Nursing home costs lead rise in Utah public assistance spending Medicaid costs in Utah have soared in recent years, pushing total public welfare spending past highway expenditure ex-penditure as the second largest (after education) category of state spending. Most of the Medicaid increase has been due to rising costs of nursing home care, according to Utah Foundation, a private non-profit research agency.. In the 1978-79 fiscal year, Utah expenditure ex-penditure for public assistance rose from $111 million to $128 million, despite the fact that non-medical spending went down slightly, the Foundation notes in a research report released this week. Spending for medical assistance increased by $17.5 million in the same year, 61 percent of the increase being in the area of nursing nur-sing home care. Over the 1969-79 decade, medical costs rose from 37 percent of total Utah welfare expenditure to 66 percent. Nursing home outlays grew even more rapidly. In fiscal 1969, nursing home costs represented 39 percent of medical expenditure and 14 percent of all welfare outlays. In fiscal 1979, nursing home costs accounted for 55 percent of Medicaid and 36 percent of all public assistance spending in the state. "Federal regulations and rulings have had an important bearing on the rise in Utah nursing home costs over the past decade," the Foundation states. "It is also apparent that the huge increase in federal spending in the health-care marketplace has been a significant factor in the continuing rise in health care costs. In the specific area of nursing homes, many people believe that while increased and improved care has been provided for welfare patients, many middle-income Americans, who do not qualify for welfare assistance, have literally been priced out of the market and are unable to find quality institutions which they can afford." The increase in Utah expenditure for nursing home care (including federal funds granted to the state) averaged 25 percent a year between 1969 and 1979, but the growth did not occur at an even rate. Twice during the period, single-year single-year increases exceeded 50 percent, and both times federal regulation was a significant factor in the rise. In 1970 a federal ruling invalidated a Utah policy which had required families of nursing home welfare patients to contribute to their support to the extent they were financially able to do so. In fiscal 1978 federal authorities required that Utah terminate its policy of reimbursing nursing home owners on a schedule of fixed fees arrived at by negotiation. Federal regulations required that reimbursement be "reasonable compensation" for all goods and services provided which were eligible under federal standards, which many Utah authorities feel are extremely liberal. An additional factor in the 1978 increase in-crease was the replacement of old and sub-standard facilities with new or rehabilitated ones. In the process of rebuilding, a great many additional beds were constructed, exceeding the existing need in the opinion of many Utah health authorities. Some officials feel that the state "caved in" to pressure brought by nursing home operators who hoped to recoup their investment costs more rapidly with larger establishments. Other officials deny that the state was moved by political pressure, but concede that an over-building occurred and that there currently exists an excess of nursing home beds in some parts of the state. Utah has made considerable headway head-way in the last two years in reducing nursing home costs in some areas, including changes in formulas for reimbursing nursing home operators. Some of these changes are being challenged in federal court. Utah's director of health care financing believes that real progress has been made in tightening the nursing home operation, and points to the fact that this year, for the first time since 1972, there has been no request for supplemental sup-plemental appropriation to finance health care operations in Utah's public welfare program. "While considerable progress is already apparent, more definitive judgment must wait until results of the new policies and practices have been more fully tested," the Foundation notes.