Balancingg LTC: Can More Home- and
Community-Based Support Save Money
Whil IImproving
While
i C
Care??
The Cost
Cost-effectiveness
effectiveness of HomeHome and
Community-Based Services
David C. Grabowski, PhD
Harvard Medical School
Balancing of LTC
• LTC system historically dominated by nursing homes
• In recent years, huge growth in delivery of LTC in noninstitutional settings
• HCBS often preferred by consumers/families
• Hope of lower cost HCBS
• Also pushed as a civil rights issue, especially by the disability
community
• Olmstead decision
Rebalancing Medicaid LTC Expenditures
100%
80%
60%
40%
20%
0%
1992
1994
1996
1998
Institutional
2000
2002
2004
2006
HCBS
Source: Thomson Reuters via CMS Form 64
-1 30 °
-120°
-110°
-1 00°
-90 °
-80°
-70°
-60°
Percent of Medicaid LTC
p
g for HCBS
Spending
40 °
40 °
Canada
Pacific
Ocean
Mexico
Gulf of Mexico
-120°
-110 °
-1 30 °
30 °
30 °
Atlantic
Ocean
-120°
-100°
-110°
-90°
-1 00°
-90 °
1997
-80°
-80°
-70°
-60°
30°
Atlantic
Ocean
Pacific
Ocean
Mexico
Gulf of Mexico
2007
-120°
-110 °
-100°
-90°
-80°
30 °
40 °
40 °
Canada
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
K
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
1997
17.5%
38.1%
6.5%
21 6%
21.6%
20.3%
39.2%
26.0%
22.0%
5.6%
18.0%
18.1%
12.9%
20.6%
11.2%
7.8%
17.8%
31 8%
31.8%
24.0%
9.4%
28.1%
28.4%
25.0%
26.7%
29.7%
4.5%
26.3%
2007
28.4%
62.6%
64.0%
30 1%
30.1%
54.3%
51.6%
35.5%
35.4%
32.6%
34.4%
38.3%
39.9%
43.6%
31.4%
33.3%
37.7%
53 4%
53.4%
30.2%
36.2%
51.4%
41.1%
38.7%
33.3%
62.9%
12.7%
44.9%
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
T
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
1997
31.3%
24.9%
16.9%
35 7%
35.7%
24.1%
42.0%
34.2%
27.7%
18.1%
20.3%
23.1%
50.3%
12.5%
35.4%
20.9%
26.4%
9 3%
9.3%
24.0%
31.0%
46.5%
25.1%
35.9%
31.0%
28.3%
38.6%
2007
45.0%
37.6%
45.3%
39 6%
39.6%
29.6%
72.9%
47.4%
44.9%
25.6%
30.1%
42.5%
72.7%
28.3%
45.6%
34.7%
39.1%
29 9%
29.9%
42.5%
38.6%
28.5%
39.6%
61.8%
41.4%
46.1%
55.7%
Overview
• Home- and community-based services have clearly grown in use
• Gi
Given
nb
budget
d tn
neutrality
tr lit rrestrictions,
tri ti n th
there
r h
has b
been
n a llott int
interest
r t in
establishing that they also save $$$
• Lower per-person cost, but potential moral hazard or “woodwork
effect
effect”
• Challenge of “targeting” services to those at highest risk of
institutionalization
• Review of the evidence on this issue
• Grabowski,
Grabowski D.C.,
D C 2006
2006, “The
The Cost
Cost-Effectiveness
Effectiveness of Noninstitutional
Long-Term Care Services: Review and Synthesis of the Most Recent
Evidence,” Medical Care Research and Review 63(1): 3-28.
Three types of HCBS evaluations
• Randomized, controlled experiments (e.g.,
Channeling)
• Medicaid waiver spending studies
• Capitation (e.g., PACE)
Summary of the literature to date
• Achieving cost savings with HCBS has proven difficult
• Relative to “non-HCBS” comparison, three different types of
research have found:
• HCBS associated with higher costs
• HCBS associated with roughly similar care outcomes
g
quality-of-life,
q
y
• HCBS associated with higher
satisfaction
Are We Asking the Right Question?
• For budgetary reasons, we often ask the question from the title of this session: “Can Greater
HCBS Save Money?”
• The literature suggests no, but we persist with the need to establish cost savings:
• State LTC program officer: “Why would we continue a program that lost
money?”
• Perhaps we should be asking: “What
What are we getting in return for increased HCBS $$$?
$$$?”
• More difficult to answer
• Society provides “nursing home care with little expectation of positive outcomes and
complete
p
certaintyy of increased expenditures.”
p
– Weissert et al.,, 1988 Milbank Q
• LTC “Experts” clearly believe HCBS add sufficient value to warrant further expansion
• 84% of respondents to Commonwealth Fund’s LTC Opinion Leader Survey (N =
1,147) supported further growth of HCBS (Grabowski et al., In press MCRR)
Today’s Session
• Chuck Milligan on cost-effectiveness for dual eligibles:
• Need to consider Medicaid waiver $$$ AND Medicare $$$
• Randy Brown on Cash and Counseling
• What is the most cost effective HCBS model?
• Peter Arno and Deborah Viola on the caregiver workforce
• Recruitment of workers; Consideration of informal caregivers