Three Essays on Medicare's Home Health Care Open Access

Zhang, Kun (2013)

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Medicare home health care (HHC) is critical to remain the elderly in the community as independently as possible and prevent unnecessary hospitalization and nursing home placement. One of the strategies employed by policymakers to curb the rising spending on HHC has been to reduce its reimbursement rates. This dissertation is comprised of two articles investigating the potential effects of reimbursement rates reduction on HHC utilization and Medicare expenditures, and one article investigating the likelihood of using and quality of HHC by one particular group of patients who have Alzheimer's disease and related dementia (ADRD).

The first chapter investigated the potential effects by analyzing the impact of Medicare HHC's moving in 1997. I investigated effects by beneficiary's entry path into HHC: post-acute or community referral. Results show strong evidence that HHC use by referral source is differentially affected by reimbursement rates reduction. I also find evidence of cost shifting within Medicare as Medicare HHC spending HHC for both referral sources patients falls significantly with lower reimbursement rates; while their total Medicare spending is unchanged.

The second chapter investigated 1) the likelihood of using any HHC by ADRD patients compared with non-ADRD patients; 2) conditional on using, the likelihood, frequency, and timing of being transferred to a hospital for ADRD patients; and 3) the impact on Medicare expenditures. Results show strong evidence that patients with ADRD are not only more likely to be transferred to a hospital during a HHC stay but are also to be transferred to a hospital sooner and with greater frequency upon HHC admission. I do not find evidence on Medicare expenditures.

The third chapter investigated whether or not hospice care serves as substitute for HHC in beneficiaries' last year of life when the reimbursement rates for HHC are reduced, and how individual-level Medicare expenditures are affected. Results show strong evidence that beneficiaries substituted hospice care for HHC in their last year of life after the Medicare reimbursement rates for HHC was reduced. Additionally, I find that hospice care is less costly than HHC with regard to providing community-based services near the end-of-life.

Table of Contents

Table of Contents


Abstract 1

I. Introduction. 2

II. Background. 5

III. Hypotheses. 11

IV. Data and Methods. 12

V. Results. 18

VI. Discussion. 23


Abstract 41

I. Introduction. 42

II. Hypotheses. 44

III. Data and Methods. 45

IV. Results. 51

V. Discussion. 55


Abstract 69

I. Introduction. 70

II. Background. 72

III. Data and Methods. 74

IV. Results. 79

V. Discussion. 85

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