Effects of Medicare payment reform: Evidence from the home health interim and prospective payment systems |
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| Institution: | 1. RAND Corporation, Santa Monica, CA, United States;2. University of Southern California (USC), Los Angeles, CA, United States;3. National Bureau of Economic Research (NBER), Cambridge, MA, United States;4. University of California – Los Angeles, Los Angeles, CA, United States;5. Harvard University, Boston, MA, United States;1. World Federation of Neurosurgical Societies, Nyon, Switzerland;2. Nanotechnology & Smart Systems, NASA Ames Research Center, Moffett Field, California, USA;3. Northwest General Hospital and Medical Center, Peshawar, Pakistan;4. Independent cross-bench member of the House of Lords and Co-Chair, All Party Parliamentary Group on Global Health, London, United Kingdom;1. Department of Economics and Related Studies, University of York, Heslington, York YO10 5DD, UK;2. Department of Economics/NIPE, University of Minho, Campus de Gualtar, 4710-057 Braga, Portugal;3. Department of Economics, University of Bergen, Norway;1. EviMed Research Group, LLC, Goshen, MA;2. University of Massachusetts School of Medicine, Worcester, MA;3. Washington Hospital Center, Washington, DC |
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| Abstract: | Medicare continues to implement payment reforms that shift reimbursement from fee-for-service toward episode-based payment, affecting average and marginal payment. We contrast the effects of two reforms for home health agencies. The home health interim payment system in 1997 lowered both types of payment; our conceptual model predicts a decline in the likelihood of use and costs, both of which we find. The home health prospective payment system in 2000 raised average but lowered marginal payment with theoretically ambiguous effects; we find a modest increase in use and costs. We find little substantive effect of either policy on readmissions or mortality. |
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| Keywords: | Medicare Treatment intensity Selection Prospective payment |
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