Training for Medicaid Home-Based Caregivers
Introduction
Cronin and Lieber (2024) estimate the demand for skills training amongst Medicaid home-based caregivers. The authors partnered with a home care agency to conduct a randomized control trial that offers caregivers the opportunity to complete an online training program. By varying the financial incentives offered to participants, the paper is able to estimate a demand curve for training. Using the estimated demand, the paper quantifies caregivers’ willingness to pay for online training. The MVPF presented in the paper is for a hypothetical policy in which the online training is provided for free without any financial incentive offered to caregivers.
MVPF = 4.8
Net Cost
The net cost to the government includes the mechanical cost of providing the training and the fiscal externalities that may arise from the training. The company providing the online training modules estimates a cost of approximately one dollar per hour used, which includes both the fixed and variable costs of operating the training. Therefore, the mechanical cost of providing the one-hour online training course is $1.
The paper discusses potential fiscal externalities such as reduced reliance on other social programs and reduced Medicaid expenditures. The paper argues that the presence of these fiscal externalities will, on net, increase the MVPF. As a conservative estimate, the paper assumes these fiscal externalities to be zero.
The net cost is then $1 + $0 = $1.
Willingness to Pay
The paper estimates caregivers’ willingness to pay for the free online training module. As 13% of caregivers in the no incentive treatment arm of the RCT chose to complete the training, there is evidence that some caregivers value the training. The paper assumes demand is linear and constructs a demand curve for the training using the variation in financial incentives and take-up rates. The area under the demand function and above a price of zero is 4.81, which represents caregivers ex-ante willingness to pay for the training program.
The paper argues that caregivers internalize the value the training will provide on their own labor market outcomes and relationships with their patients. To the extent that caregivers underestimate the positive impacts of the training, the willingness to pay will be a lower bound.
The willingness to pay is then $4.81.
MVPF Summary
The estimated MVPF of providing free online training to home-based caregivers is then $4.81/$1 = 4.81.
References
Cronin, Christopher and Ethan Lieber (2024). “The demand for skills training among Medicaid home-based caregivers.” Journal of Health Economics, 95:102877-16. DOI: https://www.sciencedirect.com/science/article/abs/pii/S0167629624000225
Policy Features
- Category
- In Kind Transfers
- Sub-Category
- Job Training
- Beneficiary Type(s)
- Adults, Seniors (65+)
- Country of Implementation
- United States
- Empirical Method
- RCT
- Research Type
- Primary
- Peer Reviewed
- Yes
- MVPF Publication Link
- www.sciencedirect.com/science/article/abs/pii/S0167629624000225