In the August issue of Health Affairs, a new study finds that for-profit Medicare home health agencies have higher costs and lower quality in comparison to their nonprofit counterparts. Researchers from the City University of New York's School of Public Health analyzed recent national cost and case-mix-adjusted quality outcomes to assess the performance of for-profit and nonprofit home health agencies.
Their analysis showed "for-profit agencies scored slightly but significantly worse on overall quality indicators compared to nonprofits. Notably, for-profit agencies scored lower than nonprofits on the clinically important outcome "avoidance of hospitalization" Scores on quality measures were lowest in the South, where for-profits predominate. Compared to nonprofits, proprietary agencies also had higher costs per patient were more profitable, and had higher administrative costs."
The authors raise concerns about the admittance of for-profit agencies to Medicare, who returned to service in 1980 after being banned from providing services. In conclusion the authors state, "Our findings raise concerns about whether for-profit agencies should continue to be eligible for Medicare payments and about the efficiency of Medicare's market-oriented, risk-based home care payment system."