Journal of Health Politics, Policy, and Law--Spring 1995
Continuing care retirement communities (CCRCs) combine housing and long-term
care (LTC) services, including personal and nursing home care. The amount of LTC
that is prepaid varies by type of CCRC, with one-third offering extensive (fully
prepaid) contracts for LTC. CCRCs are a potentially promising model for LTC
delivery because they offer a full continuum of services and can substitute less
expensive supportive care for institutional care. Using data on CCRCs, we tested
one central hypothesis: Provision of supportive services, particularly when
combined with capitation, reduces use of nursing home care. To test this
hypothesis, we studied the effect of various contract types for LTC services
offered by CCRCs and provision of support services on utilization of nursing
home and personal care units. Compared with other types of CCRCs, those offering
completely prepaid LTC coverage reduced use of nursing home care by 13 percent
and personal care by 5 percent. CCRCs with prepaid LTC coverage did not use more
stringent health screening at entry, so "cream-skimming" does not appear to
explain this result. However, affordability is an important issue: CCRC
residents with extensive contracts were wealthier than were other CCRC
residents.