HLTH 8451 Week 11 Doctoral Regulatory Analysis Example

Keeping Frail Residents Cool When the Power Fails: A Doctoral Regulatory Analysis of the Composite Heat Refuge Rule, Recommending a Performance Standard and Stating When That Advice Reverses

Student Name

Walden University

HLTH 8451: Public Policy Analysis

Instructor Name

Month Day, Year

Keeping Frail Residents Cool When the Power Fails: A Doctoral Regulatory Analysis of the Composite Heat Refuge Rule, Recommending a Performance Standard and Stating When That Advice Reverses

Executive Summary

The composite heat refuge rule would require Medicare- and Medicaid-certified nursing homes to maintain a powered refuge area at or below 81 degrees Fahrenheit during declared heat emergencies. This analysis, prepared for a federal regulatory analysis office, recommends a performance standard instead: facilities would keep residents at or below 81 degrees by means they choose and document. Against a baseline that removes facilities already protected, covered by state rules or expected to adopt voluntarily, the performance standard yields annualized net benefits of about $197 million at a 7 percent discount rate, compared with about $180 million for the refuge mandate. Net benefits are positive in most tests, including 90 percent of simulations. The recommendation reverses under three conditions: if deaths avoided are valued by remaining life-years rather than by an unadjusted value per statistical life, net benefits of both alternatives become negative; if outages during heat emergencies occur about twice as often as the central forecast, the mandate overtakes the performance standard; and under the weights of two of five judges, the mandate ranks first. Every parameter value used is a composite, marked as such in the appendices.

1. Tradition and Client

The analysis follows the client-oriented tradition, in which policy analysis is advice to a specific decision maker, relevant to a public decision and informed by social values (Weimer & Vining, 2017). The client is a federal office of the kind that prepares or reviews regulatory impact analyses under Executive Order 12866 (Exec. Order No. 12866, 58 Fed. Reg. 51735, 1993). The order of work came from Dunn's sequence of procedures, structuring before forecasting and recommendation (Dunn, 2018). The choice of tradition means the client's question has been taken as given, a limit discussed in Section 11.

2. Rationale

Of the market failures tested, information asymmetry carries the case. Families choosing a facility, often within days of a hospital discharge, cannot observe whether its generator can run cooling or whether staff have rehearsed an outage. Public payment reinforces the failure: Medicaid, the primary payer for most residents, sets rates administratively, and in 2019 its payments fell about 18 percent short of facilities' estimated Medicaid costs on average (Bowblis et al., 2026), leaving facilities little room to recover investment in preparedness through price. Externalities, such as emergency department load during regional heat events, are real but small. The risk of government failure, especially a burden that pushes small rural facilities to reduce beds or close, argues for a flexible remedy.

3. Problem Structure

Four formulations of heat risk were mapped: a facility engineering problem, a staffing and monitoring problem, a grid reliability problem and a gap in preparedness requirements. The analysis adopts the engineering formulation, with the requirements gap as its institutional explanation. Existing federal preparedness rules ask for a plan to hold safe temperatures but stop short of requiring equipment (42 C.F.R. § 483.73). Evidence supports the link between indoor cooling and survival: power loss after Hurricane Irma raised Florida residents' odds of dying within a month (Skarha et al., 2021), and in Ontario the excess mortality of extreme heat days was confined to homes lacking air conditioning (Katz et al., 2026). The staffing and grid formulations are retained as scenarios.

4. Baseline

The baseline represents the best assessment of the world without the rule (Office of Management and Budget, 2003). Of about 15,000 certified facilities, 38 percent are assumed already to maintain cooling on backup power, a further 9 percent operate under state rules that already match or exceed the performance standard, such as Florida's (Florida Agency for Health Care Administration, 2018), and 8 percent would adopt voluntarily. About 6,750 facilities would therefore change their equipment because of the rule. Rising heat is treated as part of the baseline, with the annual probability of an outage during a heat emergency rising from 2.0 to 3.0 percent over the 20-year analysis period, a direction taken from the national climate assessment (Crimmins et al., 2023).

5. Alternatives

The refuge mandate requires a powered space of 30 square feet per resident at or below 81 degrees. The performance standard sets the same temperature limit for residents and leaves the means to each facility, which might cool the whole building, run portable units from a smaller generator or arrange in advance to move residents to a cooled site. Guidance without a mandate was screened out because its effect is hard to distinguish from the baseline.

6. Cost-Benefit Analysis

Standing is national. Medicaid rate increases to cover compliance are treated as transfers and excluded from net benefits; equipment, energy, testing and surveyor time are counted as costs (Boardman et al., 2018). The health model multiplies four terms: affected facilities, the yearly chance of an outage during a heat emergency, residents per affected building, and the added risk that an exposed resident dies or is hospitalized.

Deaths avoided are valued with an unadjusted value per statistical life of $12 million (composite), consistent with HHS guidelines (Office of the Assistant Secretary for Planning and Evaluation, 2016). That value comes mostly from studies of working-age adults (Viscusi & Aldy, 2003), and the residents protected are old and frail, so a QALY-based cost-effectiveness ratio is reported beside it. No age adjustment is applied.

Table 1

Central Results, Annualized, 7 Percent Discount Rate

All values are composite. At 3 percent, net benefits are about $219 million and $223 million.

The two measures point in different directions. By net benefits, both alternatives are worth adopting; by cost per QALY, neither would pass any threshold used in health technology assessment. The difference arises because the residents protected have short expected survival, and the analysis reports both rather than letting one measure hide the other.

7. Multi-Criteria Comparison

Some criteria resist monetization, so the alternatives were also compared on five criteria with swing weights elicited from five roles: a geriatric clinician, a small-facility administrator, a resident advocate, a state survey official and a health economist. The clinician, administrator and economist weights put the performance standard first, mainly because of its lower cost and greater flexibility. The advocate and survey official weights put the mandate first, because of its uniform protection for rural residents and its ease of inspection. The weight sets were kept separate rather than averaged, so the client can see whose values favor each alternative.

8. Uncertainty

One-way analysis showed that the mortality effect, the outage probability and the value per statistical life move net benefits most. Only the lower confidence limit of the mortality effect turns net benefits negative. The staffing scenario favors the performance standard more strongly; in the grid scenario, with outages twice as frequent, the mandate leads. Of 10,000 Monte Carlo draws over the three parameters with defensible distributions, 90 percent gave the performance standard positive net benefits. At a 2 percent discount rate, the two alternatives are nearly equal. A life-year valuation leaves the performance standard about $110 million a year worse than doing nothing.

9. Distribution

Costs per resident are highest in small rural facilities, which must buy equipment of similar size for fewer residents. Under the mandate, a 45-resident facility would pay about $600 per resident per year; under the performance standard, about $420, and less if it uses a transfer agreement. Who ultimately pays depends on state rate decisions. If states raise Medicaid rates, state and federal budgets bear the cost; if not, it falls on facilities with many Medicaid residents, which already receive payments below cost.

10. Response to Review

The Week 10 peer review made seven requests. Each is answered below.

Table 2

Responses to the Seven Review Comments

Every requested revision was made; none changed which alternative is recommended in the central case.

The reviewer rated comments 2 and 3 as potentially decisive. They did not reverse the recommendation, but the alternative mortality source cut net benefits by more than half and lowered the probability that they are positive. The analysis should be read with that in mind. A regional estimate of heat effects in northern facilities, which the reviewer suggested, could not be obtained and remains a gap.

11. What Regulatory Analysis Cannot Settle

Three limits remain after every test. The first is the value of lives near their end. The verdict depends on whether a death avoided among residents with months of expected survival is worth the same as any other death avoided. That is an ethical question, and the analysis can only show how much the answer matters, which is enough to reverse the result. The second is the choice of judges. Five roles were chosen to represent those affected, but residents themselves were not among them, and another set of roles would produce other weights. The third returns to the choice made in Week 1. A client-oriented analysis answers the client's question with the client's criteria. It does not ask residents whether they would choose a cool refuge over other improvements in their care, or how they would weigh a few more months against comfort in their final weeks. Those questions belong to public deliberation, through comment periods, hearings and the voices of residents and families, which this analysis can inform but cannot replace. Wildavsky (1979) asked analysts to speak truth to power; this analysis has spoken to one holder of power and should be read as one contribution to a wider public decision.

Appendices

Appendix A, parameter table with sources and ranges, reproduces the Week 9 table with revisions. Appendix B lists the five weight sets by role. Appendix C describes the Monte Carlo distributions, the random seed and the 10,000 draws for each simulation.

References

Boardman, A. E., Greenberg, D. H., Vining, A. R., & Weimer, D. L. (2018). Cost-benefit analysis: Concepts and practice (5th ed.). Cambridge University Press.

Bowblis, J. R., Miller, E. A., Simpson, E., Karon, S., & Cohen, M. A. (2026). Does Medicaid cover the cost of nursing home care? Variation by ownership status, payer-mix, and staffing level. Medical Care, 64(1), 29-37. https://doi.org/10.1097/MLR.0000000000002252

Crimmins, A. R., Avery, C. W., Easterling, D. R., Kunkel, K. E., Stewart, B. C., & Maycock, T. K. (Eds.). (2023). Fifth National Climate Assessment. U.S. Global Change Research Program. https://doi.org/10.7930/NCA5.2023

Dunn, W. N. (2018). Public policy analysis: An integrated approach (6th ed.). Routledge.

Emergency preparedness, 42 C.F.R. § 483.73 (2024).

Exec. Order No. 12866, 58 Fed. Reg. 51735 (October 4, 1993).

Florida Agency for Health Care Administration. (2018). Emergency environmental control for nursing homes (Fla. Admin. Code R. 59A-4.1265).

Katz, G. M., Brown, K. A., Giannakeas, V., & Stall, N. M. (2026). Air conditioning in nursing homes and mortality during extreme heat. JAMA Internal Medicine, 186(2), 243-251. https://doi.org/10.1001/jamainternmed.2025.6595

Office of Management and Budget. (2003). Circular A-4: Regulatory analysis. Executive Office of the President.

Office of the Assistant Secretary for Planning and Evaluation. (2016). Guidelines for regulatory impact analysis. U.S. Department of Health and Human Services.

Skarha, J., Gordon, L., Sakib, N., June, J., Jester, D. J., Peterson, L. J., Andel, R., & Dosa, D. M. (2021). Association of power outage with mortality and hospitalizations among Florida nursing home residents after Hurricane Irma. JAMA Health Forum, 2(11), e213900. https://doi.org/10.1001/jamahealthforum.2021.3900

Viscusi, W. K., & Aldy, J. E. (2003). The value of a statistical life: A critical review of market estimates throughout the world. Journal of Risk and Uncertainty, 27(1), 5-76. https://doi.org/10.1023/A:1025598106257

Weimer, D. L., & Vining, A. R. (2017). Policy analysis: Concepts and practice (6th ed.). Routledge.

Wildavsky, A. (1979). Speaking truth to power: The art and craft of policy analysis. Little, Brown.