The statistics are clear: the number of individuals requiring assistance with personal care activities will rise dramatically in the years ahead. Even in the presence of reported declines in age-specific disability rates, the number of individuals age 65 and over who will need assistance with activities of daily living (ADLs) or instrumental activities of daily living (IADLs) will grow from about 5 million (today) to 7 million (by 2020) (The Lewin Group 2002). The implications for families (who provide the bulk of care and must balance caregiving, work, and childcare), service providers (who must figure out how to deliver care in a variety of settings in a context of uncertain payment streams), and payers (who are struggling to contain costs and budgets) are enormous. The challenges ahead require careful planning, information, and service development to assure that the needs of disabled individuals will be met.
Given the availability of national data on the prevalence of various forms of disability, it is possible to estimate the magnitude of overall need for personal care services. However, what is more difficult to predict is how and where people will actually receive care. This uncertainty derives from a number of factors. First, the service system is changing dramatically, constantly and quickly. Alternative models of care are being implemented and traditional providers have come to play new roles in the service delivery system. The nursing home of the early 21st century already looks very different from the nursing home of the 1980s. Assisted living facilities (ALFs), new models of home and community-based care delivery, sub-acute care units in nursing homes and the use of home-based assistive technologies have altered the demand for substitute and complementary long-term care (LTC) services. This has led to a blurring of the lines between acute and LTC, between family (informal) and paid (formal) caregiving, and between residential care and home-based care.
Second, despite the tremendous amount of research devoted to identifying the factors related to the need for LTC services -- be they paid or unpaid -- we still do not have a good understanding of what influences consumers to choose a particular service modality. Most of the national data on the prevalence of disability and service use is cross-sectional in nature. While such data does enable one to uncover the factors related to observing someone in a particular state of disability or service modality, it does not facilitate an understanding of the factors behind the decision to begin using a particular service. Nor can we adequately understand the reasons behind various transitions across alternate service modalities. Thus, without a better understanding of consumers’ decision-making process when they perceive they need care and engage providers, it is difficult to make predictions about patterns of service use.
Finally, given the relatively high costs associated with LTC services -- upwards of $70,000 a year in a nursing home and as much as $15,000 a year for home care services (MetLife 2005) -- most disabled individuals rely exclusively on family caregivers for assistance. Recent research suggests that the lifetime costs associated with keeping a disabled individual living at home -- and never having to rely on nursing home care -- are upwards of $175,000 (AARP 2005). According to the 1994 National Long-Term Care Survey, almost half of disabled elders who use formal home care pay for it themselves or their families pay for it out of pocket (ASPE/AoA 1998). Low income elders at risk of nursing home admission may be eligible for paid care financed by Medicaid or other public programs, but availability of such funding varies by state and many states have waiting lists. Moreover, Medicaid coverage of assisted living is currently very limited in most states and federal Medicaid law prohibits states from covering the room and board, as distinct from nursing and personal assistance services costs, in assisted living, although such costs are covered in nursing homes. Because Medicaid coverage for nursing home care is an “entitlement” that is available to all Americans who are judged to need this level of care but are unable to pay privately for it, whereas coverage for assisted living, adult day care, and home-delivered services is more limited, Medicaid is often faulted for creating a purely financial bias toward nursing home use even when alternative services could substitute at lower cost. Thus, the ability to pay confounds our understanding of the level and mix of services that individuals would choose to meet their care needs and maximize their own well being. As states experiment with programs that provide cash payments to disabled elders, it is increasingly important from a planning and infrastructure development perspective to understand the reasons behind the consumer’s choice of paid services at the time of initial and transitional use.