The Effects of Housing Costs on Nursing Home Diversion

Abstract

This article examines the effect of the housing market on nursing home diversion and/or transition. Prior evaluations of federally funded diversion/transition efforts indicate that lack of housing may be a significant impediment to diversion policy efforts. We test this charge by examining the transition rates in all 351 municipalities in Massachusetts, using a data set of over 15,000 individuals seeking to remain or transition home between 2010 and 2014 through Massachusetts' Options Counseling program and their relation to key indicators of housing quality and affordability, including housing burden, crowding, and incomplete kitchen and plumbing facilities. We also control for demographic indicators identified in previous findings, which are age, level of frailty, and whether seniors live alone. We do not find a significant relationship between housing affordability or quality and successful nursing home diversion. This fact suggests that consumers are not as sensitive to housing costs and conditions as previously expected. Future research should continue to investigate the economic and social conditions behind this fact in the context of home value appreciation, incidence of home ownership, and the ability of seniors to offset nursing home costs through accumulated home equity.