The Future of Long-Term Care, the Aging Network and Managed Care Organizations

1. The Future of Long-Term Care, theAging Network andManaged Care Organizations Larry Polivka, Ph.D. Claude Pepper Center, Florida State University The Gerontological Society of America 64th Annual Scientific Meeting Boston, MA November 21, 2011

2. Creating a Balanced Long-Term Care System: Organizational and Administrative Options • Our major LTC policy goal should be to close the gap between what we know and what we do—between knowledge and practice. What we know: • Consumer preference • Cost-effectiveness of HCBS • Growing need for LTC What we do: • NH dominance • Reduced HCBS Funding

3. Creating a Balanced System (cont’d) Strategies to close the gap: • Consolidating administrative responsibility for all LTC financing and service delivery (OR and WA)—global budgets. • Implementing managed care strategies designed to administer all services and funding sources under a capitated rate structure.

4. Creating a Balanced System (cont’d) Managed care strategies: • Several states have implemented some form of managed LTC (MLTC), but only one (AZ) has a statewide MLTC system • Nationally, only 3% of all publicly funded LTC consumers are in MLTC. • This percentage may increase rapidly with the growing interest of some managed care organizations in LTC and Medicaid funding crises.

5. Brief Overview of MLTC Programs LTC Capitation: • Arizona (ALTCS) • Texas (Star Plus) • New York • Wisconsin (Family Care • Florida (Diversion, Senior Care) Medicare and Medicaid capitation: • PACE, Wisconsin Partnership, Minnesota (MSHO), Massachusetts (Senior Care Options)

6. Managed LTC Programs • These programs represent a range of managed LTC models involving not-for-profit and for-profit organizations or combinations of both. • Four combine Medicaid and Medicare (PACE, MSHO, WPP, MSCO).

7. Wisconsin Family Care Program: A Potential Model for Aging Network-Based Managed Long-Term Care • The Wisconsin Family Care Program is the most aging-network-anchored MLTC program • Family Care has two major components—aging and disability resource centers and care management organization, both of which are run by the counties. • Aging resource centers • Care management organizations • Funding sources, capitation (shared risk and no reimbursement) • Consumer-focused seamless system • Waiting lists

8. Wisconsin Family Care: Analysis of Costs Total Medicaid costs. • Less for Family Care members in the non-Milwaukee CMOs and for the frail elders served by the Milwaukee CMO than for their matched comparison groups. • Sources of savings: - Family Care reduces costs directly by purchasing or providing services more economically, and - Family Care reduces costs indirectly by favorably affecting Family Care members’ health status and functional abilities so that they have less need for services.

9. Wisconsin Family Care (cont’d) Long-term care costs. • Average individual monthly LTC costs for Family Care members outside Milwaukee were lower than those of the matched comparison group, both at baseline ($250 less) and at the end of the study period ($722 less). • For the frail elders served in Milwaukee, average individual monthly LTC costs were $1 less than those for the comparison group at the baseline, and $565 less at the end of the study period.

10. Wisconsin Family Care (cont’d) Sources of the Family Care savings. • Average individual monthly costs at the end of the study period for the Milwaukee County frail elders’ care in community-based residential facilities (CBRFs) was $462 more than that spent for CBRF care for the comparison group. • On the other hand, average individual monthly costs for nursing facility care of frail elders served by the Milwaukee CMO were $1,363 less than those for frail elders in the matched comparison group at the end of the study period. • This is a direct result of the flexibility in funding provided by the Family Care benefit package. • Changes in Primary Care.

11. Wisconsin Family Care (cont’d) Estimating potential future savings. • The estimated monthly savings for the current enrollment levels (9,396) was roughly $1.9 million. • This implies that for every 1,000 persons enrolled in an expanded Family Care program, an additional $452,000 Medicaid dollars would be saved on a monthly basis.

12. Comparative Florida HCBS Waiver Data Several studies conducted by The Florida Data Center on Aging (USF) and the Office of Program Policy Analysis and Government Accountability (OPPAGA) between 2003 and 2010 found that the aging network administered HCBS waiver programs were less expensive than the MCO administered Nursing Home Diversion Waiver.

13. Comparative Florida HCBS Waiver Data (cont’d) The OPAGGA study found that while all four of the waiver programs were relatively cost-effective for beneficiaries with Alzheimer’s or related dementia, the two aging network operated waiver programs were substantially less expensive on a per person per month basis than Nursing Home Diversion, the current managed LTC program, as shown in the following table.

14. Comparative Florida HCBS Waiver Data (cont’d)

15. Comparative Florida HCBS Waiver Data (cont’d) • On average, it costs the state less to serve similar elders through the Aged and Disabled Adult and Assisted Living for the Elderly Waiver Programs than the Nursing Home Diversion Waiver Program. • The 2011 Legislature passed legislation requesting CMS approval of a proposal to move Medicaid LTC services into MCDS beginning in 2012. Critics have raised questions about increased cost (see above cost data) or reduced services and number served under the MLTC proposal.

16. Comparative Florida HCBS Waiver Data (cont’d) • These studies provide consistent evidence that the private, non-profit aging network is qualitatively more efficient (less expensive) than the current managed care organizations in Florida’s Medicaid HCBS system. • This fact should be extremely gratifying to state and federal policy makers who have invested in the development of the aging network for over 35 years. This investment made it possible for the aging network to create the HCBS system of LTC.

17. Summary Observations • Perhaps the most fundamental message conveyed by this overview is that the traditional aging network organizations who administer the HCB Medicaid waiver services have the demonstrated capacity to provide an array of community-based LTC services efficiently, in either a FSS or managed care arrangement. • This does not mean, however, that the future of community-based LTC will be a replication of the past (see Florida).

18. Summary Observations (cont’d) • In many states, they are likely to be challenged by MCOs, which are increasingly prepared to administer LTC through integrated plans, with a boost possibly from the SNP initiative and the HHS Office of Integrated Care. • Aging network organizations should seriously consider the development of their own managed LTC programs designed to achieve greater efficiencies in the use of resources

19. Summary Observations (cont’d) • At a minimum, policymakers, taxpayers, and LTC consumers are likely to benefit from a diversity of strategies to provide LTC more efficiently over the next several years; • including managed LTC systems and the current fee-for-service approach where managed care strategies are not feasible (e.g., some rural areas)

20. The Ethics of Long-Term Care • Finally, we need to address the ethical dimension of LTC. I think it is important to preserve and strengthen a mission-driven, ethics-of-care focus in LTC. This focus has guided the work of the aging network for over 30 years. • We need to avoid the complete commodification of formal caregiving services and relationships-keep LTC from looking like the rest of the health care system in terms of costs and quality.

21. Ethics (cont’d) • There may be some states or regions within states where the AN will not be able to administer the entire public LTC system under capitated arrangements and proprietary managed care organizations may be better prepared to play this role. Or, it may be best to continue current FFS arrangements with AN providers. • Where feasible, however, I think the AN should step forward; and, based on the organizational capacities, social capital and moral resources accumulated over the last 30 years, exercise the leadership we will need to create a more responsive and cost-effective LTC system in the years ahead.

22. Ethics (cont’d) • The resources of the AN are essential in meeting what the President’s Council on Bioethics (Leon Kars, 2006) calls the potential crises of caregiving: 1) the danger that some old people will be abandoned or impoverished, with no one to care for them, no advocate to stand with them, and inadequate resources to provide for themselves. 2) the complete transformation of caregiving into labor, creating a situation where people’s basic physical needs are efficiently provided for by “workers,” but their deeper human and spiritual needs are largely ignored.