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Competition And Quality In Home Health Care Markets

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  • Kyoungrae Jung
  • Daniel Polsky

Abstract

Market‐based solutions are often proposed to improve health care quality; yet evidence on the role of competition in quality in non‐hospital settings is sparse. We examine the relationship between competition and quality in home health care. This market is different from other markets in that service delivery takes place in patients' homes, which implies low costs of market entry and exit for agencies. We use 6 years of panel data for Medicare beneficiaries during the early 2000s. We identify the competition effect from within‐market variation in competition over time. We analyze three quality measures: functional improvements, the number of home health visits, and discharges without hospitalization. We find that the relationship between competition and home health quality is nonlinear and its pattern differs by quality measure. Competition has positive effects on functional improvements and the number of visits in most ranges, but in the most competitive markets, functional outcomes and the number of visits slightly drop. Competition has a negative effect on discharges without hospitalization that is strongest in the most competitive markets. This finding is different from prior research on hospital markets and suggests that market‐specific environments should be considered in developing polices to promote competition. Copyright © 2013 John Wiley & Sons, Ltd.

Suggested Citation

  • Kyoungrae Jung & Daniel Polsky, 2014. "Competition And Quality In Home Health Care Markets," Health Economics, John Wiley & Sons, Ltd., vol. 23(3), pages 298-313, March.
    • Handle: RePEc:wly:hlthec:v:23:y:2014:i:3:p:298-313
    DOI: 10.1002/hec.2938
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    References listed on IDEAS

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    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. 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.
    3. 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.
    4. 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.
    5. Remco Eijkel & Mark Kattenberg & Ab Torre, 2023. "Pricing behavior in long term care markets: evidence from provider-level data for home help services," International Journal of Health Economics and Management, Springer, vol. 23(1), pages 59-83, March.
    6. Martins, Lurdes & Queirós, Sónia, 2015. "Competition among pharmacies and the typology of services delivered: The Portuguese case," Health Policy, Elsevier, vol. 119(5), pages 640-647.

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