Long-Term Care Hospitals: A Case Study in Waste / Liran Einav, Amy Finkelstein, Neale Mahoney.

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Einav, Liran

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w24946.Publication details: Cambridge, Mass. National Bureau of Economic Research 2018.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: There is substantial waste in U.S. healthcare, but little consensus on how to identify or combat it. We identify one specific source of waste: long-term care hospitals (LTCHs). These post-acute care facilities began as a regulatory carve-out for a few dozen specialty hospitals, but have expanded into an industry with over 400 hospitals and $5.4 billion in annual Medicare spending in 2014. We use the entry of LTCHs into local hospital markets and an event study design to estimate LTCHs' impact. We find that most LTCH patients would have counterfactually received care at Skilled Nursing Facilities - post-acute care facilities that provide medically similar care to LTCHs but are paid significantly less - and that substitution to LTCHs leaves patients unaffected or worse off on all dimensions we can objectively measure. Our results imply that Medicare could save about $4.6 billion per year - with no harm to patients - by not allowing for discharge to LTCHs.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w24946 (Browse shelf(Opens below))	Not For Loan

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August 2018.

There is substantial waste in U.S. healthcare, but little consensus on how to identify or combat it. We identify one specific source of waste: long-term care hospitals (LTCHs). These post-acute care facilities began as a regulatory carve-out for a few dozen specialty hospitals, but have expanded into an industry with over 400 hospitals and $5.4 billion in annual Medicare spending in 2014. We use the entry of LTCHs into local hospital markets and an event study design to estimate LTCHs' impact. We find that most LTCH patients would have counterfactually received care at Skilled Nursing Facilities - post-acute care facilities that provide medically similar care to LTCHs but are paid significantly less - and that substitution to LTCHs leaves patients unaffected or worse off on all dimensions we can objectively measure. Our results imply that Medicare could save about $4.6 billion per year - with no harm to patients - by not allowing for discharge to LTCHs.