Fewer Patients Receive Home Health Care After Medicare Changes Its Method of Payment in 1997

The Medicare home health benefit changed dramatically between 1997 and 2001, leading to significant reductions in the number of people who used the benefit and the amount of services they received, according to an analysis by researchers at the Visiting Nurse Service of New York.

The proportion of Medicare beneficiaries who received home health services decreased by almost one third over that time period, and the average number of visits users received each year decreased by nearly 60 percent.

Key Findings

The researchers reported these findings in an article published in the September/October 2003 issue of the journal Health Affairs:

  • The proportion of Medicare beneficiaries using the home health benefit decreased by almost one-third between 1997 and 2001.
  • The average annual number of home health visits received by Medicare beneficiaries declined by nearly 60 percent between 1997 and 2001.
  • Medicare expenditures for home health visits decreased by more than 50 percent from 1997 to 2001.
  • Between 1997 and 2001 Medicare beneficiaries increasingly received a larger proportion of their home health visits from skilled home health providers.

Key Conclusions

The researchers offered the following conclusions in their Health Affairs article and in a post-grant interview:

  • The Balanced Budget Amendment of 1997 "clearly has been successful at reining in the use of the [home health] benefit as well as shifting it toward skilled services."

Whereas an earlier analysis found little evidence of problems with access or patient outcomes associated with the introduction of the interim payment system, it remains unclear if the later introduction of the home health prospective payment system had an impact on these measures.