title: Effects of Medicare payment reform: evidence from the home health interim and prospective payment systems.
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.
authors.affiliation: RAND Corporation, Santa Monica, CA, United States. Electronic address: huckfeld@rand.org.
authors.forename: Peter J
authors.initials: PJ
authors.lastname: Huckfeldt
authors.affiliation: RAND Corporation, Santa Monica, CA, United States; University of Southern California (USC), Los Angeles, CA, United States; National Bureau of Economic Research (NBER), Cambridge, MA, United States.
authors.forename: Neeraj
authors.initials: N
authors.lastname: Sood
authors.affiliation: RAND Corporation, Santa Monica, CA, United States; National Bureau of Economic Research (NBER), Cambridge, MA, United States; University of California - Los Angeles, Los Angeles, CA, United States.
authors.forename: José J
authors.initials: JJ
authors.lastname: Escarce
authors.affiliation: Harvard University, Boston, MA, United States.
authors.forename: David C
authors.initials: DC
authors.lastname: Grabowski
authors.affiliation: National Bureau of Economic Research (NBER), Cambridge, MA, United States; Harvard University, Boston, MA, United States.
authors.forename: Joseph P
authors.initials: JP
authors.lastname: Newhouse
mesh_terms: D000368:Aged; D000369:Aged, 80 and over; D019643:Arthroplasty, Replacement / Q000191:economics; D017048:Health Care Costs / Q000706:statistics & numerical data; D018166:Health Care Reform / Q000191:economics / Q000458:organization & administration*; D006620:Hip Fractures / Q000191:economics / Q000628:therapy; D018574:Home Care Agencies / Q000191:economics / Q000458:organization & administration*; D006760:Hospitalization / Q000191:economics / Q000706:statistics & numerical data; D006801:Humans; D006278:Medicare / Q000191:economics / Q000458:organization & administration*; D018803:Models, Economic; D010043:Outcome and Process Assessment, Health Care; D011445:Prospective Payment System / Q000191:economics / Q000458:organization & administration*; D012051:Reimbursement Mechanisms / Q000191:economics / Q000458:organization & administration; D020521:Stroke / Q000191:economics / Q000628:therapy; D014481:United States
keywords: Medicare; Prospective payment; Selection; Treatment intensity