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A state-level analysis of factors associated with nursing home utilization and expenditures

Dissertation
Author: Sarah Elizabeth Fogler
Abstract:
Purpose. This study examined trends and predictors of state Medicaid nursing home users and expenditures from 1997 to 2007 to identify factors of interest to policy makers and government officials interested in rebalancing the nation's long-term care (LTC) system. Design and Methods. State-level data were collected from multiple data sources for each study year. Three separate regression analyses were conducted to examine the effects of socio-demographic, economic, supply, political and programmatic factors on the share of total Medicaid LTC expenditures devoted to nursing home care, rates of nursing home utilization, and rates of nursing home expenditures. Results. The nursing home share of total Medicaid LTC expenditures was positively associated with female labor force participation, and negatively associated with those aged 85 and over, Hispanics, Medicare home health users, Cash and Counseling programs, and democratic governors. Rates of nursing home utilization were positively associated with poverty rates, nursing home beds, and personal care state plan options, and negatively associated with spending on Medicaid home- and community-based services (HCBS). Rates of nursing home expenditures were positively associated with those aged 65 to 84, Hispanics, per capita incomes, nursing home beds, and Real Choice System Change grants, and negatively associated with female labor force participation, poverty rates, HCBS spending, and democratic governors. Implications. Factors that may be amenable to policy intervention aimed at rebalancing the nation's LTC system include nursing home supply restriction and Medicaid program policy. States that reduce bed capacity may experience lower rates of nursing home utilization and expenditures, and those that take advantage of flexible service delivery models like the personal care state plan option and/or the Cash and Counseling grant/demonstration program may experience greater success rebalancing their LTC systems.

Table of Contents

Dedication ...................................................................................................................... i Acknowledgements ....................................................................................................... ii Table of Contents ......................................................................................................... iii List of Tables ................................................................................................................ v Chapter 1: Introduction ................................................................................................. 1 Defining Long-Term Care ........................................................................................ 1 Evidence of Long-Term Care Need .......................................................................... 2 Demographic Changes .......................................................................................... 2 Health Status among Older Adults ....................................................................... 5 Poverty Status among Older Adults ...................................................................... 6 LTC Supply ........................................................................................................... 8 Study Purpose and Significance................................................................................ 9 Chapter 2: Background ............................................................................................... 12 The Medicaid Program ........................................................................................... 12 Recent Changes in Medicaid Long-Term Care Policy ........................................... 14 Medicaid LTC Utilization and Expenditures .......................................................... 19 National Trends in Medicaid Utilization and Expenditures ............................... 19 State-Level Trends in Medicaid LTC Utilization and Expenditures .................. 23 Chapter 3: Literature Review ...................................................................................... 26 Literature Review Method ...................................................................................... 26 Factors Associated with Medicaid LTC Utilization and Expenditures .................. 27 Socio-demographic Factors ................................................................................ 28 Economic Factors................................................................................................ 31 Supply Factors .................................................................................................... 32 Political Factors .................................................................................................. 34 Programmatic Factors ......................................................................................... 35 Chapter 4: Methodology ............................................................................................. 38 New Contributions of Proposed Research .............................................................. 38 Conceptual Framework ........................................................................................... 39 Study Population ..................................................................................................... 40 Measures and Data Sources .................................................................................... 41 Dependent Variables ........................................................................................... 41 Independent Variables ........................................................................................ 42 Analysis................................................................................................................... 46 Chapter 5: Results ...................................................................................................... 49 Trend Analyses ....................................................................................................... 49 Correlation Matrix .................................................................................................. 69 Multi-Variate Regression Analyses ........................................................................ 70 Nursing Home Share of LTC expenditures ........................................................ 74 Per Capita Nursing Home Utilization ................................................................. 75 Per Capita Nursing Home Expenditures ............................................................. 76 Chapter 6: Discussion ................................................................................................ 78 Summary of Findings .............................................................................................. 78

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Study Limitations .................................................................................................... 88 Policy Implications ................................................................................................. 90 Future Research ...................................................................................................... 94 Appendices .................................................................................................................. 97 Bibliography ............................................................................................................. 103

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List of Tables

Table 1. Independent variables, data sources, measurements, and predicted association with the dependent variables Table 2. Descriptive statistics for state-level factors, 1997 and 2007 Table 3. Rates of state-level nursing home utilization by age group, 1997 to 2007 Table 4. Rates of state-level nursing home expenditures by age group, 1997 to 2007 Table 5. Nursing home share of Medicaid long-term care expenditures by state, 1997 and 2007 Table 6. State-level factors associated with nursing home share of total Medicaid long-term care expenditures, nursing home utilization, and nursing home expenditures, 1997 to 2007

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Chapter 1: Introduction

Defining Long-Term Care

The approach to delivering long-term services and supports to older adults (65+) and working-age adults with physical disabilities, also commonly referred to as ―long-term care‖ (LTC), has gradually evolved based partially on the private and public financing of LTC providers. What was once nursing care provided in an institutional setting now involves a broad range of supports and services provided in a multitude of settings. Today, LTC is defined as a variety of services and supports to meet health and/or personal care needs over an extended period of time (National Clearinghouse for LTC Information, 2008). In contrast to acute medical care, which is usually intended to help a patient recover from an injury or illness, LTC is aimed at assisting those with long-term chronic illnesses and/or physical disabilities to manage their daily lives in relative comfort and security (Gleckman, 2007). LTC can be delivered in the home, in the community, and/or in an institutional setting such as a nursing home. Services range from personal care, such as help with bathing or dressing, to complex medical support for people with chronic health conditions. LTC encompasses an even broader array of supports and services, including assistance with performing self-care activities and household tasks, habilitation and rehabilitation, adult day services, case management, social services, assistive technology, environmental modification, some medical care, and services to help individuals with disabilities maintain employment (Houser, Fox-Grage & Gibson, 2009). More than 80 percent of those receiving LTC do so at home, where

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care is mostly provided by an unpaid family member or friend, but can be supplemented by a formal/paid caregiver (Houser, et al., 2009) Although the term LTC is broadly used to describe services furnished to multiple populations, including children, for the purposes of this research, LTC is defined as supports and services furnished to older adults and working-age adults with physical disabilities. This is an important distinction because children and those with developmental disabilities have dramatically different patterns of LTC utilization and expenditures, and can consequently confound LTC research specific to the older adults and working-age adults with physical disabilities. Evidence of Long-Term Care Need

In 2000, there were an estimated 10 million Americans in need of LTC—with approximately 63 percent age 65 and older (6.3 million) and 37 percent 64 years of age and younger with a physical disability (Rogers & Komisar, 2003; Special Committee on Aging, 2000). It has been estimated that 70 percent of older adults will require LTC before they die, and will likely require that care for an average of three years (Kemper, Komisar, and Alecxih, 2005). Several factors contribute to the anticipated future need for LTC, including (1) demographic changes, (2) the health status of the older adult population, (3) the poverty status of the older adult population, and (4) the supply of LTC. Demographic Changes The nation is in the midst of a profound demographic change—the rapid aging of its population (Himes, 2002). According to U.S. Census Bureau projections, the

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older adult population will more than double between 2000 and 2030, growing from 35 million to over 70 million (U.S. Census Bureau, 2005). As a result of the aging population and other societal trends, such as blended families and the growing participation of women in the workforce, the LTC delivery system is expected to face considerable pressures in the near future (Himes, 2002). Perhaps the strongest evidence of future LTC demand is the number of people age 85 and older, often referred to as the ―oldest-old‖. The oldest-old is the fastest growing segment of the older adult population with only an estimated four million people in 2000 projected to increase to 21 million by the year 2050 (U.S. Census Bureau, 2005). In 2000, this segment of the population represented an estimated 12 percent of the older adult population and only about two percent of the total population. By 2050, the oldest-old are expected to comprise 24 percent of older adults and five percent of the total population (U.S. Census Bureau, 2005). The oldest-old are of special interest to government officials and policy makers because they have much higher rates of chronic disease and disability, and subsequently are more likely to utilize health care services—particularly LTC services that are provided over an extended period of time (Himes, 2002; Houser et al., 2009). Also of note is the fact that the oldest-old are more likely to be widowed and without someone to provide needed assistance, meaning that they are more likely to be dependent on formal paid supports that are often times financed through public programs (Houser et al., 2009). The size of the aging population is not the only predictor of LTC service demand. The rapidly changing racial/ethnic composition of the aging population is

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also critically important, as the effects of aging are compounded by the additional effects of race and class (Himes, 2002). National estimates from the 2007 American Community Survey (ACS) show an estimated 85 percent of the older adult population was non-Hispanic White, compared to 74 percent of the total population (U.S. Census Bureau, 2007). By 2050, the non-Hispanic White older adult population is projected to decrease by 64 percent as the growing minority population increases. Although Hispanics comprised only six percent of the older adult population in 2007, it is projected that by 2050, 17 percent of older adults will be Hispanic (U.S. Census Bureau, 2007). Similarly, African American individuals accounted for only eight percent of the older adult population in 2007, but are expected to comprise 13 percent of older adults in 2050 (U.S. Census Bureau). The compositional changes facing the nation in the coming decades have significant implications for future LTC demand. In the past, the use of formal LTC services by older African Americans and Hispanics was substantially lower than that of non-Hispanic Whites (Wallace, Levy-Storms, Kingston, Andersen, 1998). However, in more recent years, data on LTC utilization has overwhelmingly shown that formal LTC utilization rates are significantly higher for non-Hispanic Whites and African Americans (Himes, 2002). The cultural preferences and language differences of the Hispanic population may explain some of the limited access to LTC supports and services (Pandya, 2005). It is also important to note data from the 2004 National Nursing Home Survey show that African American and Hispanic nursing home residents were twice as likely as non-Hispanic White residents to be under the age of 65 years (Jones, Dwyer, Bercowitz & Strahan, 2009). Such findings suggest that

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young racial/ethnic minorities may spend more years in need of formal LTC supports and services. Health Status among Older Adults The combined effect of aging, race, and social class can result in a greater risk for health and social problems—particularly for minority populations. Previous research confirms that with advancing age there is both an increase in chronic disease prevalence and associated functional limitations and/or disabilities (Himes, 2002). The number of people with chronic conditions is expected to increase in the coming years with the rapid growth in the aging population. While the age at which chronic disease, functional limitations, and disability is encountered may increase, increasing longevity may mean that several years of life are spent with some impairment (Himes, 2002; Satariano, 2006). Such impairments likely mean that individuals will require some form of supportive LTC services, whether formal/paid or informal, or both, to perform their everyday tasks. Trends in the prevalence of disability are also important indicators of future LTC demand 1 . National estimates consistently report that an estimated 40 percent of persons age 65 and older have a disability, compared to only 6 percent of those ages 5 to15 and 12 percent of those ages 16 to 64 (U.S. Census Bureau, 2005; U.S. Census Bureau, 2006; U.S. Census Bureau, 2007). In 2007, 10 percent of older adults reported having a self-care limitation compared to an estimated one to two percent of

1 Estimates of disability drawn from national surveys are often measures of functional impairment because the concept of ―disability‖ is difficult to define and objectively measure. However, because disability estimates convey information about functional limitations in the areas of physical, sensory, self-care, and/or mental function, they provide a reasonable approximation of the potential need for supportive services.

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people between the age of 5 and 64 (U.S. Census Bureau). The inability of an individual to perform their own self-care can initiate movement along the LTC continuum—where an individual either receives assistance in their own home or begins to investigate alternative housing options where formal care is provided (Himes, 2002). Like demographic trends, changes in disability rates among older racial/ethnic minorities are likely to affect future LTC demand. Older African Americans continue to have higher disability rates (62%) than older Hispanics (54%) and older non- Hispanic Whites (50%) (U.S. Census Bureau, 2007). Of additional note, 49 percent of African Americans and 42 percent of Hispanics had a severe disability, compared to only 35 percent of the non-Hispanic White aged population (U.S. Census Bureau, 2007). Considering the anticipated growth in racial/ethnic minority populations, the need for LTC will likely increase dramatically as the proportion of those in need of LTC grows, which has significant implications for public programs that finance LTC since minority populations comprise a significant share of the beneficiary populations. Poverty Status among Older Adults The poverty status of older adults can also significantly impact the demand for LTC. In 2007, 10 percent of older adults were below the Federal Poverty Level (FPL), which is defined as earning an annual income of less than $9,669 for individuals ages 65 and over 2 (U.S. Census Bureau, 2007). Poverty rates increase

2 A number of studies have used a broader definition of poverty measuring poverty status as being within 300 percent of the FPL. An estimated one-half of people age 65 or older have annual incomes at

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with advancing age because of the greater likelihood that older adults will deplete their assets and savings in order to supplement their working income to pay for basic needs such as health care services, prescription drugs, and housing (Himes, 2002; Houser et al., 2009). More specifically, accessing LTC can be particularly challenging for older adults who experience a decrease in earned income and an increased reliance on personal savings, personal pensions, and Social Security (Houser et al., 2009; Wu, 2008). Combined, these financial factors make it difficult for many older adults to afford formal LTC services and supports in the current market. Poverty among older adults is highest among racial and ethnic minorities. For minority populations, there are often fewer resources to finance LTC because of lifetime patterns of lower wages, fewer investment opportunities, and lower levels of education (Himes, 2002). For example, in 2007, an estimated 25 percent of African Americans and 22 percent of Hispanics lived in poverty compared to only eight percent of non-Hispanic Whites (U.S. Census Bureau). The disparity in poverty status between the African American population, the Hispanic population, and the non- Hispanic White population, combined with the anticipated growth in the minority populations, is a critical indicator of future LTC need—namely for publicly- supported LTC services and supports.

or below 300 percent of FPL, which is about $30,000 for a single person over age 65 or $38,000 for a family of two.

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LTC Supply Surveys show that the vast majority of older adults in need of LTC strongly prefer to remain in their homes, receiving assistance from family, friends, and/or formal/paid home-care providers (Houser et al., 2009). However, some older adults find that their chronic disease and associated limitations and/or disabilities limit their ability to live independently, and in turn, choose to explore alternative housing options where formal supports are available. An individual‘s limitations in their everyday tasks often determine the extent and type of care that they will need, as well as the setting in which the services are provided. The configuration of LTC supports and services varies widely across settings. As mentioned above, the greatest preference among those in need of LTC is to receive services at home and/or in a community setting. The most common community-based services included in the LTC continuum include adult day care, home care, respite care, access services (i.e. transportation, information/assistance, etc.), and nutrition services. Such services can be financed through private funds, state programs, and/or federal programs (to be discussed later in Chapter 3). For individuals with more intense LTC needs, there are different types of housing-with- services options including supportive housing settings such as assisted-living facilities (ALFs) and group homes, continuing care retirement communities (CCRCs), and nursing homes. Nursing homes typically represent the high end of the LTC continuum in both cost and intensity of services provided—with residents typically being very frail individuals who require nursing care and round-the-clock supervision or are technology-dependent (Special Committee on Aging, 2000).

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With the cost of home care between $35 and $100 a day (in year 2000 dollars) and nursing home care ranging from $35,000 to $60,000 a year, LTC expenses are often unaffordable to even middle and upper-middle class families (Special Committee on Aging, 2000). Considering that the median income of older adults in 2007 was $17,424, the private costs of LTC far exceed the financial resources of many older adults, particularly those who are single, less educated, African American or Hispanic, female, and over the age of 80 (Congressional Research Service (CRS), 2007). Many older adults impoverish themselves paying for LTC services and are forced to rely on public programs (both federal and state) to help finance their care (Special Committee on Aging, 2000). This is partially a function of the general lack of insurance coverage for LTC services and the eventual depletion of one‘s personal assets and income financing LTC. For example, Medicaid program data show that spending for the elderly is driven largely by its coverage of people who have become poor as the result of depleting assets and income on the cost of nursing home care (Special Committee on Aging, 2000). Study Purpose and Significance

The institutional bias of the nation‘s LTC system has garnered increased attention in the past few decades as a result of (1) consumer preference to remain in their own homes and/community, (2) legal decisions that have required community- based accommodations for those with disabilities, and (3) the possibility of cost containment within public programs (Shirk, 2007). Despite some evidence to support that community-based care better meets the preferences of most individuals and that it is less expensive on a per person basis than

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nursing home care, public financing continues to most readily pay for nursing home care (Grabowski, 2006; Kaye, LaPlante, & Harrington, 2009). The bias toward nursing home care is perpetuated through statute, though a number of states have reduced their reliance on nursing home care and have demonstrated a more equitable balance between the proportion of public dollars spent on institutional services and those spent on community-based services. Why some states have demonstrated greater success in shifting LTC dollars is of great interest to government officials and policy makers. It is not yet clear why some states are more aggressive in providing LTC in nursing homes and why some are especially committed to providing more of that care in the community (Kane, Kane, Ladd, & Veazie, 1998). Examining the state-level factors affecting nursing home utilization and expenditures provides insight into the causes underlying differences in public spending on the aged and working-age individuals with physical disabilities. Gaining a better understanding of such state- level factors both offers an opportunity to identify policy areas that may be amenable to future intervention and helps guide efforts aimed at achieving the social objective of a more balanced LTC delivery system. Thus, this research seeks to determine the various state-level (socio- demographic, economic, supply, political, and programmatic) factors associated with nursing home utilization and expenditures. Specifically, this research will (1) determine the state-level factors associated with a greater proportion of Medicaid LTC spending devoted to nursing home care rather than community-based care, and (2) determining the state-level factors associated with greater per capita nursing home

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utilization and expenditures. The results of this study are expected to provide valuable insight into the nation‘s success ―balancing‖ its LTC delivery system, as well as offer possible opportunities for policy intervention

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Chapter 2: Background

The Medicaid Program

The nation does not currently have a comprehensive system to finance LTC. Medicare, the federally-funded medical plan for individuals age 65 and older and people with disabilities, provides minimal funding for LTC through limited coverage of short stays for rehabilitative care in nursing homes and some home health care services (CMS, 2009a). Despite dramatic growth in Medicare spending on ―skilled‖ services provided in nursing homes and in the community, there continues to be no LTC benefit under the Medicare program. Medicaid, the jointly funded state and federal entitlement program that pays for medical assistance for certain individuals and families with low incomes and resources, is the nation‘s primary payer of formal LTC services. Since it was enacted in 1965, Medicaid has increased access to health care for low-income people and functioned as the nation‘s safety net of LTC financing (Kaiser Commission on Medicaid and the Uninsured (KCMU), 2007). Within broad federal guidelines, states have the flexibility to design and manage their individual Medicaid programs. States administer their own Medicaid programs by (1) establishing eligibility standards, (2) determining the type, amount, duration, and scope of services, and (3) setting the rate of payment for services. States are key governmental actors in LTC, individualizing their own Medicaid programs to best meet the needs of their specific populations (Kane et al., 1998). Despite such flexibility, federal law mandates that certain individuals receive medical assistance and be covered under specific benefits including emergency room, in-patient hospital

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care, physician services, home health care, nursing facility (NF) services for persons 21 or older, and Early and Periodic Diagnosis & Treatment for children under 21. In addition to the mandatory benefits that states must provide, states provide optional Medicaid services including diagnostic, rehabilitation, physical therapy and other therapies, intermediate care facilities for persons with mental retardation (ICFs/MR), personal care, dental services, durable medical equipment, non- emergency transportation, and visual care. It is critical to note that under federal Medicaid law, nursing home care is a mandatory benefit, while community-based services (i.e., the personal care services benefit, and 1915 (c) home and community- based service (HCBS) waivers) are optional Medicaid benefits (Title XIX of the Social Security Act (SSA), Section 1902). Only the home health benefit is a mandatory community-based benefit, and available only to those with nursing facility level needs. This has significant implications for LTC policy reform, as it perpetuates what has been referred to as the ―institutional bias‖ and ―medical model‖ of the Medicaid program. Each state has a State Medicaid Plan (Plan) that offers a comprehensive explanation of how the Medicaid program operates (e.g., whom it covers, what services it offers, how much it pays for those services, among others). The Plans are working documents, and are required to be changed and approved by the Centers for Medicare and Medicaid Services (CMS) whenever there is a change in (1) state law, organization, or policy, (2) the operation of the state Medicaid program, and (3) federal law, regulations, policy interpretations or court decisions (Shirk, 2007). In addition to the required changes, waiver and demonstration authorities were more

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recently appended to the federal Medicaid statute as a means of allowing states flexibility in operating their Medicaid programs. Medicaid waivers ―waive‖ certain aspects of the federal Medicaid law and can be obtained to (1) test policy innovations likely to further the objectives of the Medicaid program, (2) allow states to implement managed care delivery systems, or otherwise limit individuals' choice of providers under Medicaid, and (3) allow LTC services to be delivered in community settings in lieu of institutional settings (Title XIX of the SSA, Section 1915). Under the 1915(c) waiver program, states may offer a variety of services to Medicaid eligible individuals that are above and beyond the service package available through the State Plan. These programs may provide a combination of both traditional medical services such as skilled nursing services, as well as non-medical services such as respite care and environmental modifications. States have the flexibility to choose the target population of the waiver program, the number of individuals to be served, and the geographic area or portion of the state where services will be delivered. The flexibility in Medicaid implementation and coverage of services has resulted in large differences in Medicaid programs across the states—in essence there are more than 56 Medicaid programs nationwide. Recent Changes in Medicaid Long-Term Care Policy

In 1981, the enactment of the Medicaid HCBS waiver program under section 1915(c) of the Social Security Act granted states the opportunity to provide community-based LTC services. Prior to the passage of this legislation, Medicaid primarily provided LTC services in institutions, with the exception of some limited home health, personal care and rehabilitation services available through the state plan

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(Title XIX of the SSA, Section 1902). Through the HCBS waiver programs, states have been able to offer additional medical (extensions of services provided under the state plan) and non-medical services, such as respite care, adult day health, and homemaker services, that provide individuals with the support they need to remain in the community rather than transition into an institutional setting. Growth of the waiver programs were slow at first, mainly because of federal rules that limited the types of people who could be served, the types of services available, and the number of people receiving services (Shirk, 2007). Additionally, the ―cold bed policy‖ restricted the early expansion of HCBS waivers, as it mandated that states eliminate the availability of one institutional bed for every added waiver slot in the community. In the late 1980s through the early 1990s, however, Congress and CMS took a number of steps to relax federal requirements. The relaxation of federal requirements, and the prediction that Medicaid LTC expenditures would be better controlled with 1915(c) waiver provisions that allowed states to cap the number of participants and the amount of spending per participant, resulted in many states pursuing community-based alternatives to institutional care (Shirk, 2007). Consumers and their advocates also pressed for community-based LTC options, and legal decisions such as the enactment of the Americans with Disabilities Act (ADA) in 1990 and subsequent court rulings such as Olmstead v. L.C. (1999) promoted the rights of people with disabilities to receive services in the most appropriate, integrated setting, rather than in institutions (Shirk, 2007). Since the early 1980‘s, these combined efforts have resulted in 308 active waiver programs across 48 states (CMS, 2009b).

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The waiver programs were followed by the advent of the Cash and Counseling (C&C) program, also under the Secretary‘s waiver authority (Title XIX of the SSA, Section 1115). The C&C program was initiated to afford older adults and individuals with disabilities the option to direct the design and delivery of LTC services in order to (1) avoid unnecessary institutionalization, (2) experience higher levels of satisfaction, and (3) maximize the efficient use of community services and supports (CMS, 2009b). In 1998, CMS approved five-year C&C demonstration projects for Arkansas, Florida, and New Jersey (CMS, 2009b). Following the success of the original C&C demonstration programs, in 2004, another 12 states 3 received replication grants to develop Independence Plus programs using either Medicaid 1915(c) HCBS waivers or a Section 1115 demonstration. By July 2007, an additional 9 4 states had C&C programs approved through 1115 demonstrations, new 1915(c) HCBS waivers, and/or 1915(c) HCBS waiver renewals. Like the waiver programs, the C&C and Independence Plus programs placed a major emphasis on rebalancing the LTC delivery system and remedying the institutional bias of the federal Medicaid law by facilitating the development of community-based alternatives to institutional care. In 2001, the Bush administration launched the New Freedom Initiative to further promote community living for older adults and individuals with disabilities. The primary goal of the New Freedom Initiative was to coordinate existing resources and modify policies to create incentives for community integration (Shirk, 2007).

Full document contains 124 pages
Abstract: Purpose. This study examined trends and predictors of state Medicaid nursing home users and expenditures from 1997 to 2007 to identify factors of interest to policy makers and government officials interested in rebalancing the nation's long-term care (LTC) system. Design and Methods. State-level data were collected from multiple data sources for each study year. Three separate regression analyses were conducted to examine the effects of socio-demographic, economic, supply, political and programmatic factors on the share of total Medicaid LTC expenditures devoted to nursing home care, rates of nursing home utilization, and rates of nursing home expenditures. Results. The nursing home share of total Medicaid LTC expenditures was positively associated with female labor force participation, and negatively associated with those aged 85 and over, Hispanics, Medicare home health users, Cash and Counseling programs, and democratic governors. Rates of nursing home utilization were positively associated with poverty rates, nursing home beds, and personal care state plan options, and negatively associated with spending on Medicaid home- and community-based services (HCBS). Rates of nursing home expenditures were positively associated with those aged 65 to 84, Hispanics, per capita incomes, nursing home beds, and Real Choice System Change grants, and negatively associated with female labor force participation, poverty rates, HCBS spending, and democratic governors. Implications. Factors that may be amenable to policy intervention aimed at rebalancing the nation's LTC system include nursing home supply restriction and Medicaid program policy. States that reduce bed capacity may experience lower rates of nursing home utilization and expenditures, and those that take advantage of flexible service delivery models like the personal care state plan option and/or the Cash and Counseling grant/demonstration program may experience greater success rebalancing their LTC systems.