Abstract
Continuing care retirement communities (CCRCs) offer life-time long-term care guarantees to their contract members, but high entry and monthly fees can put membership beyond the reach of elderly persons with moderate income and assets. Annual cost per resident, which must be met by initial and monthly fees, consists of costs associated with land and buildings (depreciation, interest, mortgage reduction, and direct capital expenditures) and departmental expenditures, the cost of providing services to residents (food service, nursing care, administration, maintenance, and the like). The current study uses economic cost analysis to uncover factors associated with the cost of providing resident services. Analysis of annual departmental expenditures per resident reported by 132 CCRCs identified factors associated with lower cost, including low use of nursing care, larger size, location in areas with lower prices, and admission of non-contract patients to nursing care units. This information may be used to design lower-cost CCRCs, to promote access to this method of long-term care provision and financing for moderate-income elderly. Estimates of the incremental cost of nursing care use in the CCRC could enable Medicaid to combine personal and public financing to provide both living environment and insured nursing care for potential spend-down populations.