Gradual Shift Seen in Public Funds from Nursing Homes to Community-Based Services

    • March 30, 2004

From 1997 to 1999, researchers at the Visiting Nurse Service of New York led by Christopher M. Murtaugh, PhD, examined current state efforts to reallocate long-term care resources and expand home and community-based services for older adults.

The project was part of the Robert Wood Johnson Foundation (RWJF) Home Care Research Initiative national program.

The researchers studied state options for allocating resources to home and community-based care by:

  • Conducting a literature review on state long-term care allocation practices.
  • Surveying 75 state agencies on aging.
  • Visiting six state agencies on aging.
  • Analyzing state Medicaid expenditures on long-term care services.

Key Findings

  • They reported their findings in State Strategies for Allocating Resources to Home and Community-Based Care. Key findings include:

    • Medicaid spending on home and community-based services is growing faster than spending on nursing home care.
    • The share of Medicaid long-term care resources going to home and community-based services is still small in most states.
    • Most states seek additional revenue to fund home and community-based services, principally through Medicaid waiver programs.
    • Many states are trying to expand individual purchases of private long-term care insurance.
    • States seek to expand programs with capitated long-term care services, though programs for seniors tend to be small.
    • States are rapidly expanding public funding of long-term care services for seniors living in assisted living facilities and other supportive housing arrangements.

Key Conclusions

  • The very modest increase between 1992 and 1997 in the typical share of Medicaid long-term care dollars devoted to home and community-based services suggests that reallocating a significant amount of public resources from nursing homes to home and community-based services remains very difficult.

  • Two allocation strategies—developing capitated/managed long-term care and assisted living—are major areas of activity and high priorities for state policy-makers.

  • The majority of states, in the absence of federal long-term care policy initiatives, are likely to continue the modest pace of change in their systems, with a gradual increase in the share of public resources devoted to home and community-based services.

The policy briefs, State Expenditures on Home and Community-Based Care for Disabled Elders and Expanding Publicly Financed Assisted Living and Other Residential Alternatives for Disabled Older Persons: Issues and Options are available online.