The Impact of Certificate-of-Need Laws on Nursing Home and Home Health Care Expenditures

Rahman, Momotazur; Galárraga, Omar; Zinn, Jacqueline S.; Grabowski, David C.; Mor, Vincent

doi:10.1177/1077558715597161

Cited by 29 publications

(22 citation statements)

References 41 publications

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“…Less attention has been directed toward the impact of hospital CON on hospital quality, with some studies suggesting improved quality for complex inpatient procedures (Vaughan-Sarrazin et al 2002), but lower quality for more routine hospital care (Stratmann and Wille 2016). Studies examining nursing home CON conclude CON does not reduce, and may increase, nursing home expenditures Rahman et al 2016), and may be associated with lower quality (Ching et al 2015). Comparatively few studies have examined CON for HHAs.…”

Section: Discussionmentioning

confidence: 99%

“…Comparatively few studies have examined CON for HHAs. Rahman et al (2016), using state-level expenditure data, found that HHA CON tends to shift expenditures from HHAs to nursing homes, and Polsky et al (2014), using Medicare claims data, found no statistically significant association between state CON for HHAs and risk of rehospitalization following receipt of post-acute care home health services (an indirect measure home health service quality).…”

Section: Discussionmentioning

confidence: 99%

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State entry regulation and home health agency quality ratings

Ohsfeldt

2018

J Regul Econ

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There is a substantial literature assessing the impact of entry restrictions created by state certificate-of-need (CON) programs on hospital and nursing home markets, but comparatively little research has focused on CON for home health agencies (HHAs). We assessed the impact of state CON programs for HHAs, and for potential substitute service providers, on quality ratings for HHAs. HHA quality ratings were obtained from the Home Health Compare database developed by the Centers for Medicare and Medicaid Services (CMS) for the last quarter of 2010 through the last quarter of 2013. The HHA-level data were augmented with county-level area characteristics for each HHA in the CMS database. An ordered logit model was used to estimate the association between state CON restrictions and Low, Medium, and High quality categories, adjusted for HHA and area characteristics. The results indicated that HHAs in states with CON for HHAs were less likely to have High quality ratings, and more likely to have Medium quality ratings, compared to agencies in states without CON for home health. Additional research is needed to assess whether the apparent adverse impact of CON on HHA quality is related to diminished competition among HHAs in states with CON.

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Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

State entry regulation and home health agency quality ratings

Ohsfeldt

2018

J Regul Econ

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“…CON laws require the nursing facility industry (and in some cases other health care providers) to obtain approval from state regulators before opening or expanding a facility, and as such have been critiqued for creating barriers to entry and blunting competition. We use data on nursing facility CON laws by state from Rahman, Galarraga, Zinn, Grabowski, and Mor () and the National Council of State Legislators.…”

Section: Methods and Datamentioning

confidence: 99%

Do financial incentives matter? Effects of Medicare price shocks on skilled nursing facility care

McHenry

Mellor

2020

Health Economics

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Skilled nursing facility (SNF) spending has been one of the fastest growing categories of Medicare spending over the past few decades, and reductions in SNF payments are often recommended as part of Medicare cost containment efforts.Using a quasi-experiment resulting from a policy-driven and facility-specific Medicare payment change, we provide new evidence on how Medicare payment changes affect the amount of SNF care provided to Medicare patients.Specifically, we examine a one-time, plausibly exogenous change in the hospital wage index, an area-level adjustment to SNF payments that affected the majority of SNFs nationwide. Using a panel dataset of SNFs, we model the effects of these payment changes on more than 12,000 SNFs across the United States. We find that increases in Medicare payment rates to SNFs increased the total number of Medicare resident days at SNFs. Specifically, a 5% payment increase raised Medicare resident days by 2.33% at facilities with a 10%Medicare share relative to 0%. Further, the effects were asymmetric: Although Medicare payment increases affected Medicare days, payment decreases did not. Our results have important implications for policies that alter the Medicare base payment rates to SNFs and other health care providers. K E Y W O R D SMedicare, nursing homes, payment policy, supply

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“…capita being of immense policy interest, most research on how CON laws affect spending has focused only on subcomponents of total spending such as hospital spending p er admission (Sloan 1981), nursing home spending (Rahman et al 2016), or prices (Bailey, Hamami, and M cCorry 2017). Only three papers before ours appear to have estimated the effect of CON on total health spending per capita, with one finding no effect (Conover and Sloan 1998) and two finding that CON increases spending (Lanning, M orrisey, and Ohsfeldt 1991;Bailey 2018a).…”

Section: Data and Empirical Modelmentioning

confidence: 99%

Competition and Health-Care Spending: Theory and Application to Certificate of Need Laws

Bailey¹,

Hamami²

2019

Working Paper (Federal Reserve Bank of Philadelphia)

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Hospitals and other health-care providers in 34 states must obtain a Certificate of Need (CON) from a state board before opening or expanding, leading to reduced competition. We develop a theoretical model of how market concentration affects health-care spending. Our theoretical model shows that increases in concentration, such as those brought about by CON, can either increase or decrease spending. Our model predicts that CON is more likely to increase spending in markets in which costs are low and patients are sicker. We test our model using spending data from the Household Component of the Medical Expenditure Panel Survey (MEPS).

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The Impact of Certificate-of-Need Laws on Nursing Home and Home Health Care Expenditures

Cited by 29 publications

References 41 publications

State entry regulation and home health agency quality ratings

State entry regulation and home health agency quality ratings

Do financial incentives matter? Effects of Medicare price shocks on skilled nursing facility care

Competition and Health-Care Spending: Theory and Application to Certificate of Need Laws

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