CONTINUING CARE RETIREMENT COMMUNITIES - PROSPECTS FOR REDUCING INSTITUTIONAL LONG-TERM-CARE

Continuing care retirement communities (CCRCs) combine housing and lon g-term care (LTC) services, including personal and nursing home care. The amount of LTC that is prepaid varies by type of CCRC, with one-thi rd offering extensive (fully prepaid) contracts for LTC. CCRCs are a p otentially promising model for LTC delivery because they offer a full continuum of services and can substitute less expensive supportive car e for institutional care. Using data on CCRCs, we tested one central h ypothesis: Provision of supportive services, particularly when combine d with capitation, reduces use of nursing home care. To test this hypo thesis, we studied the effect of various contract types for LTC servic es offered by CCRCs and provision of support services on utilization o f nursing home and personal care units. Compared with other types of C CRCs, those offering completely prepaid LTC coverage reduced use of nu rsing home care by 13 percent and personal care by 5 percent. CCRCs wi th prepaid LTC coverage did not use more stringent health screening at entry, so ''cream-skimming'' does not appear to explain this result. However, affordability is an important issue: CCRC residents with exte nsive contracts were wealthier than were other CCRC residents.