Relation between state Medicaid HCBS investment and long-term care services and supports expenditures: 2000-2011

Obective: There continues to be significant state variation in the share of long-term services and supports (LTSS) expenditures that are home and community-based services (HCBS) for older adults and adults with physical disabilities.  This reflects, in part, concern with the effect of HCBS provision on total LTSS expenditures.  Methods:  We examined the relation between state Medicaid HCBS investment and per capita LTSS, using a cross-sectional time series model with state and year fixed effects.  Findings:  All states but two increased the share of dollars supporting HCBS for older adults and individuals with physical disabilities over the study period.  In 2000, the percentage supporting HCBS ranged from 0.55% in Tennessee to 47.99% in Oregon.  In 2011, it ranged from 13.58 % in North Dakota to 91.83% in New Mexico.  The average investment in HCBS LTSS increased from 17.18% in 2000 to 34.18% in 2011.  In multivariate analyses, the share of LTSS allocated to HCBS was negatively related to per capita LTSS expenditures.  A 1-percentage point increase in the share allocated to HCBS was associated with lower LTSS per capita spending of $366,810 over the study period, all else equal.  Lower per capita spending was also associated with the state having a Democratic governor.  Nursing facility bed supply positively influenced per capita LTSS expenditures.  Implications:  These findings support continued policy efforts to encourage state 'rebalancing' of their LTSS systems to provide care in community-based settings.  Attention to institutional bed capacity and its reduction is important as well.