1950-1970: Nursing Home Population and Cost

Nursing Home Supply, Expenditures, and Utilization, Mid-Twentieth Century

The data in the following table comes from a variety of sources, and it’s impossible to tell if all of them were referring to exactly the same facilities and residents, so it is imprecise. However, it probably is good enough to create a very general picture of nursing home utilization and expenditures in the mid-twentieth century. The explosion in utilization and costs that took place after FHA financial assistance for nursing home construction was made available in 1959 and again after Medicare and Medicaid were enacted in 1965 is obvious. Also note that the percentage of the cost borne by the federal government increased far more than that borne by state and local government.

U.S. Population195019601970
Total population151,000,000179,000,000203,000,000
Population age 65+12,300,00016,500,00020,000,000
Age 65+ / total population8.1%9.2%9.8%
Nursing Home Supply and Utilization195419631969
Number of nursing homes9,00013,10015,300
Number of beds260,000507,500879,000
Number of residents260,000470,000793,000
Nursing home residents / 65+ population2.1%2.8%3.9%
National Nursing Home Expenditures195019631969
National spending on nursing homes (millions)$187$1,055$3,567
Expenditures per resident$700$1,800$5,300
Federal/State/Individual Share of Expenditures195019631969
Federal direct payments for care0%18%24%
State/local direct payments for care10%13%14%
Non-government payments for care
(includes government payments to individuals)

Data Sources

As compared to the earlier table of the institutionalized population, this table now includes only “nursing homes” and excludes people in facilities for the mentally ill or those in custodial, or board and care homes. Data on the number of homes and residents comes from estimates made by the Institute of Medicine and Master Facility Inventories done by the National Center for Health Statistics (NCHS). Census data is from the U.S. Bureau of the Census. Current Population Reports, Special Studies, P23-19065+ in the United States. (U.S. Government Printing Office, Washington, DC, 1996).Nursing home expenditure data is from the IOM report and from National Health Expenditures tables posted on the web site of the Centers for Medicare and Medicaid Services.

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