A state-level analysis of factors associated with nursing home utilization and expenditures

Purpose: This study examined trends and predictors of state Medicaid nursing home users and expenditures from 1997 to 2007 to identify factors of interest to policy makers and government officials interested in rebalancing the nation's long-term care (LTC) system. Design and Methods: State-level data were collected from multiple data sources for each study year. Three separate regression analyses were conducted to examine the effects of socio-demographic, economic, supply, political and programmatic factors on the share of total Medicaid LTC expenditures devoted to nursing home care, rates of nursing home utilization, and rates of nursing home expenditures. Results: The nursing home share of total Medicaid LTC expenditures was positively associated with female labor force participation, and negatively associated with those aged 85 and over, Hispanics, Medicare home health users, Cash and Counseling programs, and democratic governors. Rates of nursing home utilization were positively associated with poverty rates, nursing home beds, and personal care state plan options, and negatively associated with spending on Medicaid home- and community-based services (HCBS). Rates of nursing home expenditures were positively associated with those aged 65 to 84, Hispanics, per capita incomes, nursing home beds, and Real Choice System Change grants, and negatively associated with female labor force participation, poverty rates, HCBS spending, and democratic governors. Implications: Factors that may be amenable to policy intervention aimed at rebalancing the nation's LTC system include nursing home supply restriction and Medicaid program policy. States that reduce bed capacity may experience lower rates of nursing home utilization and expenditures, and those that take advantage of flexible service delivery models like the personal care state plan option and/or the Cash and Counseling grant/demonstration program may experience greater success rebalancing their LTC systems