The Effects of the Balanced Budget Act of 1997 on Home Health and Hospice in Older Adult Cancer Patients

Background: Home health and hospice services can constitute important elements in the continuum of care for older adults diagnosed with cancer. The Balanced Budget Act (BBA) of 1997 included provisions affecting those services.

Objectives: The first objective of this study is to assess the effect of the BBA of 1997 on home health and hospice service utilization in older cancer patients. The second objective is to estimate the effect of the BBA of 1997 on costs associated specifically with home health and hospice services and on total costs of care. The final objective is to evaluate the effect of the BBA of 1997 on mortality in these patients.

Research Design: Longitudinal analysis using the Surveillance, Epidemiology, and End Results-Medicare Database, covering a service area that includes 26% of the US population.

Participants: Community-dwelling Medicare beneficiaries 65 years of age and older.

Measures: Utilization rates of home health and hospice services; costs associated with those services, and total costs of care; and mortality.

Results: Home health utilization rates dropped substantially and hospice utilization rates increased after the BBA. Medicare costs for home health services declined as did total Medicare costs but hospice costs increased. There was no discernable effect on mortality rates.

Conclusions: The BBA was successful in containing the costs of home health services and resulted in savings in overall costs of care for older cancer patients. Reduction in utilization of home health services did not seem to negatively affect outcomes. The BBA may have contributed to the trend of increasing use of hospice care.