Long-Term Care Around the Globe

It is a matter of intense interest to policy-makers, and much debated among experts, as to whether or not increases in public funding for formal home care result in a decreased use of residential eldercare, especially nursing home and long-stay hospital care. Certainly, there is clear historical evidence from the United States that hospital stays can be shortened by investing in home-delivered nursing and home health-aide services. According to Jacobzone (2000), institutionalization rates for the elderly in five countries for which data are available suggest that rates decreased during the 1990s. The United States is one of the countries cited as having experienced reductions in nursing home use.

According to the most recent (1995–1997) National Nursing Home Survey (NNHS), the total rate of nursing home residence among the U.S. population age sixty-five and older declined from the previous 1985 NNHS. The ageadjusted nursing home residence rate was forty-five persons per one thousand age sixty-five and older in 1997, as compared to forty-five per one thousand in 1985. Among older Americans age sixty-five to seventy-four, and those age eighty-five and older, the nursing home residence rates declined 14 and 13 percent, respectively. The greatest decline in nursing home residence (21 percent) occurred among older Americans age seventy-five to eighty-four.

The nursing home component of the 1996 Medical Expenditures Panel Survey found that the supply of nursing home beds per one thousand elders age seventy-five and older decreased by 19 percent between 1987 and 1996. Moreover, the average nursing home occupancy rate declined from 92.3 percent to 88.8 percent. Both surveys also found that nursing home residents were, on average, older and more severely disabled.

On the face of it, these statistics might appear to confirm that the significant increases in spending (primarily by government programs) for home and community-based services which also occurred over the 1980s through the mid 1990s, had the desired effect of reducing institutionalization. However, this conclusion would be simplistic.

What accounts for the discrepancy between the 1985–1995/97 National Nursing Home Survey finding of a small decline in prevalence of nursing home use among Ameiican elders and the National Long-Term Care Survey measures which show no change in institutional use? The NNHS is a provider survey, which focuses only on use of a particular type of eldercare facility (i.e., federally certified and/or state licensed nursing homes. In contrast, the NLTCS is person-based; it characterizes living arrangements of individual sample members, who are classified as living either in the community or in institutional settings, which are not limited to nursing homes.

It is noteworthy that in 1987, Congress enacted legislation that changed the definition of a nursing home. Since 1972 nursing homes could be certified for Medicaid reimbursement either as skilled nursing facilities (SNFs) or intermediate care facilities (ICFs). The principal difference in these two levels of care was in nurse staffing requirements. By about 1990, nursing homes had to meet the skilled care standard to qualify for Medicaid as well as Medicare coverage. Just about the time this change went into effect, a new form of residential eldercare called "assisted living" began to proliferate. The 1997 National Survey of Assisted Living Facilities (Hawes et al., 1999) found 11,472 assisted living facilities (ALFs), accommodating 558,400 residents. Fifty-eight percent of ALFs had been in existence for ten or fewer years.

In 1997, there were approximately 1.5 million nursing home residents. Thus, if the residents of nursing homes and assisted living facilities were added together, ALF residents represented about one fourth of the total. Clearly, whether the percentage of the U.S. elderly population residing in eldercare institutions is perceived to have declined, stayed the same, or actually increased from the mid-1980s through the mid-1990s is a matter of defining what kinds of living arrangements or care settings should be classified as institutions. Are all congregate facilities that purposefully serve disabled elders institutions or are some better characterized as community housing with supportive services?

Various criteria for differentiating institutions from supportive housing—size, amount of medical or nursing care provided, and privacy of accommodations—have been suggested. None of these clearly resolve the status of ALFs.

An alternative to trying to classify individual ALFs as institutions or community living based on characteristics such as larger or smaller size, availability of nurses on staff, or prevalence of private rooms or apartments is to refrain from using the term "institution" because it is not clearly defined and has such pejorative connotations. If both nursing homes and ALFs are viewed more neutrally as forms of specialized residential care for disabled elders, it seems clear that the growth of ALFs has more than offset the decreased use of nursing homes. In any event, patterns in residential eldercare in the United States are different than they were in the last decades of the twentieth century. Facilities licensed and certified as nursing homes now provide more short term, post-hospital convalescent and rehabilitative care and also serve a more severely disabled long-stay population. Nursing homes also cater more to public pay (Medicare, Medicaid) residents, whereas assisted living facilities serve predominantly private payers.

As previously mentioned, a comparable movement away from nursing homes (or their equivalent) toward alternative forms of residential eldercare is underway in other developed countries. Experts in other countries also struggle with how to characterize these newer residential settings. Up to the late 1980s, there was agreement that most eldercare facilities in Europe, Canada, Australia, and New Zealand were, like facilities in the United States, institution in character. Generally speaking, the ratio of nonmedical to medical institutions was higher in Europe than elsewhere. The movement to deinstitutionalize eldercare facilities began and is most advanced in Scandinavia., especially Denmark, which in 1987 passed a law prohibiting construction of any new nursing homes. New types of sheltered housing have developed, which offer independent living, but combined with services and care to an extent, which makes it hard to distinguish them from modern, non-custodial institutions. This type of accommodation is, to an increasing extent, being substituted for traditional residential homes. Perhaps the key difference affecting development of alternative forms of residential eldercare in the United States as compared to other developed countries, is that in other countries the new forms are being developed exclusively or primarily in the public sector (usually at the municipal or local government level), whereas, in the United States the newer forms of residential care have been developed by private, for-profit firms and nonprofit organizations for a private-pay market.

A 2000 Israeli study for the World Heath Organization reviewed the findings from an evaluation of Israel's social insurance coverage for home care, as well as other international evidence about whether increased public funding (especially non–means-tested funding) decreased admissions to nursing homes. The study concluded that, in the short term, insurance coverage for home care may cause increased nursing-home admissions because more elders who actually do need this level of care are identified when they apply to receive services at home. In the longer term, use of residential care facilities by elders with mild to moderate functional disabilities has decreased, but the admission rate for severely disabled elders has not decreased.

While New Zealand's spending for community-based care grew fourfold during the 1990s, the percentage of elderly New Zealanders residing in residential eldercare remained constant. Other countries which formerly had higher rates of institutional eldercare compared to others, have succeeded in reducing those rates in large part by refusing to build new nursing home beds, even to keep pace with growth in the oldest-old or as replacements for beds in aging facilities that closed. Denmark appears to be the only country in which an actual (and impressively sizable) shift of resources out of the institutional sector into home care can be documented. Between 1982 and 1996, the percentage of Danes age eighty and older in institutions dropped from 20 to 12 percent and the institutional use rate among the Danish population age sixty-seven and older went from 6.6 percent to 4.6 percent. Over the same period, provision of home care was expanded to nearly one quarter of Danish elderly. Yet the percentage of GDP spent on long-term care in Denmark decreased from 2.6 percent in 1982 to 2.3 percent in 1994.

The United States, United Kingdom, and Germany have long had lower prevalence rates for institutional eldercare than most other developed countries. It is still not known whether the community care reforms implemented in the United Kingdom or the introduction of social-insurance financing for long-term care in Germany, both of which occurred in the early 1990s, will eventually yield significant reductions in residential eldercare. In the United States, a number of individual states have claimed reductions in nursing home use as a result of expanded Medicaid funding of home and community-based care. The state of Oregon is the best known example; however, a closer look reveals that most of the decline in nursing home use in Oregon is attributable to substituting other forms of residential eldercare (assisted living and adult foster care) rather than to the major expansion of Medicaid-funded home care that took place. Kane and colleagues (1998) concluded that Oregon's experience was that 2.6 people needed to be served in home and community-based settings (including alternative forms of residential care) in order to eliminate a single nursing home bed.

Policymakers in countries that have moved toward a social insurance model of funding both institutional and noninstitutional long-term care (e.g., Germany, Japan) have been less narrowly focused on reducing nursing home use and achieving net savings through public investments in home care. They also value outcomes not associated with cost savings, such as reducing the stress on informal caregivers and improving the quality of care and quality of life for disabled elders and their families. These goals are often best accomplished by providing services or larger amounts of services to address elders' unmet or undermet needs for assistance regardless of whether or not the care recipients might have been able to remain at home without or with less publicly funded home care.

Policymakers in most developed countries describe the purpose of increasing investment in home care as that of achieving a more appropriate balance between government spending on institutional and noninstitutional services. Nevertheless, policymakers everywhere are concerned with overall cost containment and cost efficiency in service provision. Thus, even the countries with the most generous funding for long-term care across the continuum of service types have moved toward greater selectivity, or targeting. In Denmark, success in reducing nursing home use is often credited to the development of 24-hour, rapid-response, emergency services.