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VOLUME 47 | NUMBER 6 | DECEMBER 2012


Assisted Living Expansion and the Market for Nursing Home Care

Keywords: Assisted living; nursing homes; utilization; acuity

Objective: To analyze the effect of market-level changes in assisted living supply on nursing home utilization and resident acuity.

Data Sources: Primary data on the supply of assisted living over time were collected from 13 states from 1993 through 2007 and merged with nursing home-level data from the Online Survey Certification and Reporting System and market-level information from the Area Resource File.

Study Design: Least squares regression specification incorporating market and time-fixed effects.

Principal Findings: A 10 percent increase in assisted living capacity led to a 1.4 percent decline in private-pay nursing home occupancy and a 0.2–0.6 percent increase in patient acuity.

Conclusions: Assisted living serves as a potential substitute for nursing home care for some healthier individuals with greater financial resources, suggesting implications for policy makers, providers, and consumers.

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