THE EFFECT OF THE MEDICAID HOME CARE BENEFIT ONLONG-TERM CARE CHOICES OF THE ELDERLY

This paper analyses the impact of Medicaid home care benefits on the probability of nursing home entry and the use of formal and informal home care by disabled elderly remaining in the community. Using data from the National Long-Term Care Survey, I find evidence that Medicaid home care subsidies reduced the probability of nursing home entry among at-risk elderly using formal home care. Among non-in-stitutionalized persons, the subsidy increased the use of formal home care but led to substitution of informal with formal care for services that were non-medical in nature.     

The Program of All-Inclusive Care for the Elderly (PACE): an innovative long-term care model in the United States

This article examines the long-term care service system in the United States, its problems, and an improved long-term care model. Problematic quality of care in institutional settings and fragmentation of service coordination in community-based settings are two major issues in the traditional long-term care system. The Program of All-Inclusive Care for the Elderly (PACE) has been emerging since the 1970s to address these issues, particularly because most frail elders prefer community-based to institutional care. The Balanced Budget Act of 1997 made PACE a permanent provider type under Medicare and granted states the option of paying a capitation rate for PACE services under Medicaid. The PACE model is a managed long-term care system that provides frail elders alternatives to nursing home life. The PACE program's primary goals are to maximize each frail elderly participant's autonomy and continued community residence, and to provide quality care at a lower cost than Medicare, Medicaid, and private-pay participants, who pay in the traditional fee-for-service system. In exchange for Medicare and Medicaid fixed monthly payments for each participating frail elder, PACE service systems provide a continuum of long-term care services, including hospital and nursing home care, and bear full financial risk. Integration of acute and long-term care services in the PACE model allows care of frail elders with multiple problems by a single service organization that can provide a full range of services. PACE's range of services and organizational features are discussed.     

The Program of All-Inclusive Care for the Elderly (PACE)

Summary

This article examines the long-term care service system in the United States, its problems, and an improved long-term care model. Problematic quality of care in institutional settings and fragmentation of service coordination in community-based settings are two major issues in the traditional long-term care system. The Program of All-Inclusive Care for the Elderly (PACE) has been emerging since the 1970s to address these issues, particularly because most frail elders prefer community-based to institutional care. The Balanced Budget Act of 1997 made PACE a permanent provider type under Medicare and granted states the option of paying a capitation rate for PACE services under Medicaid. The PACE model is a managed long-term care system that provides frail elders alternatives to nursing home life. The PACE program's primary goals are to maximize each frail elderly participant's autonomy and continued community residence, and to provide quality care at a lower cost than Medicare, Medicaid, and private-pay participants, who pay in the traditional fee-for-service system. In exchange for Medicare and Medicaid fixed monthly payments for each participating frail elder, PACE service systems provide a continuum of long-term care services, including hospital and nursing home care, and bear full financial risk. Integration of acute and long-term care services in the PACE model allows care of frail elders with multiple problems by a single service organization that can provide a full range of services. PACE's range of services and organizational features are discussed.     

Strengthening home and community-based care through Medicaid waivers

States are increasingly using the Medicaid 1915c waiver program to provide community-based long-term care (LTC). We examined state predictors of waiver utilization and expenditures for waivers serving both older and working-age individuals. State level data for the period 1992 to 2001 were used to estimate random effects panel models. States with increased community-based care (e.g., home health agencies) and decreased nursing home bed capacity were positively associated with state per capita rates of use, expenditures, and the share of Medicaid LTC dollars supporting 1915c waivers. States appeared to substitute Medicare for Medicaid services for individuals eligible for both. State per capita income was positively related to each measure. State policies that facilitate decreased institutional and increased community- based capacity appear essential to state efforts to expand access to community-based services. Federal policies that address state resource issues may also spur growth in community-based LTC, which, in most states, continues to be limited.     

Race and gender differences in the distribution of home and community-based services in Florida

This article examines the distribution of home and community-based services (HCBS) under Florida's Medicaid waiver program. Controlling for personal and community characteristics, it was found that gender and race significantly affect the access of the disabled adult population to HCBS services, with women and nonwhites significantly more likely to be receiving HCBS services. At the county level, the likelihood of one's being in the waiver program is contingent on the racial composition and level of segregation of the county. People residing in counties with substantial proportions of nonwhites are less likely to receive HCBS services--whatever their race. However, the higher the rate of racial segregation in the county, the higher the probability that the Medicaid disabled adult population will receive HCBS services. The Medicaid waiver program allows older, disabled black women to remain in their home neighborhoods rather than having to move to predominantly white areas where nursing homes are concentrated. Thus, the HCBS program not only provides them with a form of care that is preferred by most older people but also resolves market problems stemming from the lack of nursing homes in segregated areas by taking advantage of support systems in black households.     

Resource effects on access to long-term care for frail older people

Access to long-term care depends primarily on personal resources, including family members and income, and on external resources, including Medicaid and Medicare. This study investigates how resources affect frail older individuals' access to long-term care, with a focus on Black and White widows. Data from the 1989 National Long-Term Care Survey is used, in conjunction with state-level Medicaid and Medicare reimbursement rates for nursing home and home health care, to estimate the likelihood of five types of care arrangements. Results show that children are a primary resource for unmarried individuals in maintaining access to informal care. Income effects are nonlinear in relation to nursing home care: increasing incomes below the mean income are associated with decreasing probabilities of nursing home care, while increasing incomes above the mean are associated with increasing probabilities of nursing home care. Income and Medicaid effects are interrelated, with nonlinearities associated with income having the potential to adversely affect some older persons' ability to access nursing home care.     

Resource Effects on Access to Long-Term Care for Frail Older People

Abstract

Access to long-term care depends primarily on personal resources, including family members and income, and on external resources, including Medicaid and Medicare. This study investigates how resources affect frail older individuals' access to long-term care, with a focus on Black and White widows. Data from the 1989 National Long-Term Care Survey is used, in conjunction with state-level Medicaid and Medicare reimbursement rates for nursing home and home health care, to estimate the likelihood of five types of care arrangements. Results show that children are a primary resource for unmarried individuals in maintaining access to informal care. Income effects are nonlinear in relation to nursing home care: increasing incomes below the mean income are associated with decreasing probabilities of nursing home care, while increasing incomes above the mean are associated with increasing probabilities of nursing home care. Income and Medicaid effects are interrelated, with nonlinearities associated with income having the potential to adversely affect some older persons' ability to access nursing home care.     

Detouring Nursing Home Entrants

Under the Omnibus Budget Reconciliation Bill of 1981, states can apply for waivers to underwrite nonmedical home care services for Medicaid clients who would otherwise enter nursing homes. Ideally, subsidized home services should improve the quality of life for older people, relieve the demand on nursing homes, and reduce overall Medicaid expenditures; yet in Rhode Island the program has served few people. This discussion proposes reasons for the minor impact of "waiver channeling."     

Race and Gender Differences in the Distribution of Home and Community-Based Services in Florida

This article examines the distribution of home and community-based services (HCBS) under Florida's Medicaid waiver program. Controlling for personal and commnunity characteristics, it was found that gender and race significantly affect the access of the disabled adult population to HCBS services, with women and nonwhites significantly more likely to be receiving HCBS services. At the county level, the likelihood of one's being in the waiver program is contingent on the racial composition and level of segregation of the county. People residing in counties with substantial proportions of nonwhites are less likely to receive HCBS services– whatever their race. However, the higher the rate of racial segregation in the county, the higher the probability that the Medicaid disabled adult population will receive HCBS services. The Medicaid waiver program allows older, disabled black womcn to remain in their home neighborhoods rather than having to move to predominantly white areas where nursing homcs are concentrated. Thus, the HCBS program not only provides them with a form of care that is preferred by most older people but also resolves market problems stemming from the lack of nursing homes in segregated areas by taking advantage of support systems in black households.     

State commitment to home and community-based services: effects on independent living for older unmarried women

This study examines the impact of state variation in commitment to the provision of home and community-based services on the living arrangement outcomes of older unmarried females with functionallimitations. We combine data from the 1990 U.S. Census of Population (PUMS) with state-level information on long-term care home and community- based service expenditures, nursing home bed availability, and Medicaid nursing home costs from a special report that compares state variation in long-term care systems. Using multilevel logistic regression modeling techniques, we find that the risk of institutionalization compared to community living arrangements is reduced as spending for home and community-based services at the state level increases. We discuss these findings in light of policy changes during the 1990s.     

Comparing States' Medicaid Nursing Facilities and Home and Community-Based Services Long-Term Care Programs: Quality and Fit with Inclination,Capacity, and Need

States employ home and community-based services (HCBS) increasingly in Medicaid support of long-term care and rely less on nursing facilities. We examine how states' nursing facilities and HCBS programs compare and whether states' long-term care responses match their ideological inclination toward, material capacity for supporting, and their citizens' need for these public social programs. We use cross-sectional panel data on structural, process, and outcome quality for nursing facilities and HCBS congregate residential programs. We rank states, correlate these measures, and use regression to link inclination, capacity, and need to quality. We find that states' nursing facility and HCBS program quality are not closely related and that state HCBS congregate residential program quality is independent of inclination, capacity, and need. This latter result underscores a need for uniform HCBS standards and better data on quality.     

Examining the Nursing Home Physical Environment Through Policy-Driven Culture Change

A critical need exists to challenge approaches to nursing home care due to rigid organizational factors and hospital-like culture. It has been argued that resident care needs to move toward a person-centered approach by addressing the organizational, social, and physical environments in nursing home facilities, a process often known as culture change. In response to this need, the Centers for Medicare & Medicaid Services (CMS) has created funding for pay for performance (P4P) nursing home incentive programs to allow nursing home providers to receive CMS reimbursements for culture change in the facilities. Through care staff interviews, site observations, and a document review, this qualitative study assesses the impact of a Midwestern state P4P incentive program in three participating nursing homes. Using an environment and behavior (E-B) policy orientation framework, this study examines culture change through a focus on policy, the physical environment, place attachment, and social and psychological processes in the study settings.     

Assisted living: will it reduce long-term care costs?

In their quest to reduce nursing home care expenditures, the various states in this country have looked to assisted living as a potentially preferred and lower-cost housing alternative for their Medicaid patients. For an assisted-living program to save costs, states must recognize that some assisted-living residents will not come from nursing homes, but rather from private residences, resulting in cost increases. This article argues that this "woodwork effect"--new clients appearing--is likely to be smaller than the level reported in the home and community care demonstrations, but that the numbers are difficult to predict with the possibility of divestiture. It also argues that the true savings from substitution, or of one form of care for another, depend on the nursing home reimbursement system in effect at the time.     

Assisted Living:

In their quest to reduce nursing home care expenditures, the various states in this country have looked to assisted living as a potentially preferred and lower-cost housing alternative for their Medicaid patients. For an assisted-living program to save costs, states must recognize that some assisted-living residents will not come from nursing homes, but rather from private residences, resulting in cost increases. This article argues that this "woodwork effect" - new clients appearing - is likely to be smaller than the level reported in the home and community care demonstrations, but that the numbers are difficult to predict with the possibility of divestiture. It also argues that the true savings from substitution, or of one form of care for another, depend on the nursing home reimbursement system in effect at the time.     

Does Home- and Community-Based Care Affect Nursing Home Use?

A study was conducted to assess change in numbers, expenditures, and case mix of nursing home residents as Medicaid investment in home- and community-based services (HCBS) 1915(c) waivers increased in seven states. The seven states provided Medicaid expenditure and utilization data from 2001 to 2005, including waiver and state plan utilization. The Minimum Data Set was used for nursing home residents. For three states, community assessment data were also used. In six states, the number of nursing home clients decreased as the numbers of HCBS clients grew. However, in most states, the number of additional waiver clients often greatly exceeded reductions in nursing home residents. Nursing home payments decreased moderately, but this decrease was offset by increases in HCBS waiver and state plan expenditures, leading to a net increase in long-term support services (LTSS) expenditures from 2001 to 2005. Increases in waiver expenditures outpaced increases in waiver clients, indicating expansion of services on top of expansion in clients. States that showed substantial increases in HCBS showed only modest increases in nursing home case mix. The case mix for nursing home residents was more acute than that for HCBS users. The expectation that greater HCBS use would siphon off less severe LTSS users and hence lead to a higher case mix in nursing homes was partially met. The more acute case mix in nursing homes suggests that HCBS serves some individuals who were previously cared for in nursing homes but many who were not. Efforts to promote substitution of HCBS for institutional care will require more proactive strategies such as diversion.     

The impact by race of changing long-term care policy

Long-term care policy has evolved with little attention to racial differences in the need for and use of services. Using 1987 National Medical Expenditure Survey data on nursing home care, formal in-home personal care, and informal-only help, a model was created to show how different races would use each type of care if: (1) a universal home-care benefit was established, (2) existing Medicaid home-care benefits were ended, or (3) the income level for Medicaid eligibility was substantially reduced. Expanded community care benefits would primarily serve severely disabled older whites. Reductions in long-term care benefits or eligibility would disproportionately impede access to long-term care for severely disabled older African-Americans. These differences indicate that race must be taken into account in long-term care policy initiatives.     

We Can Run But We Can't Hide:

Long-term care costs are not covered to any significant extent by public or private insurance. As a result, nursing home patients often must use their entire life savings to pay for their care and once impoverished turn to welfare in the form of Medicaid, the federal-state health care program for the poor. Private-sector solutions, such as private long-term care insurance, should expand to play a larger role but cannot solve the whole problem by themselves. Reform of the Medicaid program to make the means test less onerous would be desirable, but this approach would retain the welfare stigma. What is needed is a public insurance program to which everyone would contribute and earn the right to benefits when they need them without having to prove impoverishment. Any public insurance program should leave a substantial role for the private sector. Public costs of a social insurance program would be high but not unaffordable, especially since society will incur most of these costs even without an expanded public program.     

Medicare and Medicaid Reimbursement Rates for Nursing Homes Motivate Select Culture Change Practices But Not Comprehensive Culture Change

Components of nursing home (NH) culture change include resident-centeredness, empowerment, and home likeness, but practices reflective of these components may be found in both traditional and “culture change” NHs. We use mixed methods to examine the presence of culture change practices in the context of an NH’s payer sources. Qualitative data show how higher pay from Medicare versus Medicaid influences implementation of select culture change practices, and quantitative data show NHs with higher proportions of Medicare residents have significantly higher (measured) environmental culture change implementation. Findings indicate that heightened coordination of Medicare and Medicaid could influence NH implementation of reform practices.     

Controlling the supply of long-term care providers in thirteen states

Many states have responded to growing Medicaid long-term care expenditures by limiting the number of long-term care providers through certificate-of-need (CON) programs and moratoriums on new construction or certification for participation in the Medicaid program. This article focuses on the use of these policies in 13 states. Most of the 13 states control the supply of nursing home beds and hospital conversions with CONs or moratoriums, but they are struggling to adapt the role of supply policy to the growth of home health and residential care. As an increasing proportion of Medicaid long-term care spending goes to these nursing home alternatives, supply policy needs to keep pace with the changing provider market and the changing demographics of the consumer market if it hopes to ensure access to long-term care and control Medicaid expenditures.     

Financing Reform for Long-Term Care

The way the nation provides for the financing and delivery of long-term care is badly in need of reform. The principal options for change are private insurance, altering Medicaid, and 110 FROM NURSJNG HOMES TO HOME CARE public long-term care insurance. This article uses the Brookings-ICE Long-Term Care Financing Model to evaluate each of these options in terms of affordability, distribution of benefits, and ability to reduce catastrophic out-of-pocket costs. So long as private insurance is aimed at the elderly, its market penetration and ability to finance long-term care will remain scverely limited. Affordability is a major problem. Selling to younger persons could solve the affordability problem, but marketing is extremely difficult. Liberalizing Medicaid could help solve the problems of long-term care, but there is little public support for means-tested programs. Finally, universalistic public insurance programs do well in meeting the goals of longterm care reform, but all social insurance programs are expensive and seem politically infeasible in the current political environment. The way the nation provides for the financing and delivery of long-term care is badly in need of reform. No other part of the health care system generates as much passionate discontent as does long-term care. At the heart of the problem is the absence of any satisfactory way to help people anticipate and pay for long-term care. The disabled elderly find, often to their surprise, that the costs of nursing home and home care are not covered to any significant extent by Medicare or private insurance. Instead, they must rely on their own savings or, failing that, turn to welfare in the form of Medicaid. At a national average cost of $40,000 a year for nursing home care, long-term care is a leading cause of catastrophic out-of-pocket health care costs for the elderly. In addition, despite the strong preferences of the disabled for home and community-based services, current financing is highly skewed toward care in nursing homes. While the debate over long-term care reform has many facets, it is primarily an argument over the relative merits of private- versus publicsector approaches. Differences over how much emphasis to put on each sector partly depend on values that cannot be directly proved or disproved. Some believe that the primary responsibility for care of the elderly belongs with individuals and their families, and that government should act only as a payer of last resort for those unable to provide for themselves. The opposite view is that the government should take the lead in ensuring comprehensive care for all disabled older people, regardless of financial need, by providing comprehensive, compulsory social insurance. In this view, there is little or no role for the private sector. Between these polar positions, many combinations of public and private responsibility are possible.