The Relationship Between Home Health Agencies’ Financial Performance and Quality of Care

Home health agencies (HHAs) provide important care within the U.S. healthcare system. This cross-sectional observational study aims to examine the possible association between HHA financial performance on Home Health Compare (HHC) Patient star ratings in the 2018 to 2019 fiscal years. This study included approximately 4700 HHAs per each fiscal year. Utilizing the Home Health Consumer Assessment of Healthcare Provider and Systems (CAHPS) survey, Medicare Cost Reports, and US Census Bureau County data, we denoted financial performance as negative operating margins for HHAs (i.e., HHAs that lose money). The quality outcome was HHC quality star ratings. Employing Poisson regression, we found HHAs with negative operating margins associated with an 8-percentage point decrease in average mean HHC star ratings (AME = −0.08; 95% CI = −0.12, −0.04; p < .001). For-profit ownership (AME = −0.07; 95% CI = −0.12, −0.03; p < .001) and urban status (AME = −0.31; 95% CI = −0.35, −0.26; p < .001) both had lower mean HHC ratings. Chain affiliation was associated with higher HHC ratings and a 15-percentage point increase in its average mean HHC ratings (AME = 0.15; 95% CI = 0.11, 0.18; p < .001). Earning a positive operating margin may not necessarily equate to high quality, yet establishing quality ratings is a key initiative for HHAs. Medicare Payment Advisory Committee (MEDPAC) recommends an overall reduction in reimbursement payments starting in 2024. Consequently, given the importance of quality ratings for HHAs, and the possible change in reimbursement rates, HHAs need to be aware of how their financial performance associates with quality.