Home care reimbursement, long-term care utilization, and health outcomes
AbstractLong-term care currently comprises almost 10% of national health expenditures and is projected to rise rapidly over coming decades. A key, and relatively poorly understood, element of long-term care is home health care. I use a substantial change in Medicare reimbursement policy, which took the form of tightly binding average per-patient reimbursement caps, to address several questions about the market for home care. I find that the reimbursement change was associated with a large drop in the provision of home care. This drop was concentrated among unhealthy beneficiaries, which is consistent with the incentives for patient selection inherent in the per-patient caps. I find that the decline in home health utilization was not offset by increases in institutional long-term care or other medical care and that there were no associated adverse health consequences. However, approximately one-quarter of the decline in Medicare spending was offset by increases in out-of-pocket expenditures for home health care, with the offset concentrated in higher income populations. Despite the value of home health care implied by the out-of-pocket expenditures, I find that the welfare implications of the reimbursement change were ambiguous.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Public Economics.
Volume (Year): 90 (2006)
Issue (Month): 1-2 (January)
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Web page: http://www.elsevier.com/locate/inca/505578
Other versions of this item:
- Robin McKnight, 2004. "Home Care Reimbursement, Long-term Care Utilization, and Health Outcomes," NBER Working Papers 10414, National Bureau of Economic Research, Inc.
- Robin McKnight, 2004. "Home Care Reimbursement, Long-term Care Utilization,And Health Outcomes," University of Oregon Economics Department Working Papers, University of Oregon Economics Department 2004-6, University of Oregon Economics Department.
- I1 - Health, Education, and Welfare - - Health
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