Health and Community Supports Can Lower Health Costs for Older Americans, but Funding Remains a Challenge

Washington, D.C. – Community-based services and programs aiming to improve older Americans’ social engagement and quality of life promote health at a fraction of the cost of medical interventions, according to two new briefs by the American Institutes for Research’s (AIR) Center on Aging. These models suggest a win-win pathway to addressing soaring healthcare costs and improving the well-being of the nation’s rapidly growing older population.

Compared with healthcare spending on older Americans, funding for supportive services, such as transportation, meals and housing is miniscule. The federal government spent about $624 billion in 2015 on Medicare, Medicaid and other programs for Americans 65 and older—supplemented by state and local government funds. By comparison, less than $10 billion was allotted to social and economic programs administered by a patchwork of agencies. Yet, supportive services can affect half of modifiable changes in health outcomes, compared with 20 percent that can be driven through clinical interventions, notes one brief, All Together Now: Integrating Health and Community Supports for Older Adults.

An aging America and $3 trillion-a-year healthcare costs make it essential that the nation finds ways to enable tens of millions of people to live healthy lives in their communities while achieving better outcomes with the enormous public and private resources spent on health. The number of older Americans has increased by 60 percent since 1980 and is projected to reach 72.8 million, or one-fifth of the population, by 2030. Federal healthcare spending accounts for one-third of the $4 trillion budget and all healthcare costs accounted for 17.5 percent of GDP in 2014. By comparison, funding for the Older American’s Act, the primary source of funding for local agencies seeking to support older Americans, has fallen by 34 percent in real terms since 1980.

The second brief, Community-Based Models for Aging in Place, examines several promising private initiatives for older Americans, with some promise on social engagement and well being, but yet to be sufficiently assessed regarding long-term health benefits:

  • Cohousing is a type of planned community with private homes as well as shared common houses and spaces for meals, recreation and socializing intended to foster a sense of community, reduce loneliness and provide mutual assistance. Started in Denmark in the 1970s, the United States has 172 cohousing communities, with 127 under development in 2016.
  • The village model exists in neighborhoods and larger geographies in which older adults are seeking to age in place. Villages have paid and volunteer staff who offer transportation, health advocacy, social events, shopping, technology assistance and home repairs. Members’ typical annual dues range from $0 to $1,200. Villages began as a popular option for middle- and upper-income members, but are increasingly becoming mixed income with growing diversity, particularly in cities. About 205 U.S. villages were operating and 150 forming in 2016.
  • Livable communities is another model. They include “naturally occurring retirement communities,” which the World Health Organization defines as communities with a large percentage of older people. These communities develop an age-friendly infrastructure, which may include outdoor spaces and buildings, transportation, social and civic participation, community support, health services. They also foster civic, economic and social engagement.

The second brief shares some proven benefits of these models, particularly with respect to social isolation and access to needed supports. Many more types of mature communities beyond these three models are working to address growing health needs as their participants age. These communities have sustainability challenges similar to their underfunded public sector counterparts.

The combination of an aging population, older Americans’ desire to age in place, the need for more cost-effective approaches to healthcare, and the goal of ensuring a good quality of life for older adults indicate that these public and private initiatives hold promise.

“Maximizing health and engagement in communities is a near-universal priority,” the authors write. “Greater emphasis on support services and better integration of those services with other programs will advance the goal of sustaining policies and programs related to aging in place.”

Get more insight on this work by joining the Center on Aging’s Dec. 15 webinar, Integrating Health and Community Supports for Aging in Place.

About AIR
Established in 1946, with headquarters in Washington, D.C., the American Institutes for Research (AIR) is a nonpartisan, not-for-profit organization that conducts behavioral and social science research and delivers technical assistance both domestically and internationally in the areas of health, education, and workforce productivity. For more information, visit


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