How Does A Fee For Service State
Respond to the Need for Care
Integration?
Robert Applebaum
Scripps Gerontology Center
Miami University
American Society on Aging
April 2011
Ohio Allocation of State-Only General Revenue Funds,
2008 (about 22 billion dollars)
Medicaid 24%
Higher Educ. 12%
Human Services
27%
General Gov. 8%
Corrections 8%
Local Government
5%
Education 40%
Who Are the Medicaid Consumers in Ohio?
Aged Blind &
Disabled
20%(little
managed care)
Families, Women &
Children
80% (All managed care)
68%
Source: Health Policy Institute of Ohio. Ohio Medicaid basics 2009
32%
Ohio Medicaid Spending by Major Categories,
2008 ($13 Billion)
Hospitals
26 Cents
Nursing
Facilities
19.6 Cents
ICFDD
5.7
Cents
Pres.
Meds
8.7
Cents
Breakdown approx 55% acute costs
45% long-term care
HCBS
Waivers
10.7
Cents
Physicians
8.7 Cents
Adm.
3.1%
All
others
17.4
Cents
Ohio’s Medicaid Challenge (s)
 No question that we have to make major changes--
 Problem is we have multiple Medicaid challenges and there may
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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 longterm 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.
Problem # 1 Higher Use and Costs of Nursing
Homes
 Ohio uses nursing homes at a higher rate then most
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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%.
Ohio's Total Medicaid Expenditures for Facilities and HCBS
(All Individuals with Disability)
Ohio's Medicaid Expenditures for Facilities
and HCBS, 2009
Percent Distribution of Ohio Medicaid Long-Term Services and
Supports Expenditures for Facilitities and HCBS Over Time
100%
90%
21%
23%
27%
30%
30%
32%
73%
70%
70%
68%
80%
32%
70%
68%
60%
50%
40%
79%
77%
30%
NF & ICFDD
HCBS
20%
10%
$4.85 Billions of dollars
0%
2004
2005
2006
NF & ICFDD
2007
2008
HCBS
2009
Medicaid Expenditures for LTCSS, 2009
(in Millions of Dollars)
Developmental Disabilities
Physical/Cognitive
NF
$2,544 (80%)
ICFDD (44%)
$744.2
HCBS Waivers
PASSPORT
Ohio Home Care
$341.0
$196.9
Transitions Aging Carve-Out
$44.1
Assisted Living
$19.4
PACE
$22.5
Choices
Individual Options
Level One
$807.7
$58.4
Transitions Developmental
Disabilities
$68.2
$7.0
Total HCBS waivers $631.2 Total HCBS waivers
$934.3
Medicaid Utilization of LTCSS, 2009
Physical/Cognitive
NF (56%)
49,650
Developmental Disabilities
ICF (24%)
7,299
HCBS Waivers
PASSPORT
Ohio Home Care
26,649 Individual Options
7,692 Level One
14,326
5,702
Transitions Aging Carve-Out Transitions Developmental
2,888
1,573 Disabilities
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)
Placement at 6 months
(1974)
(1259)
Diversion
Transition
(percent)
Home/Community
AL
NF
Deceased
63
3
17
17
53
14
23
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 LongTerm 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), 2009
Type of Facility or Program
LTCSS Health-Care Total
Acute care cost/Total
cost
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
Capitated rate
$2,645
PACE
Choices (22%)
$1,500
$432
$1,932
Individual Options (12%)
$4,698
$639
$5,337
$854
$451
$1,305
$1,968
$2,653
$4,621
Level One (35%)
Transition Developmental
Solutions to Problem # 2
 Develop a plan to better integrate acute and long-term care and
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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
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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.