FY 2009 Institution vs Community-FY 2009 Breakdown of Medicaid Services for Older and Younger Americans with Disabilities

Bob Kafka of ADAPT with civil rights attorney Steve Gold outside of Access Living during a housing conference

Steve Gold is a civil rights attorney based in Philadelphia.  He has collaborated and still collaborates with Access Living on disability rights cases, including the pending “Colbert” case that was filed on behalf of people with disabilities in nursing homes in Illinois.  Gold issues regular bulletins on disability issues.  This bulletin focuses on Medicaid long-term care spending, looking at the break down of institutional spending versue community based spending.  Twenty years after the Americans with Disabilities Act, and 11 years after the Olmstead Supreme Court ruling, many states, including Illinois, still disproportionately fund institutional care.

Steve Gold Information Bulletin #321 (8/2010)

 Each State’s FY 2009 Medicaid expenditures provide extremely helpful information to analyze your State’s distribution of its Long Term Care expenditures between its Institutional versus Community-Based Services.

Follow the Medicaid money and you’ll see how committed your State really is to ending unnecessary institutionalization of older and younger Americans with disabilities.  How your state allocates its expenditures demonstrates its commitment to provide the elderly and younger persons with disabilities a real choice between unnecessary institutionalization and living in the community.

Let’s repeat – “show us the money” and where your state spends it, and you can see how much your state respects both the ADA and the Olmstead decision.  Remember that the Supreme Court in 1999 – more than ten years ago -told states to end unnecessary institutionalization!  The FY 2009 data was just released by Thomson Reuters, an independent contractor which compiles the data submitted by each State to the federal funding agency.

How much progress has been made?  Let’s compare the past five years.

In FY 2004, States spent 74.9% of their total Medicaid LTC funds for “Aged/Disabled” [i.e., older and younger Americans with disabilities] Services in nursing homes, and 25.1% in the community.

In FY 2009, States spent 66.2% of their total Medicaid LTC funds for “Aged/Disabled” Services in nursing homes, and 33.8% in the community.

In dollar terms, in FY 2004, States spent about $46 billion on institutional care and $15 billion in the community.  In FY 2009, States spent about $50 billion on institutional care and $26 billion in the community.

The good news is that there was an 8% shift towards the community in those five years.  The bad news is that ten years after the Olmstead decision, States are still spending nearly twice the amount of Medicaid LTC funds on nursing homes than on services in the community, despite the overwhelming survey data showing that people want to stay at home.

There is nothing magical about where your State allocates its Medicaid money.  Tomorrow States could turn the FY 2009 upside down and spend 66.2% in the community instead of in nursing homes – IF States wanted to do so. 

Congress and CMS has given States enormous flexibility during the past five years but most States have not taken advantage of the options.

Why has the change been so slow?  State legislatures and Governors seem to be very beholden to the nursing home industry, which definitely knows how to play the political process much better than elderly and disabled advocates.

Until the political pressure from the people with disabilities – regardless of age- increases, the nursing home industry will prevail.  Let’s look at how your State did in FY 2009 with its Medicaid Long-Term Care expenditures for older and younger Americans with Disabilities:

Some States have consistently done very poorly and have been consistently below the national average.  Some States conversely been consistently above the national average.  Some States seem ripe for class action Olmstead litigation.

What sanctions are CMS and OCR planning for those States that have both lengthy waiting lists for community-based services and spend disproportionately on nursing homes?

In the listing below, the first number is the percentage spent on nursing home services.  The second number is the percentage spent on community-based services.

National …………………66.2% ………… 33.8%

Alabama ………………….85.1%  …………14.9%  

Alaska …………………. 44.3% ………….55.7%

Arizona ………………… 78.6%…………..21.4% *

Arkansas………………… 71.0 …………..29.0

California………………. 44.9 …………..55.1*

Colorado………………… 56.4……………43.6

Connecticut……………….75.7……………24.3

Delaware………………….87.5……………12.5

D. C……………………..54.4……………45.6

Florida…………………..79.5……………20.5

Georgia…………………..74.0……………26.0

Hawaii……………………80.8……………19.2*                    

Idaho…………………….56.7……………43.3

Illinois………………….80.2 …………..19.8

Indiana…………………..83.8 …………..16.2

Iowa……………………..70.4 …………..29.6

Kansas……………………60.6……………39.4

Kentucky………………….80.7 …………..19.3

Louisiana…………………67.5……………32.5

Maine…………………….75.5 …………..24.5

Maryland………………… 85.1……………14.9

Massachusetts…………..64.1……………35.9*

Michigan………………….78.5……………21.5

Minnesota…………………42.5……………57.5*

Mississippi……………….84.2……………15.8

Missouri………………….66.3 …………..33.7

Montana…………………..66.1……………33.9

Nebraska………………….75.1……………24.9

Nevada……………………65.9 …………..34.1

New Hampshire……………..82.3……………17.7

New Jersey………………..78.8……………21.2

New Mexico………………..31.2……………68.8

New York …………………61.9……………38.1*

North Carolina…………….57.2……………42.8

North Dakota…………….. 89.8……………10.2

Ohio……………………..75.9 …………..24.1

Oklahoma………………… 67.6……………32.4

Oregon………………….. 43.8……………56.2

Pennsylvania…………….. 82.1……………17.9

Rhode Island…………….. 95.6…………….4.4*

South Carolina…………… 72.1……………27.9

South Dakota…………….. 86.0……………14.0

Tennessee……………….. 91.1…………….8.9*

Texas…………………….55.5……………44.5*

Utah……………………..80.4……………19.6

Vermont…………………..67.5……………32.5*  

Virginia………………….64.9……………35.1

Washington ……………….38.0 …………..62.0

West Virginia……………. 74.5……………25.5

Wisconsin ………………. 74.0 …………. 26.0*

Wyoming ………………….76.6……………23.4

* Data may not include certain LTC expenditures with managed care or 115 waiver data not available.

 Steve Gold, The Disability Odyssey continues

To learn more about Steve Gold or subscribe to his mailing list, click here

Illinois budget cuts threaten independence of people with disabilities

A few weeks ago, Illinois announced millions of dollars in cuts to programs that support people with disabilities living independently in their own homes and communities. Statewide, the community is organizing to stop the cuts.  Community based programs support the independence of people with disabilities and make fiscal sense — community services cost less than institutional services.

Below is a letter published in the Chicago Tribune on July 12.

The Chicago Tribune Voice of the People ran the piece below on Monday, July 12, 2010

Common sense, people with disabilities, under attack in Illinois.

Illinois’ progress toward a more cost effective and just approach to serving people with disabilities and their families took a major blow last week when Governor Quinn announced more than $300 million in budget cuts to programs for the disabled. That’s a full 20 percent of the total reductions in the state budget. The Governor is faced with balancing many difficult budget demands, but this decision hurts both taxpayers and people with disabilities.

When is a budget cut not a budget cut? The answer is when the least costly and most effective services are cut, leaving only outmoded, expensive and politically entrenched approaches.

In this case, that means programs that serve people in their own homes and in  community settings are being slashed while the state continues to pour money into  expensive nursing homes and state-run institutions that keep people with disabilities trapped in a state of unwanted and unnecessary dependence. That defies common sense.

Community-living and support options work and are paying off for taxpayers. We know now that today everyone can be supported in his or her community.

And we know that programs that serve people in their community save money. A 2010 report by the Illinois Human Services Commission found that Illinois provided community-based mental health services to 175,000 people at a cost of $390 million in FY 2010, half the cost of $640 million for only 15,000 nursing home beds for people with disabilities who do not require daily nursing.

Illinois is one of the few states that waste money on state-operated institutions and nursing homes. Taxpayers spend a staggering $162,000 per person for the 2000 residents of eight large state-operated institutions.

We are your families, neighbors and friends. We want, and have a right, to remain in our communities. We do not want to be forced into nursing homes or state institutions. As we approach the 20^th anniversary of the Americans with Disabilities Act, this budget rolls back civil rights.

We need to keep programs that work and slash those that don’t. We ask the governor and the legislature to rescind these cuts and support:

1. Reforming the wasteful institutional bias in state spending for the disabled
2. No caps on home service hours, and adequate funding to meet demand.
3. Closing down the state operated institutions serving the developmentally disabled and investing those resources in community services.
4.   New revenue to be applied to cost-effective community and in home services.

 

Ann Ford, executive director, Illinois Network of Centers for Independent Living, Springfield

Charlotte Cronin, executive director, Family Support Network, Peoria

Tony Zipple, CEO, Thresholds, Chicago

Why I oppose managed care

The author of this post is Tom Wilson, a community development organizer and health care advocate

As an organizer supporting home and community services and high quality affordable health care with equal access for all at Access Living for many years, I have seen advances and setbacks for people with disabilities in Illinois based on state policy decisions related to Medicaid. In the current Illinois budget crisis (which is partially due to many years of financial mismanagement and a structural deficit predating the economic crash) Illinois is in the midst of the worst financial circumstances for state government since the Great Depression.  Because of this crisis, Illinois has proposed cuts in state services.

People with disabilities who are on Medicaid, now confront this crisis through various cuts in services.  Medicaid Managed Care is one form of these cuts.  The state is proposing to put 38-40,000 people in six counties into its new Medicaid Managed Care program.  This proposal would hand most of the current taxpayer money spent on the healthcare for people with disabilities over to two insurance companies (known as Managed-Care Organizations).

The Managed-Care Organizations would then be responsible for paying for all of the health care services of their enrollees. This program would not be voluntary but would force people to choose between the two Managed-Care Organizations (MCOs) or Health Maintenance Organizations (HMO) selected by the state.  Or, if people with disabilities do not choose one, they will be assigned to one of the organizations.  The proposal would aggregate the Medicaid money budgeted and use it to provide health care, case management, long term care and all other therapies that are currently covered by Medicaid.

The state’s goal is to save $200 million over five years.  That figure comes out to a $1,000 per year per person cut in spending.  The medical loss ratio, that is, the money actually spent on health services has been set at 88%.   The remaining 12% is put in to the pockets of the insurance companies in the form of case management, provider recruitment expenses, administrative costs, and profit.  That 12% represents money that is currently going toward health care for people with disabilities that will no longer go to the people who need it. The insurance companies (HMOs) and the state will argue that with proper case management they will reduce enough expenditures, such as emergency room visits, to cover the 12% spent on administration and profits, plus the $200 million that the state wants to save.

Past experience with Medicaid Managed Care shows many drawbacks to this approach.  The problems that have been observed in other states managed care programs have included being assigned a primary provider that is not easy to get to; limited access to specialty care, especially for rare conditions; and denial of services that the consumer desires for maintenance of health such as rehabilitative therapy.  In addition to limited coverage, in other states that have implemented managed care programs many people have been dropped completely from their healthcare plans because they were too costly and they required “too much care.” HMOs have dropped seniors in Medicare managed care and poor people in Medicaid managed care programs because such consumers limited their profit margins.  

Research confirms that Medicaid Managed Care has, in many cases, not been successful. An article from March 2005 in Academy Health by Bonnie Austin titled “Managed Care Mandates Fall Short of Curbing California Medicaid Costs,” quoted results from a large population study done by Mark Duggan and researchers from the University of Maryland and the National Bureau of Economic Research. The study states, “Our findings suggest that managed care contracting reduced the efficiency of the Medicaid program in California.  In fact, Medicaid spending appeared to increase by almost 20% following the shift to managed care and persisted long after the mandates first took effect.”  The article also importantly notes that “The researchers also found that the switch from FFS (Fee for Service) to managed care did not lead to significant improvements in health outcomes.”

Although the  aforementioned study only examined managed care in California, The Journal of the American Medical Association (JAMA) conducted a study in 2004 that examined how the introduction of mandated managed care affected enrollees across 15 states.  Some of the specific downsides to mandated managed care included: limited choice of primary care physician, (some consumers have spent years identifying physicians they trust); extremely short visits with their primary care physicians (the physicians are given a financial incentive to see more patients per day); inability to prescribe medications and treatments that are not on the enrollee’s plan; inability to see highly specific specialists who are not on the enrollee’s plan; strict limits on physical therapy and counseling services; increased delays in obtaining appointments with physicians; and often, certain emergency room care is not covered at all.  It is also important to note that in the JAMA 2004 study, the groups observed were often specific “carve outs” (pregnant women, children, etc.) that required less health care on average than people with disabilities.  The aforementioned point is important because what are perceived as minor inconveniences for specific groups of people receiving care could potentially be greater problems for people with disabilities.  For example, expanded choice of physicians is extremely important for people with certain disabilities so they can be sure to find a physician whose office is accessible. 

The question of profit is a major one in examining Medicaid managed care. The HMO’s main motivation is to make money. The member’s health is a secondary consideration.  There are circumstances where the HMO’s desire to make money may coincide with the member’s goal of good health.  But prior experience has shown us that these two goals can also be totally opposed to each other. For example, Suzie, who has cerebral palsy, requires regular physical therapy to retain strength and range of motion to care for her child, but the HMO has determined it can only afford half as much therapy as Suzie requires.  Any healthcare delivery program that fails to put the patients’ health as their top priority cannot be the correct choice for our state.  Healthcare for people with disabilities is more than a service that is provided by a corporation.  Healthcare is a  basic human right which should involve only the patient and one’s physician. 

Much of the difference is due to competing conceptions of health care. Insurance companies and Wall Street see health as a commodity that has to be bought and sold so investors can gain  maximum profits. Many health care advocates and health care consumers see health care as a human right. Under the commodity formulation you only get as much health care as you can afford or the state will pay. As a human right, health care is guaranteed for all medically necessary treatments and all individuals are treated equally in their access to health care.  As a right, the society is responsible for publicly raising the money to fund health care and the money is used primarily for services, (Medicare has a 3% overhead).   Systems that treat health as a commodity use vastly larger sums for administration, avoid covering people with potentially costly conditions, and prioritize profits.

Research has shown that in the United States, not-for-profit healthcare providers get better outcomes  (“Quality of Care in Investor Owned vs. Not-for-Profit HMOs” by Himmelstein, Woolhandler, Hellander and Wolfe).  This is also true in comparing for-profit and not-for-profit hospitals and nursing homes.   Global comparisons also show that countries that guarantee health care to their citizens get better outcomes  including longer life spans and they spend significantly less to get superior results.

These objections are all very important but, arguably just as important is, the question of consumer control; a central tenet of the disability rights movement.  People with disabilities have often had decisions made for them. They have been locked in institutions against their will and they have even been sterilized. More recently, people with disabilities have been denied medical treatment because their lives were not valued highly enough by their families and  doctors.  There still exists great stigma about disability throughout society and thus people with disabilities mistrust  HMOs to make the best decisions about their health care needs.  People with disabilities have good reason to be suspicious of others making their healthcare decisions for them and this suspicion only grows when a profit interest is involved.  No one has a better understanding of their disability and how it impacts treatment needs and options more than the person with a disability.  People with disabilities do need to have professionals clearly explain the options available to them but the person with a disability or their chosen representative needs to be in charge of their final health decisions.  Anyone who comes between a person with a disability and their chosen doctor is potentially a problem to achieving the desired outcome of good health. Managed Care is, by its nature, all about putting limitations on this consumer control and the amount of health care that a person can receive and that is simply not acceptable.