Home Health & Hospice Week

The longstanding tension between for-profit and non-profit home care providers has been stepped up thanks to a recent study published in the August issue of the journal Health Affairs.

For-profit home health agencies are far costlier for Medicare than nonprofit agencies, says the study conducted by researchers at the City Univer-sity of New York School of Public Health. The authors analyzed cost reports filed with Medicare by 7,165 home health agencies in 2010-2011, as well as data for 22 quality measures from Medicare’s Home Health Compare database covering 9,128 agencies.

"Compared to nonprofits, operating costs at for-profit agencies were 18 percent higher, with excess administration (at $476 per patient) accounting for nearly two-thirds of the $752 difference in operating costs," according to a release about the study. For-profits also did many more speech, physical and occupational therapy visits, and added 15 percent on top of operating costs vs. a 6.4 percent surplus at nonprofit agencies, the authors claim.

Despite their higher costs, for-profit agencies delivered slightly lower-quality care, according to HH Compare. "Rehospitalizations, widely viewed as an important quality measure, were more frequent among for-profit agencies’ patients: 28.4 percent vs. 26.5 percent at nonprofit agencies," the study notes.

The researchers don’t mince words when stating their conclusions. "For-profit home care agencies are bleeding Medicare," Dr. Steffie Wool-handler, professor of public health at CUNY’s Hunter College, lecturer at Harvard Medical School and senior author of the study, says in the release. "They raise costs by $3.3 billion each year and lower the quality of care for frail seniors."

"While our study is the first to show that profit-making has trumped patient care in Medi-care’s home health program, that’s no surprise," adds lead author William Cabin, assistant professor of social work at Temple University. "A large body of research on hospitals, nursing homes, dialysis facilities, and HMOs has shown that for-profits deliver inferior care at inflated prices."

Bottom line: "Our findings raise concerns about whether for-profit agencies should continue to be eligible for Medicare payments and about the efficiency of Medicare’s market-oriented, risk-based home care payment system," says the study’s ab-stract, available at http://content.healthaffairs.org/content/33/8/1460.abstract?sid=066bf951-881a-406d-8977-0587864271f9.