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Exhibit A: Projected Need for Long-Term Care Services
Pages 29-52

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From page 29...
... About 8 out of 10 of these older people eventually develop one or more chronic illnesses, such as heart or cerebro-vascular diseases, arthritis, rheumatism, osteoporosis, dementia, or depression, that limits to some extent their performance of everyday living activities. The limitations can be severe enough to make the individual dependent on others for assistance, intermittently or continuously, in various activities of daily living, including obtaining treatment for the chronic condition, over extended periods of time -- in short, for long-term care.
From page 30...
... Even more dramatic is the expected rapid increase within the elderly population of those aged 85 and over who, as previously noted, are most functionally dependent and have the greatest needs for help and assistance in everyday living. At present, this sub-group of the elderly population are the highest users of nursing home care.
From page 31...
... who by definition required the help and assistance of others in their everyday living activities, as well as specialized services related to their disabilities. About 250,000 lived in residential facilities specifically designated for the developmentally disabled; another 56,000 were in nursing homes specifically designated as intermediate care facilities for the mentally retarded, still another 20,000 were in foster care homes, and some 2,500 were in mental hospitals.
From page 32...
... Making allowances for growth between 1977 and 1980, and taking into account the number of the non-institutionalized functionally dependent elderly, and the developmentally disabled and chronically mentally ill previously estimated for 1980, a conservative estimate for "other disabled" functionally dependent adults (ages 21-64) in that year would be 1,000,000.
From page 33...
... Other estimates for the 1980 base year put the non-institutionalized developmentally disabled well over 2.5 million. Likewise, there may have been as many as 2 million homeless chronically mentally ill persons not counted in any of the 1980 figures shown according to estimates from the Alcohol, Drug Abuse, and Mental Health Administration, although a lower estimate of around 1 million may be more reasonable.
From page 34...
... Population Under Age 65 Age 65 And Over Non- institutionalized Long-Term Care Populations Elderly - Age 65 and Over Developmentally Disabled Under Age 22 Chronically Mentally Ill Adults - Age 21 to 64 Other Disabled Adults Age 21 to 64 Institutionalized Long-Term Care Populations Elderly Developmentally Disabled Chronically Mentally Ill Adults2 Other Disabled Adults2 Veterans (All Ages, Not Included Above) TOTAL LONG-TERM CARE POPULATION Number Percent of Total Population 1980 2000 % Increases .
From page 35...
... suggests that the "total dependency" ratio in the nation -- the ratio of those not working to those working -- would be smaller in the year 2000 than it was in 1980 e Finally, although not displayed in the table, there are significant geographic differences among the states in the ongoing and projected future shifts in the size and age composition of these populations. There already was substantial interstate variation in 1980 in the proportions of elderly, as well as in the proportions of long-term care populations by state.
From page 37...
... As more people live longer, chronic diseases, most commonly conditions of middle and old age, have emerged as major causes of disability and functional dependency requiring services that impact on many sectors of the economy: income security, health, housing, transportation, and recreation. The burden of chronic disease poses a great challenge for policymakers, for providers of long-term care services, including families and friends, and for the individual suffering from the disease.
From page 38...
... TABLE 1 Number and Distribution of the United States Population, All Ages and 65 Years and Over, 1900-2000. Population 65 Years and Over Population 65 to 74 75 to 84 85 Years Year All Ages Total Years Years and Over Number (in thousands)
From page 39...
... A variety of factors are responsible for the substantial declines in mortality from heart disease and stroke during the past three decades. Contributing factors include improved medical services, advanced surgical and medical treatment of coronary heart disease, improved control of blood pressure, decreasing smoking, modified eating habits, increased exercise, and more healthy lifestyles in general.
From page 40...
... 16.8 14.5 18.8 SOURCE: U.S. National Center for Health Statistics.
From page 41...
... 5.1 20.6 90.2 SOURCE: U.S. National Center for Health Statistics.
From page 42...
... are in nursing homes. Other chronically ill elderly persons are in psychiatric or other chronic disease hospitals, Veterans Administration hospitals, and other long-term care facilities.
From page 43...
... Average reimbursement per decedent for hospital care was 7.3 times higher in the last year of life than for survivors; 3.9 times higher for physician and other medical services; and 12.7 times for nursing home care (Lubitz and Prihoda, 1983~. Future Morbidity Patterns There is considerable conjecture and controversy regarding future morbidity patterns.
From page 45...
... used the population projections made by the Social Security actuaries to show the impact of these demographic changes in the age structure of the population on health status, health services utilization, and expenditures for heath care to the year 2040 (Table 5~. The projections were based on current age-sex-specific rates of health status and utilization patterns, although it is expected that additional changes in levels of morbidity, therapies and technologies, availability, cost of care, and social and economic conditions also will contribute to altered patterns and levels of utilization of medical care services.
From page 46...
... J Feldman, "Living Longer in the United States; Demographic Changes and Health Needs of the Elderly." Milbank Memorial Fund Quarterly: Health and Society, Vol.
From page 47...
... o Using constant 1980 dollars, total personal health expenditures are projected to increase 68 percent; for the elderly an increase of 159 percent is projected. In 1980, ll percent of the population aged 65 and over consumed 29 percent of total health expenditures; by 2040 the elderly are projected to comprise 21 percent of the population, and almost half of the expenditures would be made in their behalf.
From page 49...
... The projected increases vary significantly by region, from only 6 percent in the Northeast to 57 percent in the West, reflecting regional population shifts as well as the aging of the population. · The total number of physician visits is projected to increase 19 percent, with significant regional variations.
From page 51...
... Continuing rapid growth in the number and proportion of aged in the population seems assured. Assuming that current utilization patterns will continue, the number of hospital days, nursing home residents, physician visits, and corresponding health expenditures will need to increase to meet the needs of the elderly.
From page 52...
... 1980. The Rising Pandemic of Mental Disorders and Associated Chronic Diseases and Disorders.


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