Nursing home care costs increasing faster than other medical services, study finds

Costs of nursing home care have generally risen faster than the costs of other services, even in the medical field, according to a new study.

Researchers from Georgetown University Medical Center analyzed nursing home price data from eight states over six years, finding that out-of-pocket prices for patients and their families have increased significantly. The study was published Thursday in the peer-reviewed journal Medical Care Research and Review.

Between 2005 and 2010, average nursing home costs in California increased by a cumulative 30.18 percent, the most of any state included in the study. During that same period, the general Consumer Price Index increased by just 11.65 percent and the medical CPI increased by 20.17 percent.

Nursing home costs in other states — including Florida, New York, Ohio and Vermont — also grew faster than the general and medical CPIs, according to the study.

Sean Huang, an assistant professor at Georgetown University Medical Center’s School of Nursing & Health Studies and lead author on the study, said only a small fraction of nursing home residents have private insurance to help them cover the costs, he said.

Most people who need nursing home care pay out of pocket until they run out of money and become eligible for Medicaid, Huang added.

“Not many people have those kind of resources, and so it is important to understand how fast prices grow and how they vary,” he said.

The study aimed to provide more transparency about out-of-pocket prices of nursing home care, according to Huang. He said the dataset used for the study is the largest one assembled on nursing home pricing to date.


In Texas, nursing home costs grew at a slower rate than the medical CPI, increasing by a cumulative 15.18 percent over the six years, according to the study. The average nursing home cost in Texas in 2010 was the lowest among the states included in the study — costing an average of $47,800 annually, compared to an average of $121,910 per year in California.

For-profit nursing home chains generally charged lower prices than nonprofit chains, adjusting for staffing levels and geographic differences, the study found. Areas with a higher market concentration of nursing homes had higher prices, as did nursing homes that were near capacity.

“This kind of information is very valuable to potential consumers of this care,” Huang said.