RECENT GROWTH OF MEDICARE HOME HEALTH

Medicare spending for home health services has grown at an unprecedented rate since regulations were revised in 1989. To address the implications of this striking growth, it is necessary to examine the causes. This paper finds that the most important source of growth has been in the number of home health visits received per beneficiary, not in the number of beneficiaries that have been added in response to redefined eligibility criteria. Policymakers should clarify the objectives of the Medicare home health benefit, in light of increased attention to long-term care financing and expanded services for older Americans.