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RAND Roybal Center for Health Policy Simulation

Functional Status, Health Outcomes, and Health Care Cost among the Elderly

Objectives

This pilot study examines how transitions among functional statuses affect nursing home entry and health care cost by the elderly. The specific aims are to:

1. Investigate if transitions among health states of the elderly satisfy Markov assumption;
2. Compare different hierarchical classification of functional status according to measures of physical functioning, instrumental activities of daily living (IADL), and activities of daily living (ADL); and
3. Examine the impact of going from 1st order to higher order Markov transitions on probability of nursing home entry, and health care cost among the elderly.

Progress To Date

Data analyses have been re-run after discussions with Emmett Keeler, a senior researcher at RAND.

Research Products

One manuscript is being revised based on the updated analysis, which presents the major study findings:

1. To reject the hypothesis that transitions among health states of the elderly satisfy Markov assumption, on the basis of a sub-sample of the Medicare Beneficiaries Survey (MCBS).
2. To present the significant impact of going from 1st order to higher order Markov transitions on probability of nursing home entry.
3. To present insignificant impact of health state transitions on annual health care cost, which was mostly explained by health status in the current year.
4. To discuss implications of the study findings for policy and research.

Next Steps

To complete and submit the manuscript.