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

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. They 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.