Budget deficit gives urgency to changes in long-term health care

Years of studies have said the state could save hundreds of millions of dollars by providing care for the elderly at home rather than in institutions.

In the face of a massive budget deficit, a panel of lawmakers is now ready to press the issue.

“This needs to happen now, let’s get this going now,” Sen. Gayle Slossberg, D-Milford, co-chairwoman of the Commission on Enhancing Agency Outcomes, said this week.

But achieving the savings-up to $900 million a year as more people will need care as the state’s population ages-will require significant changes in how the state uses Medicaid money to care for the elderly.

To get those changes under way, the commission is creating a “blueprint” for Republican Gov. M. Jodi Rell and both major-party gubernatorial candidates of what needs to be done, both by Rell in the next few months and by the next governor as soon as he takes office.

“A lot of what will get accomplished lies in their hands,” she said, adding a letter outlining the commission’s recommendations will be in Rell’s and Republican Tom Foley‘s and Democrat Dan Malloy‘s mailboxes in the next few days. “Let’s get a big money saver to the front burner. We are pushing people into a system that is more expensive.”

State government dedicated just over half of its Medicaid funding and 13.6 percent of its entire budget, almost $2.5 billion, to long-term care in fiscal 2009. That outlay was spent on just 40,000 Medicaid clients, roughly 1 percent of the population, the state’s Long Term Care Advisory Council says.

Almost as many Medicaid clients receive community care, but at roughly half the cost.

A report by the Connecticut Commission on Aging says that not only do people prefer to be cared for in their homes, but it also costs $41,735 less than institutional care.

“That’s significant, highly significant,” Julia Evans Starr, executive director of the aging commission, told legislators last week when presenting the report.

The Long Term Care Advisory Council reported in February that 85 percent of people receiving at home care in 2006, or 116,000 people, paid for it without any state or federal assistance. Additionally, 200,000 people received unpaid care at home

Connecticut does have eight community and home-based care programs in place where the cost is at least partially picked up by either the state or federal government, but Evan Starr said many of the Medicaid home programs have waiting lists, “so access is a problem.” Eligibility requirements also are difficult to navigate.

“There is no way an elderly person is going to get through that. They need their hand held,” said Peter Gioia, chief economist for Connecticut’s Business and Industry Association, who also supports long term care reorganization.

Slossberg said the bipartisan letter from commission members to Foley, Malloy and Rell will present them with a laundry list of recommendations. Some of the recommendations discussed at the commission’s last meeting include making it easier to enroll in programs, expanding opportunities and resisting attempts to cut home-care spending.

Evans Starr said that if the state gets fully behind home health care, the number of nursing home beds needed in 2030 could be 25 percent below the current level. But if the state continues its reliance on institutional care, it will need 42 percent more best, an increase of more than 37,000.

David Dearborn, spokesman for the Department of Social Services, said existing home-care programs already are reducing demand for nursing home beds.

“Connecticut has made significant progress in expanding community services for Medicaid-eligible individuals over the years, as evidenced most vividly by the decrease in Medicaid-eligible clients in nursing homes,” he said. The number of nursing home residents on Medicaid dropped in the state by 14 percent from 2001 to 2009, he said, while the number of Medicaid patients receiving home care rose by 45 percent.

Dearborn said spending on nursing homes decreased from fiscal 2008 to 2009 by almost 3 percent, or $33 million.

But Slossberg said the potential exists for much greater savings. “Other states have done this and we have yet to do anything as significant.”

The key, she said, is to get the next governor on board.

Foley and Malloy both agree that there is some money to be saved by diverting people who should be receiving home and community-based care away from institutional care.

“I think nursing homes have become the default treatment,” Malloy said Thursday while touring a health clinic in Hartford. “I think there is a gap. I think there is some people who are receiving inappropriate care at the moment.”

Foley called a transition to home care a “win-win scenario. We can improve the care they receive and save money by moving to community based care providers… The state has to do what makes long-term sense. If there’s an alternative way of caring for people and it’s better care, then that’s a pretty easy decision for the governor to make.”

But Malloy said he thinks the estimated $900 million in savings is overly optimistic given Connecticut’s aging population.

“What we may do is save money by not creating additional nursing home beds,” he said. “There are changes to be made in nursing home care, don’t get me wrong, but do I think that’s going to produce $900 million a year? The answer is no, I don’t. But I have an open mind.”

He said he would oppose cutting funding for nursing homes or for home care.

“I resist cutting both. … I am highly supportive of home care and I am also supportive of nursing home care,” he said.

Foley said it’s been difficult for the state to realize the savings partially because of special interests – including unionized nursing home employees and a politically-active nursing home industry. But he said a shift to home care would open up new opportunities for workers and he industry.

Matthew Barrett, executive vice president of the Connecticut Association of Health Care Facilities, said the 110 nursing homes he represents recognize the need to provide more care in the community.

“There is no question that we need to enhance community choices and options – but there is also no doubt that there will continue to be a significant need for a strong and vibrant nursing home option,” he said, calling a goal of reducing beds by 25 percent “highly speculative.”

Barrett said that goal would result in some 60 homes closing.

“This is completely unrealistic.”

Slossberg said she understands the concerns, but says this could give this industry a chance to diversify the services they provide.
“They will be at the table still,” she said. “We have to start seriously looking at this and see what we can do as a state so we are not starting from scratch when the next governor takes office in January.”