Housing Plus Services, IADL Impairment, and Healthcare Expenditures: Evidence from the Medicare Current Beneficiaries Survey

BACKGROUND AND OBJECTIVES: Despite enthusiasm for the potential cost savings of embedding supportive services in senior housing, few population health studies have empirically examined such associations. We investigated the extent to which associations between housing plus services in senior housing and healthcare expenditures depend upon residents' instrumental activities of daily living (IADL) impairment and the level of services available. RESEARCH DESIGN AND METHODS: We used data from 2,601 participants aged 65 or older in the 2001-2013 Medicare Current Beneficiary Survey, who reported living in senior or retirement housing. Based on survey self-reports, we created a measure of housing with different levels of services, including the categories of housing without services, housing plus services (i.e., assistance with IADLs, but not with medications), and housing plus enhanced services (i.e., assistance with IADLs including medications). Administrative and survey data were used to create measures of healthcare expenditures paid by all sources. We estimated generalized linear models based on pooled data from participants across the 13 years of data collection. RESULTS: Residents with IADL impairment-who lived in housing plus enhanced services-had lower total healthcare expenditures than their counterparts in housing without services and housing plus services. Upon examining component healthcare costs, this pattern of results was similar for inpatient/subacute care, as well as ambulatory care, but not for home health care. DISCUSSION AND IMPLICATIONS: Findings indicate the importance of studies on the cost savings of housing-based service programs to consider resident IADL status and the types of services available.