Audit regimes in long-term care

This paper studies the effects of various audit regimes used by a gatekeeper, differing in the degree of enforcement and the presence of performance incentives, on behavior of care providers filing applications for providing long-term care services to patients. We present evidence from a large-scale field experiment in the Dutch market for long-term care. We find that increasing enforcement reduces the number of applications and that introducing performance incentives reduces this even further. Finally, we find detrimental effects on audit approval rates, but we provide some results showing that assessors are less strict when audits do not have direct implications. This implies that an audit regime with performance incentives can support policy makers, who are faced with the trade-off between providing services quickly and efficient spending of public resources.