Willingness to Pay for Home- and Community-Based Services for Seniors in Florida

Abstract

States are increasingly interested in measuring the benefit of home- and community-based services (HCBS) programs in order to determine if continued provision of HCBS can be justified on a cost-benefit basis. This study attempts to assess the maximum dollar amount HCBS enrollees or eligible applicants are willing to pay as a measure of the value of the services to them. A contingent valuation survey was conducted on a random sample of 409 clients who were enrolled in or waitlisted for HCBS programs in Florida. Based on estimates from a random-effect model, the median and mean willingness to pay amounts are calculated to be $901 and $933 per month per person, respectively, with considerable variation across HCBS programs. The major determinants of willingness to pay include household income and individual functional status. The sizable values for willingness to pay reported in this study suggest that HCBS programs are perceived as a valuable resource for the elderly.

Keywords:

• elderly
• long-term care
• Medicaid
• willingness to pay

Notes

1. The bidding price in DC2 is $250–$500 greater than that in DC1 if the DC1 response is positive. The bidding price in DC2 is $250–$500 less than that in DC1 but no less than $50 if the DC1 response is negative.

2. The count of I-ADL limitations is not included for its high correlation with ADL in the sample.

3. In the plotting in the right panel of Figure 1, the downward sloping pattern in acceptance rate with respect to bidding prices can be more clearly observed once the responses to bidding price of $300 and $1,700 are neglected. The unusually low and high acceptance rates for these two bidding prices are likely a result of small sample bias—there were only seven responses for $300 and two for $1,700.