Caring for the Disabled Elderly: Who Will Pay?

By Alice M. Rivlin; Joshua M. Wiener et al. | Go to book overview

Chapter Nine
Private Sector Approaches and Delivery System Reform

Private sector approaches for financing long-term care will vary in their effect on quality of care, the balance of nursing home and home care services, access to care, family caregiving burdens, and government administrative burdens and in their flexibility to meet the demands of individuals and local conditions. Although most private long-term care insurance now available merely reimburses people for services used, insurers are becoming more interesed in actively shaping the delivery system. Continuing care retirement communities (CCRCs) and social/health maintenance organizations ( S/HMOs) deliberately try to change the way long-term care services are provided by creating their own service systems. In contrast, individual medical accounts (IMAs) and home equity conversions (HECs) provide elderly consumers with more cash but do not directly change the way services are organized. Thus the effect of IMAs and HECs depends on how consumers decide to spend the additional money available to them.


Quality of Care

If the expansion of private sector financing mechanisms leads to an increase in the number of private pay patients relative to medicaid patients, nursing home providers may improve quality in order to compete in the much more profitable private pay market. 1 Families paying privately may feel that they have the right to demand more from nursing homes than medicaid patients do; 2 they also have the resources to go elsewhere if they are not satisfied. Since prices charged

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