Title: Home care reimbursement, long-term care utilization, and health outcomes
Description: "Long-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"--National Bureau of Economic Research web site.
Subjects: Home care services, Long-term care of the sick, Medicare, Prospective payment
Places: United States