An Economic Analysis of Life Care / Jonathan S. Feinstein, Edward G. Keating.

Format:

Book

Author/Creator:

Feinstein, Jonathan S.

Contributor:

National Bureau of Economic Research.

Keating, Edward G.

Series:

Working Paper Series (National Bureau of Economic Research) no. w4155.

NBER working paper series no. w4155

Language:

English

Subjects (All):

Life care communities.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1992.

Cambridge, Mass : National Bureau of Economic Research, 1992.

Summary:

Life care communities offer long term care to the elderly in the context of a residential community. Residents move into a life care community while still relatively young (though typically past age 65), initially occupying an independent living unit situated in a living complex similar to a retirement community. Later, when a resident requires more intensive care, she moves to an on-site nursing facility. We present an economic analysis of the life care industry. Our model includes a detailed specification of elderly couples' utility, a description of elderly morbidity and mortality experiences, and a formulation of the life care contract. Using extensive computer simulations we show that life care offers two main advantages to elderly as compared with stand-alone nursing homes: (i) reduced mobility costs and nearness to spouse and friends when sick; and (ii) insurance, linked to a rebate paid to the couple's heirs. We also investigate regulation of life care and the effects stemming from the risk of operator bankruptcy.

Notes:

Print version record

September 1992.