Paying to Stay: Effects of Vertical Integration and Competition in a Post-Acute Care Setting / Vicki Y. Chen.

Format:

Book

Thesis/Dissertation

Author/Creator:

Chen, Vicki Y., author.

Contributor:

David, Guy, degree supervisor.

Werner, Rachel, degree committee member.

Swanson, Ashley, degree committee member.

Polsky, Daniel, degree committee member.

University of Pennsylvania. Applied Economics, degree granting institution.

Language:

English

Subjects (All):

Health care management.

Applied Economics--Penn dissertations.

Penn dissertations--Applied Economics.

Local Subjects:

Health care management.

Applied Economics--Penn dissertations.

Penn dissertations--Applied Economics.

Genre:

Academic theses.

Physical Description:

1 online resource (130 pages)

Contained In:

Dissertation Abstracts International 79-10B(E).

Place of Publication:

[Philadelphia, Pennsylvania]: University of Pennsylvania ; Ann Arbor : ProQuest Dissertations & Theses, 2018.

Language Note:

English

System Details:

Mode of access: World Wide Web.

text file

Summary:

I investigate how competition and vertical integration affect a firm's customer acquisition versus retention strategies in the context of home health agencies. Under Medicare, these agencies are paid a lump-sum payment for each new or current patient's home health episode, lasting up to 60 days. I focus on the agency's strategic choice to retain, or recertify, patients for an additional episode when under changing competitive dynamics or under vertical integration with a hospital. Using data on Medicare beneficiaries who transition from an acute stay to post-acute care from 2007 to 2013, I show that non-vertically integrated agencies facing increasing competition for new patients under this payment system recertify more patients in order to compensate for diminishing quantity (and profits). In contrast, vertically integrated agencies are insulated from these competitive pressures and have fewer recertifications by 3.43 percentage points (or 22%) on average without increases in readmissions. To control for patient selection and provider-level selection bias into vertical arrangements, I use a combination of instrumental variables approach and fixed effects at the hospital-agency pair level over time. I also construct a Herfindahl--Hirschman index using a conditional logit model based on relatively exogenous travel distances. The results indicate that, in this setting, vertical integration can reduce Medicare spending on post-acute care episodes through referral control without adverse effects on readmissions by 5.8-7.5%. Competition for new patients among non-integrated agencies may exacerbate the unnecessary retention of current patients, resulting in 4-5.5% increase in HHA spending.

Notes:

Source: Dissertation Abstracts International, Volume: 79-10(E), Section: B.

Advisors: Guy David; Committee members: Daniel Polsky; Ashley Swanson; Rachel Werner.

Department: Applied Economics.

Ph.D. University of Pennsylvania 2018.

Local Notes:

School code: 0175

ISBN:

9780438037137

Access Restriction:

Restricted for use by site license.