ABSTRACT
Changes in nursing home care financing would in all likelihood change the way individuals and families plan for, purchase and utilize nursing home care. With increasing life expectancy, an aging population, and the functionally impaired population growing, how best to meet long-term care needs continues to challenge policy makers. The issue of financing nursing home care is and will remain a major health and social issue in the decades to come; evaluation of nursing home care policy is urgently needed. The few existing studies of nursing home care demand have found a highly elastic response to price; an increase in price has been shown to have a significant negative effect on the quantity of nursing home services demanded. For nursing home care, the process of adjusting price to equate demand and utilization does not take place. The nursing home market is in disequilibrium.
