Before implementation of the BBA, there was significant regional variation in HH usage with greater variation in the number of HH visits per beneficiary than variation in number of beneficiaries selected for HH care after major orthopedic surgery. This variation in number of HH visits was driven primarily by variation in the number of HH aide visits.
These results reported herein support the earlier IPS findings by McCall et al. (2003a
; and related findings by Murtaugh et al. (2003)
, who reported that between 1997 and 2001 among a 1 percent sample of all HH users (both chronic and postacute care patients), there was a 79 percent reduction in HH aide visits but only a 42 percent reduction in skilled visits (physical therapy and nursing).
Before the BBA, the number of visits per beneficiary had been unconstrained. As elucidated by McKnight (2006)
, with the IPS per-beneficiary limits based on a blend of agency and regional historical costs, agencies with high average historical costs relative to national average costs faced greater pressure to restrain costs per beneficiary than agencies with lower historical costs. Because number of visits is highly correlated with costs, this translated to greater pressure to reduce visits per user on agencies with high utilization. Porrell, Liu, and Brungo (2006)
correlated agency low historical per beneficiary limits with subsequent market share expansion and high limits with market share contraction. Owing to the regional variation in utilization and the differential effect of blended per beneficiary limits, it is not surprising to see greater reductions in regions with greater HH utilization.
With the implementation of PPS, the number of visits per episode and regional variation fell even further. For these physical therapy–intense HH episodes of care, reimbursement under PPS was generous, with average payments per visit higher under PPS than IPS or even before IPS implementation. Therefore, the reduction in number of visits after orthopedic surgery under PPS was attributable to the incentive structure of prospective payments rather than reimbursement cuts.
Policy makers have long been concerned that regional variation was attributable to fraudulent or inefficient care (Brown 1997
). While it is clear that the IPS and PPS reduced regional variation and that under IPS, this was largely accomplished by reduction in utilization of HH aide visits, it is not clear if these reductions were primarily reductions in inefficient services. Some authors have reported that reductions in HH care use, in general, were not associated with poorer patient clinical outcomes or satisfaction (McCall et al. 2004
; Schlenker, Powell, and Goodrich 2005
;). However, McCall et al. (2002)
did report that for HH patients between 1997 and 1999, there was increased use of SNF, emergency room use, and mortality after HH admission, though no change in hospital readmission rates.
Peng, Navaie-Waliser, and Feldman (2003)
reported that at time of HH discharge, patients had a significant number of dependencies, as well as anxiety and depression. Brega et al. (2005)
reported that African American and nonwhite Hispanic HH patients had poorer functional outcomes than Caucasian patients at discharge.
With reductions in HH visits and in particular HH aide services, it is likely there would be increased burdens upon informal care from family members, which may disproportionately burden vulnerable HH patients. Peng, Navaie-Waliser, and Feldman (2003)
reported that Hispanic and Asian patients reported greater disabilities at time of discharge, and that African American patients were less likely to have informal care available than Caucasian patients. McKnight (2006)
reported that reductions in HH utilization were partly offset by increased out-of-pocket payments, and that low-income beneficiaries experienced larger reductions in HH care after implementation of IPS, arguing for potential loss in welfare though no poorer outcomes were noted. Schwartz et al. (2002)
reported that in rural HH agencies 81 percent of HH beneficiaries reported increased demands on informal care and heightened concern about older and frail beneficiaries (Lin and Meit 2005
). For certain vulnerable patient groups, particularly those with limited informal care options, earlier discharge under these BBA policies could have adverse effects.
Our findings need to be interpreted carefully. Only two conditions were studied, although these represent a significant proportion of postacute care services. Caution should be used extrapolating these findings to other groups of HH patients.
Furthermore, several other policies were concurrently implemented, which either directly (Operation Restore Trust, HH surety bonds, civil penalties for physicians inappropriately prescribing HH services and a 6-month moratorium on new HH agencies) or indirectly (SNF PPS, Short Stay Transfer Policy) impacted HH utilization and might explain some of the observed changes over time. (See Tables S1 and S2
for summary.) However, with the exception of Operation Restore Trust, no policies had differential regional implementation or regulation, so any potential temporal–regional bias is unlikely to be substantial. Furthermore, the above month-to-month analyses demonstrate that changes in utilization correlate well with BBA implementation dates.
In summary, the IPS and PPS reduced regional variation in HH services after major orthopedic surgery. Under IPS, this was largely attributable to reductions in lesser skilled services. Other authors have documented no concurrent reductions in patient outcomes. However, reducing services could result in increased burden on informal care, and for those beneficiaries with little social support, this could have adverse implications. To the extent that these reductions may have reduced ineffective care, these findings suggest that tailoring policies to target areas of high utilization may be an effective strategy to reduce program costs while minimizing potential untoward adverse outcomes.