ABSTRACT
This chapter reviews the empirical literature on nursing home utilization. It also reviews the fundamental role played by Medicaid. The chapter suggests that incremental changes that may occur in Medicaid and identifies an interdisciplinary research agenda. It focuses on the role of Medicaid, the nature of the private segment of the market, and the emergence of private long-term care insurance. The private nursing home market is also characterized by the presence of long-term care insurance. Tax incentives for the purchase of private insurance or for expenditures on long-term care services could be put in place. Fundamentally, policy analysis of long-term care markets must take a much stronger market perspective. Despite the increasing sophistication that has come to studies of the risk of nursing home placement and estimating nursing home length of stay, these are fundamentally episode-based approaches. The forgoing growth projections imply potentially large changes in the nursing home market.
