title: Optimal public provision of nursing homes and the role of information.
abstract: Increasing demand for long-term care poses at least five challenges to the policy-maker: (i) How should care be supplied, within a nursing home or within the family? (ii) What level of care should be provided in the different arrangements? (iii) How do the answers relate to the severity of dependence? (iv) How can financial strain be mitigated for families with severely dependent members? (v) What is the role of information constraints for the nature and scope of optimal long-term care policy? We consider a theoretical model of long-term care provision under adverse selection to address these challenges. Our main - and remarkably robust - result is that nursing home care facilitates self selection and mitigates and possibly eliminates distortions in caring levels and transfers. Informational asymmetries may thus lead to care being provided too often within institutions rather than within a family context.
authors.affiliation: Vienna Institute for Demography, Wohllebengasse 12-14, 1040 Vienna, Austria. michael.kuhn@oeaw.ac.at
authors.forename: Michael
authors.initials: M
authors.lastname: Kuhn
authors.forename: Robert
authors.initials: R
authors.lastname: Nuscheler
mesh_terms: D005190:Family; D006291:Health Policy; D006301:Health Services Needs and Demand; D006701:Home Nursing; D006801:Humans; D008134:Long-Term Care / Q000458:organization & administration; D008962:Models, Theoretical; D009735:Nursing Homes / Q000458:organization & administration*; D011050:Policy Making