population age 65 and older increased by 188 percent, and the population 85 and older increased by 635 percent (Eberhardt et al., 2001, Hetzel and Smith, 2001). Over this same period, the life expectancy of people at age 65 increased from 13.9 to 17.9 years (Natonal Center for Health Statistics, unpublished data, 2001). These trends will likely be accentuated by the aging of the post-WWII baby boom generation. The U.S. Bureau of the Census predicts that by 2030, the population over age 65 will nearly triple to more than 70 million people, and older people will make up more than 20 percent of the population (up from 12.3 percent in 1990) (Population Projections Program, 2000).

It is heartening that large proportions of the nation’s older people are living without substantial disability. Among people age 75 and older in 1999, 70 percent described their health as good or excellent (Eberhardt et al., 2001). Inevitably, however, the aging of the population is also associated with increases in age-related diseases and disabilities. Of the estimated 12.8 million Americans reporting need for assistance with activities of daily living (ADLs—eating, dressing, bathing, transferring between the bed and a chair, toileting, controlling bladder and bowel) or instrumental activities of daily living (IADLs—preparing meals, performing housework, taking drugs, going on errands, managing finances, using a telephone), 57 percent (7.3 million people) were over the age of 65 (Administration on Aging, 1997). Dementia is present in approximately 5 to 10 percent of persons age 65 and older and 30 to 39 percent of persons age 85 and older (Rice et al., 2001; Henderson, 1998). Among people age 85 and older in 1999, 33 percent reported themselves to be in fair or poor health, 84 percent had disabilities involving mobility (unpublished data Natonal Center for Health Statistics, 2002), and 16 percent had Alzheimer’s disease (Brookmeyer et al., 1998).

Given the projected growth in the elderly population, long-term care for elderly people with disabilities has become an increasingly urgent policy concern (Institute of Medicine, 2001; Stone, 2000). The settings in which long-term care is provided depend on a variety of factors, including the older person’s needs and preferences, the availability of informal support, and the source of reimbursement for care. An increasing number of elderly people reside outside traditional home settings in highly restrictive institutional environments (such as skilled or intermediate nursing facilities) or in less restrictive community-based residential settings, such as assisted living facilities, board and care homes, and adult foster homes. Among the 34 million persons over age 65 in 1995, 5 percent were nursing home residents, and 12 percent lived in the community setting with ADL or IADL limitations. The number of nursing home residents increased between 1973–1974 and 1999 from 961,500 to 1,469,500 among those age 65 and older, and from 413,6000 to 757,100 among those 85 and older (Eberhardt et al., 2001). In 1999, another 500,000 elderly people were living in



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