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State entry regulation and home health agency quality ratings

Robert L. Ohsfeldt () and Pengxiang Li ()
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Robert L. Ohsfeldt: Texas A&M University
Pengxiang Li: University of Pennsylvania

Journal of Regulatory Economics, 2018, vol. 53, issue 1, 1-19

Abstract: Abstract There is a substantial literature assessing the impact of entry restrictions created by state certificate-of-need (CON) programs on hospital and nursing home markets, but comparatively little research has focused on CON for home health agencies (HHAs). We assessed the impact of state CON programs for HHAs, and for potential substitute service providers, on quality ratings for HHAs. HHA quality ratings were obtained from the Home Health Compare database developed by the Centers for Medicare and Medicaid Services (CMS) for the last quarter of 2010 through the last quarter of 2013. The HHA-level data were augmented with county-level area characteristics for each HHA in the CMS database. An ordered logit model was used to estimate the association between state CON restrictions and Low, Medium, and High quality categories, adjusted for HHA and area characteristics. The results indicated that HHAs in states with CON for HHAs were less likely to have High quality ratings, and more likely to have Medium quality ratings, compared to agencies in states without CON for home health. Additional research is needed to assess whether the apparent adverse impact of CON on HHA quality is related to diminished competition among HHAs in states with CON.

Keywords: Home health; Barriers to entry; Certificate of Need; Quality (search for similar items in EconPapers)
JEL-codes: I18 L51 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:kap:regeco:v:53:y:2018:i:1:d:10.1007_s11149-018-9351-4