COMPETITION AND QUALITY IN HOME HEALTH CARE MARKETS
Article first published online: 14 MAY 2013
Copyright © 2013 John Wiley & Sons, Ltd.
Volume 23, Issue 3, pages 298–313, March 2014
How to Cite
Jung, K. and Polsky, D. (2014), COMPETITION AND QUALITY IN HOME HEALTH CARE MARKETS. Health Econ., 23: 298–313. doi: 10.1002/hec.2938
- Issue published online: 17 FEB 2014
- Article first published online: 14 MAY 2013
- Manuscript Accepted: 6 FEB 2013
- Manuscript Revised: 4 JAN 2013
- Manuscript Received: 24 MAY 2012
- NIH/NHLBI. Grant Number: grant # R01 HL088586-01
- NIH/NIA. Grant Number: grant # 1R03AG035098-01
- quality of care;
- home health care markets
Market-based solutions are often proposed to improve health care quality; yet evidence on the role of competition in quality in non-hospital settings is sparse. We examine the relationship between competition and quality in home health care. This market is different from other markets in that service delivery takes place in patients' homes, which implies low costs of market entry and exit for agencies. We use 6 years of panel data for Medicare beneficiaries during the early 2000s. We identify the competition effect from within-market variation in competition over time. We analyze three quality measures: functional improvements, the number of home health visits, and discharges without hospitalization. We find that the relationship between competition and home health quality is nonlinear and its pattern differs by quality measure. Competition has positive effects on functional improvements and the number of visits in most ranges, but in the most competitive markets, functional outcomes and the number of visits slightly drop. Competition has a negative effect on discharges without hospitalization that is strongest in the most competitive markets. This finding is different from prior research on hospital markets and suggests that market-specific environments should be considered in developing polices to promote competition. Copyright © 2013 John Wiley & Sons, Ltd.