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The effect of entry regulation in the health care sector: The case of home health

Author

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  • Polsky, Daniel
  • David, Guy
  • Yang, Jianing
  • Kinosian, Bruce
  • Werner, Rachel M.

Abstract

The consequences of government regulation in the post-acute care sector are not well understood. We examine the effect of entry regulation on quality of care in home health care by analyzing the universe of hospital discharges during 2006 for publicly insured beneficiaries (about 4.5 million) and subsequent home health admissions to determine whether there is a significant difference in home health utilization, hospital readmission rates, and health care expenditures in states with and without Certificate of Need laws (CON) regulating entry. We identify these effects by looking across regulated and nonregulated states within Hospital Referral Regions, which characterize well-defined health care markets and frequently cross state boundaries. We find that CON states use home health less frequently, but system-wide rehospitalization rates, overall Medicare expenditures, and home health practice patterns are similar. Removing CON for home health would have negligible system-wide effects on health care costs and quality.

Suggested Citation

  • Polsky, Daniel & David, Guy & Yang, Jianing & Kinosian, Bruce & Werner, Rachel M., 2014. "The effect of entry regulation in the health care sector: The case of home health," Journal of Public Economics, Elsevier, vol. 110(C), pages 1-14.
    • Handle: RePEc:eee:pubeco:v:110:y:2014:i:c:p:1-14
    DOI: 10.1016/j.jpubeco.2013.11.003
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    Citations

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    Cited by:

    1. Bingxiao Wu & Jeah Jung & Hyunjee Kim & Daniel Polsky, 2019. "Entry regulation and the effect of public reporting: Evidence from Home Health Compare," Health Economics, John Wiley & Sons, Ltd., vol. 28(4), pages 492-516, April.
    2. Elena Andreyeva & Guy David & Hummy Song, 2018. "The Effects of Home Health Visit Length on Hospital Readmission," NBER Working Papers 24566, National Bureau of Economic Research, Inc.
    3. Jill Horwitz & Austin Nichols & Carrie H. Colla & David M. Cutler, 2024. "Technology Regulation Reconsidered: The Effects of Certificate of Need Policies on the Quantity and Quality of Diagnostic Imaging," NBER Working Papers 32143, National Bureau of Economic Research, Inc.
    4. Norton, E.C., 2016. "Health and Long-Term Care," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 951-989, Elsevier.
    5. Stratmann, Thomas & Wille, David, 2016. "Certificate-of-Need Laws and Hospital Quality," Working Papers 06927, George Mason University, Mercatus Center.
    6. Robert L. Ohsfeldt & Pengxiang Li, 2018. "State entry regulation and home health agency quality ratings," Journal of Regulatory Economics, Springer, vol. 53(1), pages 1-19, February.
    7. van Noort, Olivier & Schotanus, Fredo & van de Klundert, Joris & Telgen, Jan, 2018. "Explaining regional variation in home care use by demand and supply variables," Health Policy, Elsevier, vol. 122(2), pages 140-146.
    8. Hyunjee Kim & Edward C. Norton, 2015. "Practice Patterns among Entrants and Incumbents in the Home Health Market after the Prospective Payment System was Implemented," Health Economics, John Wiley & Sons, Ltd., vol. 24(S1), pages 118-131, March.
    9. David, Guy & Kim, Kunhee Lucy, 2018. "The effect of workforce assignment on performance: Evidence from home health care," Journal of Health Economics, Elsevier, vol. 59(C), pages 26-45.
    10. Thomas S. Conkling, 2020. "Compliance and competition with heterogeneous service providers: the federal Lifeline program," Journal of Regulatory Economics, Springer, vol. 57(1), pages 74-104, February.
    11. Crawford, Rowena & Stoye, George & Zaranko, Ben, 2021. "Long-term care spending and hospital use among the older population in England," Journal of Health Economics, Elsevier, vol. 78(C).
    12. Hummy Song & Elena Andreyeva & Guy David, 2022. "Time Is the Wisest Counselor of All: The Value of Provider–Patient Engagement Length in Home Healthcare," Management Science, INFORMS, vol. 68(1), pages 420-441, January.

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    More about this item

    Keywords

    Competition; Certificate of need; Quality of care; Home health care;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • K2 - Law and Economics - - Regulation and Business Law
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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