In this article, case-mix-adjusted outcomes of home health care are fo
und to be superior for Medicare fee-for-service (FFS) patients relativ
e to Medicare health maintenance organization (HMO) patients. The supe
rior outcomes for FFS patients were accompanied by higher utilization
and cost of home health services, suggesting a volume-outcome (or dose
-response) relationship that was further substantiated by within-HMO a
nd within-FFS analyses. The findings suggest that greater attention sh
ould be paid to both outcome-based quality assurance and managed care
practices that may be overly restrictive in terms of the use of home h
ealth services.