The substitutability of adult foster care for nursing home care in Oregon.
OBJECTIVE
This study investigates the degree of substitutability of adult foster care for nursing home care in Oregon.


METHODS
Using three tests, the authors determined (1) the extent to which an additional adult foster care resident in a county reduces the number of nursing home residents in that county, (2) which characteristics of residents and facilities are important in sorting residents into either nursing homes or adult foster care facilities, and (3) the price elasticity of demand for adult foster care, using the county as the unit of observation.


RESULTS
It was found that for every additional foster care resident in a county, a nursing home loses 0.85 residents-almost a one-to-one substitution ratio.


CONCLUSIONS
Despite the high degree of substitutability, residents perceive important differences in the characteristics of the two forms of care. Indeed, private residents are, on average, willing to pay twice as much for nursing home care as for adult foster care, suggesting that these differences are important. Finally, private consumers are sensitive to price differences among adult foster care facilities. The implications for policy are discussed.
Nyman
J A
JA
Institute for Health Services Research, University of Minnesota, Minneapolis 55455-0392, USA.
Finch
M
M
Kane
R A
RA
Kane
R L
RL
Illston
L H
LH
D000328:Adult; D000368:Aged; D004465:Economic Competition; D005260:Female; D005581:Foster Home Care / Q000191:economics / Q000458:organization & administration* / Q000706:statistics & numerical data; D017048:Health Care Costs; D006301:Health Services Needs and Demand; D006302:Health Services Research; D006701:Home Nursing / Q000191:economics / Q000458:organization & administration* / Q000706:statistics & numerical data; D006801:Humans; D008297:Male; D008389:Marketing of Health Services; D008875:Middle Aged; D009922:Oregon; D017060:Patient Satisfaction; D012044:Regression Analysis