States in a reformed health system: lessons from nursing home policy.

Most serious health system reform proposals include a prominent role for states, despite documented variation in costs, delivery systems, and health status among states. As policymakers search for an approach that will reform the health system and minimize inappropriate interstate variation, the experience of nursing home policies and politics in two states--New York and California--can offer useful lessons about underlying reasons for variation and how to ensure equitability amidst state differences. These two states are examined as case studies because they have the nation's two largest Medicaid programs yet have approached their long-term care systems very differently. The differences in their nursing home policy approaches suggest that state-based health system reform be pursued with caution, lacking further study of state variations.