An Investigation of Interstate Variation in Medicaid Long-Term Care Use and Expenditures Across 40 States in 2006
Audra Wenzlow, Rosemary Borck, Dean Miller, Pamela Doty and John Drabek
State long-term care (LTC) financing and delivery systems and, in particular, Medicaid funded LTC have long been criticized for being "institutionally biased." Shifting the balance in publicly-funded LTC provision away from institutional care (nursing homes, long-term hospitals, intermediate care facilities for people with intellectual or developmental disabilities [ICF/IID]) toward greater reliance on home and community-based services (HCBS) has been a federal goal for the past three decades -- a goal often referred to as "re-balancing" state LTC systems.
This report explores interstate variations in LTC expenditure and service use patterns, not only in terms of institutional and non-institutional services, but also by Medicaid LTC users' age and type of disability (e.g., intellectual and developmental disabilities [ID/DD] or other adult onset disabilities). Some states have re-oriented more toward HCBS than others. It also well known that greater progress has been made in serving certain subgroups within the LTC population in the community (those with ID/DD) compared to others and that reliance on institutional care remains greatest among the elderly, although here again there are interstate variations. This report seeks to quantify the magnitude of such differences.
Interstate variations in reliance on HCBS compared to institutional care are partly a function of some states having committed more strongly to the goal than others, and having accordingly made greater efforts to "re-balance." However, states also experience differential advantages or handicaps that make re-balancing easier or more difficult for some compared to others. The factors that make re-balancing easier or more difficult vary in malleability; that is, the extent to which state policymakers can exercise control over them. For example, states with colder, snowier climates, states with large areas classified as "rural" or "frontier" because of population density, as well as states with disproportionately high low-income aging populations may find it more difficult to "re-balance" because of the logistical challenges of providing primarily home-delivered services under these circumstances. These particular factors are largely outside a state government's ability to change. In contrast, other factors hypothesized to influence re-balancing toward greater reliance on HCBS are at least somewhat under state control. For example, states can use licensing and Certificate of Need legislation to limit nursing home bed supply and enable expansion of alternative services such as assisted living, other forms of residential care, and home health/home care agencies. States can also choose to offer consumer-directed alternatives to "traditional" modes of service delivery such as agency-delivered personal care services.
In this study, we use data from the Medicaid Analytic eXtract, the American Community Survey (ACS), and a variety of data sources describing state characteristics and policies to quantify interstate variations in Medicaid LTC systems performance, and to explore and begin to test hypotheses about the factors that explain greater or lesser use of HCBS across states and subpopulations. Our findings are based on data from 39 states and the District of Columbia, and represent Medicaid service use and expenditures in calendar year 2006.
Key Findings on Variation in Medicaid Long-Term Care System Performance in 2006
Across the 40 study states, about 41 percent of Medicaid LTC spending was for HCBS in 2006, while almost 64 percent of Medicaid LTC users used HCBS. Medicaid spent about 46 cents per user of HCBS for every dollar on persons in institutional care. The findings presented in this report suggest that there is considerable variation across measures, across states, and across subgroups in LTC system performance:
One performance indicator alone does not adequately capture variation across state LTC systems. Some states provide more limited funding for HCBS to a large number of enrollees, whereas others are allocating more resources per-capita to fewer enrollees. As a result, states that score relatively high on one measure do not score uniformly high on all measures. There is a clear consensus among government officials, advocates, and LTC experts that spending more proportionately on HCBS than on institutional care, and serving increasingly more LTC users in the community than in institutions are desirable goals. With respect to other comparative measures of state systems performance -- beyond percent of total LTC spending on HCBS and percent of total LTC users receiving HCBS -- there is no similar consensus on desirability, let alone a benchmark minimum standard for good performance.
We have developed several additional performance measures in this report. One is average per-user spending on HCBS. Another is the ratio of per-user spending on HCBS to per-user spending on institutional care. However, additional research is needed to decide whether or not -- or exactly how -- such measures can be used to describe better or worse systems performance. Alternatively, some performance measures we have developed may measure progress toward desirable goals that may be related to, but do not, strictly speaking, reflect "re-balancing" toward HCBS. A case in point is the measure we have developed, based on the ACS, that seeks to provide a rough estimate of how many "potentially Medicaid eligible" state residents living in the community with significant needs for LTC are actually receiving Medicaid-funded HCBS.
Overall statistics on percent total LTC spending going toward HCBS or numbers of individuals served in the community compared to institutions mask considerable variation by subpopulations (e.g., more than 60 percent of their LTC spending went toward HCBS for those with ID/DD, compared with 46 percent for those with physical disabilities and 26 percent for people over 65). There may be greater obstacles to "re-balancing" for some subpopulations than for others. Nevertheless, in an ideal world, all states should be striving for the best that can be achieved for all subgroups. Who would really wish to take the position that a state that achieves a higher overall "re-balancing" score by spending well above the national average on HCBS for one subgroup, while doing well below average for another is doing "better" than a state that spends only a little more than average on HCBS for both populations? We think there is more to be learned from comparing scores by subpopulation. By investigating how states that score better than others (for each subgroup) manage to do so, other states may develop methods to improve their performance.
Although most state Medicaid LTC systems have achieved primary reliance on HCBS for LTC users with ID/DD (more than 60 percent of their LTC spending went toward HCBS), this measure does not reflect the difference in the likelihood that low-income persons by age or disabling condition will actually receive any Medicaid funded LTC services, institutional or HCBS. Compared to state residents who are potential Medicaid LTC users among the low-income elderly or younger adults in need of assistance with personal care tasks, a relatively small share of those with ID/DD who are potentially eligible for Medicaid LTC services actually received them. However, the results depend critically on how disability is measured.
Key Findings on Associations between State Constraints, Policies, and Long-Term Care System Performance
Our exploratory analysis of the associations between system performance, state policies, and other factors that might facilitate or hinder Medicaid HCBS expansions suggests that:
Two factors over which states have little control -- poor weather conditions and size of the workforce needed to provide adequate HCBS -- are associated with systems less balanced toward HCBS.
Three factors that states could alter -- availability of Medicaid consumer-directed services, state plan personal care coverage, and availability of state Supplemental Security Income supplements for people living in the community -- are positively associated with systems more balanced toward HCBS.
State policies and constraints are likely to function differently for different subgroups of Medicaid enrollees. Consumer direction, for example, was significantly associated with HCBS spending for the aged and people with physical disabilities, but not for enrollees with ID/DD. Other factors appear to be related to progress in re-balancing LTC for people with ID/DD, most notably financial resources.
We cannot infer causal relationships from these findings, but rather note that they point the way to possibly fruitful work in the future.
Directions for Future Research
Our findings indicate that alternative system performance indicators provide a more nuanced understanding of LTC system transformation and potentially could lead to different conclusions about program effectiveness and re-balancing efforts across states and subgroups than those based on 1-2 aggregate measures, such as total Medicaid spending on non-institutional compared to institutional LTC or total numbers of Medicaid beneficiaries receiving HCBS compared to those residing in nursing homes, long-term hospitals, or ICFs/IID. It will be important for future studies to assess state LTC systems on multiple dimensions for distinct target populations. As Medicaid continues to serve more enrollees in the community, it also will be important to monitor the breadth and type of LTC services low-income people need and receive.
Several promising policy options -- including Medicaid and non-Medicaid policies -- are associated with LTC system performance, but longitudinal studies will be needed to assess impacts. Of particular interest are which approaches are most cost effective and their applicability to different Medicaid subgroups. As state budgets change over time, also of interest is the extent to which fiscal constraints will limit states' ability to support or maintain HCBS expansions into the future.
|The Full Report is also available from the DALTCP website (http://aspe.hhs.gov/office_specific/daltcp.cfm) or directly at http://aspe.hhs.gov/daltcp/reports/2013/40State.shtml.|