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Health Econ. 2019 May;28(5):678-692. doi: 10.1002/hec.3873. Epub 2019 Mar 18.

What is the marginal benefit of payment-induced family care? Impact on Medicaid spending and health of care recipients.

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Perelman School of Medicine, Department of Medical Ethics and Health Policy, University of Pennsylvania, Philadelphia, Pennsylvania, USA.
National Bureau of Economic Research (NBER), Cambridge, Massachusetts, USA.
Agency for Healthcare Research and Quality, Center for Delivery, Organization, and Markets, Rockville, Maryland, USA.
Department of Public Health Sciences, University of Chicago, Chicago, Illinois, USA.
Department of General Internal Medicine, Duke University Medical Center, Durham, North Carolina, USA.
Health Services Research and Development in Primary Care, Durham Veteran's Affairs Medical Center, Durham, North Carolina, USA.


Research on home-based long-term care has centered almost solely on the costs; there has been very little, if any, attention paid to the relative benefits. This study exploits the randomization built into the Cash and Counseling Demonstration and Evaluation program that directly impacted the likelihood of having family involved in home care delivery. Randomization in the trial is used as an instrumental variable for family involvement in care, resulting in a causal estimate of the effect of changing the combination of home health-care providers on health-care utilization and health outcomes of the beneficiary. We find that some family involvement in home-based care significantly decreases health-care utilization: lower likelihood of emergency room use, Medicaid-financed inpatient days, any Medicaid hospital expenditures, and fewer months with Medicaid-paid inpatient use. We find that individuals who have some family involved in home-based care are less likely to have several adverse health outcomes within the first 9 months of the trial, including lower prevalence of infections, bedsores, or shortness of breath, suggesting that the lower utilization may be due to better health outcomes.


Medicaid; cash and counseling; informal care; instrumental variables

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