Change of ownership in home health agencies may lead to increased Medicare spending and reduced staffing levels, according to UTHealth Houston research

Medicare-certified home health agencies, which are key to allowing older adults to age in place, are increasingly going through ownership changes, raising concerns about health care spending, workforce, and quality of care, according to a study by UTHealth Houston.

The research was published in JAMA Health Forum, part of the Journal of the American Medical Association.

“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 U.S. health care system and causing concerns about quality of care,” said Yucheng Hou, PhD, assistant professor in the Department of Management, Policy, and Community Health at UTHealth Houston School of Public Health. “Some types of the 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 other studies have looked at implications after ownership changes in hospitals, physician practices, and nursing homes, this is one of the first studies to examine home health agencies, Hou said.

The researchers looked at 294 Medicare-certified home health agencies through change-of-ownership files linked to publicly available Medicare data from 2016 to 2019. They were compared with 2,330 matched controls before and after the ownership transaction.

In the three years after ownership changes, quarterly star ratings increased by 0.18 relative to controls, with greater increases seen among home health agencies that converted from nonprofit/public to for-profit. Per-capita payments from Medicare also increased within two years of the ownership change. Sixty-day hospital admission rates and emergency department visits, however, remained the same.

The increased home health spending per patient, Hou said, 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.

“Although we find an increase in the home health star rating, this measure is mostly composed of self-reported quality measures from the home health agencies, so there might be room for upcoding,” Hou said. “The more objective claims-based quality measures, such as 60-day hospital admissions and outpatient emergency room visits, did not change.”

Most concerning, Hou said, was the reduction in staffing levels: down 17% in nurses and 26% in home health aides. There was also a reduction in per-visit minutes for patients: down 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 said.

Co-first authors were Zhanji Zhang, MSc, of the University of Minnesota, Minneapolis; and Kun Li, PhD, postdoctoral associate at Duke University. Co-authors were Siyi Wang, BS, of Rice University, and Shekinah Fashaw-Walters, PhD, assistant professor at the University of Pennsylvania, Philadelphia.