Time is the Wisest Counselor of All: The Value of Provider-Patient Engagement Length in Home Health Care

Abstract

Home health care is a rapidly growing area of the health sector in the United States. We study its role in the shift towards value-based care, as it is viewed as an avenue for achieving reductions in the cost and utilization of expensive downstream health care services. Using a novel dataset on home health care visits, we examine whether and how the amount of time that a provider spends during a home health visit with a recently-discharged patient impacts the patient’s likelihood of being readmitted to the hospital. Since unobserved patient health status may influence both the length of a home health visit and the likelihood of hospital readmission, we use the within-provider average visit length of all other episodes’ visits conducted by each provider in the 30-day period before and after the focal visit as an instrument for visit length. Using this instrumental variable approach and controlling for operational, demographic, and patient condition-related characteristics, we find the following: on average, an extra minute during a focal home health visit is associated with a 1.39% decrease in the likelihood of readmission to the hospital following that visit. Our finding suggests that a 10% increase in visit length would decrease the likelihood of readmission following a home health visit by 6%. We document heterogeneity in this effect across different patient types and visit types. We conduct a cost-benefit analysis that suggests that the cost of investing in additional home health capacity is outweighed by the cost savings arising from fewer hospitalizations.

Keywords: home health, post-acute care, readmissions, value-based care, empirical operations

JEL Classification: I1, J22