Home Health Care Quality, Its Costs and Implications for Home Health Value-Based Purchasing

Abstract

The Home Health Value-based Purchasing (HHVBP) demonstration, incorporating a payment formula designed to incentivize both high-quality care and quality improvement, is expected to become a national program after 2022, when the demonstration ends. This study investigated the relationship between costs and several quality dimensions, to inform HHVBP policy. Using Medicare cost reports, OASIS and Home Health Compare data for 7,673 home health agencies nationally, we estimated cost functions with instrumental variables for quality. The estimated net marginal costs varied by composite quality measure, baseline quality, and agency size. For four of the five composite quality measures, the net marginal cost was negative for low-quality agencies, suggesting that quality improvement was cost saving for this agency type. As the magnitude of the net marginal cost is commensurate with the payment incentive planned for HHVBP, it should be considered when designing the incentives for HHVBP, to maximize their effectiveness.

Association of the Home Health Value-Based Purchasing Model With Quality, Utilization, and Medicare Payments After the First 5 Years

“…Determining whether agencies with specific characteristics were primarily responsible for the savings and quality improvement attributed to the HHVBP model remains a topic for future investigation. Research by Mukamel and colleagues suggests that agencies with lower quality at baseline face net savings and costs that provide stronger incentives to improve quality compared with agencies with higher quality at baseline. Investigating whether agencies with lower baseline quality realized greater improvement in response to the model may provide further insight into mechanisms by which HHVBP is associated with outcomes.…”