Analysis of Long-Term Care Economic Issues and Policies

This report delves into the economic dimensions of long-term care facilities, distinguishing them from hospitals by examining the unique characteristics of long-term care settings and the populations they serve. It analyzes the impact of Certificate of Need (CON) programs on healthcare costs and supply within the long-term care sector, contrasting it with the effects observed in hospitals. The report forecasts the supply and demand dynamics of long-term care over the next 25 years, considering factors like an aging population and advances in medicine, and discusses how these projections should influence decision-making. Furthermore, it explores the role of the U.S. government in funding healthcare for the elderly, including middle and wealthy classes, considering income disparities and healthcare needs across different socioeconomic groups.

Running Head: LONG-TERM CARE 1
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Factors that make long-term care unique compared to a hospital
Long-term care refers to a form of care which is non-medical in nature (usually
custodial care) which is required by people who actually need to be assisted in performing
daily basic activities due to chronic illnesses or disabilities which hinder or rather limit their
body functionality (Norton, 2016). Some of the daily basic activities for which such people
require assistance include bathing, use of toilets or even dressing among others.
Long-term care is unique compared to a hospital since people who need assistance can
receive from different settings. These include peoples’ residential premises, nursing-care
homes, assisted-living and other various facilities such as rehabilitation ones. Long-term care
is also unique based on the period taken by various individuals receiving it. Actually, some
people stay in care premises for a shorter period and thereafter return to their residential
premises after successful rehabilitation while others spend longer periods or even stay at the
care premises for the rest of their lives.
Uniqueness comes in as people under the settings of long-term care are commonly
termed as residents as opposed to those in hospitals who are generally termed as patients.
Also, despite the fact that many residents under long-term care suffer from various disabilities
and chronic illnesses, the main aim of long-term care is to support and maintain the
individuals’ health status. This is not the case involved in hospitals as their main aim is to
cure the patients rather than supporting or maintaining their health statuses.
The effect of Certificate of Need (CON)

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Certificate of need programs focus on restraining health care costs by controlling the
construction of new health care facilities. Certificate of need programs ensure that before a
new health care facility (hospital or nursing home among others) is constructed the local
demand is adequate for its construction to be allowed (Havighurst, 2014). This is due to the
assumption that the overbuilding of health care facilities increases costs associated with health
care. This is due to the fact that fixed costs have to be paid whether the health care facilities
are maximally utilized or not.
The effect of certificate of need has been increased costs for long-term care (Salkever
& Bice, 2017). This is due to the fact that the supply of the long-term facilities has been
limited despite the fact that the demand for the same has been increasing. This effect differs
from that of hospitals operating under the Roemer’s Law which states that an increase in
supply will lead to an increase in utilization whether the population needs increase or not. If
the certificate of need regulation is applied in hospitals positive results will be yielded as
hospital costs decreases but this is not the case for the long-term care.
The future of long-term care and decision making
The supply and demand for long-term care are anticipated to increase for the coming
25 years (Stein & Gambrill, 2017). This is due to the improvement of various determinant
factors such as the increase in peoples’ standards of living, improvement of Research and
Development (R&D) which has led lifestyle diseases advancement and the aging population.
Decision making in as much as long-term care is concerned will be restructured in order to:
improve the functionality of the payment and insurance systems for the long-term care,
change the organization of the health care in various communities to make it easily accessible,

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take advantage of advancement in medicine due to improved research and development to
maintain the elderly healthy and maintain the status of the elderly in various communities
which might look down upon them according to their cultural practices (Forbes & Hoffart,
2017).
Involvement of the US Government in Care of the Elderly (middle and wealthy classes)
The United States government should cater for health care costs for both middle and
wealthy classes as well as the poor (Rothman, 2018). In the United States, despite the fact that
the rich have more income than the poor, they spend much on catering for their health. The poor
and the middle class have little income available for their expenditure but they have higher
health needs than the rich. Also, many insurance schemes in the United States charge the rich
highly heightening health care costs. Since the rich spend much in catering for their health while
the poor and the middle class have little to pay for their health care needs, the United States
government should cover for the health costs of all the classes.
References
Forbes, S., & Hoffart, N. (2017). Elders' decision making regarding the use of long-term care
services: A precarious balance. Qualitative Health Research, 8(6), 736-750.
Havighurst, C. C. (2014). Regulation of health facilities and services by certificate of need. Va.
L. Rev., 59, 1143.
Norton, E. C. (2016). Long-term care. Handbook of health economics, 1, 955-994.

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Rothman, D. J. (2018). A century of failure: Health care reform in America. Journal of Health
Politics, Policy and Law, 18(2), 271-286.
Salkever, D. S., & Bice, T. W. (2017). The impact of certificate-of need controls on hospital
investment. The Milbank Memorial Fund Quarterly. Health and Society, 185-214.
Stein, T. J., & Gambrill, E. D. (2017). Facilitating decision making in foster care: The Alameda
project. Social Service Review, 51(3), 502-513.