Office of Program Policy Analysis and Government Accountability
Office of Program Policy Analysis and Government Accountability

Performance Review of the Certificate of Need Program for Nursing Homes Administered by the Agency for Health Care Administration

Report 95-51, April 1996




Report Summary

If current trends continue, state expenditures for nursing home care will more than double within the next ten years. Certificate of need (CON) reduces these costs by controlling the supply of beds. However, the program does little to control demand and may limit the state's ability to shift resources to less-costly, long-term care alternatives.

REPORT HIGHLIGHTS

  • By year 2005, the number of individuals over 65 years old in Florida will increase by 19.5%, and the number aged 85 or more will increase by 60%.
  • With expected price level increases, Medicaid expenditures for nursing home care will more than double from $1.11 billion in 1994 to $2.74 billion in 2005.
  • Demand for nursing home care has been heavily influenced by the Medicaid Program, which entitles individuals to receive care in nursing homes but not in other settings.
  • Certificates of need are issued three years in advance; once beds are open, the Legislature may be hesitant to shift funds from nursing homes to less-costly, community-based alternatives.
  • Proposed changes in Federal regulations could eliminate the need for certificate of need.
RECOMMENDATIONS
  • The Legislature should require the Agency for Health Care Administration, Department of Elder Affairs, and Department of Health and Rehabilitative Services to develop a plan for expanding community-based, long-term care alternatives to nursing homes.
  • Planned increases in community-based slots should be subtracted from CON's estimates of the need for new nursing home beds.
  • To avoid a future surplus of nursing home beds, the Legislature should consider either placing a temporary moratorium on the construction of new nursing home beds or increasing target occupancy rates.
  • The Legislature should sunset CON for nursing homes effective July 1, 2001.


Related Reports
  1. Follow-Up Report on the Performance Review of the Certificate of Need Program for Nursing Homes
    Report 97-73 May 1998
Copies of this report in print or alternate accessible format may be obtained by email OPPAGA@oppaga.fl.gov, telephone (850) 488-0021, or mail 111 W. Madison St., Room 312 Tallahassee, FL 32399-1475.
Copies of this report in print or alternate accessible format may be obtained by email OPPAGA@oppaga.fl.gov, telephone (850) 488-0021, or mail 111 W. Madison St., Room 312 Tallahassee, FL 32399-1475.
social services, health, nursing homes