title: The causal effects of home care use on institutional long-term care utilization and expenditures.
abstract: Limited evidence exists on whether expanding home care saves money overall or how much institutional long-term care can be reduced. This paper estimates the causal effect of Medicaid-financed home care services on the costs and utilization of institutional long-term care using Medicaid claims data. A unique instrumental variable was applied to address the potential bias caused by omitted variables or reverse effect of institutional care use. We find that the use of Medicaid-financed home care services significantly reduced but only partially offset utilization and Medicaid expenditures on nursing facility services. A $1000 increase in Medicaid home care expenditures avoided 2.75 days in nursing facilities and reduced annual Medicaid nursing facility costs by $351 among people over age 65 when selection bias is addressed. Failure to address selection biases would misestimate the substitution and offset effects.
authors.affiliation: American Institutes for Research, Washington, DC, USA.
authors.forename: Jing
authors.initials: J
authors.lastname: Guo
authors.forename: R Tamara
authors.initials: RT
authors.lastname: Konetzka
authors.forename: Willard G
authors.initials: WG
authors.lastname: Manning
mesh_terms: D000368:Aged; D000369:Aged, 80 and over; D005260:Female; D005102:Health Expenditures / Q000706:statistics & numerical data*; D006699:Home Care Services / Q000191:economics / Q000706:statistics & numerical data*; D006701:Home Nursing / Q000191:economics / Q000706:statistics & numerical data; D006801:Humans; D008134:Long-Term Care / Q000191:economics / Q000379:methods / Q000706:statistics & numerical data*; D008297:Male; D008484:Medicaid / Q000191:economics / Q000706:statistics & numerical data; D009735:Nursing Homes / Q000191:economics / Q000706:statistics & numerical data; D013997:Time Factors; D014481:United States
keywords: home care; institutional long-term care; instrumental variable