Long-Term Care Study Award in PA

On January 10, 2007, Pennsylvania State University announced that the Pennsylvania Department of Public Welfare commissioned a research study to be conducted by a team located at Penn State Harrisburg on long-term care in the Commonwealth.

It will be funded by a $1.65 Million grant from DPW, "to develop and implement a plan to explore issues related to current and projected participation in long-term care services" in this state. See: Press Release, $1.65 million grant funds long-term care study (01/10/07).

Through a $1.65 million DPW grant, one of the largest ever awarded to Penn State Harrisburg and its Institute of State and Regional Affairs, the team of faculty and staff researchers will assess the current and projected future need for long-term care services in Pennsylvania and the associated cost of service delivery in the coming years.

Cynthia Mara, associate professor of health-care administration and policy, is the principal investigator for the effort, and Michael Behney, director of the Institute of State and Regional Affairs, is serving as project director. Jacob De Rooy, associate professor of managerial economics and statistics, is co-principal investigator with assistance coming from all the applied research centers in the institute.

The research, which will cover 18 months through June 2008, includes six objectives:

• Production of detailed state population projections by age, sex and race;
• Documentation of social, cultural and other factors in the long-term care environment that affect demand;
• Gauging of consumer choice factors relating to long-term care services;
• Identification of demand for and supply of long-term care services in Pennsylvania;
• Documentation of current and projected costs of long-term care services in Pennsylvania; and
• Development of a predictive model of consumer demand and cost of long-term care services in Pennsylvania.

The grant & study were the subject of a report, Aging population drives new study of long-term care, broadcast on WITF-FM (Harrisburg, PA) on January 19, 2007, for public radio affiliates in Pennsylvania:

* * *Cynthia Mara, an associate professor of health care administration and policy, says the issue is an important one in Pennsylvania, where the 85-plus population is rapidly growing. However, she notes age isn't the only factor to consider. The researchers will examine what types of care exists, as well as what areas are underserved. Mara says she expects the team's work to play a key role in decision making at the state level.

There is much attention lately to the growing need nationally for long-term personal care, seeking innovative solutions to meet such needs.

The current health care system favors institutional caretaking, according to a study recently referenced in an online article Bias in Long-Term Care Favors Nursing Homes, Government.

The National Bureau of Economic Research performed that study & also issued a report in 2006 entitled "Medicaid Crowd-Out of Private Long-Term Care Insurance Demand: Evidence from the Health and Retirement Survey" (NBER Working Paper No. 12526).

The report begins with a summary of its key findings:

This paper provides empirical evidence of Medicaid crowd out of demand for private long-term care insurance.

Using data on the near- and young-elderly in the Health and Retirement Survey, our central estimate suggests that a $10,000 decrease in the level of assets an individual can keep while qualifying for Medicaid would increase private long-term care insurance coverage by 1.1 percentage points.

These estimates imply that if every state in the country moved from their current Medicaid asset eligibility requirements to the most stringent Medicaid eligibility requirements allowed by federal law -- a change that would decrease average household assets protected by Medicaid by about $25,000 -- demand for private long-term care insurance would rise by 2.7 percentage points.

While this represents a 30 percent increase in insurance coverage relative to the baseline ownership rate of 9.1 percent, it also indicates that the vast majority of households would still find it unattractive to purchase private insurance.

We discuss reasons why, even with extremely stringent eligibility requirements, Medicaid may still exert a large crowd-out effect on demand for private insurance.

The long-term health care system forces the elderly into nursing homes -- the only long-term care option covered by Medicaid -- opines Dr. Ira Rosofsky, a psychologist who practices in nursing homes and who is working on a book about caring for the elderly.

In his opinion/editorial "Escape from the Nursing Home", published in the New York Times on January 17, 2007, he urges innovative thinking:

Seventy-five thousand dollars is the average yearly cost of living in a nursing home, whether you pay out of pocket, whether you have long-term-care insurance, or whether you’re on welfare and your stay is paid for by Medicaid. (In 2005, Medicaid paid an estimated $54 billion of the $122 billion national expenditure on nursing homes.) * * * But for long-term care, couldn’t we imagine a better way to spend that $75,000? * * *

[T]hree frail elderly people could share an apartment and a 24-hour aide and, by pooling the cost, have more than $58,000 left over among them for food, clothing, shelter, physical therapy and even fun and frolic.

Crisis entry of an elderly person into a nursing home that becomes residence long-term "grossly violates" the "accepted gold standard" that health care should provide services in the least restrictive manner, he says. "We are faced with a public health system that resists innovation, but the sheer size" of the baby-boom generation "may force the issue."

Such are the long-term care issues that the Penn State Harrisburg Study Team will be challenged to assess and explore.