Certificate of need and the cost of competition in home healthcare markets

Home Health Care Serv Q. 2020 Apr-Jun;39(2):51-64. doi: 10.1080/01621424.2020.1728464. Epub 2020 Feb 14.

Abstract

We used 2010-16 Medicare Cost Reports for 10,737 freestanding home health agencies (HHAs) to examine the impact of home health (HH) and nursing home (NH) certificate-of-need (CON) laws on HHA caseload, total and per-patient variable costs. After adjusting for other HHA characteristics, total costs were higher in states with only HH CON laws ($2,975,698), only NH CON laws ($1,768,097), and both types of laws ($3,511,277), compared with no CON laws ($1,538,536). Higher costs were driven by caseloads, as CON reduced per-patient costs. Additional research is needed to distinguish whether this is due to skimping on quality vs. economies of scale.

Keywords: Home health; certificate-of-need; cost; nursing home; regulation.

Publication types

  • Research Support, N.I.H., Extramural

MeSH terms

  • Certificate of Need / economics*
  • Certificate of Need / trends
  • Cohort Studies
  • Delivery of Health Care / methods*
  • Delivery of Health Care / standards
  • Delivery of Health Care / trends
  • Economic Competition / standards*
  • Economic Competition / trends
  • Home Care Agencies / economics*
  • Home Care Agencies / organization & administration
  • Home Care Agencies / trends
  • Humans
  • United States