How Does A Fee For Service State Respond to the Need for Care Integration?

Robert ApplebaumScripps Gerontology Center

Miami UniversityAmerican Society on Aging

April 2011

Ohio Allocation of State-Only General Revenue Funds, 2008 (about 22 billion dollars)

General Gov. 8%

Corrections 8%

Local Government 5% Education 40%

Human Services 27%Higher Educ. 12%

Medicaid 24%

Who Are the Medicaid Consumers in Ohio?

Families, Women & Children

80% (All managed care)

Aged Blind & Disabled 20%(little managed

care)

68% 32%

Source: Health Policy Institute of Ohio. Ohio Medicaid basics 2009

Ohio Medicaid Spending by Major Categories, 2008 ($13 Billion)

Hospitals26 Cents

Nursing Facilities19.6 Cents

ICFDD5.7 Cents

Pres. Meds8.7 Cents

HCBS Waivers10.7 Cents

Physicians8.7 Cents

Adm.3.1%

All others17.4 Cents

Breakdown approx 55% acute costs 45% long-term care

Ohio’s Medicaid Challenge (s)

No question that we have to make major changes-- Problem is we have multiple Medicaid challenges and there may

not be one solution. Problem # 1 Higher institutional use and expenditures for the over

65 group, bad integration of care, but not high acute care costs, under Medicaid.

Problem # 2 High per member per month (both acute and long-term care) expenditures for individuals under age 65 with physical disability- growing nursing home use, bad integration.

Problem # 3 High per member per month expenditures for individuals with developmental disabilities. Balance a problem.

Problem # 4 Medicaid grows when unemployment rises for all under age 65.

Today will focus on problems 1 and 2.

Ohio uses nursing homes at a higher rate then most other states (for age 75 and over ranks 6th).

About 25% of Ohio’s severely disabled population are long stay nursing home users (Low use states 16%).

Ohio has a higher Medicaid payment rate than most states (ranks 7th) --although rate has been flat for last 6 years–

Two-thirds of Ohio NF residents on Medicaid. Ohio per person institutional expenditures are higher than

most states (ranks 7th ). ODH estimates in 2015 state will be overbedded by 5200

beds, if occupancy rates are 90%.

Problem # 1 Higher Use and Costs of Nursing Homes

Ohio's Total Medicaid Expenditures for Facilities and HCBS (All Individuals with Disability)

Ohio's Medicaid Expenditures for Facilities and HCBS, 2009

32%

68%

NF & ICFDD HCBS

$4.85 Billions of dollars

79%

21%

77%

23%

73%

27%

70%

30%

70%

30%

68%

32%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2005 2006 2007 2008 2009

Percent Distribution of Ohio Medicaid Long-Term Services and Supports Expenditures for Facilitities and HCBS Over Time

NF & ICFDD HCBS

Medicaid Expenditures for LTCSS, 2009(in Millions of Dollars)

Physical/Cognitive Developmental DisabilitiesNF $2,544 (80%) ICFDD (44%) $744.2

HCBS Waivers

PASSPORT $341.0 Individual Options $807.7

Ohio Home Care $196.9 Level One $58.4

Transitions Aging Carve-Out $44.1

Transitions Developmental Disabilities $68.2

Assisted Living $19.4

PACE $22.5

Choices $7.0

Total HCBS waivers $631.2 Total HCBS waivers $934.3

Medicaid Utilization of LTCSS, 2009Physical/Cognitive Developmental Disabilities

NF (56%) 49,650 ICF (24%) 7,299

HCBS Waivers

PASSPORT 26,649 Individual Options 14,326

Ohio Home Care 7,692 Level One 5,702

Transitions Aging Carve-Out

1,573

Transitions Developmental Disabilities 2,888

Assisted Living 1,066

PACE 710

Choices 390

Total HCBS waivers 38,338 Total HCBS waivers 22,916

How Nursing Home Use has Changed

In last 10 years overall Medicaid nursing home census has dropped by 6%, private nursing home use has dropped by 26%, and Medicare has increased by 150%.

In last 10 years the over age 60 Medicaid nursing home use has dropped by 10%, even though we have increased the over 85 population by 75,000.

In last 10 years the under age 60 Medicaid nursing home use has increased by 17%.

Six Month Follow-Up Results of AAA Diversion and Transition Intervention (March 2010- February 2011)

Total (3233) (1974) (1259)

Placement at 6 months Diversion Transition (percent)

Home/Community 63 53

AL 3 14

NF 17 23

Deceased 17 10

Solutions to Problem # 1

Remove excess NF bed capacity from system. Achieve better balance between NF and HCBS expenditures. Continue focus on transitions and diversions. Figure out workable system to better integrate care for dual

eligibles– one that really works! ACO, Medical- Health Homes, Managed Care, PACE, Hybrid, 65 plus very low Medicaid acute

Recognize that systems have developed separately across the state and reform needs to build on what works.

Better efforts to keep individuals from needing Medicaid– prevention efforts, support for non-Medicaid services, family

51% older people with severe disability on Medicaid– will grow by 25% in next 10 years. 66% NF Medicaid, 8% 65 plus in community on Medicaid.

Problem # 2 High Per Member Per Month Cost for Long-Term and Acute Care, Growing Nursing Home Use, More Balance (For Individuals Under Age 65)

Very high waiver and Medicaid acute care costs. Increased use of nursing homes (up 17% last ten

years). Demographic challenges upon us right now. Increased concerns about growth in individuals with

mental health needs . Current health and long-term care systems not well

integrated.

Medicaid Per-Member, Per-Month (PMPM) Expenditures for People Who Received Long-Term Services & Supports

(LTCSS), 2009Type of Facility or Program

Acute care cost/Total cost

LTCSS Health-Care Total

Nursing Facility (14%) $4,281 $697 $4,978

ICFDD (6%) $8,520 $547 $9,067

PASSPORT 65+ (28%)

PASSPORT 60-64 (58%)$1,100

$980

$430

$1,388

$1,530

$2,368

Ohio Home Care (53%) $2,133 $2,441 $,4574

Assisted Living (18%) $1,518 $325 $1,843

Aging Carve-Out (42%) $2,339 $1,701 $4,040

PACE Capitated rate $2,645

Choices (22%) $1,500 $432 $1,932

Individual Options (12%) $4,698 $639 $5,337

Level One (35%) $854 $451 $1,305

Transition Developmental Disabilities (57%)

$1,968 $2,653 $4,621

Solutions to Problem # 2

Develop a plan to better integrate acute and long-term care and better allocate costs for under 60 waiver participants. Relatively stable enrollment, high health needs group. Explore managed care options.

Develop a plan to better integrate care and better allocate costs for PASSPORT participants age 60-64. Explore ACO’s or AAA demonstration.

Address growing population of individuals with mental health needs using nursing homes.

Improve housing options for adults with physical disabilities and mental health needs.

Use the diverse care options as a strength by evaluating natural field labs in preparation for the demographic changes ahead.

Lessons From the Data

Window for reform is now– I0-15 years to transform the system– current approach is unsustainable

Tremendous current budgetary pressure to do something– our challenge is to not just do something, but to do the right something.

We have not figured out how to really integrate acute and long-term care, but we must!

We need to build our system from strength, but be willing to experiment and change.

Data and outcomes should drive policy decisions to create an efficient and effective system. We need every ounce of innovation that we can muster.