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Home and Community Care of the Elderly: System Resources en c] Constraints Susan L. Hughes Today, I win address five issues concerning the constraints and re- sources that influence Me provision of community care services: availability of financing, availability of services, reimbursement for com- munity care, availability of low-tech community services, and availability of manpower for community care. I win also include a few words about informal careg~vers and conclude with a brief comment on the importance of coordinating available services in ways that optimize their impact and improve quality of care. AVAILABILITY OF FINANCING Financing is absolutely pivotal in shaping the provision of services for me elderly. Our current way of financing community-based care presents a mixed picture win both good and bad news. But if you take the long view, it is mainly good. We have begun a very significant turn- around In long-term care financing policy in the United States. In 1977, public expenditures for institutional care outweighed community care expenditures by a ratio of 5 to I. By 1980, the ratio was reduced to 3 to ~ and was furler reduced by 1986 to 2 to ~ all. ~ do not want to imply by any means Hat current community-care doBars are adequate, but impor- tant strides have been made in redressing the balance of doDars during a relatively short period. This progress in closing me gap is important to keep in perspec- tive. This change in financing patterns also raises the question: Where are the new community-care dollars coming from? Given prospective pay- ment for hospital care and Be shift to ambulatory care Tat has taken place 55

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56 SUSAN L. HUGHES over Me past 5 years, it is no surprise Mat the bulk of Me increased expenditures for commun~ty-based care has come from heady, rawer Man social services, funding streams. Funding for Medicare home health care increased by 251 percent between 1980 and 1986. In 1980, Medicare home care accounted for 18 percent of aU community care expenditures of any type. Medicaid contributed an additional 9 percent. By 1986, Medicare paid 38 percent of aB community care expenditures, with Medi- caid accounting for another 19 percent; together hey provided 57 percent of the total amount of public funds spent for community care including Medicare parts A and B. Medicare hospice, Medicaid, Title XX, and the two titles of Me Older Americans Act (OAA) that finance home-based services. The bad news, however, is reflected in the zero growth in social services funding over the same period. Why do we care where Me doBars come from? We care because services follow doDars. The growth of Medicare skilled home care predated Me 1980s. Grown has been greatest in reimbursements, proba- bly reflecting increases in the number of beneficiaries (i.e., Me greater number of elderly) and increases in visits. It is worm noting that me increase in average charge per visit, during Me same period, is less than growth in the over two factors. AVAILABILITY OF SERVICES What are the implications of the increased availability of Medicare home care doBars? As a result of the influx of new doBars, Me number of Medicare home care providers has increased substantially. As other speakers have previously noted, Medicare home health care is a highly regulated industry mat has become much more competitive in recent years. The net result is Mat Me composition of providers by type has changed considerably since Me original passage of Medicare in 1966. In 1966, the Visiting Nurse Associations (VNAs) and the public heath nursing agencies dominated the Medicare home health care industry, accounting for 91 percent of aU providers. By 19X3, Weir share had declined to 44 percent, with hospital-based, proprietary, voluntary, and not-for-profits taking the lead, accounting for 57 percent of aU home health care providers. These figures do not imply that VNAs are going out of business. Rather, Me figures imply that new entrants to Me field of home health care are different and Mat they are probably using more sophisticated manage-

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HOME AND COMMUNITY CARE: SYSTEM RESOURCES AlID CONSIRAl~TS 57 ment and marketing techniques. We do not know, however, what these changes in provider type imply for access to and quality of care over time. We can conclude from these data that great progress has been made in increasing the supply of a very particular type of community care Medicare home health care. Medicare home care is, however, a skiBed health care service that terminates when the fiscal intermediary decides that patients no longer need sterile dressing changes or whatever other skilled care might be required. REIMBURSEMENT FOR COMMUNITY CARE Given the combined effects of diagnostic-related groups for hospi- tal reimbursement and prospective case-mix-based reimbursement for institutional care, I think that an important problem in the future may be the growing number of elderly in the community who do not need skilled nursing care but need low-tech, long-term supportive services. The likelihood of encountering this problem win be heightened if two things happen. First, the trend toward prospective, case-mix-based reimburse- ment for institutional care may cause nursing homes to preferentially admit more patients needing highly skiDed care versus those needing lighter, intermediate care. Second, if this happens, and if the nursing home bed supply remains relatively constant, we may end up with a situation where patients who need lighter care have nowhere to go. This scenario implies that there may be considerably greater need for low-tech home care in the future. Thus, our ability to understand and document differences in home care models and in their supply and staffing win become increasingly more important. AVAILABILITY OF LOW-TECH COMMUNITY CARE SERVICES At Northwestem University School of Medicine, we have been conducting research for the past 6 years with He Five Hospital Program in Chicago. The Five Hospital Program provides low-tech home care to chron~caDy impairs elderly who need it for a considerable period of time. We recently D~ru shed a 4-year longitudinal evaluation of that pro- gram. Our comparison of He low-tech services provided by the Five Hospital Program and national data on Medicare visits by staff shows that

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58 SUSAN L. HUGHES the Medicare home care model is very nurse intensive Alp. In contrast, the long-term home care model is much more interdisciplinary, with a greater proportion of visits made by home health aides and by social workers. In our longitudinal evaluation of We Five Hospital Program, we found that this comprehensive and continuous long-tenn home care mode} significantly reduced lifetime risk of permanent admission to intermedi- ate nursing home care by 32 percent compared with controls (2~. This finding was accompanied by a 25 percent increase in overall cost, which is considerably less than cost increases that have been reported in earlier studies. For example, the Section 222 day-care homemaker evaluation conducted by Weissert et al. reported a 65 percent increase in cost (3~. The SkeHie et al. evaluation of the Georgia Alternatives Health Services Program came in at 35 percent (4~. When costs nm over by 20 to 25 percent, we as a society may be able to institute different management techniques to reduce them, such as deploying workers in more efficient ways, reducing the length of a visit, or trimming high volume users. It is important to note that clients in the Five Hospital Program also expenenced quality-of-life benefits that accompanied the 25 percent in- crease in costs. Those benefits included better cognitive functioning at 9 months, that was sustained at 48 monks, and fewer unmet needs for care in the treatment group (5~. We see increasing evidence that more humble, low-tech services are needed in addition to the growing need for skilled home care. Low- tech services may not, however, be increasing at as fast a rate as He need. It is important to note that no good information is available on the supply of low-tech home care providers in the United States. The Office of the Assistant Secretary for Planning and Evaluation (ASPE) of the Depart- ment of Health and Human Services was planning to conduct a survey on this, but I understand that it was discontinued. We definitely need more information about He availability, staffing, and cost of these services if we are to adequately care for the growing numbers of frail elderly in He future. AVAILABILITY OF MANPOWER FOR COMMUNITY CARE What about manpower for community care? Due to time con- straints, I win address only nursing manpower. A recent article by Aiken and Mullinex(6) in the New England Journal discusses the overall nurs- ing shortage in the United States. I am not aware of any statistics about

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HOME AND COMMUNITY CARE: SYSTEM RESOURCES AND CONSTRAINTS 59 manpower shortages in commuruty-based care, but this is an area that definitely needs more study. Prior to this meeting, ~ asked the director of the Five Hospital Program, who is also the current president of He Renoir Council of Home Health Services, if nursing manpower is a problem for home care agencies In Illinois. She informed me that, yes, recruiting trained and adequate personnel for home care is a problem in the state. There are two sides to the problem. The good news is that community care is inherently attractive to nurses. Nurses have more autonomy when practicing in a community care sewing, and the hours are more regular. The bad news is that more nurses win a Bachelor of Science in Nursing (B.S.N.) degree may be needed to provide community care. Since nurses are increasingly being asked to function as case managers, more not lessprofessional judgment is being required of them. As a result of the increased complexity of the nurse's role, most nurses feel that a B.S.N. nurse is the appropriate person to provide them. In fact, most directors of nursing in home health care agencies not only prefer to hire B.S.N. nurses but also prefer those win a year of exper~- ence. At present, as we an know, not enough B.S.N. graduates are being produced by the schools. Aiken and MuBinex have documented a 20 percent decline in nursing school enrollment since 1983. They also report lower Scholastic Aptitude Test (SAT) scores among those interested in pursuing a nursing career. The authors suggest that a more differentiated wage structure and more opportunity for career advancement are neces- sary to reverse this serious manpower constraint for community-based care in the future (6~. INFORMAL CARE PROVIDERS In community care, formal care providers play a backseat role to the informal caregiver. ~ support what other speakers at this conference have already noted: we have to recognize what the national long-term care survey documented that 70 percent of care provided to the sick elderly in the community is provided by informal caregivers. On our recent randomized study of hospital-based home care in the Veterans Administration (VA), we found that informal careg~vers of what we can the "severely disabled" groupveterans who have at least two acEvities-of-daily-living (ADL~) impairments are providing X hours of care a day, 7 days a week (5~. That is, obviously, He equivalent of a full- time job.

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60 SUSAN L. HUGHES Our 4-year longitudinal evaluation of the Five Hospital Program has shown that caregivers continue to provide service over time even after formal services have been introduced; there is not as much of a substitu- tion effect as some people have feared (5~. A major question that remains is whether these careg~vers win continue to be available in Me future. It is projected that by 1990, 70 percent of women ages 35 to 44 and 61 percent of Rose ages 45 to 54 win be in He labor force. These women win be dealing with the competing demands of children, parents, and jobs. In view of this trend, an appropriate policy response would be to provide long-tenn home care, respite, and adult day care services Hat buttress infonnal caregivers instead of having the family co-pay for institutional care. COORDINATING AVAILABLE SERVICES Finally, how can we coordinate existing services to reduce frag- mentation and assist people in their search for appropriate care? Some states have attempted to resolve this issue by pooling existing funds. This solution presents many problems. Who controls the pot? Even if all public funding were pooled, is there enough money in He pot to start wig? Most analysts seem to agree that the total amount of funding must increase, probably through a mixture of public and private funding mecha- nisms. More and more has been written recently about the need for case management. ~ have a number of questions about case management, not the least of which is, Do older people want it? ~ think that He enrollment and reenroll~nent experience of the elderly In Medicare health mainte- nance organizations (HMOs) and the experience of the social HMOs will be very instructive to watch. Dr. Robert Binstock recently proposed that limited Title Ill OAA community care funds be used to create a voluntary network of Area Agencies on Aging (AAAs) that would stop providing direct service in areas where Hey now compete with other private providers. Instead, they would become a un~fo~y visible, easily assessable network of aging resource centers for help (ARCHs). This proposal is intriguing. Finally, we are currently conducting the national evaluation of the Living-At-Home Program (LAMP) demonstration Hat is being conducted with funding from a consortium of 35 private foundations across the country, headed by The Commonwealth Fund and The PEW Charitable Trusts. The L`AHP Program office is directed by Morton Bogdonoff,

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HOME AND COMMUNITY CARE: SYSTEM RESOURCES AND CONSTRAINTS 61 M.D., of New York. The Program National Advisory Committee is headed by Robert Butler, M.D., of Mount Sinai School of Medicine, New York. LAHP is testing whether voluntary consortia of heady and social service agencies in 20 communities across the United States can stream- I~ne access to community-based care and identify and hE service gaps without the infusion of new service dollars (7~. A research team headed by WiBiam Weissert, Ph.D., University of Norm Carolina, Chapel Hid, is providing technical assistance to He sites in the form of computer soft- ware to estimate demand for care and prospectively budget services. The LAHP demonstration win be completed and results from the evaluation win be available by He spring of 1990. As part of the evaluation design we are obtaining data on He characteristics of 1,500 elderly clients across He sites, their patterns of service use, and unmet service needs by site and organizational strategies that produce viable, coordinated systems of care. These data should help to answer some of these important questions about how to better promote access to needed services in the future. REFERENCES 1. Hughes, S.L. Long-Tenn Care: Options in an Expanding Market. Rockville, Md.: Aspen Publications (formerly Dow Jones/lrwin), 1986. Hughes, S.L., Manheim, L.M., Edelman, P., and Conrad, K. Impact of long-term care on hospital and nursing home use and cost. Health Services Research 22~11:19-47, 1987. 3. Weissert, W.G., Wan, T.H., and Livieratos, B. Effects and costs of day care and homemaker services for He chronically ill: A random- ized experiment. Hyattsville, Md.: Department of Health, Education, and Welfare/National Center for Health Services Research, 1979. 4. Skellie, F.A., Mobley, G.M., and Co an, R.E. Cost-effectiveness of community-based long term care. American Joumal of Public Health 72(4):35~358, 1982. Hughes, S.L., Conrad, K.J., Manhenn, L., and EdeLnan, P. Impact of long term home care on mortality, functional status and unmet needs. Heals Services Research 23~2~:269-294, 1988. 6. Aiken, L.H., and MuDinex, C.F. The nurse shortage: Myth or reality? New England Joumal of Medicine 317~101:641 645, 1987. 7. Hughes, S.L., and Weissert, W. Living at home variations on a case management theme. Generations: Joumal ofthe American Society on Aging (Fall):66-67, 1988.