Changes in the Medicare Home Health Care Market

Abstract

These results demonstrate the direct impact of policy changes on the home health care market and highlight the need to evaluate policy changes to understand both intended and unintended impacts on health markets. Future research should analyze the effect of these policy changes on other healthcare providers and systems and their impact on health outcomes for Medicare beneficiaries.

Comparison of Home Health and Hospice Care Agencies by Organizational Characteristics and Services Provided: United States, 2007

“…Other sources have shown that for-profit establishments in both home health and hospice care sectors have entered the market in greater numbers since 2000 (3,11 In contrast, the average number of current hospice care patients served by a hospice care only agency continuously increased during 1996-2007. The number of hospice care patients served by hospice care only agencies and mixed agencies was basically similar in 1996.…”

“…In particular, studies on Medicare-certified home health care agencies suggest that the decreases in the number of agencies and the number of patients served while undergoing the two BBA-mandated payment system changes (i.e., interim payment system in 1997, PPS in 2000) occurred primarily among for-profit establishments (11,13).…”

“…National Center for Health Statistics in the home health care industry since 2000 (2,4,11). Expansion of Medicare payment and covered hospice care services may also have increased the supply of hospices (3,9).…”

“…At the same time, changes in the Medicare payment system may underlie some of the recent growth in home health and hospice care agencies. Medicare is the single largest payer for both home health and hospice care (9,10) and, hence, changes in the Medicare payment system associated with the Balanced Budget Act of 1997 (BBA) had a major impact according to most observers (11)(12)(13). Initially BBA implementation seemed to have resulted in a considerable number of home health care agencies' exits from the market (11).…”

“…Medicare is the single largest payer for both home health and hospice care (9,10) and, hence, changes in the Medicare payment system associated with the Balanced Budget Act of 1997 (BBA) had a major impact according to most observers (11)(12)(13). Initially BBA implementation seemed to have resulted in a considerable number of home health care agencies' exits from the market (11). But adjustment to changes in the Medicare payment system and regained financial stability of agencies under the prospective payment system (PPS) may have led to renewed growth…”