Who Rules Home Care? The Impact of Privatization on Profitability, Cost, and Quality

Source: William Cabin, Home Health Care Management Practice February 2016 Vol. 28 No. 1 28-34

This article explores the literature, including two recent studies, on whether home health agency (HHA) ownership type plays a significant role in agency quality, cost, and profitability. The literature is limited, except for the two recent studies that use a merged database created from the Medicare Home Health Compare and the 2010 Medicare home health cost reports databases. One study found statistically significant differences between proprietary and non-profit HHAs: Proprietary agencies have lower overall quality, higher profitability, higher costs per patient, and more visits per patient, with therapy visits accounting for a larger share of the total. However, the second study found that the explanatory value of ownership is limited, with the number of HHAs in the state and therapy visits as a percentage of total visits having a significant influence on cost and quality when combined with ownership compared with ownership alone. Policy, practice, and research implications are discussed.