The Effects of Post-Acute Care Payment Reform on the Need For and Receipt of Caregiving

Rachel M. Werner, Norma B. Coe, Seiyoun Kim and R. Tamara Konetzka

American Journal of Health Economics, 2025, vol. 11, issue 2, 247 - 273

Abstract: Alternative payment models, such as bundled payment, have been proposed as a solution to the high costs of health care. While these models are typically effective at constraining spending on post-acute care, the decrease in consumption of formal post-acute care may result in a compensatory increase in the need for and use of informal or family caregiving. We estimate the effect of a large, randomized experiment with Medicare bundled payment on the need for and receipt of caregiving. Using data on over 2 million Medicare beneficiaries undergoing knee or hip replacement and a difference-in-differences approach, we find that the mandatory bundled payment caused a 1 to 2 percentage point absolute increase (a 9 percent to 14–15 percent relative increase) in both the need for and receipt of help with activities of daily living at the end of a home health episode, help that was likely provided by family caregivers. This increased caregiver burden was corroborated by a large shift away from nursing-home-based post-acute care (or care in a skilled nursing facility or SNF) after knee or hip replacement, a shift toward home health care, and an accompanying decline in the intensity of home care.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1086/729337 (application/pdf)
http://dx.doi.org/10.1086/729337 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:amjhec:doi:10.1086/729337

Access Statistics for this article

More articles in American Journal of Health Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().