We differentiate two types of state characteristics likely to affect the role of HCBS in LTC systems: (1) factors over which states have little or no control over such as climate or little or no control in the near term, such as the cost of living; and (2) factors that states could alter, such as their LTC policies, such as whether or not to offer HCBS as an "entitlement" (e.g., state plan personal care services or HCBS waiver services without capped enrollment that requires waiting lists) or policies those that affect the supply of LTC (such as Certificate of Need requirements that restrict nursing home bed supply).
1. Exogenous Factors
Policymakers have always known that states face unique circumstances that make it important to allow for state differences in implementing health care programs. Re-balancing also faces regional challenges, which may result in slow development of HCBS in some communities. Previous studies have cited tight fiscal constraints (Howes 2010; Smith et al. 2009) and access to adequate housing (Denny-Brown and Lipson 2009; Siebenaler 2005) as challenges states face in their efforts to shift their LTC systems from heavy reliance on institutional care to community settings.
Some states face unusual obstacles to re-balancing toward HCBS because of factors beyond policymakers' control. Other states may benefit from atypically favorable conditions. For example, North Dakota is a rural state with a cold, snowy climate, which has also experienced substantial outmigration, especially among the young, over the past several decades. Arguably, the logistics and economics of delivering HCBS to the elderly and disabled living on rural farms without access to much informal support from younger, healthier relatives and neighbors, inevitably limits the extent to which the state's LTC system can be re-balanced toward greater reliance on HCBS. On the other hand, demography (a comparatively younger population), geography, climate, and settlement patterns in Alaska have long favored HCBS. Because many villages (many of which are Native American communities) are largely inaccessible by modern transportation except by air, elderly and disabled individuals may remain in the community longer because their relatives, friends, and neighbors would have great difficulty visiting them if they were placed in specialized residential care facilities that exist only in far away urban centers. A different kind of advantage is enjoyed by states that have large immigrant populations available for low paid, less skilled work; typically, immigrants are drawn to settle in particular geographic areas for reasons unrelated to home care work opportunities. However, once there, immigrant workers become available to work in home care.
To understand how some of these factors may be related to the relative success of re-balancing the LTC system, we investigated the following factors:
The High Cost of Living in the Community. High costs may make it very difficult for the elderly poor to maintain their residence, whereas admission to a nursing home can relieve those financial burdens.
Community Financial Resources. A high level of local financial resources may make it feasible for the community to support programs that subsidize utility bills and other living costs, making it less expensive for an individual to remain in the community.
Environmental Factors. Extreme weather conditions may make it unsafe to live alone or difficult to travel, encouraging more nursing home placements.
Limited State Resources. States with very limited financial resources may find it difficult to identify resources for use in designing community-based programs or be unwilling to risk developing a new program that may add to Medicaid program costs.
High Demand for Services. Communities with a high proportion of elderly residents may be more likely to be at the forefront of HCBS because meeting those elderly needs is seen to be a high priority. On the other hand, states with unusually high percentages of low-income elderly, especially in the age 85 and older cohort, may be hard pressed to meet the associated demand for Medicaid-covered LTC services.
Ability to Provide Care. States with relatively few home care workers or labor shortages may be reluctant to introduce programs that might strain already overtaxed labor markets when nursing homes can serve more residents with fewer workers. There is evidence that Medicaid program coverage rules, in some states, during certain periods of time, authorized more HCBS based on individualized professional needs assessments than home care agency providers were able to deliver because they could not recruit and retain sufficient numbers of frontline workers (Benjamin and Fennell 2007).
Some may question whether or the extent to which some of the factors listed above are truly outside of state control. For example, there is considerable debate over whether and how state policymakers could reduce or eliminate home care worker shortages. Some experts say they could do so by providing home care workers who provide Medicaid HCBS with better pay and benefits or by giving the job enhanced status via training and credentialing requirements. Some also argue that unionization of home care workers (extensive in some states but sparse or non-existent in most) will result in improved pay, benefits, and more training for home care workers. State policies may affect the ability of home care workers to unionize. It has also been suggested that state policymakers can alleviate home care worker shortages by adopting policies that allow Medicaid beneficiaries to hire individual aides, including family members, friends, and neighbors (often referred to as offering options for "consumer-directed" services). The argument is that consumer-directed services options expand the labor pool because that pool is no longer restricted to individuals who are interested in becoming employees of home care agencies.
Measuring these factors and finding data that can support an analysis of their relationships to re-balancing efforts is challenging. Table III.1 lists the factors we were able to measure for this study. The table also lists the measures we used as indicators of constraints, their sources, and their hypothesized relationships with the degree of HCBS provision in a state.
|TABLE III.1. Factors that May affect LTC System Performance|
|Factor||Measure (source)|| Hypothesized Relationship with
Higher Levels of HCBS
|Cost of living||Single-family house price index, 2006 (Federal Housing Finance Agency 2008)||-|
|Community financial ability||Per-capita personal income (BEA and Census Bureau 2010)||+|
|Environmental factors||Average winter precipitation (NOAA 2002)||-|
|Fiscal constraints||Total taxable resources per-capita (BEA 2008)||+|
|Demand for services||Percentage of potential Medicaid-eligibles age 75 or older (Mathematica analysis of ACS 2007 data)||+|
|Workforce shortages||Home health aides & personal & home care aides (BLS 2010) per 1,000 elderly or persons with a disability (ACS 2007), 2009||+|
|NOTE: Constraints considered but not available for this study included: population density, political forces, and workforce shortages measured as the percentage of people with high school education or less who were unemployed in the state using ACS 2007.
+ = hypothesized positive relationship between measure and HCBS.
- = hypothesized negative relationship between measure and HCBS.
2. State Policy Variables
Numerous Medicaid policies could potentially increase the use of HCBS. States have the options to provide personal care and expanded home health services under their Medicaid state plans and to waive certain Medicaid regulations to cover HCBS for select subpopulations under 1915(c) waivers. Other state policies, such as nursing home regulations and SSI supplements that support independent living, may influence the use of HCBS (Irvin and Ballou 2010, Ng et al. 2009). Under the Deficit Reduction Act of 2005, states have even more options to provide HCBS via state plans through 1915(i) and 1915(j) waivers, although few changes had been implemented by 2006.
To understand how some of these policies may be related to the relative success of re-balancing the LTC system, we investigated the following factors:
Consumer Direction Options. Consumer direction of personal care services has been shown to improve client satisfaction with services. States that adopt this option may have more residents interested in using HCBS.
Financial and Functional Eligibility Options. States may develop lenient financial or functional eligibility rules to encourage the use of HCBS. Although lenient rules may increase overall spending on and use of HCBS, they also may result in lower spending per HCBS user if the resulting population using Medicaid LTC has fewer service needs.
State Plan Coverage. States may offer personal care services under their state plans, eliminating the need for the individual to be covered by a waiver program to receive HCBS, where enrollment can be limited.
Residential Care Coverage. States that support residential placements other than traditional institutions, such as assisted living facilities, may have more enrollees who can avail themselves of HCBS.
Number of Waiver Program Enrollees. States that set a relatively high level for HCBS waiver enrollment will have fewer people on waiting lists and provide more HCBS.
SSI Supplements to Support Independent Living. States that supplement federal SSI payments for people living in the community at a higher level than those in Medicaid facilities may encourage the disabled poor to remain in the community.
Institutional Supply Policies. States that limit the number of institutions or are actively closing institutions (such as recent trends to reduce the number of ICFs/IID) will increase their need to use HCBS.
Nursing Home Policies. States that enable nursing homes to hold rooms and receive payment for those enrollees who take short leaves either to hospitals or home may encourage nursing home rather than HCBS use. By allowing people short home stays, residents and families may feel less need to enroll in an HCBS program.
Payment Policies. Policies that encourage the supply of HCBS in a state -- such as higher rates for such services -- may increase the number of HCBS providers who also could provide care to Medicaid recipients. However, policies that pay nursing homes more may encourage the growth of that industry, thus increasing the use of nursing home services.
Table III.2 lists the state policies that may affect HCBS use, how we measured them, and how they may be related to Medicaid HCBS use.
|TABLE III.2. State Policies and Other Supply-Side Factors Potentially Associated with Spending and Use of Medicaid LTC and Associated Data Sources|
|Policy or Supply-Side Factor||Measure (source)|| Hypothesized Relationship
|Consumer direction||Consumer direction required or allowed for home health, personal care, or via waiver (Kitchener et al. 2007)||+|
|Financial & functional eligibility rules||Stricter functional limits for HCBS waivers than nursing home care, 2006 (Ng et al. 2009)||- (+ with spending ratio)|
|Personal care, residential, & home health care coverage||State covers state plan personal care or expanded home health 2006 (documentation from multiples sources) or covers residential care, group homes for people with ID/DD, or assisted living/personal care facilities for elderly, 2003 (Mollica et al. 2007)||+|
|Waiver waiting lists||Waiting list count per 1,000 people enrolled in waivers or using personal care services, separately for ID/DD population and all others (Kitchener et al. 2007)||-|
|SSI supplements||State supplements federal SSI payments for people living in the community at a higher level than those in Medicaid facilities, January 2006 (SSA 2006)||+|
|Bed-hold policies||Maximum days, 2000 (Intrator et al. 2009)||-|
|Nursing home bed supply||Nursing home beds per 1,000 elderly, 2003 (Mollica et al. 2007)||-|
|ICFs/IID availability||Percentage of ICFs/IID with 16 or more beds, 2006 (Bruininks et al. 2007)||+|
|Payment rates that encourage nursing home care supply||Medicaid payment per day for nursing facility care, 2007 (Houser et al. 2009)||-|
|Payment rates that encourage HCBS supply||Medicare reimbursement for home health aide, 2006, & average private pay daily rate for adult day care, 2008 (Houser et al. 2009)||+|
|NOTE: Policies considered but not available for this study included: LTC-related lawsuits, presumptive eligibility, standard use of assessment tools, diversion programs that serve a specified percentage of the state's LTC users, global LTC budgeting (single appropriation), implementation of best practices, and state-funded family caregiver support programs.
+ = hypothesized positive relationship between measure and HCBS.
- = hypothesized negative relationship between measure and HCBS.