ContractNo.: 500-94-0062 MPRReferenceNo.: 8246-125 MedicarePerEpisode ProspectivePayment: A SystemwithNoApparent ShiftsinCostorBurden June8,2000 Ba ps Vet. .irsSanDiegoHealthCareSystem Universii_yofCalifornia,SanDiego Programmers: ElizabethStuart MathematicaPolicyResearch,Inc. AmyZambrowski MathematicaPolicyResearch,Inc. SurveyDirector: RhodaCohen MathematicaPolicyResearch,Inc. Submittedto: Submittedby: HealthCareFinancingAdministration MathematicaPolicyResearch,Inc. 7500SecurityBlvd,(C-3-21-06) P.O.Box2393 Baltimore,MD 21244-1850 Princeton,NJ 08543-2393 (609)799-3535 ProjectOfficer: ProjectDirector: AnnMeadow ValerieCheh PrincipalInvestigators: ValerieCheh RandallBrown BarbaraPhillips .. CONTENTS Chapter Page EXECUTIVESUMMARY xi I THEPER-EPISODEHOMEHEALTHDEMONSTRATIONAND EVALUATION 1 A. THEMEDICAREHOMEHEALTHBENEFIT 2 B. THEPER-EPISODEDEMONSTRATION 4 1 DemonstrationPaymentandIncentives 6 2. OtherDemonstrationProcedures 9 n MECHANISMS,STRATEGIES,ANDIMPACTSONHOME HEALTHUSE 13 A. MECHANISMS 13 B. AGENCYSTRATEGIES 15 C. IMPACTOFPER-EPISODEPAYMENTONHOMEHEALTH SERVICES 16 D. EXPECTEDIMPACTONTHEUSEOFNON-MEDICARE SERVICES 17 III DATAANDVARIABLES 19 A. THEPATIENTSURVEY 19 B. VARIABLES 21 1 OutcomeVariables 21 2. ControlVariables 25 ni ... CONTENTS(continued) Chapter Page IV METHODS 37 A. STATISTICALTECHNIQUES 37 1. ModelsforEstimatingOverallImpacts 38 2. EstimatingSubgroupImpacts 40 B. WEIGHTINGANDDESIGNEFFECTS 42 1 Weighting 42 2. AdjustingfortheDesignEffect 44 C. SAMPLES 47 D. HYPOTHESISTESTSFORTHEIMPACTESTIMATES 47 V OVERALLIMPACTS 49 A. IMPACTSONINFORMALCARE 49 1 LikelihoodofReceivingInformalCare 49 2. AmountofInformalCare 55 3. SensitivitytoSample 55 4. Discussion 57 B. IMPACTSONHOME-BASEDANDCOMMUNITY- BASEDSERVICES 59 1. Results 59 2. Discussion 66 C. IMPACTSONRESIDENTIALSERVICES 67 1 LikelihoodofResidenceinanAssisted-LivingFacility 67 2. NursingHomeServices 72 3. Discussion 75 IV .. CONTENTS(continued) Chapter P«g« VI SUBGROUPIMPACTS 81 A. SUBGROUPDEFINITIONS 82 1 AgencyCharacteristics °2 2. PatientCharacteristics 84 B. ESTIMATEDDIFFERENCESFORAGENCYSUBGROUPS 85 C. IMPACTSFORPATIENTSUBGROUP: MEDICAID RECIPIENTS 89 1. InformalCare 89 2. Home-BasedandCommunity-BasedServices 99 3. ResidentialServices ^^" D. DISCUSSION 112 1 InformalCare 11^ 2. Home-DeliveredMeals 11^ 3. ResidentialServices 11^ VII CONCLUSIONS 119 A. SUMMARYOFRESULTS 119 1. OverallResults 119 2. DifferentialImpactsbyPatientandAgencyCharacteristics 120 B. LIMITATIONSOFTHISANALYSIS 121 C. POLICYIMPLICATIONS 123 REFERENCES 125 APPENDIXA: ILLUSTRATIVEQUESTIONSFROM THEFOUR-ANDEIGHT-MONTH INTERVIEWSONUSEOFNON-MEDICARE SERVICES 127 CONTENTS(continued) Chapter Page APPENDIXB: DESIGNANDFIELDINGOF THEPATIENTSURVEY ... 155 APPENDIXC: SUPPLEMENTALTABLESFOR CHAPTERVI 167 VI TABLES Table Page III.1 EPISODE-LEVELCONTROLVARIABLESFORMULTIVARIATE ANALYSIS,BYSOURCE 28 111.2 AGENCY-ANDAREA-LEVELCONTROLVARIABLESFOR MULTIVARIATEANALYSES,BYSOURCE 29 111.3 WEIGHTEDMEANSFORCONTROLVARIABLES,BY TREATMENTSTATUS 32 V.1 THEIMPACTOFPER-EPISODEPAYMENTONTHEUSEOF INFORMALCAREATFOURMONTHS 51 V.2 THEIMPACTOFPER-EPISODEPAYMENTONTHEUSEOF INFORMALCAREATFOURMONTHS 52 V.3 THEIMPACTOFPER-EPISODEPAYMENTONTHEUSEOF INFORMALCAREATEIGHTMONTHS 53 V.4 THEIMPACTOFPER-EPISODEPAYMENTONTHEUSEOF INFORMALCAREATEIGHTMONTHS 54 V.5 THEIMPACTOFPER-EPISODEPAYMENTONTHEUSEOF HOME-BASEDANDCOMMUNITY-BASEDNON-MEDICARE SERVICESATFOURMONTHS 60 V.6 THEIMPACTOFPER-EPISODEPAYMENTONTHEUSEOF HOME-BASEDANDCOMMUNITY-BASEDNON-MEDICARE SERVICESATFOURMONTHS 61 V.7 THEIMPACTOFPER-EPISODEPAYMENTONTHEUSEOF HOME-BASED ANDCOMMUNITY-BASEDNON-MEDICARE SERVICESATEIGHTMONTHS 62 V.8 THEIMPACTOFPER-EPISODEPAYMENTONTHEUSEOF HOME-BASEDANDCOMMUNITY-BASEDNON-MEDICARE SERVICESATEIGHTMONTHS 65 V.9 THEIMPACTOFPER-EPISODEPAYMENTONTHEUSEOF RESIDENTIAL NON-MEDICARESERVICESATFOURMONTHS 68 Vll 81 TABLES(continued) Table Page V.1 TOFHEREISMIPDAECNTTIOAFLPNEOR-NE-PMIESDOIDCEAPRAEYSMEERNVTICOENSTAHTEFUOSUERMONTHS 69 V.1 TOFHEREISMIPDAECNTTIOAFLPNEOR-NE-PMIESDOIDCEAPRAEYSMEERNVTICOENSTAHTEEUISGEHTMONTHS 71 V.12 THEIMPACTOFPER-EPISODEPAYMENTONTHEUSEOF RESIDENTIAL NON-MEDICARESERVICESATEIGHTMONTHS 74 VI.1 DEPENDENTVARIABLESFORAGENCYSUBGROUPANALYSES 87 VI.2 IMPACTOFPER-EPISODEPAYMENTONTHEUSEOFINFORMAL CAREATFOURMONTHS,BYPATIENT'SMEDICAIDSTATUS 90 VI.3 IMPACTOFPER-EPISODEPAYMENTONTHEUSEOFINFORMAL CARE ATEIGHTMONTHS,BYPATIENT'SMEDICAIDSTATUS 93 VI.4 IMPACTOFPER-EPISODEPAYMENTONTHEUSEOFINFORMAL CARE ATEIGHTMONTHS,BYPATIENT'SMEDICAIDSTATUS 96 VI.5 ESTIMATEDTREATMENT-CONTROLDIFFERENCESFOR LIKELIHOODOF RECEIPTOFINFORMALCAREATEIGHT MONTHS,BYPATIENT'SMEDICAIDSTATUSANDWEIGHTING SCHEME 98 VI.6 IMPACTOFPER-EPISODEPAYMENTONTHEUSEOFFORMAL, NON-RESIDENTIALNON-MEDICARESERVICESATFOUR MONTHS,BYPATIENT'SMEDICAIDSTATUS 100 VI.7 IMPACTOFPER-EPISODEPAYMENTONTHEUSEOFFORMAL, NON-RESIDENTIAL,NON-MEDICARESERVICESATEIGHT MONTHS,BYPATIENT'SMEDICAIDSTATUS 102 VI. IMPACTOFPER-EPISODEPAYMENTONTHEUSEOF RESIDENTIALSERVICESATFOURMONTHS,BYPATIENT'S MEDICAIDSTATUS 107 VI.9 IMPACTOFPER-EPISODEPAYMENTONTHEUSEOF RESIDENTIALSERVICESTOEIGHTMONTHS,BYPATIENT'S MEDICAIDSTATUS 109 viu FIGURES Figure Page V.1 MEANINFORMALCAREGIVERVISITS,TWOWEEKSBEFORE INTERVIEW 56 V.2 MEANNON-MEDICAREHOMEMAKERVISITS,TWOWEEKS BEFOREINTERVIEW 64 V.3 MEANNURSINGHOMEDAYSDURINGFOUR-MONTHPERIOD 76 IX