The cost-effectiveness of community services in a frail elderly population

We use an integrated model incorporating simple principles of decision analysis and marginal cost analysis to discuss cost-effectiveness of community long-term care services as a substitute for nursing home care. By taking individuals as the unit of analysis and analyzing different types of community services separately, the model defines the targeting issue precisely and permits key policy parameters to be estimated empirically. When applied to data from the National Long Term Care Channeling Demonstration, 41% of those screened into the control group were found to have some potential for net long-term care cost reduction through program services.