A Systematic Comparison of Community Care Demonstrations

Concern about inappropriate nursing home placement and rising long-term care costs led to a series of government-financed demonstrations to study whether substituting care at home for care in nursing homes could reduce costs and improve the quality of life for the frail elderly. Based on the evaluation of these demonstrations, the authors conclude that expanding public financing of community services beyond what already exists under the current system does not reduce costs. Small nursing home cost reductions are more than offset by increased costs of providing expanded community services to those who would not enter nursing homes even without the expanded services. Although they do not reduce costs, expanded community services appear to make people better off. Moreover, the expanded services do not appear to cause substantial reductions in care by family and friends. The research and policy debate should move beyond the question of whether expanded public financing of community care will reduce costs to the problems of how much community care society is willing to pay for, who should receive it, and how it can be delivered efficiently. (University of Wisconsin-Madison, Institute for Research on Poverty, Special Report Series, SR#45) [75 PDF pages]