Long-term care in Arizona

              LONG-TERM CARE
IN ARIZONA
EXECUTIVE SUMMARY
me Pritzlaf, f. C ommission on Long-Term Care
, <
JULY, 1984
LONG-TERM CARE
IN ARIZONA
EXECUTIVE SUMMARY
The Pritxlaff Commission on Long-Term Care
JULY, 1984
Commission Members:
John C. Pritzlaff, Jr., Chairman
Kenneth R. Smith, Ph.D., Vice Chairman
James R. Lincicome
Maxine B. Marshall
Rev. Dr. Culver H. Nelson
Charles I. Schottland
Ashton B. Taylor, M.D.
Stanley G. Kleiner, Staff Director
Supported by the Flinn Foundation
Design and Production Assistance
provided by Motorola GEG
PREFACE
This Final Report presents the work of the seven member-Pritzlaff Commission on Long-Term Care. The origin
of the Commission can be traced to January, 1983 when the Governor and the respective chairmen of the House
and Senate Health Committees asked The Flinn Foundation, a private Arizona-based grantmaking organization
to study long-term care in Arizona. In a letter, the state leaders identified "the funding and provision of long-term
care services" as an important health care policy issue in Arizona for the middle income, as well as indigent citi-zens,
and their families. The letter asked The Flinn Foundation to study existing problems and propose policies
that would be helpful in designing a "system" of long-term care for Arizona's elderly and disabled residents. These
include special population groups who are often assumed to be receiving care through separate federal programs
(e.g.; Veterans Administration, the Bureau of Indian Affairs and Indian Health Service). The Pritzlaff Commis-sion
on Long-Term Care, chaired by the Honorable John C. Pritzlaff, Jr., was established in June, 1983 with a
commitment to complete a final report in July, 1984.
Members of the Commission are:
John C. Pritzlaff, Jr., Commission Chairman and former Arizona State Senator;
Kenneth R. Smith, Ph.D., Vice Chairman and Dean, University of Arizona College of Business and Public
Administration;
James R. Lincicome, Executive Vice President and General Manager, Motorola, Inc., Government Electron-ics
Group;
Maxine B. Marshall, Associate Publisher, Scottsdale Progress;
Rev. Dr. Culver H. Nelson, Senior Minister, Church of the Beatitudes;
Charles I. Schottland, Chairman, Governor's Advisory Council on Aging;
Ashton B. Taylor. M.D., Phoenix Physician, Internal Medicine/Gastroenterology
The Commission conducted its work in four phases:
1. From July through September, 1983, Commission members focused on organizing and identifying the back-ground
information that was to form the basis for the Commission study. Members read and analyzed avail-able
written materials that varied from opinions offered by individuals to national studies prepared by U.S.
government agencies.
2. The months of October through December, 1983 were devoted to the mammoth undertaking of gathering data
locally, on a national level and from other states. The Pritzlaff Commission conducted five days of public,
statewide hearings. Approximately 150 individuals and organizations testified, and more than 100 written
statements were received. Two points were made over and over again: increased services are needed to enable
people to remain as independent as possible in their home communities, and the cost of long-term care is a
major concern. In addition, the Commission collected information on current federal policies and analyzed
information on current public expenditures in Arizona.
3. During the months of January through March, 1984, the Commission began a detailed analysis of future direc-tions
and trends in long-term care in Arizona, using projections to begin discussions of how Arizona should
change the direction of its current programs of long-term care.
4. Finally, in April through June, 1984, Commission members focused their discussion on key findings and rec-ommendations,
devoting a major portion of their time to the development of this report.
The Commission is indebted to The Flinn Foundation, the Governor's Office and the Arizona Legislature. In
addition, excellent cooperation was received from dozens of organizations. Among them were: the Arizona Asso-ciation
of Counties; Department of Economic Security; Department of Health Services; all eight Area Agencies on
Aging (including those of the Navajo Nation and Inter Tribal Council); the Veterans Administration; the Arizona
Long-Term Gerontology Center; and the Arizona Department of Insurance. Special appreciation is directed to the
Governor's Advisory Council on Aging, the Arizona Division of Personnel (for office space) and the University of
Arizona Foundation and College of Business and Public Administration (for administrative support). And last, a
special thanks extended to the hundreds of people who gave testimony, collected state and county data and offered
their guidance and encouragement.
This Executive Summary Report contains a series of Findings and corresponding Recommendations. The Find-ings
are abstracted from sections in the full report on Population, Services, Financing and Governance which con-tain
core information and referenced data. To develop a true system of long-term care for Arizona, the
recommendations must be considered as a collective whole. If they are only partially adopted, the result is likely
to be the continuation of fragmented andlor expensive services.
Development of a system will require sequential steps over a period of three to five years. The key to success
will be the common commitment required of public bodies, advocacy groups and private agencies. The goal is to
improve long-term care services, financing and program administration through the cost-effective use of private
and public initiatives.
The members of the Pritzlaff Commission earnestly believe that much should be done to improve and expand
options for long-term care for Arizona's residents. Commission members welcome comments and questions and
will be active during the ensuing months to promote understanding of the Report's recommendations.
EXECUTIVE SUMMARY
OVERVIEW
The issues and problems of long-term care, which face 120,000 elderly and disabled Arizonans, are found
throughout the United States and have become worldwide concerns and critical challenges to society.
Viewed simply, long-term care is the prolonged assistance required by individuals who have become dependent
on others as a result of some physical or mental disorder causing functional limitations or disabilities. The pro-longed
assistance - while always requiring the labor of others - may vary in degree from simple, nonmedical
support to intense, continuous monitoring and services.
The need for long-term care has grown as medical advances in the prevention and treatment of formerly fatal
injuries and diseases have made it possible for more people to survive and live longer. Although the elderly rep-resent
the majority of those who need long-term care, people of any age can have mental and physical impairments
that cause dependency.
Conditions which reduce a person's ability to function independently for as little as three months or for as long
as several decades place him or her in the category of those needing long-term care. These conditions, which may
cause simple annoyances or servere pain, can limit personal independence and disrupt normal life.
Most long-term care services are expensive, causing major burdens for public agencies and private individuals
alike. Arizona counties now spend approximately $48 million for the long-term care needs of the indigent. With
the addition of state, federal and private funding the total publiclprivate expenditure for long-term care in Ari-zona
conservatively is estimated to be $200 million. Estimates of future expenditures indicate the total will grow
to between $1.6 billion and $2 billion by the year 2000.
The financial burden on families is heavy, sending many middle income individuals and families into financial
dependency. In Maricopa County, which supports approximately 2,000 nursing home patients, 30 percent of those
receiving county assistance were private patients in nursing homes who became financially impoverished and eli-gible
for county assistance while there.
At the present time, long-term care is fragmented for many Arizonans. Formal provider agencies differ signifi-cantly
in their administration of services and the clients whom they assist. People are served under an array of
rules and eligibilities with significant differences in the availability of options, depending upon where in Arizona
one lives. As a result, dependent individuals must find assistance from a patchwork of agencies and organizations
with limited capacities and funding levels.
Significantly, approximately 79,000 Arizonans - two-thirds of those who need long-term care - are not assisted
by organized provider agencies. While most of these individuals have their needs fully met by family caregivers,
neighbors, and friends, others have them only partially met, and some have no support at all.
The resources spent by family members and volunteers are not included in the estimates of organized long-term
care costs, but it is clear their financial contribution in the overall picture of long-term care is a vital one. The
economic value of informal caregiving in Arizona is difficult to precisely quantify. Nevertheless, a cautious esti-mate
of comparable board and care expenses suggests that it could be several hundred millions of dollars each
year.
This report comes at a particularly critical time in the development of long-term care in Arizona. Projections
indicate that the population growth surge will continue and that the percentage of elderly in the population will
become even greater in the decades to come. The three-year demonstration program, the Arizona Health Care
Cost Containment System (AHCCCS), omits coverage for long-term care services, a fact that has left the cost of
treating the poor elderly to financially burdened county governments. Arizona has the opportunity and challenge
of building a system of long-term care that can effectively serve residents, regardless of geographic and economic
differences.
FINDINGS AND RECOMMENDATIONS
POPULATION
Finding 1 Recommendation 1
Those most likely to need long-term care assistance The state of Arizona should carefully plan and
in Arizona are the older elderly, chronically mentally develop a system of long-term care in the ensuing
ill, developmentally disabled and severely physically five years (Figure 1). This system must be able to
disabled. There are presently 120,000 elderly and dis- respond to an indiuidual's long-term care needs and
abled Arizona residents who require long-term care encourage people to attain their maximum levels of
assistance. This number will grow, conservatively, to personal independence.
225,000 by the year 2000. The increase reflects a com-posite
of the state's annual growth of 6 percent to 7
percent for those who are 65 and over and 3 percent
for the mentally and physically disabled.
COMPONENTS OF A LONG TERM CARE SYSTEM
I INDIVIDUAL NEEDS FACTORS I a Personal Care a Mobility a Household Help a Condition a Other
-Eating -Walking -Meal Preparation -Physical -Income
-Toileting -Going Outside -Shopping -Mental -Family Status
-Bathing -Chores -Age
-Dressing -Money Management
SIGNIFICANT LIMITED DEPENDENT
INDEPENDENCE INDEPENDENCE
Home, Community, Alternative Housing,
Alternative Housing Institutional
Alternative Residential
Figure 1. Components of Long Term Care System 28380-3
Finding 2
The state's population of residents who are 65 years
and older will double between 1984 and the year 2000,
from the current 365,000 to a projected 725,000 (Figure
2). Approximately 18 percent of this projected popu-lation
will need long-term care assistance. Most of
them will be in their 70's and 80's, and 70 percent will
be concentrated within two dozen (mostly urban) Ari-zona
communities. The remaining 30 percent will be
widely dispersed throughout the state. In 1990, seven
counties (all rural) will have elderly populations of 15
to 29 percent (Figure 3). Twelve percent of Arizona's
elderly residents are living under federal poverty lev-els,
and another 6 percent are just above the poverty
level. The needs of this elderly population span a con-tinuum
from limited support and assistance to contin-uous
intensive care. Consequently, Arizona's elderly
will experience continued significant growth in the
need and demand for long-term care services.
Recommendation 2
Arizona's system of long-term care must establish
expanded service options for the elderly, ranging
from assistance for people in their homes and com-munities
to services in alternative residential set-tings
and in nursing homes. While options may vary
with locations, service should be available to those
GROWTH IN ARIZONA
800 1
YEARS 2- 2
Figure 2. Population Age 65 and Older
in the rural areas as well as those living in the two
metropolitan sections of the state. A lack of options
will result in the use of more expensive services or
in people not having appropriate care available.
And without appropriate care, the individual who
needs long-term care is less likely to achieve the
level of independence that he otherwise could.
- --
Finding 3
The chronically mentally ill, developmentally dis-abled
and severely physically disabled populations will
collectively increase to 100,000 individuals by the year
2000. They will be living throughout the state in direct
proportion to the general population. Like the elderly,
they will be concentrated in Maricopa and Pima coun-ties
where services tend to be more available, and the
remainder will be living in smaller communities and
rural areas. Like the elderly, most share a desire and
ability to live in community-based settings rather than
in institutions. Very different from the elderly, how-ever,
is the much longer time frame during which
assistance is needed, often for 20 or more years.
-
Recommendation 3
Arizona's system of long-term care must recog-nize
and participate in expanding services to meet
the needs of the physically and mentally disabled.
They depend heavily on residential support, edu-cation,
vocational and occupational training, spe-cific
therapies and institutional care for the most
severely disabled. Whatever their needs, if indiuid-uals
cannot attain the maximum, independent life-style
feasible, they will continue to have greater
dependency on others and diminished self-reliance,
in many cases requiring institutional care. In the
long run, failure to provide needed options aimed
at promoting individual independence will result in
a higher public cost as more dollars are funneled
into institutional care.
APACHE
C O C O N I N O
P l N A L
G R A H A M
C O C H I S E
year Source Ar~zona Department ot SANTA CRUZ
Econom~c Secur~ty
Populat~on S t a t ~ s t ~ cUsn lt. 9/28/83
Figure 3. Arizona's Elderly Population 65+ (Projections by County)
Finding 4
Arizona has two population groups who require long-term
care assistance but who are usually considered as
being supported by federal resources and, therefore,
separate from state or county assistance. They are
American Indians and U.S. Veterans.
A. Among Arizona's 155,000 Indian residents are the
elderly and disabled who have a portion of their
long-term care service needs provided by the
Bureau of Indian Affairs or the U.S: Indian Health
Services. The BIA provides some support for nus-ing
home care below the level of skilled care, and
the IHS provides skilled nursing home care sup-port.
Both the BIA and IHS, however, are trying
to further contain and even reduce their funding
for long-term care with the expectation that Indi-ans
will have to find resources elsewhere. For non-institutional
support, most Indians must rely on
the same resources available through Older Amer-icans
Act, Social Security Block Grants and Social
Security payments. Arizona counties, which nor-mally
assist the indigent, do not accept the finan-cial
responsibility for this population, because of
a belief that funding needs are fully covered by the
federal government.
B. Arizona has a very large and growing population
of older U.S. veterans, approximately 12 percent
of whom actually use the VA for care. Arizona's
three Veterans Administration Medical Centers in
Phoenix, Tucson and Prescott primarily provide
acute inpatient and outpatient services. They also
have limited nursing home and residential beds
available for a portion of their population. There
is recognition that the VA's funding may not be
sufficient to meet the long-term care needs of the
rapidly growing number of eligible elderly veter-ans,
especially if a greater percentage of eligible
veterans chose the VA.
Recommendation 4
Arizona's system of long-term care must recog-nize
and address the needs of these two popula-tions.
Every effort should be made to use all
available resources from the federal government
(BIA, IHS and VA) when they can be obtained. At
the same time, efforts should be made to ensure that
coordination occurs, and that these populations are
afforded the same level of assistance from programs
available to other Arizona residents.
SERVICES
Finding 5
Individuals requiring long-term care (and involved
family members) often lack initial information on how
to obtain assistance. Also, they are unable to under-stand
the extent of an individual's needs or the options
for care. National experience has documented the
importance of accurate guidance, individualized
assessment and ongoing case management. Assess-ment
is the process of determining a person's level of
need using measures of personal care, mobility and
family and financial status. Once completed, a case
plan can be established with the involved individual
deciding on the forms of available assistance that best
meet these needs. A trained case manager can facili-tate
the process of matching needs to options for
assistance and then monitor the individual's status
over time.
Recommendation 5
Arizona's long-term care system must establish
assessment and case management as the building
blocks upon which it is based. All residents who are
-
Finding 6
Long-term care includes a broad mix of services
ranging from supportive and social assistance to
intensive clinical care. In Arizona approximately 75
percent of all long-term care assistance is provided
informally by family members, friends and volun-teers.
The family members most involved usually are
the spouse and daughter. Current trends suggest that
informal caregiving will decline in future years as more
and more women become part of the work force, and
thus become less available as caregivers. Caregivers,
themselves, can become overly stressed. They can
benefit from occasional relief and support which can
complement and improve the quality of their caregiv-ing,
while also reducing the possibility of "burnout"
from stress.
Recommendation 6
The long-term care system should recognize
informal caregivers and support them through the
provision of organized services to relieve but not
replace, family caregiuers. Counseling, training and
-- -. -
potential long-term care participants should be
provided with a readily accessible point of entry for
information on long-term care resources followed by
a simple, initial assessment of needs. This assess-ment
s t e p should serve as the "gatekeeping"
authority for screening and approving assistance
supported by public funds.
The initial information and assessmen,t should be
provided as a public service to all regardless of
financial status. Case management and funding
assistance for formal services also could be provided
to those who are evaluated as being low income. A
statewide network of professional staff for assess-ment
and case management could be composed of
a combination of state and county employees, along
with staff from contracted private agencies. With
accurate initial information, assessment and case
management, people are more likely to make
appropriate decisions; conversely, when people do
not have information they are likely to make choices
that do not meet their needs or are not cost effec-tive.
respite are all important needs. Economic incen-tives
in the form of state tax credits or other state
tax exemptions should be developed to encourage
informal caregivers to keep individuals at home
whenever possible.
Like family caregiuers, volunteers must be viewed
as a highly valued source for informal caregiving. A
program of grants should be allocated to commu-nity
agencies, service organizations andlor religious
groups to expand their training and use of volun-teers.
Such grants might be used where appropriate
to support per-diem reimbursement for volunteer's
travel, food or related expenses.
The system must encourage, supplement and
relieve informal caregivers without substituting or
replacing their role as caregiuers. If this recommen-dation
is not addressed, informal caregiving by
family members and volunteers will have to be
replaced by more expensive organized services, and
Arizona will have failed to make full use of this
immense source of effective care-giving.
Finding 7
Formal, organized noninstitutional long-term care
assistance for individuals includes home and commu-nity
services and care in alternative residential set-tings.
These services include, but are not limited to,
home care, meals, respite care, telephone reassurance,
transportation, hospice, adult day care and residential
care for the ambulatory person unable to live in his own
home. At the present time noninstitutional services are
more readily found in the greater metropolitan areas
of Tucson and Phoenix but their availability is signif-icantly
limited in rural Arizona.
Recommendation 7
An Arizona system of long-term care must endorse
and expand noninstitutional options for care in
home and community settings. Additional federal
and state funds should be set aside for reimburse-ment
of noninstitutional services, especially in rural
counties. Since most counties have at least some
organizational structure in place for providing non-institutional
care, new funds are needed to expand
these existing organizational capacities and to help
develop new organizations where they do not exist.
These are the services that must be available if
people are to have options for care that enable them
to remain outside of expensive institutional set-tings
and if informal caregivers are to be assisted.
Finding 8
Arizona has a variety of alternative residental facil-ities
used by people who are no longer able to live
independently. These individuals require some assist-ance
and supervision, are unable to remain in their own
homes, but do not need the more intensive 24-hour
assistance available in a license nursing home. For
them, the answer is a board and care facility that cur-rently
may be a nonlicensed home, a county certified
adult foster home, a private boarding home or a state-licensed
supervisory care home. Residents of such
facilities often include elderly individuals as well as
younger adults who are chronically mentally ill or
developmentally disabled.
There are no uniform standards and no monitoring
of board and care homes. Further, a recently com-pleted
Arizona Department of Health Services survey
showed that eight percent of operating board and care
homes are substandard in the care they provide, rang-ing
from a low two percent in adult foster care homes
to a high 13 percent for unlicensed homes. The total
state population of board and care home residents is
estimated to be .5000, but could be as high as 10,000.
Monthly fees average $500, varying from $300 to $600.
Many residents must depend on a maximum income
of $375 per month from a combination of Social Secu-rity,
Supplemental Security Income and State Sup-plemental
Payments; thus forcing them to choose from
among the least expensive (more marginal) board and
care facilities.
Recommendation 8
A system of long-term care must include board
and care homes as an essential component of care
for Arizona's long-term care population. Every effort
should be made to stimulate the development of
additional supervisory and adult foster care homes
for people who cannot live in their own homes, need
limited assistance and are able to maintain rela-tively
independent lifestyles. When public funds are
used to support individuals in board and care facil-ities,
the homes must participate in a program of
uniform statewide standards with county respon-sibility
for certification and monitoring. To accom-plish
this the state must establish the standards and
provide counties with funds to monitor those homes
where public funds are used.
Finding 9
Arizona's nursing homes have received significant
attention with regard to the quality of care and bed
supply in the past ten years. Regulations were inten-tionally
reduced in 1981-82, including repeal of Certif-icate
of Need (CON) requirements and local standards
for professional staffing. The number of new nursing
home beds planned and under construction within the
past two years has been extremely high in Arizona.
This is not unusual, given Arizona's overall occupancy
of 92 percent and a widely held perception that the
future market for new nursing home beds is rapidly
growing. All this has occurred against a state history
of limited public funding and growth of nursing homes.
The current ratio of nursing home beds to elderly is one
of the lowest in the country at 2.5 beds per 100 elderly.
Although the number of beds is low relative to other
states, the Commission believes that there is an ade-quate
availability of beds for the majority of Arizo-nans.
Members are concerned that the 8500 nursing
home beds existing in 1982 could readily grow to 13,000
beds by 1985. Licensed nursing homes, which serve
approximately 25 percent of all those using organized,
formal services, require 75 percent of all the resources
paying for organized care. The current expansion could
result in a rapid growth in long-term care expendi-tures
and reduce the effectiveness of a strategy to con-tain
expenditures over time.
Pressure for additional skilled nursing home beds
could result from the recently implemented federal
program that prospectively pays hospitals according to
established diagnostic related groups (DRG's). This
system will encourage hospitals to discharge elderly
patients as early as possible, some of whom will require
care in a skilled nursing facility as a means of com-pleting
a short term transition before resuming inde-pendent
living.
Recommendation 9
Arizona's system of long-term care must contain
the growth of nursing home beds to an agreed limit
in relation to the population needing services. A
policy of containment should be sufficiently flexible
to permit development of new nursing home beds in
areas where shortages exist. This recommendation
is presented as the most feasible response to the
concern that major growth in nursing home beds will
significantly increase total long-term care expend-itures
(as shown in Commission data which project
future Arizona developments in long-term care).
Limiting the emphasis on institutional care will
increase the resources required for the noninstitu-tional
and residential services identified in Rec-ommendation
#7 and #8. To reduce the potential
pressures for skilled nursing home beds likely to
result from prospective payment programs, those
hospitals permitted by federal policy should be
encouraged to establish "swing beds" by using empty
inpatient beds as skilled nursing home care beds
when feasible.
Quality standards for nursing home operations,
based on patient outcome, should be revised and
new monitoring mechanisms which look beyond
staffing procedures or facility characteristics should
be created. One option for monitoring is deuelop-ment
of trained assessment teams composed of
community volunteers in each county to periodi-cally
visit and examine characteristics of patient
care. This same approach could be used to assess
care in alternative residential facilities as well.
FINANCING
Finding 10
Currently, $200 million is spent for organized long-term
care services in Arizona. Half of this amount is
paid by individuals privately and the other half is paid
by public agencies. During the next 15 years, Commis-sion
projections indicate the expenditures are likely to
increase by 7 to 10 times, corresponding with a pro-jected
doubling of these long-term care population
(Figures 4 and 5). The portion required for institu-tional
care will be the key factor and could continue to
be 75 percent of all long-term care expenditures unless
there is a change in the manner that long-term care
services are provided.
ORGANIZED CARE TOTAL
22".0 2
0.0 I 1 I I
1984 1985 1990 2000
YEAR 2 mI
Figure 4. Organized Care Total
(Scenario Cost Comparisons)
Recommendation 10
Arizona's system of long-term care must imple-ment
programs to contain costs while encouraging
appropriate services. A financial policy that sup-ports
active expansion of noninstitutional services
and controlled growth of institutional beds should
be established as soon as possible. Concurrent with
this policy must be the mandated use of assessment
and case management to screen those individuals
most at risk for institutional care and enable them
to have the opportunity to be served by noninsti-tutional
options. The Commission believes the
cumulative ability to maintain people in noninsti-tutional
settings will reduce the proportion of funds
for institutional services to below 75 percent of total
long-term care expenditures.
NURSING CARE INSTITUTIONS
2.2 , I I I
0 0 1 I
1984 1985 1990 2000
YEAR >a= 5
Figure 5. Nursing Care Institutions
(Scenario Cost Comparisons)
Finding 11 PUBLIC EXPENDITURES vs PUBLIC DOLLARS
With the significant future growth in total long-term 320
care expenditures will come an increasing demand in 300
280
Arizona for public payment of long-term care pro- , 260
grams. Arizona is the only state that does not partici- [3r 224200 pate in the Title XIX (Medicaid) program for lmg- 8 200
term care. If this continues, county and state govern- u- 180
O 160 ments will not be able to keep pace with the demand p 140
for public expenditures. Significant shortfalls in pub- ;:: lic funds for long-term care will occur by 1989, and 5
perhaps even sooner. 60
The problem already has become especially acute for 40
20
Arizona's counties, which have been the sole source of o
AZ'83 I II Ill lllA
payment for the cost of indigent care in nursing homes. SCENARIO
In 1982-83, counties paid $48 million, of which $40 TITLE xx AND I tPXU:$oIIuRE C I T l T L E 1 1, FUNDS STATE E~COmUrl KEDNSXXI TY
>am >
Figure 6. Long-Term Care in Arizona - 1990
million was used for the institutional care of approxi-mately
4000 people. In addition, counties provide $8
million toward limited residential board and care
assistance, assessment and case management and other
services in the home. From 1980 to 1984, county's long-term
care spending will have grown from $35 million
to a projected $52 million. In addition, counties are
currently contributing $63 million to Arizona's Health
Care Cost Containment System. The budgets in Ari-zona's
counties, especially rural counties, are experi-encing
recurring annual budget crises related to long-term
care. At the source of the problem are a combi-nation
of factors: poor county economies, a limited tax
base, and a high proportion of elderly indigent.
Recommendation 11
Arizona must move as quickly as possible to par-ticipate
in the federal Title XIX (Medicaid) pro-gram
for long-term care services. There must be
flexibility to use a portion of these funds in support
Finding 12
Private payments for long-term care are limited
almost exclusively to individuals paying directly for
their own care. Neither Medicare nor private insur-ance
contributes in any significant way as a third-party
resource for long-term care. Although there are over
twelve private companies in Arizona selling nearly 30
policies for nursing home care, they are moderately
expensive and restrictive in their coverages. Further,
only a few of these commercial policies provide reim-bursement
to sufficiently cover nursing home care for
the average length of stay of 2.5 years. None provide
immediate payments for home and community-based
services. Consequently, a very large number of people
who require long-term care and began as private pay-ers,
exhaust their resources and become eligible for
pi~hlica ssistance Nationally; this occi~rsw ith 25 per-cent
to 30 percent of Medicaid-supported residents in
nursing homes. The same is true in Arizona, as evi-denced
in Maricopa County where the rate is 30 per-cent.
of noninstitutional services. Critical to accomplish
this is the use of waivers, which enable some Title
XIX funds to be spent on care in home and com-munity-
based settings. Without Title XIX funding,
Commission members believe that Arizona will not
be able to pay for the public portion of long-term
care.
Counties should be relieved of the direct respon-sibility
to pay for nursing home care. They must
continue to contribute, however, toward the state
Title XIX match for both acute and long-term care.
The long-term care contribution made by each
county should reflect the utilization of services
within the county and be continued but not at the
rate of annual increases experienced over the past
five years. One approach might be to contain the
aggregate county contribution by having a multi-year
cap based on the actual 1984 funding of $52 million for
long-term care while still accounting for relative
changes within counties.
Recommendation 12
Creative approaches to developing private pay-ment
mechanisms for long-term care are needed and
should be promoted by Arizona's long-term care
system. Many potential avenues exist and should
be explored to provide protection for the non-poor
and reduce the likelihood of spending down, becom-ing
impoverished and dependent on public funding.
The following are among possibilities that should
be considered:
A. Arizona should encourage commercial insur-ance
companies to improve the presently auail-able
indemnity policies for nursing home care.
Coverages need to be extended beyond skilled
nursing care, premiums k e p t a t affordable
prices, and purchase of such policies encour-aged
ai much earlier ages. This might be
accomplished through state incentives that pro-mote
cooperative pooling of commercial insur-ance
policies and premiums with involvement
of several companies.
B. The majority of the elderly own their own
homes, usually with little or no remaining
mortgage. The equity in these homes could be
converted into a supply of dollars to pay for
long-term care expenses, should that be needed.
These home equity conversions are being exam-ined
throughout the country and should be con-sidered
in Arizona. T o do so will require
cooperation of Arizona state government and the
mortgage loan industry.
C. Many people already invest in Individual
Retirement Accounts (IRA'S). Such accounts
also could become a way of saving during an
individual's earlier years until retirement, when
long-term care might be needed. Federal IRA
laws would have to be modified to enable the
used funds to remain untaxed as an incentive
for the individual to use an IRA type account
for long-term care expenditures.
D. Vouchers provide a means for individuals eli-gible
for public assistance to enter the private
market. Vouchers could be issued for a fixed
dollar value based on a professional assessor's
judgement of need. Individuals could use
vouchers to buy services or coverages of their
own choosing. The challenge to the person using
the voucher is to select satisfactory services that
are within the voucher value. For private serv-ice
agencies, there is the opportunity to com-pete
for a larger number of "priuate" clients. If
current federal regulations can be changed a
primary source for the payment of vouchers
could be the Medicare program.
E. Prepaid, capitated health plans (health main-tenance
organizations, HMO's) have developed
throughout the country as a means of providing
an established set of acute care services for an
established monthly premium. Recent Medicare
changes now permit Medicare recipients to
enroll in HMO's for acute care benefits. Selected
long-term care services could be added as HMO
benefits to meet all or nearly all of a person's
acute and continuing care needs. Such efforts
are being developed as demonstrations in other
parts of the country and should be encouraged
in Arizona by state and local governments. By
having the funding and controlling the services
for acute and long term care, HMO's have the
greatest potential for being the most cost effec-tive
approach of meeting the continuing needs
of those who enroll.
F. For middle income elderly, life care communi-ties
are emerging as a future option. While such
communities have different formulas, they all
seek participants who are able to pay privately
in exchange for independent residential living
quarters and a commitment of future assistance
should long-term care be needed. Since life care
communities have a history of financial insol-vency
problems, they must demonstrate an ade-quacy
of resources to account for inflation and
increases in life expectancy. Arizona has legis-lation
which requires licensing of life care com-munities
with periodic updating of their
financial status. Assuming continued enforce-ment
of this legislation, Arizona should encour-age
life care communities as one option for
private participation.
Finding 13
Current methods of nursing home reimbursement
are not sufficiently related to the acuity level of the
individual patient or outcome of care. Payments tra-ditionally
have been based on a fixed per-day rate,
regardless of the resident's condition. This has pro-vided
an incentive for nursing homes to seek patients
who are less sick but still classified at the highest fixed
rate (e.g.: skilled care). Also, because public rates are
usually lower than private fixed rates for comparably
classified patients, nursing homes have been less will-ing
to accept very sick patients, especially if they have
lower public reimbursement. Hospitalized public
patients are often delayed in nursing home placement.
As a result, millions of dollars are spent on unneeded
hospital care for public patients.
Recommendations 13
Arizona's system of long-term care should explore
the feasibility of reimbursement methods that more
effectively link reimbursement with the patient's
acuity needs and the outcome of the care provided.
These methods should provide incentives to nursing
homes to give the best care while also enabling
homes to be fairly reimbursed for care provided
regardless of whether payment is public or private.
Further, the containment policy in Recommen-dation
9 will promote continuation of high nursing
home bed census. To prevent nursing homes from
arbitrarily increasing prices, reimbursement sched-ules
for public patients should be established that
reflect sound investment principles and do not per-mit
cost shifting to private paying patients.
Finding 14
The funding of long-term care in Arizona is frag-mented;
public resources are controlled by a mixture
of agencies spread across state and county govern-ments.
Different programs have different guidelines
and different target populations. Agencies providing
services have adapted by piecing together funds from
whatever sources they can find. For the individual
long-term care recipient, the availability and use of
funding is often confusing and unclear. One potential
source of long term care finding is Medicare which
currently provides over $400,000,000 for acute care
services in Arizona.
Recommendation 14
All public long-term care funds from state, fed-eral
and local sources should be coordinated through
a single unit (see Recommendation 16). This unit
should also be responsible for consolidating differ-ent
reporting requirements, integrating funds, and
simplifying the reporting requirement for local
provider agencies. Included would be the funds from
Social Service Block Grants (Title XX), Medicaid
(Title X I X , when available in Arizona), Medicare
(Title XVIII, if permitted by federal waivers), Older
Americans Act (Title 111), and the various state-funded
programs in the Departments of Health
Services and Economic Security. Without such
coordination, long-term care programs will continue
to have a fragmented impact and reporting require-ments
will remain complicated.
Finding 15
The state of Arizona has concentrated most of its
direct long-term care funding on services for the
developmentally disabled, particularly on the 550 res-idents
in the state's three institutions for the severely
developmentally disabled. There are some additional
state monies, although limited, for supplemental pay-ments
for home care and for residents who are in
supervisory care and adult foster care settings. The
Department of Health Services also provides a rela-tively
small level of service dollars for the care of the
chronically mentally ill. State financing for the elderly
and severely physically disabled is even more limited.
Recommendation 15
The state of Arizona must become more active in
financing long-term care programs for the elderly
and physically disabled. In addition, residential care
for the chronically mentally ill and noninstitu-tional
services for the developmentally disabled
should have additional state funding.
As a beginning, the state should provide addi-tional
funds for the following specific efforts:
A. An expansion of existing assessment and case
management efforts throughout the state. This
would enable assessment to be available to peo-ple
regardless of income levels and would
improve quality of case management in rural
communities which currently operate on a lim-ited
basis.
B. The expansion of home and congregate com-munity-
based services in all counties of Arizona
with new funding specifically targeted toward
the homemaker, home health aide, adult day
care and transportation services.
C. Establishment of a program to provide funds to
agencies experienced in the recruitment, train-ing,
and use of volunteers. These volunteers
would assist persons in need of long-term care
seruices. Volunteer tasks could range from being
a surrogate family member to providing per-sonal
care to housekeeping chores and trans-portation.
Volunteers could also serve in case
management roles, reducing the need for high
cost staff time.
D. The creation of a last dollar reserve fund for
noninstitutional care. The fund would be used
to assist those individuals who have no other
funding support and are determined by the
assessment and case management team as being
at high risk of institutional care but having the
desire and support system to remain at home.
The actual level of funding could be based on a
proportion of what institutional care would have
cost (e.g.: 75 percent). The fund could be used
to pay for services and provide continuity when
funding voids arise, while at the same time
assuring that options to institutional care are
available to the low income population.
GOVERNANCE
Finding 16
Responsibilities for long-term care in Arizona are
divided among many units within the Departments of
Health Services and Economic Security. Some of these
units deal with service dollars and contractual serv-ices;
others are focused on standards, licensure, and
education; and some are involved in the direct provi-sion
of services in state institutions or in other state
offices with staff that assess and provide case manage-ment.
These state units control a combination of state
funds as well as some federal monies. There is no over-all
point of control and coordination for long-term care.
This is especially true for the elderly.
Recommendation 16
The Arizona Legislature should establish a new
unit for long-term care with overall authority for
long-term services. The unit would have responsi-bility
for planning, development of policies, stan-dard
setting, coordinating use of public funds and
contracting with local jurisdictions for operating and
delivering services. In addition, the unit would work
with the private sector to stimulate statewide efforts
in long-term care delivery and finance. To succeed,
the new unit must have authority to carry out these
responsibilities, regardless whether it is established
within an existing agency or created as a new unit.
This new unit should be divided into two sections:
one for the elderly which has no existing counter-part
in Arizona state government; the other section
would have overview responsibilities for programs
for the developmentally disabled, chronically men-tally
ill and physically disabled. Since units already
exist with responsibility for services to all three of
these populations, the second section must be
developed with sufficient care so as not to disrupt
or diminish existing programs. If this unit is not
established, funding and services are likely to
remain fragmented, with fewer opportunities to
coordinate and consolidate common services and
higher overall public expenditures.
Finding 17
Many of Arizona's counties are experienced in
developing and operating (either directly or through
contracts) programs providing long-term care services
for the elderly. County governments have become
expert in their knowledge of county needs and
resources.
Recommendation 17
Arizona's counties should retain operational
responsibility for long-term care programs for the
elderly. Operating within state plans and stan-dards,
each county under contractural ties to the
new state unit of long-term care should be respon-sible
for the delivery of services within the county.
The counties then would have the choice of deliv-ering
services directly or contracting for services,
with the preference for contracting whenever pos-sible.
The county units should work cooperatively
with service agencies, community councils, Area
Agencies on Aging and constituency organizations.
Counties would not have operating responsibility for
the non-elderly. Instead, they would work cooper-atively
with state agencies that would continue tra-ditional
operational roles for the mentally and
physically disabled.
Finding 18
The Arizona Health Care Cost Containment Sys-tem
has undergone constant change during its first two
years. At the end of the 1984 legislative session,
AHCCCS legislation was passed to expand state
responsibilities, including complete administrative
responsibility. For AHCCCS members who require
long-term care (especially nursing home care),
AHCCCS continues to be responsible for acute medi-cal
care costs on a fee-for-service basis or through
enrollment in one of five long-term care provider health
plans that serve areas of the state. When long-term
care is recommended by the AHCCCS provider plan,
the county then determines eligibility for county sup-port.
If the county concurs, county funds are used to
pay for the bed and board costs in nursing homes and
alternative residential settings in accordance with how
the county defines long-term care.
Long-term care in AHCCCS is a cumbersome
administrative process and will continue to be so as
long as responsibilities for determining eligibility,
making payments and maintaining accountability for
patient care are split between AHCCCS provider plans,
AHCCCS and county governments. Patients can be
left in a void while determination is being made of who
is responsible for acute medical services and pay-ments.
Additionally, there is little or no coordination
of social service care planning with the acute medical
care component.
Recommendation 18
Administrative changes should be made with the
AHCCCS program to smooth out the gaps that exist
for AHCCCS members needing long-term care. The
process of being disenrolled and then re-enrolled in
a long-term care provider plan (for acute care) or
covered by fee-for-service care is time consuming
and disruptive. One possibility would be for the
health plan responsible for acute care to continue
those responsibilities when the member is receiving
institutional long-term care. Alternatively, a sys-tem
could be explored that would place under a dif-ferent
provider plan the responsibility for provision
of social and acute medical seruices.
There should be a coordinated relationship
between the newly formed state unit of long-term
care and AHCCCS. The state unit would have ouer-all
responsibility for planning and monitoring long-term
care services. AHCCCS, as a separate state
ofice, would work closely with the long-term care
unit to make sure that its members were receiving
long-term care services provided in approved set-tings
and that the additional federal Title XIX
funds are administered in accordance with federal
requirements.
Finding 19
Arizona will continue to have many issues and ques-tions
related to long-term care. They include the role
and responsibility of informal caregivers; the cost
effectiveness of formal noninstitutional services and
the degree to which they are substituted for informal
care; the most effective methods for controlling and
reimbursing nursing homes; the ability of private sec-tor
financing to reduce the phenomenon of spending
down; and the overall effectiveness of the state unit of
long-term care.
Recommendation 19
A program of research, ongoing study and formal
evaluations of programslissues must be an integral
component of Arizona's system of long-term care.
The unit of long-term care should contract for the
evaluation of issues regarding expenditures, quality
of care and cost effec2iuene.s~o f services. The three
university campuses in Arizona have professionals
with expertise on the aging and disabled and should
be used as resources. Coordination of these efforts
should be through the Arizona Long-Term Care
Gerontology Center in Tucson.
Finding 20
Long-term care is a term that encompasses a com-plicated,
many faceted set of issues and programs.
Quality of services, cost-effective care and cost con-tainment
are overriding issues along with accessibility
of services. The experiences of other states facing these
same issues demonstrate that long-term care requires
"a long-term" view if a true system is to be estab-lished.
There are sequential steps beginning with ini-tial
actions, and followed over a period of several years
by evolving changes and growth. Only after a period of
three to five years can the real impact of cost contain-ment
steps be realized.
Other states, similar in characteristics to Arizona,
have embarked on three-to-five year strategies to
establish a system of long-term care. Among them are
Oregon, Washington, Utah and Wisconsin. The expe-rience
of these states, as well as the programs of larger
states such as Texas and Florida, provide excellent
examples of evolving systems for long-term care.
Recommendation 20
Once established, the Arizona unit of long-term
care must move to establish the building blocks for
a system of long-term care. The following steps,
which have already been identified in earlier rec-ommendations,
should be accomplished by Decem-ber,
1985:
A. Secure Title XIX (Medicaid) funds for long-term
care with waiver authority to permit some
dollars to be used for home and community-based
services. This must be accomplished by a
working agreement with AHCCCS on how to
best administer long-term care dollars in rela-tion
to the current AHCCCS Title XIX dem-onstration.
(Recommendation 11)
B. Establish a statewide program for initial
assessment and care management. (Recommen-dation
5)
C. Reestablish some control and review process over
the building of new nursing home beds. A
method to determine need in any given area for
additional nursing home beds must be included.
(Recommendation 9)
D. Develop standards for residential board and care
facilities that include increased latitude for the
personal care of residents with limited ambu-lation.
(Recommendation 8)
E. Begin the process of expanding home and corn-munity-
based services for residents throughout
the state. Such services should be designed to
assist the long-term care recipient and to pro-vide
relief for informal caregivers. (Recommen-dations
6 and 7)
F. Work with the private sector to expand the
resources available for the private individual to
pay for long-term care seruices. (Recommenda-tion
12)
From January, 1986, through December, 1988, the
following components of Arizona's long-term care
system should be further developed:
A. Growth of private sector efforts to pay for long-term
care through insurance, individual savings
programs, tax incentives and prepaid, capitated
programs that provide acute and continuing
care benefits. (Recommendation 12)
B. Development and implementation of a reim-bursement
method for nursing home care that
creates an incentive for providing quality care
and eliminates discrimination between public
and private payments. (Recommendation 13)
C. Completion of a statewide effort to identify all
residential board and care homes that are
meeting established standards. (Recommenda-tion
8)