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Introduction to State Health Policy: A Seminar for New State Legislators

Slide Presentation by Christine G. Williams, M.Ed.


On March 31, 2005, Christine G. Williams made a presentation in a seminar entitled Introduction to State Health Policy.

This is the text version of Ms. Williams' slide presentation. Select to access the PowerPoint® Slides (174 KB).


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

The title slide has the logo of the Department of Health and Human Services and the AHRQ logo with the slogan: Advancing Excellence in Health Care, www.ahrq.gov. The AHRQ logo and slogan appear in the upper left corner and the Department of Health and Human Services logo appears is the lower right corner of all the following slides.

Slide 1

What Is Long-term Care?

  • Broad range of personal, social, and medical supports and services.
  • Affects persons of all ages with physical or mental impairments, who cannot function independently.
  • Need for services projected 3 or more months.
  • Services and housing both essential to long-term care policy and systems.
  • Delivered across a range of settings.

Slide 2

How Is the Need for Long-term Care Defined?

  • The need for long-term care 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, et cetera.
  • Persons with cognitive impairments
    • Alzheimer's and related dementias.

Slide 3

Who Is Most Likely to Need Long-term Care?

  • Demand affected by age, gender, race or ethnicity, and marital status.
  • Need increases with age.
  • Dramatic increase in physical and cognitive disability over age 85.
  • Demand higher among women.
  • Demand higher among those living alone.

Slide 4

Demographics of Long-term Care Population

  • 57 percent needing long-term care are over 65: 17 percent of elderly population.
  • 40 percent are adults 18 to 64: 3.3 million which is 2.1 percent population.
  • 3 percent children equals 400,000; National Academy on Aging, l997.

Slide 5

Boomers turn 65 in 7 Years!

  • Disability declining by 1 percent per year.
  • But from 2000 to 2030, adults 65 and up will grow from 35 to 71 million
    • 12.4 percent will increase to 20 percent of total population.
    • These populations will triple.
  • 85 and up.
  • 65 and up in nursing homes.
  • 65 and up with ADLs.
  • Racial, ethnic diversity: disability higher.
  • Women outlive men, yet more disabled.
  • Fewer informal caregivers: smaller families, divorce, childlessness.

Slide 6

The Oldest Old: Fastest Growing Age Group

  • People ages 85 and up have the highest rates of disability: their numbers will increase by 31 percent by 2025.
  • Cognitive impairment: Alzheimer's and related dementias: increases dramatically with increasing age.
  • Nearly half of all nursing homes residents have some form of dementia.

Slide 7

Long-term Care: How Is It Financed?

  • Long-term care financing is a patchwork of public; Federal, State, local; and private dollars.
  • 43 percent long-term care spending covered by Medicaid, largest payer.
  • 24 percent covered by out-of-pocket spending.
  • 17 percent covered by Medicare.
  • 4 to 11 percent covered by long-term care insurance.
  • Rand estimates value of informal care giving up to 200 billion dollars annually: 80 percent of people at home who need long-term care rely only on unpaid care.

Slide 8

Medicaid Spending Trends for Long-term Care

  • All Medicaid spending grew 105 percent from 1993 to 2003.
    • Spending for home and community-based services grew 564 percent.
  • Fiscal year 2003 Medicaid long-term care spending:
    • 44.8 billion dollars: nursing homes.
    • 27.8 billion dollars: home and community-based services.
    • 11.3 billion dollars: intensive care facilities slash mentally retarded.

Slide 9

National Trends in Long-term Care Financing and Services

  • States trying to "rebalance" long-term care systems
    • More State, Federal, local resources committed for choice of services and settings.
    • Using multiple strategies to rebalance.
    • Combining financing and organization of delivery systems to shift funds from nursing homes to home and community-based services.
  • Nursing homes occupancy rates declining
    • But remaining residents are older and more dependent.

Slide 10

Delivery System Is Flawed

  • Little person-centered or family-centered care.
  • No real integration of services across time, settings, and providers.
  • Inadequate attention paid to transitions.
  • Poorly trained professionals and paraprofessional workforce.
  • Inadequate information systems to evaluate quality and track outcomes.

Slide 11

What the Research Tells Us

  • People would prefer to remain in the community: yet 70 percent of Medicaid long-term care dollars spent on institutional care.
  • There is unmet need for long-term care in the community.
  • At least 15 percent of nursing home residents could be cared for in the community.
  • Some Federal long-term care demos show expanded home care not offset by less nursing homes spending, but a few State studies show cost-effectiveness.
  • Quality remains a serious issue in all settings.

Slide 12

Challenges Facing State Policymakers

  • Demographic realities.
  • Rising expenditures for long-term care.
  • State budget crisis.
  • Fragmented delivery and financing system.
  • Quality problems in most settings.
  • Demand for formal and informal caregivers growing: supply shrinking.
  • Comprehensive long-term care system unlikely.

Slide 13

State Responsibility: Health and Long-term Care for 65 and up

  • Limited responsibility for ages 65 to 75.
  • Primary burden for States: over age 75.
  • Primary State issue disability, not health.
  • States must obtain Federal waiver for community-based care: institutional care mandated as Medicaid benefit.
  • Responsibility for quote "eligibles."

Slide 14

Elderly Medicaid Beneficiaries: quote, Dual Eligibles, unquote

  • Medicaid beneficiaries much more likely than the total Medicare population to be:
    • Oldest and poorest.
    • In fair or poor general health or mental health.
    • In greater need of help with ADL or IADL.
    • Users of more resources.
    • 40 percent racial, ethnic minority populations.
  • 16 percent Medicaid enrollees: 42 percent costs.
  • 18 percent Medicare enrollees: 42 plus percent costs.

Slide 15

Low-Income Protection under Medicare

  • Qualified Medicare Beneficiary, QMB
    • Up to 100 percent poverty.
    • Medicaid pays for Medicare Part B Premium and copays.
  • Specified Low-Income Medicare Beneficiary, SLMB
    • 100 to 125 percent poverty.
    • Medicaid pays for Part B Premium only.
  • Relatively few in the eligible population have been enrolled.

Slide 16

Medicaid and Persons with Disabilities

  • Elderly and disabled account for one third of Medicaid beneficiaries but two thirds of Medicaid spending.
  • 7 million disabled qualify for Medicaid, of these, only 2 million are elderly.
  • Younger disabled increasing as a percent of Medicaid.
  • Medicaid spends more per beneficiary on the elderly than on the disabled.
  • Medicaid spends more in total on nonelderly disabled than any other group.

Source: Vladeck et al. Health Affairs, volume 22, 1; 2003

Slide 17

Medicaid and Persons with Disabilities

  • More diverse population
    • Physically disabled children and or adults.
    • Mentally ill.
    • Mentally retarded or developmentally disabled, MR slash DD.
  • Nursing homes spending shrinking minority of total long-term care money on younger disabled.
  • Medicaid spending for disabled will continue to increase both absolutely and relative to other covered populations.

Source: Vladeck et al. Health Affairs, Volume 22, 1; 2003

Slide 18

Olmstead, Medicaid, and Long-term Care

  • Olmstead versus 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.

Slide 19

Where Do Elders Receive Long-term Care Services?

  • 81 percent with ADL or IADL needs are in the community.
  • Unmet need in community: 37 percent of ADL-impaired elderly in community need help or additional assistance.
  • Only 5 percent of elderly needing long-term care are in nursing homes.
  • Supply of beds slash occupancy rate for 75 and up declined: long-term care needs increasingly being met outside of nursing homes.

Slide 20

Home and Community-Based Services

  • States expanding home and community-based services options: but 70 percent Medicaid long-term care money still institutional.
  • Overall, greatest increase in home and community-based services for younger disabled: mentally retarded and developmentally disabled.
  • Overall savings unclear: "woodwork" effect.
  • Potential cost savings in home and community-based services: Alecxih et al, 1996 study in Washington, Oregon, and Colorado.

Slide 21

Nursing Homes: Whom Do They Serve?

  • Nursing homes serve small percent of functionally impaired elderly, 4 to 5 percent, but dominate long-term care financing.
  • Nursing homes' population older, more disabled, frail, cognitively impaired, 50 percent, need more skilled care.
  • Likelihood of needing nursing homes care increases dramatically with age: 50 percent of residents are 85 and up.
  • Lack of financial resources or family caregivers contributes to need for nursing home care
    • 50 percent of elderly with long-term care needs without family in nursing homes.
    • 7 percent elderly with long-term care needs with family in nursing homes.

Slide 22

Assisted Living: Issues and Future Trends

  • Fastest growing senior housing.
  • State, facility definition slash regulations vary.
  • Quality unknown.
  • Few available to moderate or low income.
  • Medicaid support for assisted living facilities increasing.
  • Limitation of assisted living facilities for dementia.
  • Primary cause for discharge: need for more care: ASPE and Hawes study.
  • Currently assisted living facilities rarely replace nursing homes.

Slide 23

Who Are the Long-term Care Caregivers?

  • 80 percent of long-term care provided by informal caregivers: family and friends: 73 percent women; average age 60.
  • Formal caregivers: Nursing assistants, home care aides, personal care workers: typical worker middle-aged, single mom, little education, poor.
  • Large percent African American, Asian, or Hispanic workers, particularly in cities.

Slide 24

Formal or Informal Caregivers: Challenges and Trends

  • Informal caregivers: backbone of long-term care need emotional, practical, and monetary support
    • 33 or more States have caregiver support programs: 30 are respite care; 50 percent of States pay caregivers.
  • Most funding for informal care is State money.
  • Formal long-term care aide recruitment slash retention major issue in most States
    • 30 or more States: wage "pass-through."
    • Other training or career support needed.

Slide 25

Quality in Long-term Care: How Can It Be Improved?

  • Nursing home reform in Omnibus Budget Reconciliation Act, OBRA, 87: quality improvements but problems remain.
  • 1999 GAO Report: additional steps needed to strengthen enforcement of Federal quality standards in nursing homes.
  • Difficult issues for State policymakers:
    • Nurse staffing levels in nursing homes.
    • Medicaid payment rates.

Slide 26

Quality in Long-term Care: How Can It Be Improved?

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

Slide 27

Long Term Care

Challenges and Options for States in a Time of Budget Crisis: Where Do We Go From Here?

Slide 28

Fiscal year 2006 Budget Proposal: Implications for States

  • Proposed 60 billion-dollar savings in Medicaid over 10 years.
  • New Freedom Initiative Proposals
    • More flexibility for home and community-based services.
    • Money follows the person, rebalancing demonstration.
  • Limits on Medicaid funding for optional services?

Slide 29

Three Broad State Strategies to Control Long-term Care Spending

  • Reform delivery system to provide care more efficiently
    • Expand home and community-based services.
    • Integrate acute and long-term care: managed care.
  • Increase private and Federal resources.
  • Reduce Medicaid eligibility, reimbursement, and services.

Slide 30

Build Community Options

  • Home-based and community-based options
    • Expansion of Medicaid 1915 c waivers.
    • Systems Changes for Community Living grants: CMS, formerly Health Care Financing Administration.
  • Olmstead: impact on home and community-based services.
  • Respite programs.
  • Adult day services.

Slide 31

Support Informal Caregivers

  • Respite care.
  • Education and training.
  • Support groups.
  • Tax credits.
  • Range of services funded by Older Americans Act and Medicaid waiver programs.
  • Money to informal caregivers.

Slide 32

Recruit and Retain Formal Long-term Care Workforce

  • Establish "wage pass-throughs."
  • Increase worker fringe benefits.
  • Develop career ladders.
  • Increase and improve training requirements.
  • Develop new worker pools including former welfare workers.
  • Wellspring model of quality improvement.

Slide 33

Support Consumer Direction

  • Issue driven by younger people.
  • Permits person to arrange own care; spend as sees fit, allows hiring family.
  • Robert Wood Johnson Foundation and CMS cash and counseling demos
    • To reduce unmet need.
    • Same or lower public cost.
    • Increased satisfaction.
    • Alaska, New Jersey, Florida.
  • Independence Plus Waiver: Florida, Louisiana, South Carolina, New Hampshire.

Slide 34

More Private or Federal Money: Private Long-term Care Insurance

  • Role of private long-term care insurance unknown: 11 percent in 2002.
  • Upper income likely market.
  • High cost of policies.
  • Potential may depend on development of employer-based group market.
  • National Claimant Study: ASPE and Robert Wood Johnson Foundation.
  • Federal Employees Health Benefits Program long-term care insurance benefit: 2002
    • Similar State offerings: Michigan, Minnesota.

Slide 35

Educate Boomers About Long-term Care

  • The Costs of long-term care: Public Perceptions vs. Reality: AARP survey
    • Underestimate costs.
    • Falsely think their insurance covers long-term care.
    • 50 percent believe Medicare covers long-term care.
  • Denial about need for long-term care.
  • Boomers need to plan for future.

Slide 36

Hallmarks of a Comprehensive Long-term Care System

  • Philosophy of care.
  • One State organization responsible for all functions.
  • Access to multiple funding sources.
  • Single appropriation for Medicaid long-term care services.
  • Streamlined functional and financial eligibility.
  • Comprehensive entry points.
  • Standardized assessment tool.

Source: Mollica and Reinhard, Recommendations of State policy leaders, Robert Wood Johnson Foundation funded, 2004.

Slide 37

Hallmarks of a Comprehensive Long-term Care System, continued

  • Full array of in-home, residential, and institutional services.
  • Information and assistance.
  • Consumer-directed services.
  • Care coordinators assigned to nursing homes to assist with relocation.
  • Quality assurance and improvement system.
  • Integration of health and long-term care services.

Slide 38

State Innovations in Long-term Care

  • Consolidate State long-term care programs and dollars in single State agency: Massachusetts and New Jersey.
  • Expand consumer direction: Alaska, New Jersey, Florida.
  • Single appropriation for Medicaid long-term care: Oregon, Maryland, Washington.
  • Adopt assessment and care management practices to target resources to most in need.

Slide 39

State Innovations in Long-term Care

  • Maine and Oregon: Reduce nursing homes utilization: increase home care and residential alternatives.
  • Texas and Minnesota: integrates long-term care and acute care services and financing in managed care, Evercare.
  • Wisconsin: Family Care Program, comprehensive entry point.

Slide 40

Future Trends

  • Financing likely to continue as patchwork of public and private sources.
  • Medicaid will continue as primary public funding: wide State variation.
  • States continue to expand home and community-based services.
  • States expand consumer direction through Medicaid and State funding.
  • Tax strategies for incremental reforms.

Current as of October 2005


Internet Citation:

Long-term Care: Balancing Systems and Costs. Text version of a slide presentation at Introduction to State Health Policy: A Seminar for New State Legislators. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/news/ulp/statepolicy/williamstxt.htm


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