The Market for Long-Term Care

More than 12 million Americans rely on long-term services and supports in home, community, or institutional settings. The number may more than double by 2050 (Commission on Long-Term Care 2013). Only a small share get services in nursing homes, and the trend is toward lower rates of nursing home care.

Several factors may influence how and where Americans get these services (Spetz et.al. 2015). First, Medicaid is a major funder of long-term care services and supports, so any changes in Medicaid policy can have major effects. Second, rates of disability have been trending down for a number of years, but there is no guarantee that this trend will continue. Third, use of long-term services and supports varies widely among major ethnic groups, so changes in the composition of the population might have major effects on demand.

Technology represents a wild card in efforts to predict the volume and nature of long-term services and supports. For example, the development of smart homes and devices might well increase the share of the population getting these services in their homes.

Draw a graph of the Market for Nursing Home Care (initial graph).For each of the discussion questions (1-4) below, show the changes in the market equilibrium, and provide evidence (i.e. a recent published study or report) to support your argument.

Discussion Questions

1.What sorts of policy changes seem likely to shift the demand for nursing home care?

a.How would your initial graph change given the scenario you outline in (1) above?

2.What sort of demographic changes seem likely to shift the demand for nursing home care?

a.How would your initial graph change given the scenario you outline in (2) above?

3.What sorts of technological changes seem likely to shift the demand for nursing home care?

a.How would your initial graph change given the scenario you outline in (3) above?

4.What sorts of health changes seem likely to shift the demand for nursing home care?

a.How would your initial graph change given the scenario you outline in (4) above?