Over the past 20 years, there has been a significant decline away from nursing home settings, particularly among the "oldest old" -- persons 85 and older. The Lewin Group, a nationally recognized health care and human services consulting firm, today released a new study describing this and other changes in the way frail older adults are supported in the United States. The study shows that since 1999, there has been an absolute decline of over eight percent in the number of nursing home residents age 65 and older -- from 1.44 million to 1.32 million.

"The implications for the future are significant," said author Lisa Alecxih. "While future disability rates and income levels among older adults are difficult to forecast, the baby boomers could be expected to have preferences similar of those of the current group of older adults. That is, they would probably seek to avoid nursing home care if possible."

The nursing home use rate among the "oldest old" dropped from 21.1 percent in 1985 to 13.9 percent in 2004. If older adults had continued to use nursing homes as they did in 1985, 1.95 million older adults would reside in nursing homes today. That number would mean that nearly 50 percent more people would have been living in nursing homes than the 1.32 million actual residents in 2004.

According to the study, several factors likely contributed to the decline in numbers:

-- The group is "healthier and wealthier." Less disability can mean fewer people in nursing homes and higher income provides the freedom to exercise more choice and pay for services in the community.

-- The pattern of nursing home use has changed. Because of changes in Medicare reimbursement and other forces, nursing homes increasingly focus on post-acute rehabilitation. The median length of stay declined from 1.7 years to 1.3 years.

-- Alternatives to nursing homes developed. Over the last decade, alternatives such as assisted living facilities have become much more widely available. And more home-based services have become available through state Medicaid and general revenue programs that help pay for those services.

-- Active efforts by states. Many states tried to reduce the number of Medicaid recipients in nursing homes by diverting them away at critical times, such as at the time of hospital discharge. Because Medicaid pays for the coverage of many nursing home residents, states will continue to have an incentive to shift care to lower cost settings where appropriate.

Specific policy initiatives and court decisions played a role in the shift away from nursing homes. During the period described by the study, several of these occurred on the federal and state levels:

-- The Supreme Court Olmstead Decision. This 1999 ruling directed states to provide appropriate services to individuals with disabilities in the most community-integrated settings practicable.

-- President Bush's New Freedom Initiative and Congressional Funds for Real Choice Systems Change. Grants associated with this initiative have helped states shift the balance of their long term care systems away from institutions and toward community living.

-- The National Family Caregiver Support Program. This program allows states to provide a continuum of caregiver services. The support of caregivers can make it possible for frail older adults to remain at home and in the community longer.

The baby boom generation that reaches the age of 65 in 2011 will account for twice as many older adults in 2030 as there are today; however, if the demand for nursing homes continues to decline at just half the rate of the past 20 years, there will be only 320,000 more nursing home residents among the "oldest old" instead of 830,000 more. This projection has important implications for the nursing home industry, caregivers, and insurance providers, as well as for the managers of health care programs offered by various states.

Copies of this report are available at lewin. An archived webcast of the press conference at the National Press Club on November 21 will also be available at lewin.

Lisa Alecxih, author of this report, is a Vice President at The Lewin Group. She joined Lewin in 1987 and leads the Center for Long Term Care at the firm.

Lisa researches and consults on the elderly, persons with disabilities and long-term care. She has spent more than 15 years advising federal and state policy makers regarding long-term care financing and elderly health insurance.

The Lewin Group
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