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Service Use and Transitions: Decisions, Choices and Care Management among an Admissions Cohort of Privately Insured Disabled Elders

Publication Date
Nov 30, 2006

This report was prepared under contract #HHS-100-02-0014 between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and LifePlans, Inc. For additional information about this subject, you can visit the DALTCP home page at or contact the ASPE Project Officers, Pamela Doty and Hunter McKay, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, S.W., Washington, D.C. 20201. Their e-mail addresses are: and

The opinions and views expressed in this report are those of the authors. They do not necessarily reflect the views of the Department of Health and Human Services, the contractor or any other funding organization.


The statistics are clear: the number of individuals requiring assistance with personal care activities will rise dramatically in the years ahead. Even in the presence of reported declines in age-specific disability rates, the number of individuals age 65 and over who will need assistance with activities of daily living (ADLs) or instrumental activities of daily living will grow from about 5 million (today) to 7 million (by 2020) (The Lewin Group 2002). The implications for families (who provide the bulk of care and must balance caregiving, work, and childcare), service providers (who must figure out how to deliver care in a variety of settings in a context of uncertain payment streams), and payers (who are struggling to contain costs and budgets) are enormous. The challenges ahead require careful planning, information, and service development to assure that the needs of disabled individuals will be met.

Given the availability of national data on the prevalence of various forms of disability, it is possible to estimate the magnitude of overall need for personal care services. However, what is more difficult to predict is how and where people will actually receive care. This uncertainty derives from a number of factors. First, the service system is changing dramatically, constantly and quickly. Second, despite the tremendous amount of research devoted to identifying the factors related to the need for long-term care (LTC) services -- be they paid or unpaid -- we still do not have a good understanding of what influences consumers to choose a particular service modality. While available data does enable one to uncover the factors related to observing someone in a particular state of disability or service modality, it does not facilitate an understanding of the factors behind the decision to begin using a particular service. Finally, given the relatively high costs associated with LTC services -- upwards of $70,000 a year in a nursing home and as much as $15,000 a year for home care services (MetLife 2005) -- most disabled individuals rely exclusively on family caregivers for assistance.

The ability to pay for needed services often confounds our understanding of the level and mix of services that individuals would choose to meet their care needs and maximize their own well being. As states experiment with programs that provide cash payments to disabled elders, it is increasingly important from a planning and infrastructure development perspective to understand the reasons behind the consumer’s choice of paid services at the time of initial and transitional use.

The purpose of this study is to obtain a comprehensive demographic, health and attitudinal profile of individuals with private LTC insurance policies at the time that they begin using paid LTC services in their current service setting. We also seek to understand the factors involved in the decision about how and why to use paid services in particular care settings (i.e., the home, assisted living or nursing facilities). Equally important, we wish to understand how and why people transition between care settings throughout the course of their disability and also assess the role of care management in the process. In order to do this, we focused on an admissions cohort of LTC claimants and traced their experience and service utilization over time and in multiple settings. That is, we completed in-person interviews with LTC insurance policyholders at or near the time they began using paid services (in either a residential care setting or the community) and then followed them telephonically over a roughly two year period. For the purposes of this report, we only discuss findings from the initial in-person interviews. Key findings are presented below.

Sample Distribution

  • Thirty-seven percent of people interviewed were receiving paid care at home, 14% were newly admitted to nursing homes, 23% newly admitted to ALFs and 26% were not yet receiving any paid services, but expected to begin in the next two months.
  • Findings suggest that the proportion of individuals accessing assisted living has significantly increased over the past 5-6 years. Whereas in the late 1990s 73% of residential care claimants were receiving care in nursing homes, by 2004, more than three in five individuals choosing residential care began their care in ALFs.

Socio-Demographic Characteristics

  • With respect to age, individuals newly admitted to ALFs are older than individuals entering all other settings. Over one-third of new entrants to ALFs are over age 85.
  • Overwhelmingly the claimants entering the formal service system are female, even in the home care setting.
  • Claimants living at home are more likely to be married than are those entering residential care settings. Those newly admitted to ALFs are least likely to be married and in fact, less likely to be married than those in nursing homes.
  • Those who have living children are more likely to enter the service system through the home care setting.
  • Individuals receiving care at home tend to be more highly educated than those receiving care in alternative settings. In fact, 46% of home care recipients have at least a college degree compared to 36% of those entering nursing homes and 30% of those entering ALFs.
  • Higher income, homeownership, and greater home values are all positively associated with individuals receiving paid care at home.
  • Almost two in five individuals receiving care at home have made some type of home modification. Most of those who are living at home have installed grab bars.

Functional and Cognitive Characteristics

  • Those receiving paid care in a nursing home are the most disabled in their ADLs, with an average of 4.2 limitations.
  • Those living at home and currently receiving paid services have more ADL limitations than both those in ALFs and those not yet receiving paid care.
  • Those in assisted living and in nursing homes have significantly more limitations than those living at home.
  • A high proportion of those living in nursing homes and ALFs are cognitively impaired -- close to two-thirds in each setting. In contrast, only about 28% of those receiving paid care at home are cognitively impaired.
  • More than three-quarters of the insured’s in all of the service settings indicated that they were using some form of assistive technology, although the percentage using this technology at home (86%) and in nursing homes (88%) is significantly higher than those using it in assisted living (77%).

Service Use

  • Those receiving paid care at home have been receiving such care for the shortest amount of time -- less than one month.
  • Individuals interviewed in residential care settings have been receiving care longer than those at home, but about the same as each other.
  • Across all service settings the vast majority had been receiving paid care at their current location for less than three months.
  • Current nursing home residents were more likely to have received paid LTC care prior to entering the nursing home than current home care users, mostly in a hospital or at home from paid caregivers.
  • Current ALF residents were the most likely to have received other LTC services prior to entering the ALF, most from paid caregivers in their home.
  • Current ALF residents were also more likely to have received unpaid care prior to entering the ALF than both current home care users and current nursing home residents.
  • A little more than one-third of current nursing home residents still receive unpaid help with daily activities from their family members and/or friends.
  • The proportion of people living at home, but not yet receiving paid care, and who receive unpaid help is significantly higher than those in all other service settings, including paid home care recipients.

Decision-Making Process

  • People in all four service settings indicated that needing more help or the inability to continue to manage on their own was the most common motivational factor behind the decision to begin using paid care.
  • The responses given by those currently residing in nursing homes were much more varied (less clustered around a small finite number of issues) than those in the other service settings.
  • Having someone available to assist when needed was ranked as most important thing considered when thinking about where to receive care for over half of those surveyed.
  • Roughly two in seven saying that feeling safe was the most important when choosing service setting.
  • Having someone available to assist when needed was ranked most important most often among all respondents regardless of service setting, followed by the desire to feel safe.
  • Nursing home residents were more likely to rank having someone available as the most important issue than those in other service settings.
  • Having control over schedules was ranked higher among those living in the community than those in facilities and feeling safe was ranked as most important by ALF residents more often than by those in other service settings.
  • Those currently receiving paid care at home were the least likely to have considered alternative care settings.
  • ALF residents seem the most likely to have considered all of the other options, with more than one-third stating that they considered staying at home, moving closer to or in with family and almost one third considering moving to a nursing home.
  • For those not yet receiving paid care, the majority (88%) intends to receive paid care at home, with another 9% planning to move to an ALF.
  • The overwhelming majority of home care recipients (93%) were receiving care at their first choice location.
  • While the majority of nursing home and ALF residents are receiving care at their first choice as well (65% and 75% respectively), the number is significantly lower than for those in the community.
  • Over two-thirds of nursing home residents (69%) said having the appropriate level of care was most important, followed by another 12% respectively stating availability of care and proximity to family as important in their decision to choose nursing home care over home care or going to an ALF.
  • About two-thirds (36%) of ALF residents said that availability of care was one of the most important things when choosing assisted living over nursing home or home care, while 26% said it was having the appropriate level of care and 23% said safety concerns.
  • Eighty-six percent of current ALF residents agreed that they would be most comfortable in an ALF.
  • Sixty-three percent of nursing home residents agreed that they would be most comfortable in a nursing home.
  • Almost all of nursing home and ALF residents (96% of both) stated that a nursing home was the safest location for them.
  • Almost three-quarters of the nursing home residents indicated that there were no other options in the area, while only 29% of ALF residents said the same.
  • ALF residents were most likely to shop around before choosing their current ALF.
  • Less than one-third of paid home care recipients interviewed more than one paid caregiver or agency.
  • We asked if cost was an important consideration when choosing the particular home care provider, nursing home or ALF. A majority of assisted living residents (61%) said cost was an important consideration in their choice of a specific facility.
  • Only 26% of nursing home residents stated that cost was an important consideration when choosing their current nursing home.
  • Those who have not yet decided on the type of care they are going to receive were the most likely to say cost was an important consideration.

Satisfaction with Service Choices

  • Ninety-eight percent of nursing home residents report that their current care needs are being met, while 96% of ALF residents and 82% of paid home care recipients do the same. This pattern persists even when looking at satisfaction levels by disability status and cognitive impairment.
  • Those receiving paid care at home (80%) and in ALFs (76%) are more likely to state they are very satisfied with their choice of a particular provider than are those residing in nursing homes (58%).
  • There is a high level of satisfaction across all service settings; however those in nursing homes are less likely to indicate that they have enough privacy, the staff spends enough time with them, the nursing home staff is reliable and that they provide quality care all the time. Home care recipients were the most satisfied with their caregivers across almost all of these measures.
  • Seventy-seven percent of paid home care recipients reported that the agency they use always sends the same caregiver and in another 21%, the agency sends the same caregiver sometimes.
  • Interestingly, 32% of paid home care recipients indicated that they had hired their caregiver privately.
  • Home care recipients were less likely to indicate their care needs were being met, but more likely to indicate they were satisfied with their current caregivers and with other aspects of their care experience. Conversely, nursing home residents are most likely to indicate that their care needs are being met and least likely to indicate that they were very satisfied overall and with specific measures of care quality.

Use of Care Management

  • At the outset of the study, we interviewed key senior management personnel from each of the participating insurance companies to better understand how they define care management, who provides it and who receives it. We discovered that there was a great deal of variation surrounding the definition of care management services. According to the insurers participating in this study, care management might range anywhere from claim adjudication and assessment, to the full gamut of services including assessment of needs, care plan development and implementation, coordination of services, and reassessment.
  • It appears that only a small percentage of study participants (regardless of service setting) used a care manager. The use of a care manager is higher among people in the community than in residential care settings, which is what would be expected; however, it is still only 19% for paid home care recipients.
  • Care managers for those residing in nursing homes were more likely to help with the development of a care plan and where to get care, and are less likely to have helped the insured find local providers.
  • All of the home care recipients and ALF residents indicated that they followed the care manager’s recommendations, while 94% of nursing home residents stated the same.
  • Approximately 60% of nursing home residents stated that their care manager made a recommendation for care in a nursing home and 92% of ALF residents said the same.
  • Satisfaction with the services provided by the care manager was very high (95% or higher) across all service settings.

The Effect of Having a Long-Term Care Insurance Policy on Paid Care Use and Choice

  • Only 15% of home care recipients seemed to think that they would not be able to receive care at home if they did not have their policy and almost the same for ALF residents (16%). Even fewer nursing home residents (8%) said the same.
  • Nursing home residents were least likely to indicate that they would have waited longer before going to their current setting if they did not have their LTC insurance policy (9%), although only a small number in all service settings thought they would have (13% for home care and 16% for ALF).
  • Over 90% of respondents did not feel that the insurance restricted their use of specific service providers (regardless of service setting). However, while only a small proportion of each sample answered in the affirmative, a statistically larger percentage of paid home care recipients (9%) did so relative to those in nursing homes (3%) and ALFs (5%).
Older Adults | People with Disabilities