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14 Jun 2018

Reining in the Cost of Care: California Is Expanding Options for People With Dementia—but Falling Short of the Need

Written by  David Gorn, CALmatters
Sharron Evans and her nephew, Rob Lyman, at the assisted-living facility where she resides. Sharron Evans and her nephew, Rob Lyman, at the assisted-living facility where she resides. Robbie Short/CALmatters

Rob Lyman of didn’t know what to do.

The Redwood City resident was helping his aunt, Sharron Evans, who had early-onset Alzheimer’s disease and needed constant supervision. A former teacher, she had run out of money and had no income. She qualified for government health-care assistance, but it appeared she’d need to go to the only setting that would be covered: a nursing home.

“Basically, that’s a hospital setting, and that was our only choice,” Lyman said.

To him, that didn’t make sense.

“My aunt just needed a safe place to be; there was nothing physically wrong with her,” Lyman said. “She didn’t need that level of care. It’s inappropriate. It costs the state a lot of money. But this is what people do. That’s the default choice.”

The baby boomers are aging. By the end of the next decade, 11.1 million Californians will be 60 or older, and the number of people 85 and older will jump 37 percent, to the 1 million mark, according to state officials. One in six Americans is expected to develop dementia, and care can be expensive enough to force even middle-class families into poverty and onto the public payroll.

For low-income seniors who can’t afford care at home and don’t need the full medical services of a nursing facility, the state’s few options aren’t enough to meet demand. A middle-ground choice—assisted living—requires special permission under government rules and is available to fewer than 4,000 Californians, although state health officials and lawmakers are both proposing increases. Taxpayers currently pick up the more-expensive nursing-home tab for more than 20,000 people who may not need it, by one advocate’s estimate.

Evans, now 69, was lucky enough to land a permitted spot in a Sacramento-area assisted-living home after nearly a year’s wait. The cost didn’t matter much to her or Lyman, because it was paid by Medi-Cal, the state’s version of the federal Medicaid program. The lower price tag for assisted living saves the state money, while also providing a more home-like setting and the right level of care for Evans.

For more than a decade, the state Department of Health Care Services has been trying to address the need for more-appropriate, less-costly care. But Medicaid pays only for what is “medically necessary,” such as nursing-home care, unless states ask for waivers. The state budget deal struck last week would provide administrative costs for a waiver to cover an additional 2,000 assisted-living slots.

That’s not enough, said Assemblyman Ash Kalra, a Democrat from San Jose. Kalra’s Assembly Bill 2233 proposes adding nearly 13,000 more, to cover a total of 18,500 people over the next five years. That would basically triple the number of Medi-Cal recipients with access to assisted-living care—assuming waivers, which last five years, can be secured.

“We’re hitting a crisis point with our senior care,” Kalra said. “It costs us twice as much for skilled nursing care.” His bill, which has no organized opposition, passed the Assembly and is now in the Senate.

The federal and state governments each pay roughly half of Medi-Cal expenses. A legislative staffer pegged savings for the state’s share at slightly more than $23 million over the five years, once all 18,500 patients are placed in assisted living. According to the Department of Health Care Services, which oversees Medi-Cal, the state’s share of the average cost for assisted living is about $22,000 a year per person—roughly half the $42,000 annual cost of a nursing-home.

“I have visited skilled-nursing facilities, and the nurses … told me that many of the patients don’t need that level of care. So we could be saving money for the state dramatically,” Kalra said.

According to the Department of Health Care Services, California has about 53,000 Medi-Cal patients in long-term institutional care, such as skilled-nursing facilities. A legislative analysis shows an estimated 11,000 of them have lower-care needs and could be fine in assisted living.

That figure could actually be twice as high, said Mark Cimino, who runs assisted-living homes in the Bay Area and around Sacramento, including the one where Evans lives. He said assisted-living facilities provide a wide range of care that could serve upward of 20,000 Medi-Cal patients who are now in nursing homes.

California’s first waivers, approved in 2004, covered about 1,000 people. That figure doubled in 2009 and nearly doubled again to about 3,700 in the most recent period, which runs out in March 2019.

“There’s a huge trajectory here,” Cimino said. “The question is: Is the expansion of the waivers enough?”

And there’s the human side of the equation, he added: “The assisted-living community is more home-like,” he said. “No one wants to spend much time in a (skilled-nursing) unit.”

The state “has specifically worked to expand access to assisted-living services,” said Department of Health Care Services spokeswoman Carol Sloan.

It’s hard to go any faster, she said by email, because the state has to check for “requirements, monitoring and oversight responsibilities, staffing, adequacy of available provider network and other resource limitations” before requesting more waivers.

As for the nursing-home industry: “If a resident can be shifted to a lower level of care, we think that’s a good thing,” said Deborah Pacyna, spokeswoman for the California Association of Health Facilities, a trade group. “We always support people getting the appropriate level of care for their needs.”

That won’t hurt business, she said: “The boomers are coming.”

For Rob Lyman, a move toward assisted living is a no-brainer.

“If the state, and we as a community, are going to provide assistance, we have to do it in a cost-effective way,” he said. “Putting people in skilled nursing when they don’t need it—that’s not good stewardship of public dollars.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

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