Essays on Informal and Formal Care for the Elderly

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2007-08-07

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This dissertation consists of two essays. In the first one I exploit geographic variation in the Medicare Home Health Care reimbursement rate that arose as a result of legislation passed in 1997 to identify the impact of government coverage of home health care visits on the living arrangements of older Medicare beneficiaries. I find that less generous reimbursement policies lead to a greater fraction of elderly living in shared living arrangements. My estimates imply that the law change had a large effect on shared living arrangements. One way to see this is to consider how the reimbursement change differentially affected living arrangements in the state that was most impacted by the law relative to the median state. My results imply that the law change caused the fraction of the elderly living in shared living arrangements to increase by 8 percent more in the most impacted state relative to the increase in the median state.

In the second essay of this dissertation I use the imposition of limits in reimbursement for Medicare Home Health Care introduced in 1997 to study changes in exit patterns of home health care agencies in California between 1994 and 2000.

When using piece-wise-constant Exponential hazard models estimated on the entire sample of providers, I find that the imposition of limits in reimbursement had a statistically significant effect on exit of home health care agencies in California.

When conducting the analysis separately for for-profit and not-for-profit providers, results obtained with the piece-wise-constant Exponential model indicate that the imposition of limits in reimbursement had a statistically significant effect on exit for for-profit agencies, but had no statistically significant effect on not-for-profit agencies.

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