Can We Afford Home & Community-Based Services?

So who wants to spend their final days in a nursing home? Please raise your hands.

I think we all hope that when our time comes we will be in natural repose – whether that’s flying down the road with a gang of over 75 year-old Harley riders or in our own bed, surrounded by those who have made our life worth the living.  What many of us also hope is that we never be a burden on others; and if that means we require care in a nursing home, we are very grateful that care exists.

The “consumer preference” side of the inertia that has been driving the social and political push toward home & community-based services (HCBS) is plain enough.  The portended cost savings side, however, has yet to be supported with hard evidence.  In fact, as reported by Jenni Bergal in her May 24, 2012 article, States Encounter Obstacles Moving Elderly and Disabled Into Community, published in Kaiser Health News, the 2007 CMS initiative, Money Follows the Person, has been a disappointment to many.

As reported there, the demonstration was initially anticipated to place apx. 35 thousand Medicaid recipients in HCBS settings within the first five years – while the actual amount has been 22.5 thousand (36% below what was targeted).  Although $4 billion has been authorized by Congress to underwrite costs of the program it is estimated there currently exist 900,000 individuals living in institutions that qualify for transfer to HCBS settings under the program.  In addition to falling short of volume and outreach expectations, it is still not clear from available research whether the program is capable of providing an overall aggregate cost savings.

There are two general areas representing obstacles to success: affordable housing and operational support.  Effective HCBS models very often require that individuals transition to a new setting because their current home does not adequately accommodate accessibility and permit in-home supportive assistance.  Affordable housing for the elderly is, of course, one of the greatest social challenges that we are now facing, irrespective of HCBS.

Within the area of operational support there are two distinct categories: lack of what I will call technical support (e.g., timely access to direct caregivers, such as physicians, nurses and therapists; inability to most effectively leverage available remote monitoring and assistance technology; and inadequate management of medication);  and individual support (e.g., both access to community-based service supports and/or availability of informal caregiver support, such as families). 

The Affordable Care Act has a number of specific programmatic initiatives in support of HCBS, including: Community First Choice (Sec. 2401), State Option to Provide Health Homes (Sec. 2703), Money Follows the Person Continuation (Sec. 2403); Independence at Home Program (Sec. 3024); Community Based Care Transitions Program (Sec. 3026); Community Health Teams (Sec. 3502); and Community Based Collaborative Care Networks (Sec. 10333).  Additional support of HCBS initiatives is coming from the Center for Medicare and Medicaid Innovation, as well as numerous state Medicaid programs.

Many senior housing and care providers that have historically provided post-acute and long-term care within the confines of institutional settings have been committing substantial resources to advance strategic HCBS initiatives.   Again, their efforts are reflective of both the perceived preferences of their targeted market, as well as recognition of the trending shift in available public funding.  And I do believe there is merit in having a sense of urgency behind such efforts because of the potential rewards that first mover advantage may bring as integrated delivery models drive markets toward greater consolidation.

Based on the available results of the Money Follows the Person demonstration, however, there is at least anecdotal evidence in support of incorporating additional risk mitigation into those efforts.  It would be prudent to ensure development plans are assessed and modified periodically as additional information becomes available about future HCBS initiatives.  To the extent those initiatives can provide organizational Option Value that can reduce the potential cost of market repositioning in reaction to what is learned over time, the additional up front investment is probably a good idea in this environment.

I know there are some very forward thinking and experienced senior housing and care providers out there who are already well down the road to building the social, community and provider infrastructure that it takes to develop successful HCBS – regardless of what future research shows.  Hopefully, one of those folks will stop by the Pub and share with us what they have already learned!

  ~ Sparky