Nursing home admission risk and the cost-effectiveness of community-based long-term care: A framework for analysis

The relationship of prior risk of nursing home entry among applicants for community-based long-term care (CB/LTC) services to cost-effective admission decisions is investigated using decision analytic techniques. It is shown that using such evaluation criteria as have predominated in the major CB/LTC demonstrations, the necessary minimum level of prior risk is well above that typical of those actually enrolled. It is further shown that the remedy usually proposed, increasing the rigor and accuracy of enrollment screening, is unlikely to be of much practical effect. A case can be made, however, for defining the benefits of CB/LTC more broadly, in which case it may become cost-effective to enroll lower-risk applicants.