The purpose of this study is to obtain a comprehensive demographic, health and attitudinal profile of individuals with private LTC insurance policies at the time that they begin using paid LTC services in their current service setting. We also seek to understand the factors involved in the decision about how and why to use paid services in particular care settings (i.e.,the home, assisted living or nursing facilities). Equally important, we wish to understand how and why people transition between care settings throughout the course of their disability and also assess the role of care management in the process. By focusing on an admissions cohort of LTC claimants and tracing their experience and service utilization over time and in multiple settings, we hope to answer the following key policy-relevant questions:
In a context where individuals have insurance covering a variety of institutional and non-institutional settings, why do they choose one service option over another and what are the trade-offs that they perceive they are making?
Are there barriers to accessing certain types of care, even in the context of adequate private financing?
When do people believe that they are disabled enough to begin to access the formal service system?
What are the reasons or key factors behind individuals’ transitions between different service settings and how important are quality and cost considerations?
How do individuals go about choosing particular providers of care and what are the critical factors affecting their choice of providers?
How often is there a mismatch between changing consumer needs and provider capability that necessitates movement between care settings?
Do people make use of the care management services that are offered to them and do they find the service useful?
What is the influence of care management on the service choices that claimants make?
Obtaining answers to these questions is important for a variety of reasons. As mentioned, we know little about the behavior of individuals at the point that they begin to interface with the formal service network and in particular, when they have the means to pay for services that they desire. A focus on individuals with private insurance would enable us to project patterns of service use if comparable financing were available for home and community-based care services as well as nursing homes and other types of residential LTC services. This is because the dollar amount of coverage that current policyholders can access from their policies likely represents an upper bound on what might be available in the context of a universal public or public/private LTC financing system designed to facilitate equal access to appropriate services based on need instead of income.
Currently, patterns of service use and difficulty accessing alternatives to nursing home care tend to be attributed almost entirely to methods of financing. Problems with the delivery system -- that is, with respect to the availability, reliability, quality, and feasibility of alternatives to nursing home care may be over-looked or under-estimated. A study of the choices that disabled elders make when financing facilitates rather than limits choice will enable us to better understand the extent to which LTC services in various settings are interchangeable or are appropriate for persons with different characteristics and related service needs. We might find, for example, that even when they can afford them, disabled elders do not choose alternatives to nursing home care because these services are not actually available to them where they live or cannot meet their needs. Thus, obtaining information about individuals and their decision-making at the time that they begin using paid services can assist policymakers in identifying the barriers that challenge consumers as they try to obtain the services that will best meet their needs.
Second, as age-specific disability rates continue to decline and use of assistive devises and environmental modifications to lessen the need for human assistance increases, it is important to understand the various points at which individuals choose to begin using formal services. This will help policymakers more accurately project service use during an expected course of disability. Third, there is little opportunity to observe disabled elders over time to understand transitions to and from use of home and community-based services (e.g., in-home aides/attendants and adult day care) and use of residential care settings (e.g., nursing homes, assisted living) as well as movement from one residential care setting to another. We know from previous research that such transitions are not uncommon but we know little about why they occur.1 This is not only because of the confounding effect of income and differential access to third party financing for some service modalities. Research on transitions from informal to formal care and from one type of formal service type to another has also been hindered by the lack of an efficient way to identify and study individuals close to the point at which they begin to use services of various types in various settings. The proposed study of privately insured new claimants will address these issues and provide information to enable better planning of service infrastructure.
Fourth, we know little about what is important to individuals’ choices regarding specific providers. That is, we do not know which provider attributes are most important to consumers. Uncovering these factors can assist providers and policymakers in the planning and development of infrastructure that will be perceived as valuable by consumers. Finally, care management, which is a service offered in these policies, is designed to help individuals access the services that are most appropriate to their needs. Yet, we know little about whether care management services are used, whether consumers believe they are valuable, whether they make a difference to decision-making at initial and transitional service use and whether care plans are actually followed. Finally, many public and private initiatives in LTC financing and service delivery are relying on a strong care management component. Learning about care management in this context presents a unique opportunity to identify the circumstances under which such efforts make a difference and how they can be structured for greater effectiveness.
Strengths and Weaknesses of Reliance on Insurance Sample
There are a number of distinct advantages of coordinating an admissions cohort study of privately insured individuals. First, this sample facilitates identification of a geographically representative sample of admissions cohorts in three distinct service settings, in a very cost-effective manner. Second, given the relatively uniform eligibility criteria used in insurance contracts, it is possible to screen out individuals with short-term post-acute care needs and focus on the true LTC population -- those with limitations in ADLS and IADLs and those with cognitive impairment. Third, previous research demonstrated that the effect of income on service utilization is mitigated in the context of private insurance (Cohen, et al. 1999 & 2000). Thus, a focus on insurance claimants enables an examination of individuals’ choices about how, when and where to utilize services to meet perceived needs, where income is less of a factor in the equation. This allows one to focus on why the service system is or is not able to respond to specific needs of individuals and how it might be configured to better meet such needs. Fourth, the claims systems of private insurance companies collect detailed financial information on service use, which can be linked to information on how and why individuals chose particular service settings. Finally, the data will allow an analysis of the effect of care management on the decision-making process of the claimant and his/her family and obtain an evaluation as to its usefulness.
The focus on those privately insured for LTC is particularly important as growth in the market accelerates and as the states and Federal Government experiment with new ways to finance and deliver LTC. Also, LTC insurance is beginning to pay more of the nation’s LTC bill. Centers for Medicare and Medicaid Services (CMS) estimates that in 2003, LTC insurance paid roughly 10% of the nation’s LTC bill (CMS 2005). Previous research has shown that these policies pay significant benefits in both facility and community settings (Cohen, et al. 1999 & 2000). As more policyholders age, private insurance is expected to play a more meaningful role in financing the nation’s LTC needs.
The major disadvantage of relying on a sample of privately insured individuals is that they are not representative of the disabled elderly population in general. For the most part, individuals claiming benefits under their private insurance policies are more likely to be married, have higher levels of income and assets, and are more highly educated than the general population of disabled individuals (HIAA 2000). On the other hand, in terms of health status, claimants do not look that different from the general population of disabled elders (Cohen, et al. 1999). Thus, it is important to note that the results of the study cannot be generalized to the population as a whole. Even so, what is learned from this sample will be applicable to public initiatives in LTC financing, care management, and service delivery.