Gorman on Attendant Services Under Medicaid
By David Henderson
Recipients of agency care, that is, care provided by certified agencies, have little control over who enters their homes, when they will come, what they will do, and how they will do it. Theft is a constant problem. In addition, the recipients cannot reward good performers or dock poor ones because personal assistants work for the agency that hires, trains, schedules, supervises, fires, and bills for their services. Because Medicaid beneficiaries often do not see invoices for their care, state officials have no way of knowing if the services agencies bill for were actually rendered. In some states, reimbursements rates are set so low that good workers refuse to work for the program, and Medicaid recipients cannot get the hours of service that they need.
This is from Linda Gorman, “Who Attends You When You Are Ill? Attendant Services Under Consumer-directed Health Care.” This is the Econlib Feature Article for June.
Health economist Gorman takes on the “Iron Triangle” idea that in health care you can achieve at most two of the following three goals: high quality, universal access, and cost containment. She examines the empirical literature on experiments in Medicaid provision of attendant services for people who are disabled. She finds that it is possible to achieve all three goals if the beneficiaries are given a budget that they are free to spend and are given a fraction of their savings if they don’t spend. Incentives matter.