013-0483-2

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  • DOI: https://doi.org/10.1007/s10198-013-0483-2

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