Changes in the ownership of Medicare-certified home health agencies may lead to higher Medicare spending and lower staffing levels, according to a UTHealth Houston study. The research also points to the influence of private equity firms on care quality.
Medicare-certified home health agencies, essential for enabling older adults to age comfortably at home, are increasingly experiencing ownership transfers. This shift raises significant concerns about health care expenditure, workforce dynamics and care quality, according to new research led by UTHealth Houston.
“The ownership change in health care sectors — including various forms of acquisitions by health systems, insurers, private equity firms and other corporate investors — is increasingly reshaping the U.S. health care system and causing concerns about quality of care,” Yucheng Hou, assistant professor in the Department of Management, Policy and Community Health at UTHealth Houston School of Public Health, said in a news release. “Some types of ownership changes, such as private equity firms’ acquisition of health care organizations, could shift organizations’ focus to short-term profit generating instead of providing high-quality care.”
While previous studies have explored the effects of ownership changes in hospitals, physician practices and nursing homes, this is one of the first to systematically assess the impact on home health agencies.
The study, published in JAMA Health Forum, analyzed 294 Medicare-certified home health agencies from 2016 to 2019, comparing them to 2,330 matched controls.
The findings indicate that post-ownership changes, these agencies saw a 0.18 increase in their quarterly star ratings compared to controls, with notable increases in agencies transitioning from nonprofit/public to for-profit status. However, Medicare spending per capita rose within two years following the transaction. Crucially, 60-day hospital admission rates and emergency department visits did not see significant changes.
“The increased home health spending per patient could be because home health agencies are shifting resources toward more profitable services or treating patients for multiple home health episodes following the ownership change, which highlights the need for future research,” added Hou.
Hou also underscored a worrisome trend in staffing levels. Post-ownership changes, there was a substantial reduction in workforce: a 17% decrease in nurses and a 26% drop in home health aides. Additionally, patient care time per visit diminished by 5% for skilled nursing, 3% for physical therapy and 11% for home health aide care.
“Overall, our results are consistent with the growing evidence of corporate consolidation in other health care sectors, which paints concerning implications of ownership changes on the quality of care,” Hou added.
The study’s co-first authors include Zhanji Zhang of the University of Minnesota and Kun Li of Duke University. Joining them as co-authors were Siyi Wang of Rice University and Shekinah Fashaw-Walters of the University of Pennsylvania.
These findings prompt an urgent call for more detailed and extended studies to fully understand how such ownership shifts affect the broader landscape of home health care, especially considering the increasingly dominant role of corporate consolidations and private equity in the health care sector.