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Home Health Care

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The Balanced Budget Act of 1997 reduced the number of home health aides

To curb the booming home health agency growth that occurred in the 1980s, Congress passed the Balanced Budget Act (BBA) of 1997. The Act sought to tame Medicare home health care costs as well as the abuse and improper use associated with it. To accomplish this, the Act initiated new reimbursement formulas, coupled with stricter certification requirements for home health agencies. As a result, Medicare expenditures fell from $18.3 billion in 1997 to $9.5 billion in 1999.

Agency for Healthcare Research and Quality researcher William Spector, Ph.D., and colleagues used Centers for Medicare and Medicaid Services data from 1996 to 2002 to examine staffing trends in rural and urban Medicare-certified home health agencies before and after the implementation of the BBA. They found an average annual decline of 13 percent in home health aides in rural and urban counties from 1997 to 2002. The number of registered nurses, licensed professional and vocational nurses, dieticians, and medical social workers also fell, but not at the rate of home health aides.

Another result of the BBA's provisions was that therapists and registered nurses took on a larger share of home health care visits, edging out opportunities once met by home health aides. These professionals also carried out Medicare's focus on short-term and rehabilitative care in lieu of the chronic care home health aides tend to provide. The number of professional therapists rose slightly after the BBA was instituted.

Both metropolitan and nonmetropolitan counties were equally affected by the staffing declines. However, rural counties tended to suffer most from the ebb of home health care staff because they tend to be underserved in general.

See "Home health care agency staffing patterns before and after the Balanced Budget Act of 1997, by rural and urban location," by William J. McAuley, Ph.D., Dr. Spector, and Joan Van Nostrand, D.P.A. in the Winter 2008 Journal of Rural Health 24(1), pp. 12-23. Reprints (AHRQ Publication No. 08-R059) are available from the AHRQ Publications Clearinghouse.

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