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Effect of Consumer Direction on Adults' Personal Care and Well-Being in Arkansas, New Jersey, and Florida

Publication Date
May 15, 2005

U.S. Department of Health and Human Services

Effect of Consumer Direction on Adults' Personal Care and Well-Being in Arkansas, New Jersey, and Florida

Executive Summary

Barbara Lepidus Carlson, Stacy Dale, Leslie Foster, Randall Brown, Barbara Phillips and Jennifer Schore

Mathematica Policy Research, Inc.

May 16, 2005

This report was prepared under contract #HHS-100-95-0046 between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and the University of Maryland. For additional information about the study, you may visit the DALTCP home page at or contact the ASPE Project Officer, Pamela Doty, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20201. Her e-mail address is:


The traditional system of providing Medicaid personal care services (PCS) through home care agencies gives consumers few choices about how and when their care is provided. As a result, consumers may not receive the type of care they feel they need, nor when and how they want it. Consequently, some are dissatisfied with their care, have unmet needs, and are unhappy with the quality of their lives.

This study of the Cash and Counseling demonstration program for adults in the three participating states--Arkansas, New Jersey, and Florida--examines how a new model of consumer-directed care changes the way that consumers with disabilities meet their personal care needs and how that affects their well-being. Demonstration enrollment, which occurred between December 1998 and July 2002, was open to interested beneficiaries who were eligible for PCS under their state Medicaid plan. After a baseline survey, enrollees were randomly assigned to direct their own personal assistance as Cash and Counseling consumers (the treatment group) or to receive services as usual from agencies (the control group).1 Cash and Counseling consumers had the opportunity to receive a monthly allowance, which they could use to hire their choice of caregivers (but not spouses or legal guardians in Arkansas) or to buy other services or goods needed for daily living. Each state had its own list of other services or goods that consumers could purchase without prior approval. Other items had to be approved on a case-by-case basis. Consumers could also call on counselors for support and advice about managing the allowance. The three states differed in how they operationalized the program, and in the size of the allowance and how it could be used, but each adhered to the basic principle of providing an allowance with limited constraints, along with some assistance in how to use it.

Because Cash and Counseling gives consumers greater flexibility and autonomy in their choice of services than the traditional system does, we expected that the individuals in the treatment group and those in the control group would meet their personal assistance needs quite differently on several dimensions. In particular, we anticipated that those in the treatment group would be more likely than those in the control group to have paid assistance at followup, to receive care during nonbusiness hours, to have multiple paid caregivers, to purchase assistive equipment and supplies, and to make home and vehicle modifications. We expected that these changes, along with being able to choose who provided the care and how that care was delivered, would improve consumer satisfaction and reduce the number of unmet needs. The treatment group, for example, was expected to have fewer unmet care needs and to be more satisfied with their paid caregivers, with their overall care arrangements, and with their life in general, without suffering more injuries or other adverse health outcomes.

Outcome measures related to the use of PCS services and consumer satisfaction were drawn from computer-assisted telephone surveys. Because most of the outcomes were binary, logit models were used to estimate treatment-control differences, controlling for possible preexisting differences between the two groups. Program effects were estimated separately for elderly and nonelderly adults, as some believe that consumer-directed care will not work for frail, elderly individuals. The results are reported separately for each state so as to capture any differences in impacts that may arise from variations in program features.

Cash and Counseling had sizable effects on the proportion of people receiving paid care in Arkansas and New Jersey but not in Florida. In Florida, to be eligible for the program, beneficiaries had to already be receiving services under the Home and Community-Based Services Waiver, and therefore a higher percentage of enrollees in Florida were already receiving that care before enrollment. The program increased hours of paid care received by the elderly in Arkansas and New Jersey, and by the nonelderly in Florida and New Jersey, but had no effect on their total hours of care for any of these groups because the hours of unpaid care decreased (relative to the control group) for both age groups in all three states.

There were also considerable differences across states in the percentage of individuals actually receiving the allowance at nine months. Indeed, nine months after enrollment many treatment group members were not receiving the monthly allowance, especially in Florida, where fewer than half the adult treatment group members were receiving the monthly allowance at the time of the followup interview. Nine months after enrollment, about 75 percent of all treatment group members in Arkansas and 61 percent in New Jersey reported receiving the monthly allowance. In Florida, only 54 percent of the nonelderly and 39 percent of the elderly treatment group members reported receiving the monthly allowance at followup. (These estimates differ from those in the table below, which displays the proportion receiving an allowance among paid care recipients.) Virtually all of the treatment group members who were not receiving the monthly allowance were receiving traditional agency services.

Cash and Counseling had many positive effects for the nonelderly in all three states regarding their satisfaction with their overall care and general life situation but, for the elderly, only Arkansas and New Jersey had these positive results because so few Florida elderly treatment group members were getting the intervention. These estimates are representative of the effects we saw in many other indicators of care satisfaction and unmet needs.

Concerns that consumers would be more susceptible to adverse health outcomes or injuries if cared for by consumer-hired workers were not realized. For none of the measures of adverse outcomes we examined did treatment group consumers fare worse than those in the control group in any state. For example, there was no difference in the percentage of individuals who had contractures in Arkansas for either age group, or for younger adults in New Jersey and older adults in Florida. But there were significantly fewer problems on some measures in one or two of the states (for example, with contractures among younger adults in Florida and older adults in New Jersey).

Key Cash and Counseling Demonstration Outcomes (Percent)
  Arkansas New Jersey Florida
Treatment Control Treatment Control Treatment Control
Nonelderly Adults
RECEIVING ANY PAID CARE AT NINE MONTHS 94.5*** 67.8 91.6*** 78.7 76.4*** 64.2
-   Receiving allowance at nine monthsa 80.6 N/A 66.8 N/A 67.5 N/A
-   Very satisfied with paid help with personal carea 95.9*** 75.7 82.8*** 69.6 92.0*** 65.4
VERY SATISFIED WITH LIFE 43.4*** 22.9 37.5*** 21.0 63.5*** 50.2
CONTRACTURES DEVELOPED/ WORSENED 26.0 25.2 24.5 28.1 9.0** 14.0
Elderly Adults
RECEIVING ANY PAID CARE AT NINE MONTHS 94.2*** 78.8 93.9*** 81.9 94.0 91.2
-   Receiving allowance at nine monthsa 74.4 N/A 65.2 N/A 41.4 N/A
-   Very satisfied with paid help with personal carea 84.6*** 75.7 79.9*** 60.0 73.5 69.1
VERY SATISFIED WITH LIFE 55.5*** 37.0 47.1*** 25.3 35.9** 27.9
CONTRACTURES DEVELOPED/ WORSENED 15.9* 19.7 17.5** 27.1 20.0 21.9
  1. Among those receiving paid care at nine months.

* Difference between treatment and control groups significantly different from 0 at the .10 level, two-tailed test.
** Difference between treatment and control groups significantly different from 0 at the .05 level, two-tailed test.
*** Difference between treatment and control groups significantly different from 0 at the .01 level, two-tailed test.

In general, the largest impacts of Cash and Counseling on the receipt of paid care and quality of care were in Arkansas, where the control group was least likely to be receiving the care that they were authorized for (primarily the result of labor shortages) and where the treatment group was most likely to start receiving the monthly allowance in a timely manner. More moderate effects were evident in New Jersey, mainly because about 40 percent of treatment group members still in the community were not receiving the monthly allowance at the followup interviews about nine months after enrollment. The smallest impacts of the program were seen in Florida, especially among the elderly adults. It is important to note that, although the effects were somewhat smaller for elderly participants than for the nonelderly, the program worked well for the former age group, which had been a concern raised about the Cash and Counseling model.

States interested in improving the well-being of Medicaid beneficiaries who need PCS should consider adopting consumer-directed approaches such as Cash and Counseling. In so doing, states should ensure that consumers have the support they need from counselors to develop a spending plan so that they can actually start receiving the monthly allowance. States also need to ensure that counselors explain to consumers that they are available to provide assistance and support in setting up a spending plan and managing their allowance.

This analysis was based on a strong, randomized research design and yielded estimated program effects that were large, compelling, consistent across numerous types of measures, and widespread across subgroups. Overall, this study offers unambiguous evidence that Cash and Counseling improved the amount and quality of paid personal assistance from the perspective of consumers, with no discernible adverse effects on safety or health. Analyses currently in progress will assess the financial consequences of adopting these programs in the three demonstration states.


  1. The Centers for Medicare & Medicaid Services (CMS) approved amendments to Florida's program (May 30, 2003) and Arkansas's program (October 2, 2002) to end the randomization requirement; New Jersey has submitted its amendment (May 17, 2004) to CMS to end randomization.

The Full Report is also available from the DALTCP website ( or directly at
Older Adults
Location- & Geography-Based Data
State Data
Cash and Counseling Demonstration