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									                 Agency for Healthcare Research and Quality
                 Advancing Excellence in Health Care • www.ahrq.gov



      Long-Term Care:
Balancing Systems and Costs
Christine G. Williams, M.Ed.
   Director
   Office of Communications and Knowledge Transfer
   Agency for Healthcare Research and Quality
Advancing
Excellence
 in Health
   Care
              What Is Long-Term Care (LTC)?
      n Broad range of personal, social, and
             medical supports and services
      n      Affects persons of all ages with
             physical or mental impairments, who
             cannot function independently
      n      Need for services projected 3+ months
      n      Services and housing both essential to
             LTC policy and systems
      n      Delivered across a range of settings
                                            Williams # 1
                 How Is the Need for LTC
                        Defined?
Advancing
Excellence
 in Health
   Care




     n The need for LTC is defined:
             – Needing help with Activities of Daily Living
               (ADLs): eating, bathing, dressing, toileting,
               transferring or
             – Instrumental Activities of Daily Living
               (IADLs): meal preparation, shopping,
               managing money, etc
     n Persons with cognitive impairments
             – Alzheimer’s and related dementias

                                                   Williams # 2
                Who Is Most Likely to Need
                         LTC?
Advancing
Excellence
 in Health
   Care




     n Demand affected by age, gender,
             race/ethnicity, and marital status
     n       Need increases with age
     n       Dramatic increase in physical and
             cognitive disability over age 85
     n       Demand higher among women
     n       Demand higher among those living
             alone
                                            Williams # 3
                       Demographics of
Advancing
Excellence
 in Health
   Care
                        LTC Population
     n 57% needing LTC are over 65 ― 17% of
             elderly population

     n 40% are adults 18-64 ― 3.3 million =
             2.1% population

     n 3% children = 400,000 (Nat’l Academy
             on Aging l997)
                                       Williams # 4
Advancing
Excellence
 in Health
              Boomers turn 65 in 7 Years!
   Care


             n Disability declining by 1% per year
             n BUT in 2000-2030, 65+ = 35 - 71 million
                – 12.4% - 20% of total population
                – Populations Triple – 85+
                – 65+ in nursing homes (NH)
                – 65+ with ADLs
             n Racial/ethnic diversity – disability higher
             n Women outlive men, yet more disabled
             n Fewer informal caregivers: smaller families,
               divorce, childlessness

                                                    Williams # 5
                  The Oldest Old:
             Fastest Growing Age Group
Advancing
Excellence
 in Health
   Care




     n People ages 85+ have the highest rates
       of disability – their numbers will increase
       by 31% by 2025
     n Cognitive impairment – Alzheimer's and
       related dementias – increases
       dramatically with increasing age
     n Nearly half of all NH residents have
       some form of dementia

                                          Williams # 6
                 LTC: How Is It Financed?
Advancing
Excellence
 in Health
   Care




     n LTC financing is a patchwork of public
       (Federal, State, local) and private dollars
     n Medicaid largest payer – 43% spending
             – Out-of-pocket spending – 24%
             – Medicare – 17%
             – LTC insurance – 4 -11%
     n RAND estimates value of informal
             caregiving up to $200 billion annually –
             80% at home rely ONLY on unpaid care
                                              Williams # 7
                   Medicaid Spending Trends for
Advancing
Excellence
 in Health
   Care
                               LTC

  n All Medicaid spending grew 105% ―
        1993-2003
             – Spending for home and community-based
               services (HCBS) grew 564%
  n FY’03 Medicaid LTC spending
             –   $44.8B – NH
             –   $27.8B – HCBS
             –   $11.3B – intensive care facilities/mentally
                 retarded (ICF/MR)
                                                      Williams # 8
                  National Trends in LTC
Advancing
Excellence
 in Health
   Care
                  Financing and Services
  n States trying to “rebalance” LTC systems
         – More State, Federal, local resources
           committed for choice of services and
           settings
         – Using multiple strategies to rebalance
         – Combining financing and org of delivery
           systems to shift funds from NH to HCBS
  n NH occupancy rates declining
         – But remaining residents are older and more
           dependent
                                              Williams # 9
Advancing
Excellence
 in Health
   Care
                Delivery System Is Flawed
     n Little person- or family-centered care
     n No real integration of services across
             time, settings, and providers
     n       Inadequate attention paid to transitions
     n       Poorly trained professionals and
             paraprofessional workforce
     n       Inadequate information systems to
             evaluate quality and track outcomes
                                              Williams # 10
Advancing
Excellence
 in Health
   Care
              What the Research Tells Us
  n People would prefer to remain in the community
    – yet 70% of Medicaid LTC dollars spent on
    institutional care
  n There is unmet need for LTC in the community
  n At least 15% of nursing home residents could be
    cared for in the community
  n Some Federal LTC demos show expanded
    home care not offset by less NH spending
             – But a few State studies show cost-effectiveness
  n Quality remains a serious issue in all settings
                                                       Williams # 11
             Challenges Facing
             State Policymakers
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   Care



     n Demographic realities
     n Rising expenditures for LTC
     n State budget crisis
     n Fragmented delivery and financing system
     n Quality problems in most settings
     n Demand for formal and informal caregivers
       growing – supply shrinking
     n Comprehensive LTC system unlikely

                                          Williams # 12
                State Responsibility:
             Health and LTC Care for 65+
Advancing
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   Care



       n Limited responsibility for ages 65-75
       n Primary burden for States – over age 75
       n Primary State issue disability, not health
       n States must obtain Federal waiver for
         community-based care – institutional
         care mandated as Medicaid benefit
       n Responsibility for “dual eligibles”


                                            Williams # 13
Advancing
             Elderly Medicaid Beneficiaries:
Excellence
 in Health
   Care
                     “Dual Eligibles”
     n Medicaid beneficiaries much more likely than
       the total Medicare population to be:
        – Oldest and poorest
        – In fair or poor general health/MH
        – In greater need of ADL or IADL
        – Users of more resources
        – 40% racial/ethnic minority populations
     n 16% Medicaid enrollees – 42% costs
     n 18% Medicare enrollees – 42+% costs
                                           Williams # 14
                   Low-Income Protection
                      Under Medicare
Advancing
Excellence
 in Health
   Care



    n Qualified Medicare Beneficiary (QMB)
             – Up to 100% poverty
             – Medicaid pays for Medicare Part B Premium
               and copays
    n Specified Low-Income Medicare Beneficiary
      (SLMB)
             – 100-125% poverty
             – Medicaid pays for Part B Premium only
    n Relatively few in the eligible population
             have been enrolled
                                                 Williams # 15
                    Medicaid and Persons with
Advancing
Excellence
 in Health
   Care
                           Disabilities
   n Elderly and disabled account for 1/3 of Medicaid
     beneficiaries but 2/3 of Medicaid spending
   n 7 million disabled qualify for Medicaid
             – Of these, only 2 million are elderly
   n Younger disabled increasing as a percent of
     Medicaid
   n Medicaid spends more per beneficiary on the
     elderly than on the disabled
   n Medicaid spends more in total on nonelderly
     disabled than any other group
   Source: Vladeck et al, Health Affairs, vol. 22 (1); 2003
                                                              Williams # 16
                     Medicaid and Persons with
Advancing
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                            Disabilities
    n More diverse population
             – Physically disabled children and/or adults
             – Mentally ill
             – Mentally retarded/developmentally disabled
               (MR/DD)
    n NH spending shrinking minority of total LTC $$
      on younger disabled
    n Medicaid spending for disabled will continue to
      increase both absolutely and relative to other
      covered populations
       Source: Vladeck et al., Health Affairs,Vol 22 (1); 2003
                                                                 Williams # 17
Advancing
Excellence
 in Health
   Care
             Olmstead, Medicaid, and LTC
     n Olmstead vs. L.C. (1999)
       – U.S. Supreme Court ruled that States must
          provide services in the “most integrated setting”
       – Violation of the Americans with Disabilities Act
          to provide services only in institutions if a
          person’s needs can be met in a community-
          based setting
       – Encourages States to re-evaluate how they
          deliver publicly funded long-term care services
       – Barriers to full community integration continue
           § Financial constraints on Medicaid in States

                                               Williams # 18
             Where Do Elders Receive
                 LTC Services?
Advancing
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 in Health
   Care



     n 81% with ADL/IADL needs are in the
       community
     n Unmet need in community – 37% of ADL-
       impaired elderly in community need help or
       additional assistance
     n Only 5% of elderly needing LTC are in NH
     n Supply of beds/occupancy rate for 75+
       declined – LTC needs increasingly being
       met outside of nursing homes
                                        Williams # 19
                  Home- and Community-
                     Based Services
Advancing
Excellence
 in Health
   Care




      n States expanding HCBS options – but
             70% Medicaid LTC $ still institutional
      n      Overall, greatest increase in HCBS for
             younger disabled – MR and DD
      n      Overall savings unclear – “woodwork”
             effect
      n      Potential cost savings in HCBS – Alecxih,
             et al.,1996 study in Washington, Oregon,
             and Colorado
                                            Williams # 20
                 Nursing Homes:
               Whom Do They Serve?
Advancing
Excellence
 in Health
   Care



        n NHs serve small percent of functionally impaired
          elderly (4-5%), but dominates LTC financing
        n NH pop. older, more disabled, frail, cognitively
          impaired (50%), need more skilled care
        n Likelihood of needing NH care increases
          dramatically with age – 50% of residents are 85+
        n Lack of financial resources or family caregivers
          contributes to need for nursing home care
           n 50% elderly w/LTC needs without family in NHs
             n 7% elderly w/LTC needs with family in NHs


                                                   Williams # 21
                 Assisted Living:
             Issues and Future Trends
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      n Fastest growing senior housing
      n State, facility definition/regs vary
      n Quality unknown
      n Few available to moderate/low income
      n Medicaid support for assisted living facilities
        (ALFs) increasing
      n Limitation of ALFs for dementia
      n Primary cause for discharge – need for more
        care – ASPE/Hawes study
      n Currently, ALFs rarely replace NHs
                                              Williams # 22
Advancing
Excellence
 in Health
   Care
             Who Are the LTC Caregivers?

     n 80% of LTC provided by informal
       caregivers: family and friends – 73%
       women; average age 60
     n Formal caregivers: Nursing assistants,
       home care aides, personal care workers
       – typical worker middle-aged, single
       mom, little education, poor
     n Large percent African American, Asian,
       or Hispanic workers, particularly in cities
                                         Williams # 23
             Formal/Informal Caregivers:
               Challenges and Trends
Advancing
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 in Health
   Care


    n Informal caregivers – backbone of LTC need
      emotional, practical, and $$ support
       – 33+ States have caregiver support programs
          – 30 are respite care; 50% of States pay
          caregivers
    n Most funding for informal care is State $$
    n Formal LTC aide recruitment/retention major
      issue in most States
       – 30+ States – wage “pass-through”
       – Other training/career support needed
                                         Williams # 24
                 Quality in LTC
             How Can It Be Improved?
Advancing
Excellence
 in Health
   Care


     n NH reform in Omnibus Budget Reconciliation
       Act (OBRA) ’87 – quality improvements but
       problems remain
     n 1999 GAO Report – additional steps needed
       to strengthen enforcement of Federal quality
       standards in NHs
     n Difficult issues for State policymakers:
        – Nurse staffing levels in NH
        – Medicaid payment rates


                                           Williams # 25
                 Quality in LTC:
             How Can It Be Improved?
Advancing
Excellence
 in Health
   Care



      n Quality in LTC difficult to define - medical
        and social services
      n Two LTC populations: clients and families
      n Serves clients with complex problems
      n Takes place over extended periods with
        periodic use of acute and subacute care
      n Shortcomings of existing quality oversight
      n CMS’s Nursing Home Compare
      n CMS’s Home Health Compare

                                              Williams # 26
          Agency for Healthcare Research and Quality
          Advancing Excellence in Health Care • www.ahrq.gov




      Long Term Care
Challenges and Options for States
   in a Time of Budget Crisis:
 Where Do We Go From Here?
                   FY’06 Budget Proposal:
Advancing
Excellence
 in Health
   Care
                   Implications for States

     n Proposed $60 billion savings in Medicaid
       over 10 years
     n New Freedom Initiative Proposals
             – More flexibility for HCBS
             – Money follows the person rebalancing
               demo
     n Limits on Medicaid funding for optional
             services?

                                               Williams # 28
               Three Broad State Strategies
                 to Control LTC Spending
Advancing
Excellence
 in Health
   Care




     n Reform delivery system to provide care
             more efficiently
             – Expand HCBS
             – Integrate acute and LTC: managed care
     n Increase private and Federal resources
     n Reduce Medicaid eligibility,
             reimbursement, and services


                                              Williams # 29
Advancing
Excellence
 in Health
   Care
                         Build Community Options
       n Home- and community-based options
                  – Expansion of Medicaid 1915(c) waivers
                  – Systems Changes for Community Living
                    grants – CMS (HCFA*)
       n Olmstead – impact on HCBS
       n Respite programs
       n Adult day services

             *formerly Health Care Financing Administration

                                                              Williams # 30
Advancing
Excellence
 in Health
   Care
             Support Informal Caregivers
         n Respite care
         n Education and training
         n Support groups
         n Tax credits
         n Range of services funded by Older
           Americans Act and Medicaid waiver
           programs
         n $$ to informal caregivers
                                        Williams # 31
                 Recruit and Retain
               Formal LTC Workforce
Advancing
Excellence
 in Health
   Care




        n Establish “wage pass-throughs”
        n Increase worker fringe benefits
        n Develop career ladders
        n Increase and improve training
          requirements
        n Develop new worker pools including
          former welfare workers
        n Wellspring model of quality improvement
                                          Williams # 32
Advancing
Excellence
 in Health
   Care
             Support Consumer Direction
    n Issue driven by younger people
    n Permits person to arrange own care; spend as sees
      fit, allows hiring family
    n Robert Wood Johnson Foundation (RWJ)/CMS cash
      and counseling demos
       – To reduce unmet need
       – Same or lower public cost
       – Increased satisfaction
       – AK, NJ, FL
    n Independence Plus Waiver – FL, LA, SC, NH
                                            Williams # 33
              More Private/Federal $
              Private LTC Insurance
Advancing
Excellence
 in Health
   Care


     n Role of private LTC insurance unknown:
       11% in 2002
     n Upper income likely market
     n High cost of policies
     n Potential may depend on development of
       employer-based group market
     n National Claimant Study - ASPE/RWJ
     n Federal Employees Health Benefits Program
       (FEHBP) LTC insurance benefit – 2002
        – Similar State offerings – MI, MN
                                         Williams # 34
                 Educate Boomers About
Advancing
Excellence
 in Health
   Care
                          LTC
     n “The Costs of LTC: Public Perceptions
             vs. Reality” – AARP survey
             –   Underestimate costs
             –   Falsely think their insurance covers LTC
             –   50% believe Medicare covers LTC
     n Denial about need for LTC
     n Boomers need to plan for future


                                                  Williams # 35
                         Hallmarks of a
Advancing
Excellence
 in Health
   Care
                    Comprehensive LTC System
     n Philosophy of care
     n One State organization responsible for all
       functions
     n Access to multiple funding sources
     n Single appropriation for Medicaid LTC
       services
     n Streamlined functional and financial eligibility
     n Comprehensive entry points
     n Standardized assessment tool
             Source: Mollica and Reinhard, Recommendations of State policy leaders,
                     RWJ funded, 2004.
                                                                          Williams # 36
             Hallmarks of a Comprehensive
Advancing
Excellence
 in Health
   Care
                  LTC System (cont’d)

     n Full array of in-home, residential, and
       institutional services
     n Information and assistance
     n Consumer-directed services
     n Care coordinators assigned to NH to assist
       with relocation
     n Quality assurance and improvement system
     n Integration of health and LTC services


                                          Williams # 37
Advancing
Excellence
             State Innovations in LTC
 in Health
   Care


  n Consolidate State LTC programs and
    dollars in single State agency - MA and
    NJ
  n Expand consumer direction - AK, NJ, FL
  n Single appropriation for Medicaid LTC -
    OR, MD, WA
  n Adopt assessment and care management
    practices to target resources to most in
    need
                                    Williams # 38
Advancing
Excellence
 in Health
   Care
             State Innovations in LTC
       n Maine and Oregon ― Reduce NH
         utilization – increase home care and
         residential alternatives
       n Texas and Minnesota ― integrates LTC
         and acute care services and financing
         in managed care (Evercare)
       n Wisconsin ― Family Care Program,
         comprehensive entry point

                                      Williams # 39
Advancing
Excellence
 in Health
   Care
                        Future Trends
     n Financing likely to continue as
             patchwork of public and private sources
     n       Medicaid will continue as primary public
             funding – wide State variation
     n       States continue to expand HCBS
     n       States expand consumer direction
             through Medicaid and State funding
     n       Tax strategies for incremental reforms
                                             Williams # 40

								
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