Nursing home fix could backfire

/Home/c. Financial Information for Nursing Home Care/Fixed Income Management and Nursing Homes

Nursing home fix could backfire

At-home health care costs the state less than nursing homes, but it also may attract more Medicaid patients.

By STEPHEN NOHLGREN

TALLAHASSEE - Faced with voracious health care costs, Florida wants to change how it cares for its sickest elders.

Instead of having Medicaid pay directly for costly nursing homes, legislators want to hire private HMOs to care for people at a lower, fixed price. The HMOs vow to keep people at home and use nursing homes as a last resort.

Gov. Jeb Bush and many legislators have embraced the idea as a humane, money-saving venture. But bureaucrats hashing out the details have encountered a thorny snag: Managed care might end up straining state coffers by working out too well.

Right now, tens of thousands of families spurn Medicaid because they don't want their relatives living in nursing homes. Offer them at-home care - courtesy of taxpayers - and they might turn up in droves.

"If we ever put out a sign and say, "We have these services to help you stay at home,' I think the phones would ring off the hook," says Debra Shade, director of Neighborly Care Network, which offers meals on wheels, adult day care and other at-home services in Pinellas County.

With Medicaid gobbling state budgets nationwide, nursing homes make tempting targets. They are so expensive that even middle-income people qualify for state aid. Two-thirds of Florida's nursing home residents are on Medicaid, which costs taxpayers more than $2-billion a year.

Managed care companies offer a tantalizing alternative: For one payment - say $2,000 a month - we'll keep frail people in their homes. We'll oversee their medications, install wheelchair ramps, get them to the doctor, even clean their house. When they absolutely need a nursing home, we'll shoulder that bill, as well, but on balance we'll make money.

With Medicaid now paying about $3,800 a month for nursing home care, $2,000 or so for an HMO looks good.

The Legislature directed the Agency for Health Care Administration to draft a plan this year to turn all clients eligible for nursing homes over to managed care organizations. The project would start as an experiment in the Interstate 4 corridor or some other region of Florida and, if it works, expand statewide.

But what if home-based care proves too attractive? What if thousands of new clients come out of the woodwork?

"That is the fundamental question. We are grappling with that," said Beth Kidder, an agency analyst. "We are pretty sure people are keeping out of (Medicaid) long-term care because they don't want to be in a nursing home."

If everyone wants at-home care, the potential caseload could be huge. Medicaid supports about 50,000 nursing home residents now. But that pales beside the numbers who might qualify for Medicaid if they tried.

Dr. Richard Olan, a St. Petersburg gerontologist, estimated that 200,000 or so Floridians are sick enough with Alzheimer's disease to qualify for nursing home care - and that's just one debilitating condition.

In theory, many of those people should pay their own way because their income or assets are too high for Medicaid. In practice, elder law attorneys often find legal ways to rearrange finances so middle-class people can meet Medicaid's financial thresholds.

Opening Medicaid's doors to more at-home services could, indeed, attract a flock of new clients, health secretary Alan Levine acknowledged this month, but Florida can't afford to stand pat. Medicaid takes up one-fourth of all state spending and is growing 15 percent a year.

If nothing is done, he said, education, transportation, criminal justice and environmental programs will suffocate.

With any luck, Levine said, managed care will save the state enough on individual clients to compensate for larger caseloads. More people will get service, and they will get it where they want it: at home.

That's what happened in other states that relied on managed care, said Dr. Jennifer Salmon, a long-term care expert at the University of South Florida. Caseloads initially jumped "because there are huge unmet needs."

"But then it settles down and in the long run, it overall keeps costs down."

Why does managed care save money? Flexibility and coordination.

For years, the state has funded a hodgepodge of at-home programs, including day care, respite for caregivers and assisted living. Each has its own rules and funding limits. Waiting lists are common. No single program serves all of a client's needs.

Managed care would coordinate these services with one caseworker at the family's side, proponents say. A person who needs to rehabilitate a broken hip, for example, would not linger in a nursing home a day longer than necessary. The case manager would smooth his way home with a home health aide, meals on wheels or whatever it takes.

"The setting and services can change between Friday morning and Monday afternoon," said Mike Radu, spokesman for Evercare, a nationwide HMO that already operates at-home programs in Florida.

Just monitoring medications can save loads of money. In one project, Evercare reduced clients' pill intake an average of 20 percent.

"A lot of people have a laundry list of medications; it's ridiculous," said Robert Schemel, president of American Eldercare, a Medicaid HMO based in Delray Beach. "We contact the primary physician and say, "Doc, are you aware your patient is going to six other physicians and getting all these meds?' In most cases, they are not even aware of it."

Not all managed care would come from HMOs. One experiment starting next year would let nonprofit agencies like Neighborly Care Network and Pasco County's CARES program take a crack at managing people at home for a fixed price.

To dampen the effect of people coming out of the woodwork, Florida may tighten some of Medicaid's physical requirements, Levine said. Some people who now qualify would be turned away.

Arizona did that 15 years ago, when it turned all of its nursing home and at-home programs over to managed care. Now about 60 percent of its frail elderly stay at home or in assisted living homes.

The key was making sure only the sickest people qualified for Medicaid, said William Weissert, a Florida State University professor who studied Arizona.

"The state was very judicious about who it accepted," he said. "The average age was higher than any other program (in the country) and the acuity level was higher."

Tony Marshall, a lobbyist for Florida's nursing home industry, noted that Arizona was heavily dependent on nursing homes when its managed care program began. There was plenty of leeway to shift people into assisted living and at-home care.

Florida has already squeezed the fat out of nursing home care, he said. Only about 2.5 percent of Floridians over 65 live in nursing homes, compared with 5 percent nationally.

Most Floridians in nursing homes are too sick to live anywhere else, Marshall said. The state does need better at-home care but shouldn't expect to save money. HMOs will largely fill up with new clients, he said, not with today's nursing home residents.

© 2006 • All Rights Reserved • St. Petersburg Times
"If you expand eligibility to (at-home) services, you will have a spike in Medicaid spending, not a decline."