| Issues concerning the care of the elderly have moved to the forefront of the public's consciousness as the baby boom generation ages. In this paper, I examine the role of publicly funded, community-based health services; specifically services provided under the Medicaid 1915(c) Waiver Program, in elder care decisions. Using a multinomial logit framework, I analyze the effects of specified services on the likelihood of institutionalization, and the likelihood of receiving Medicaid assistance within the community. In addition, I examine the extent to which these services substitute for, or complement, the provision of unpaid care by the friends and family of a prospective client. Finally, I look for evidence of a "woodwork effect" associated with these services. I find that the effects of subsidized community services are masked in the general population. By expanding the nature of the services under consideration, and focusing on sub-groups of respondents with varying levels of infirmities. I am able to identify responses to program incentives. In particular, I find evidence that subsidies for residential care decrease the conditional probability of nursing home entrance for severely impaired respondents. I also find weaker evidence that subsidies for adult day care may also divert relatively less frail individuals from nursing home placements. I find no evidence that subsidies for personal care attendants have any effect on institutionalization rates. Finally, I note that personal and/or respite care services are the services most prone to the woodwork effect. |
