Practice Patterns among Entrants and Incumbents in the Home Health Market after the Prospective Payment System was Implemented

Hyunjee Kim and Edward Norton

Health Economics, 2015, vol. 24, issue S1, 118-131

Abstract: Home health care expenditures were the fastest growing part of Medicare from 2001–2009, despite the implementation of prospective payment. Prior research has shown that home health agencies adopted two specific strategies to take advantage of Medicare policies: provide at least 10 therapy visits to get an enormous marginal payment and recertify patients for additional episodes. We study whether there is heterogeneity in the adoption of those strategic behaviors between home health agency entrants and incumbents and find that entrants were more likely to adopt strategic practice patterns than were incumbents. We also find that for‐profit incumbents mimicked one of the practice patterns following entrants in the same market. Our findings suggest that it is important to understand the heterogeneity in providers' behavior and how firms interact with each other in the same market. These findings help explain the rapid rise in expenditures in the home health care market. Copyright © 2015 John Wiley & Sons, Ltd.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://doi.org/10.1002/hec.3147

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:wly:hlthec:v:24:y:2015:i:s1:p:118-131

Access Statistics for this article

Health Economics is currently edited by Alan Maynard, John Hutton and Andrew Jones

More articles in Health Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().