A Review of Recent Evaluations of Nursing Homes in the US using Cost-Benefit Analysis
Main Article Content
Abstract
Recently, a Cost-Benefit Analysis (CBA) was carried out to ascertain whether expenditures on nursing homes are socially worthwhile. It has been well-known for a long while that nursing homes had major problems. But it was only newly discovered just how large were the social losses from these facilities. The objective of this review is to report the scale of these losses and to explain in detail how these negative net-benefits were estimated. Cost estimates were obtained from the literature. The benefit methodology involved using changed Quality Adjusted Life Years (QALYs) to quantify the effects of nursing homes, which were then valued by putting a price on the QALYs. The social welfare loss was estimated, based on a large panel data set, to amount to $1.93 trillion. This sum would be saved if people were able to reside outside nursing homes. Two major reasons for the nursing home loss of benefits were giving residents improper medications (like anti-psychotics) and neglecting to provide necessary services (like hearing aids). For those who were unable to live outside a nursing home, this review summarized an extensive report on nursing homes by the National Academies of Sciences, Engineering and Medicine. Seven recommendations for improvement were outlined. One of the suggested interventions was covered in detail. The seven recommendations can be on the agenda for medical researchers to carry out future CBAs targeting nursing home interventions using methods outlined in this review.
Keywords:
Avoiding nursing homes, CBA, QALYs, VSLY, NASEM report, Long-Term Care Ombudsman Program
Article Details
How to Cite
BRENT, Robert J..
A Review of Recent Evaluations of Nursing Homes in the US using Cost-Benefit Analysis.
Medical Research Archives, [S.l.], v. 13, n. 10, oct. 2025.
ISSN 2375-1924.
Available at: <https://esmed.org/MRA/mra/article/view/6977>. Date accessed: 15 nov. 2025.
doi: https://doi.org/10.18103/mra.v13i10.6977.
Section
Review Articles
The Medical Research Archives grants authors the right to publish and reproduce the unrevised contribution in whole or in part at any time and in any form for any scholarly non-commercial purpose with the condition that all publications of the contribution include a full citation to the journal as published by the Medical Research Archives.
References
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2. Brent RJ. The Benefits of Not Living in Nursing Homes. Applied Economics, 2022; 54 (32): 3740-3750. https://doi.org/10.1080/00036846.2021.1983141.
3. Brent RJ. Cost-Benefit Analysis Versus Cost-Effectiveness Analysis from a Societal Perspective in Healthcare. Int. J. Environ. Res. Public Health, 2023; 20, 4637. https://doi.org/10.3390/ijerph20054637.
4. Brent RJ. Cost-Benefit Analysis and Health Care Evaluations (Second Edition). Edward Elgar, Cheltenham, UK, December 2014.
5. Brent RJ. Advanced Introduction to Cost-Benefit Analysis. Edward Elgar, Cheltenham, UK. October, 2017.
6. Brent RJ. A CBA of Corrective Lenses, Including the Benefits for Reducing the Symptoms of Dementia. Applied Economics, 2020; 52(48): 5218-5229. https://doi.org/10.1080/00036846.2020.1761533.
7. Brent RJ. A CBA of Hearing Aids, Including the Benefits of Reducing the Symptoms of Dementia. Applied Economics, 2019; 51(28): 3091-3103. https://doi.org/10.1080/00036846.2018.1564123.
8. Brent RJ. Estimating the Monetary Benefits of Medicare Eligibility for Reducing the Symptoms of Dementia. Applied Economics, 2018; 50(58): 6327–6340. https://doi.org/10.1080/00036846.2018.1489519.
9. Brent RJ. Behavioral versus Biological Definitions of Dementia Symptoms: Recognizing that Worthwhile Interventions already Exist. OBM Geriatrics, 2019; 3(4): 2-14. doi:10.21926/obm.geriatr.1904079.
10. Morris JC. The Clinical Dementia Rating (CDR). Current Version and Scoring Rules. Neurology, 1993; 43: 2412-2414.
11. Vagetti GC, Barbosa Filho VC, Moreira NB, Oliveira VD, Mazzardo O, Campos WD. Association between Physical Activity and Quality of Life in the Elderly: A Systematic Review 2000-2012. Braz J Psychiatry, 2014; 36(1):76-88. doi: 10.1590/1516-4446-2012-0895.
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13. Beekly DL, Ramos ER, Lee WW, Deitrich ME, Jacka ME, Wu J, et al. The National Alzheimer’s Coordinating Center (NACC) database: The Uniform Data Set. Alzheimer Dis Assoc Disord, 2007; 21: 249-258.
14. Aldy JE, Viscusi WK. 2008. Adjusting the Value of a Statistical Life for Age and Cohort Effects. The Review of Economics and Statistics, 2008; 90(3): 573–581. https://doi.org/101162/rest.90.3.573.
15. McCreedy E.M, Weinstein BE, Chodosh J, Blustein J. Hearing Loss: Why Does it Matter for Nursing Homes? Journal of the American Medical Directors Association, 2018; 19(4): 323–327. doi:10 .1016/j. jamda.2017.12.007.
16. National Academies of Sciences, Engineering, and Medicine. The National Imperative to Improve Nursing Home Quality: Honoring Our Commitment to Residents, Families, and Staff. 2022. Washington, DC: The National Academies Press. https://doi.org/10.17226/26526.
17. Guo J, Konetzkab T, Manning WG. 2015. The Causal Effects of Home Care Use on Institutional Longterm Care Utilization and Expenditures. Health Economics, 24 (Suppl. 1): 4–17. doi:10.1002/hec.3155.
18. US Bureau of Economic Analysis (BEA). 2025. https://www.bea.gov
19. Lachs, M, Pillemer, KA. 2015. Elder Abuse. The New England Journal of Medicine, 2025; 373: 1947-1956.
20. Brent RJ. Detecting the Incidence and Benefits Foregone of Elder Abuse Neglect: The Case of Hearing Aids in Nursing Homes. Review of Economics and Finance, 2021; 19: 169-175.
21. HRW (Human Rights Watch). They Want Docile: How Nursing Homes in the United States Overmedicate People with Dementia. 2018. New York: Human Rights Watch.
22. Brent, RJ. An Economic Evaluation of Antipsychotic Medications given to Persons with Dementia. Applied Economics, 2024; DOI: 10.108 0/00036846.2024.2339187
23. APA (American Psychiatric Association). The American Psychiatric Association Practice Guideline on the Use of Antipsychotics to Treat Agitation or Psychosis in Patients with Dementia. 2016. Arlington, Virginia: APA.
24. Harris-Kojetin L, Sengupta M, Lendon JP, Rome V, Valverde R, Caffrey C. Long-term Care Providers and Services Users in the United States, 2015–2016. Vital and Health Statistics, 2019; series 3, no. 43. Washington, DC: U.S. Government Publishing Office. https://www.cdc.gov/nchs/data/series/sr_03/sr03_43-508.pdf.
25. Brent RJ. FDA-Approved Medications for Dementia Are Unlike Non-Pharmacological Interventions As They Are Counterproductive. Applied Economics, 2023; 56(16): 1935–1949. https://doi.org/10.1080/00036846. 2023. 2178625
26. Brent RJ. A Cost-Benefit Analysis of Beta-Blockers, Including the Benefits of Reducing the Symptoms of Dementia. Applied Economics, 2024; 1–13. https://doi.org/10. 1080/00036846.2024.2311078.
27. Grabowski DC. Strengthening Nursing Home Policy for the Postpandemic World:How can we Improve Residents’ Health Outcomes and Experiences? https://www.commonwealthfund.org/publications/issue-briefs/2020/aug/strengthening-nursing-homepolicy-postpandemic-world.
28. IOM. 1996. Nursing Staff in Hospitals and Nursing Homes: Is it Adequate? 1996. Washington, DC. National Academy Press.
29. CMS. Medicare and Medicaid Programs; Requirements for Long-term Care Facilities: Regulatory Provisions to Promote Efficiency, and Transparency. 2019. https://www.federalregistergov/documents/2019/07/18/2019-14946/medicare-and-medicaid-programs-requirementsfor-long-term-care-facilities-regulatory-provisions-to.
30. Konetzka RT. 2014b. The hidden costs of rebalancing long-term care. Health Services Research, 2014; 49(3):771–777.
31. ACL. Long-Term Care Ombudsman Program. 2021. https://acl.gov/programs/ProtectingRightsand-Preventing-Abuse/Long-term-Care-Ombudsman-Program.
32. Edelman T. Changes to Nursing Home Compare and the Five Star Quality Rating System. 2015. https://medicareadvocacy.org/changes-to-nursing-home-compare-and-the-five-star-qualityrating-system.
33. MACPAC. Integrating Clinical Care through greater Use of Electronic Health Records for Behavioral Health. 2021. Chapter 4 in June 2021 report to Congress on Medicaid and CHIP. Washington, DC: Medicaid and CHIP Payment and Access Commission.
34. NORC (NORC at the University of Chicago). Final Report: Process Evaluation of the Long-Term Care Ombudsman Program (LTCOP). 2019. https://acl.gov/sites/default/programs/2020-10/LTCOPProcessEvaluationFinalReport_2.pdf.
35. Hunt SS. History and Role of the Long-Term Care Ombudsman Program. 2008. https://ltcombudsman.org/uploads/files/support/history-and-role.pdf
36. Estes CL, Lohrer SP, Goldberg S, Grossman BR, Nelson M, Koren MJ, Hollister B. Factors Associated with Perceived Effectiveness of Local Long-Term Care Ombudsman Programs in New York and California. Journal of Aging and Health, 2010; 22(6):772–803.
37. Berish DE, Bornstein J, Bowblis JR. 2019. The Impact of Long-Term Care OmbudsmanPresence on Nursing Home Survey Deficiencies. Journal of the American Medical DirectorsAssociation, 2019; 20(10):1325–1330.
38. Estes CL, Zulman DM, Goldberg SC, Ogawa DD. State Long Term Care Ombudsman Programs: Factors Associated with Perceived Effectiveness. The Gerontologist, 2004; 44(1):104–115.
39. Brent RJ. Cost-Benefit Analysis and Dementia: New Interventions, 2022 Cheltenham, UK: Edward Elgar.
2. Brent RJ. The Benefits of Not Living in Nursing Homes. Applied Economics, 2022; 54 (32): 3740-3750. https://doi.org/10.1080/00036846.2021.1983141.
3. Brent RJ. Cost-Benefit Analysis Versus Cost-Effectiveness Analysis from a Societal Perspective in Healthcare. Int. J. Environ. Res. Public Health, 2023; 20, 4637. https://doi.org/10.3390/ijerph20054637.
4. Brent RJ. Cost-Benefit Analysis and Health Care Evaluations (Second Edition). Edward Elgar, Cheltenham, UK, December 2014.
5. Brent RJ. Advanced Introduction to Cost-Benefit Analysis. Edward Elgar, Cheltenham, UK. October, 2017.
6. Brent RJ. A CBA of Corrective Lenses, Including the Benefits for Reducing the Symptoms of Dementia. Applied Economics, 2020; 52(48): 5218-5229. https://doi.org/10.1080/00036846.2020.1761533.
7. Brent RJ. A CBA of Hearing Aids, Including the Benefits of Reducing the Symptoms of Dementia. Applied Economics, 2019; 51(28): 3091-3103. https://doi.org/10.1080/00036846.2018.1564123.
8. Brent RJ. Estimating the Monetary Benefits of Medicare Eligibility for Reducing the Symptoms of Dementia. Applied Economics, 2018; 50(58): 6327–6340. https://doi.org/10.1080/00036846.2018.1489519.
9. Brent RJ. Behavioral versus Biological Definitions of Dementia Symptoms: Recognizing that Worthwhile Interventions already Exist. OBM Geriatrics, 2019; 3(4): 2-14. doi:10.21926/obm.geriatr.1904079.
10. Morris JC. The Clinical Dementia Rating (CDR). Current Version and Scoring Rules. Neurology, 1993; 43: 2412-2414.
11. Vagetti GC, Barbosa Filho VC, Moreira NB, Oliveira VD, Mazzardo O, Campos WD. Association between Physical Activity and Quality of Life in the Elderly: A Systematic Review 2000-2012. Braz J Psychiatry, 2014; 36(1):76-88. doi: 10.1590/1516-4446-2012-0895.
12. Weintraub S, Salmon D, Mercaldo N, Ferris S, Graff-Radford NR, Chui H, et al. The Alzheimer’s Disease Centers’ Uniform Data Set (UDS): The Neuropsychological Test Battery. Alzheimer Dis Assoc Disord 2009; 23: 91-101.
13. Beekly DL, Ramos ER, Lee WW, Deitrich ME, Jacka ME, Wu J, et al. The National Alzheimer’s Coordinating Center (NACC) database: The Uniform Data Set. Alzheimer Dis Assoc Disord, 2007; 21: 249-258.
14. Aldy JE, Viscusi WK. 2008. Adjusting the Value of a Statistical Life for Age and Cohort Effects. The Review of Economics and Statistics, 2008; 90(3): 573–581. https://doi.org/101162/rest.90.3.573.
15. McCreedy E.M, Weinstein BE, Chodosh J, Blustein J. Hearing Loss: Why Does it Matter for Nursing Homes? Journal of the American Medical Directors Association, 2018; 19(4): 323–327. doi:10 .1016/j. jamda.2017.12.007.
16. National Academies of Sciences, Engineering, and Medicine. The National Imperative to Improve Nursing Home Quality: Honoring Our Commitment to Residents, Families, and Staff. 2022. Washington, DC: The National Academies Press. https://doi.org/10.17226/26526.
17. Guo J, Konetzkab T, Manning WG. 2015. The Causal Effects of Home Care Use on Institutional Longterm Care Utilization and Expenditures. Health Economics, 24 (Suppl. 1): 4–17. doi:10.1002/hec.3155.
18. US Bureau of Economic Analysis (BEA). 2025. https://www.bea.gov
19. Lachs, M, Pillemer, KA. 2015. Elder Abuse. The New England Journal of Medicine, 2025; 373: 1947-1956.
20. Brent RJ. Detecting the Incidence and Benefits Foregone of Elder Abuse Neglect: The Case of Hearing Aids in Nursing Homes. Review of Economics and Finance, 2021; 19: 169-175.
21. HRW (Human Rights Watch). They Want Docile: How Nursing Homes in the United States Overmedicate People with Dementia. 2018. New York: Human Rights Watch.
22. Brent, RJ. An Economic Evaluation of Antipsychotic Medications given to Persons with Dementia. Applied Economics, 2024; DOI: 10.108 0/00036846.2024.2339187
23. APA (American Psychiatric Association). The American Psychiatric Association Practice Guideline on the Use of Antipsychotics to Treat Agitation or Psychosis in Patients with Dementia. 2016. Arlington, Virginia: APA.
24. Harris-Kojetin L, Sengupta M, Lendon JP, Rome V, Valverde R, Caffrey C. Long-term Care Providers and Services Users in the United States, 2015–2016. Vital and Health Statistics, 2019; series 3, no. 43. Washington, DC: U.S. Government Publishing Office. https://www.cdc.gov/nchs/data/series/sr_03/sr03_43-508.pdf.
25. Brent RJ. FDA-Approved Medications for Dementia Are Unlike Non-Pharmacological Interventions As They Are Counterproductive. Applied Economics, 2023; 56(16): 1935–1949. https://doi.org/10.1080/00036846. 2023. 2178625
26. Brent RJ. A Cost-Benefit Analysis of Beta-Blockers, Including the Benefits of Reducing the Symptoms of Dementia. Applied Economics, 2024; 1–13. https://doi.org/10. 1080/00036846.2024.2311078.
27. Grabowski DC. Strengthening Nursing Home Policy for the Postpandemic World:How can we Improve Residents’ Health Outcomes and Experiences? https://www.commonwealthfund.org/publications/issue-briefs/2020/aug/strengthening-nursing-homepolicy-postpandemic-world.
28. IOM. 1996. Nursing Staff in Hospitals and Nursing Homes: Is it Adequate? 1996. Washington, DC. National Academy Press.
29. CMS. Medicare and Medicaid Programs; Requirements for Long-term Care Facilities: Regulatory Provisions to Promote Efficiency, and Transparency. 2019. https://www.federalregistergov/documents/2019/07/18/2019-14946/medicare-and-medicaid-programs-requirementsfor-long-term-care-facilities-regulatory-provisions-to.
30. Konetzka RT. 2014b. The hidden costs of rebalancing long-term care. Health Services Research, 2014; 49(3):771–777.
31. ACL. Long-Term Care Ombudsman Program. 2021. https://acl.gov/programs/ProtectingRightsand-Preventing-Abuse/Long-term-Care-Ombudsman-Program.
32. Edelman T. Changes to Nursing Home Compare and the Five Star Quality Rating System. 2015. https://medicareadvocacy.org/changes-to-nursing-home-compare-and-the-five-star-qualityrating-system.
33. MACPAC. Integrating Clinical Care through greater Use of Electronic Health Records for Behavioral Health. 2021. Chapter 4 in June 2021 report to Congress on Medicaid and CHIP. Washington, DC: Medicaid and CHIP Payment and Access Commission.
34. NORC (NORC at the University of Chicago). Final Report: Process Evaluation of the Long-Term Care Ombudsman Program (LTCOP). 2019. https://acl.gov/sites/default/programs/2020-10/LTCOPProcessEvaluationFinalReport_2.pdf.
35. Hunt SS. History and Role of the Long-Term Care Ombudsman Program. 2008. https://ltcombudsman.org/uploads/files/support/history-and-role.pdf
36. Estes CL, Lohrer SP, Goldberg S, Grossman BR, Nelson M, Koren MJ, Hollister B. Factors Associated with Perceived Effectiveness of Local Long-Term Care Ombudsman Programs in New York and California. Journal of Aging and Health, 2010; 22(6):772–803.
37. Berish DE, Bornstein J, Bowblis JR. 2019. The Impact of Long-Term Care OmbudsmanPresence on Nursing Home Survey Deficiencies. Journal of the American Medical DirectorsAssociation, 2019; 20(10):1325–1330.
38. Estes CL, Zulman DM, Goldberg SC, Ogawa DD. State Long Term Care Ombudsman Programs: Factors Associated with Perceived Effectiveness. The Gerontologist, 2004; 44(1):104–115.
39. Brent RJ. Cost-Benefit Analysis and Dementia: New Interventions, 2022 Cheltenham, UK: Edward Elgar.