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Policy Synthesis on Assisted Living for the Frail Elderly: Final Report

Publication Date

Barbara Manard, William Altman, Nancy Bray, Lisa Kane and Andrea Zeuschner

Lewin-VHI, Inc.

December 16, 1992

This report was prepared under contract #HHS-100-89-0032 between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and the Lewin Group. For additional information about the study, you may visit the DALTCP home page at http://aspe.hhs.gov/daltcp/home.shtml or contact the office at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20201. The e-mail address is: webmaster.DALTCP@hhs.gov. The DALTCP Project Officer was Robert Clark.

 

CHAPTER I: INTRODUCTION AND OVERVIEW

The term "assisted living" refers to a type of care that combines housing and services in a homelike environment that strives to maximize the individual functioning and autonomy of the frail elderly and other dependent populations. This policy synthesis focuses exclusively on assisted living for the frail elderly. Chapter I provides an overview of why assisted living is increasingly important from a policy perspective, why the synthesis on assisted living for the frail elderly has been undertaken, and how the synthesis is organized to address relevant policy issues.

  • Why this synthesis was undertaken. The synthesis was undertaken because of policy concerns generated by an increasing aged population: between 1990 and 2030 the elderly population is expected to double to 65 million people. The costs of delivering long-term care to that population are rising rapidly. Assisted living has been proposed as one approach to mitigating those rising costs, as well as potentially improving quality of life for the frail elderly. Addressing issues related to assisted living involves the coordinated efforts of researchers and policy-makers with substantive expertise in several different fields -- including both services and housing. To that end, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) sponsored the development of this synthesis. It initially served as a background piece for a meeting on assisted living for the frail elderly jointly sponsored by ASPE and the National Academy for State Health Policy (NASHP) that brought together researchers, policymakers, and practitioners who contributed to a policy relevant discussion of housing and supportive services for the frail elderly. Discussions at the meeting, which included developing issues for future research, are incorporated in this synthesis.

  • Sources of information used for the synthesis. The field of supportive housing for the elderly is evolving rapidly from both a public and private perspective. What was current in the field two months ago may be out-of-date today. This synthesis is based on a review and analysis of over 350 books, reports, and documents (both published and unpublished), and on extensive telephone interviews with related association representatives, policyrnakers, and academicians/researchers.

  • How this synthesis is organized. The synthesis is organized into eight chapters. Chapters II through V provide general background information on assisted living -- who assisted living is intended to serve and why, and what its perceived advantages are over other long-term care options. The remaining chapters provide more detailed information on available federal and state resources in addition to federal and state initiatives specifically directed at increasing the availability of assisted living options. In addition, potential research questions are provided at the end of Chapter IV, Chapter V, Chapter VI, and Chapter VII.

    • Chapter I -- Introduction

    • Chapter II -- What is Assisted Living?
      Provides an overview of what is meant by the term assisted living, other terms used to refer to the assisted living concept, how assisted living fits into the long-term care continuum, and estimates on the numbers of assisted living facilities.

    • Chapter III -- Who are the Frail Elderly?
      Includes estimates of the number of frail elderly in addition to selected demographic and socioeconomic characteristics.

    • Chapter IV -- Matching Needs and Services
      Includes a discussion of the segment of the population for whom assisted living is considered an appropriate option, how service needs and eligibility are assessed, and how services are organized and delivered to meet those needs.

    • Chapter V -- The Effectiveness and Cost of Assisted Living
      Examines the empirical and logical basis for the reasons that assisted living is believed to be a preferred living alternative for the frail elderly, namely: that the elderly prefer assisted living over nursing home care, assisted living improves outcomes and quality of life, and assisted living costs less than other long-term care alternatives.

    • Chapter VI -- Issues in Regulating Assisted Living
      Considers the myriad of assisted living regulatory issues faced by policymakers, researchers, consumers, and providers by raising the theoretical and practical reasons why regulation of assisted living is an important and challenging question, general approaches for regulating assisted living, and specific regulatory issues that arise.

    • Chapter VII -- Public Financing of Assisted Living
      Discusses the host of public resources potentially available to fund housing and supportive services and presents more recent initiatives to combine funding for those housing and services and how to target resources more specifically to the elderly at risk of institutionalization.

    • Chapter VIII -- State Experiences
      Provides an overview of some major issues and approaches considered by states in developing assisted living programs in addition to a description of specific state programs.

 

CHAPTER II: WHAT IS ASSISTED LIVING?

Assisted living is a term that is used broadly to define the combination of housing and services in a home-like environment. This chapter provides an overview of the assisted living concept, how the term assisted living is typically used, other terms used for assisted living and estimates of the numbers of assisted living facilities. More detail on how assisted living facilities are operated, financed, and regulated is included in subsequent chapters. This chapter address the following questions:

  • What do people mean by the term assisted living?
    The term assisted living is used to refer to a type of care that combines housing and services in a homelike environment that maximizes individual functioning and autonomy. Beyond this basic definition, there is wide variation in how the term is used, the specific services provided, and the appropriate target population.

  • What other terms are used to refer to assisted living facilities?
    Many other terms are used to refer to assisted living -- terms such as: board and care, residential care, personal care, foster care, domiciliary care. and congregate care. Federal regulations often place assisted living facilities under the rubric of "board and care". Only a few states explicitly use either the terms "board and care" or "assisted living" when licensing or regulating facilities that provide services similar to those provided in "assisted living." Private developers use a wide range of terms (including assisted living), but typically avoid the term "board and care" which is viewed as less marketable.

  • Where does assisted living fit into the long-term care system?
    The literature typically describes assisted living as falling between boarding homes (facilities that only provide room and board) and skilled nursing facilities on the long term care continuum. How facilities are categorized on that continuum depends, in large part, an the nature and scope of services provided and the level of need of clients served. Thus, it is difficult to place assisted living firmly on the long term care continuum.

  • What general types of assisted living facilities are there?
    In general, assisted living facilities may be categorized into three types -- each of which tends to be discussed in a separate literature: public housing, units in continuing care retirement communities, and freestanding facilities (that may or may not be on the campus of a nursing facility). These facilities differ in their target populations, funding, and how services are organized and delivered.

  • How many assisted living facilities are there?
    Estimates in the literature of the numbers of assisted living facilities vary widely, There is no definitive source estimating the precise number of assisted living facilities in the literature or through the various associations whose members include assisted living facilities. Representatives of the Assisted Living Association of America stated that a major goal of this new association is to quantify the numbers of assisted living facilities. Estimates of the number of assisted living facilities range from approximately 40,000 to 65,000 facilities that are believed to serve up to 1,000,000 elderly people, depending on definitions used.

 

CHAPTER III: THE FRAIL ELDERLY AND THEIR LIVING ARRANGEMENTS

This chapter provides descriptive data on the frail elderly, describes correlates of nursing home use by identifying the elderly population "at risk" for institutionalization, and describes trends over the past century in the elderly's use of different types of residential settings with services. These data provide valuable insight into the question of whether assisted living can serve as a substitute for nursing homes for some frail elderly.

The chapter addresses the following questions:

  • Who are the frail elderly?
    The "frail elderly" form a heterogeneous cross section of elderly people representing a diversity of ages, incomes. living arrangements. and lifestyles. For the purposes of this synthesis. the term is used to differentiate a segment of the long-term care population from other dependent groups such as persons with mental retardation. Depending on the measure of functional impairment used, the frail elderly includes from 2 to 11 million people, or between 7 to 30 percent of the total population over age 65.

  • How are age, functional impairment, and other factors related to the use of nursing homes?
    The nursing home population is considerably older and more likely to have functional impairments than those in the community. These two factors alone. however, are not very good predictors of nursing home use, although they are sometimes used to specify people thought to be "at risk" for institutionalization. There are a number of better assessment tools available such as Morris, Sherwood, and Gutkin's (1988) instrument.

  • How has the elderly's use of different types of residential settings with services changed over time?
    Over the last century, the population of the elderly in institutions and group quarters of all types has changed very little (it averages around 4-5 percent of all those 65+). But the types of residential group settings available to house those who need to help others has changed dramatically. These changes from almshouses, and mental hospitals to certified skilled nursing facilities and homes for the aged -- have been largely precipitated by changes over time in how society views old age and dependency and the sources of funds available to support those who need help, but lack sufficient money to pay privately for care. These historical trends suggest that viable substitutes for nursing homes (such as assisted living) can be developed.

 

CHAPTER IV. ASSISTED LIVING: MATCHING NEEDS AND SERVICES

This chapter explores issues surrounding the question of which segment of the frail elderly population should be targeted for assisted living and how eligibility for assisted living is determined. In addition, the chapter provides an overview of the types of services available in assisted living facilities as well as typical staffing configurations designed to manage and deliver those services:

  • For which segment of the frail elderly population is assisted living an appropriate option?
    Nowhere in the literature is it disputed that assisted living is appropriate for medically stable individuals who are not in need of 24-hour nursing care. Opinions vary, however, on the appropriateness of assisted living for the cognitively impaired, nursing facility eligible individuals and those who are not ambulatory.

  • How is eligibility determined?
    There are three main criteria used to determine eligibility for assisted living facilities: age, income and functional capacity. How the criteria are applied varies from facility to facility.

  • Who screens for eligibility?
    Who screens for eligibility also varies from facility to facility. In 202 housing, housing managers often perform the initial assessments, they may contract with an outside case manager, or employ their own case manager. In CCRCs and private facilities, case managers and housing managers typically have more distinct functions in the assessment process.

  • How are transfer decisions made?
    Little is known about transfer decisions and policies except in CCRCs and HUD facilities. These transfer decisions are based on written policies and procedures. Who applies these policies and procedures varies across facilities, from professional assessment committees, to head nurses, housing managers, and physicians. Transfer decisions also typically rely heavily on input from friends and family.

  • What services do assisted living facilities provide?
    There are substantial variations in the range of services that assisted living facilities provide in part because different facilities target different populations. Some facilities might target more independent populations that may not require more intensive personal care services while others might provide services to the more functionally impaired elderly. Services provided also vary according to funding sources.

  • How are service needs initially assessed and routinely reevaluated?
    Screenings are performed to varying degrees to ensure that potential residents can be cared for safely in a non-institutional environment. The frequency of screenings is variable: some facilities perform screenings as often as monthly while others conduct screenings only after residents are hospitalized, or their physical or mental condition changes.

  • How are facilities staffed?
    The types and ratios of staff are influenced by the size of the facility, available funding resources, and the functional capacity of the residents. In addition, there are wide variations among facilities in the degree to which they employ their own staff or rely on outside providers.

  • What staffing limitations are there and how can they be overcome?
    A major issue in the industry is how to attract and retain capable staff when assisted living facilities often have to compete with facilities paying higher salaries. Cross-staffing, enhanced opportunities for staff to attend national conferences, using part-time outside contractors, and developing shared staffing arrangements with other facilities are just a few of the alternatives.

 

CHAPTER V. THE COST AND EFFECTIVENESS OF ASSISTED LIVING

Why has assisted living emerged as an important living alternative for the frail elderly in the view of so many policy officials, advocates, and consumers? The answer resides, in part, in the belief that assisted living represents an autonomy-enhancing, home-like environment preferred by the frail elderly, while at the same time providing a level of care difficult to deliver in homes or apartments. Assisted living is also thought to be a cost-effective alternative to nursing home care. Although these beliefs are often grounded in sound logic, professional experience, and in some cases empirical research, this chapter explores underlying assumptions and elucidates areas of uncertainty. Available research from the assisted living literature is presented and reviewed. Because a paucity of detailed research on assisted living per se exists, research on home and (non-residential) community-based settings and congregate housing facilities is also reviewed, though the applicability of this work to assisted living is an open question. This chapter addresses the following three general questions:

  • Do the frail elderly prefer assisted living to nursing homes?
    Little research exists on the preferences of frail elderly for assisted living. Existing research does suggest that they do prefer these settings to nursing homes. Moreover, elderly people overwhelmingly prefer to stay in their own homes, or reside in congregate living arrangements, over living in nursing homes. Whether these findings extend to assisted living facilities will depend, in part, on whether the needs of the frail elderly can be met without creating an "institutional" assisted living environment.

  • Does assisted living improve the quality of life and produce better "outcomes" for the frail elderly?
    Important outcomes to measure for assisted living include life satisfaction, nursing home placement, functional capacity, health outcomes, and caregiver satisfaction. Limited research suggests that the frail elderly residing in assisted living settings are happier than nursing home residents, may avoid institutional placement (but the empirical evidence is weak on this point), and caregivers of assisted living tenants also exhibit higher levels of satisfaction. Limited and preliminary research suggests some improvement in health and functioning for assisted living residents.

    In the absence of detailed empirical work on assisted living per se, findings from research on home and (non-residential) community-based care are also reviewed in this chapter. In contrast, this research suggests that there are few, if any, differences in functioning or health outcomes between community and nursing home dwelling frail elders. This literature also questions whether community-based care serves as a substitute for nursing home care and can successfully avert nursing home placement. The extent to which these findings apply in the assisted living context is an open question.

  • Does assisted living cost less than nursing home care?
    Again, the assisted living literature is sparse, but the limited evidence points to some cost savings as assisted living is substituted for nursing home care. In contrast, a comparably well developed body of literature indicates that home and community-based care does not reduce aggregate costs since it is difficult to target those frail elders who are truly "at risk" of nursing home placement, and because the costs of home and (non-residential) community-based care for a dependent population can approach nursing home costs. Assisted living facilities, however, may be able to achieve economies of scale impossible to achieve for individuals living in their homes and some states have been more successful at "targeting" frail elderly most likely to use a nursing home. The applicability of the home and community-based care literature is therefore an open question.

 

CHAPTER VI: ISSUES IN REGULATING ASSISTED LIVING

This chapter considers the myriad of assisted living regulatory issues faced by policy makers, researchers, consumers, and providers. The chapter has two parts. Part One raises basic theoretical and practical reasons why regulation of assisted living is an important and challenging question. Three basic philosophical tensions inherent in regulating assisted living are explored: the tension between the "medical model" (traditionally used in caring for the frail elderly) versus the "social model" (advocated by proponents of assisted living); the tension between "paternalism" (the government's/provider's predilection and perceived obligation to protect the frail elderly) versus "autonomy" (which encourages frail elders to exercise control over decisions in their lives); and the tension between "safety" versus "risk", or the extent to which assisted living environments should protect frail elders versus permitting both clients and providers to take "risk" by facilitating autonomous actions. Part One also discusses the range of regulatory approaches that might be considered for assisted living in light of these tensions, including a free market approach, where few aspects of operations are regulated; a nursing home regulatory approach, where nearly all aspects of structure, process and outcome are regulated; an approach that regulates the philosophy of assisted living and certain aspects of structure and process, but outcomes are not regulated; and an approach that regulates structure, process and outcomes, but leaves many assisted living operations unregulated to promote provider innovation and protect client autonomy.

Part Two addresses raises specific regulatory issues, without providing concrete answers, that arise in the assisted living context, including:

  • Do board and care licensure laws apply to assisted living? Should they?

  • What role (if any) should the federal government play in regulating assisted living?

  • Should regulatory approaches change as assisted living evolves from demonstration projects to publicly-subsidized, for-profit, operations?

  • How can "risk" be regulated in assisted living? Should risk be regulated?

  • Should the supply of assisted living facilities be regulated?

  • Should there be different regulations for the cognitively impaired frail elderly?

  • To what extent can (should) "aging in place" be regulated?

  • Should marketing and advertising be regulated?

How some of these issues manifest themselves in particular states is discussed in Chapter VIII.

 

CHAPTER VII: PUBLIC FINANCING

Compared to the private sector, public programs have played a limited role in financing the development of assisted living for the frail elderly, but over the past several decades a variety of programs to support housing with services have been developed. Financing has included resources to fund both housing (the construction of new units and rental assistance in existing units) and services. Three major trends have occurred with regard to this financing. First, over time resources have shifted from producing new housing units to increasing support for rental assistance. Second, some efforts have been made to combine bricks and mortar financing with services financing. These programs have largely been in the domain of the Department of Housing and Urban Development (HUD), though HUD has traditionally considered human services to be in the domain of other agencies. Third, Congress and others have encouraged partnerships between the federal government and states to develop innovative housing alternatives for the elderly.

This chapter examines public financing that can potentially be used for assisted living by addressing the following topics:

  • Federal programs that can potentially increase the supply of assisted living units by directly financing the construction of new facilities.
    The federal government has been a major generator of publicly funded housing through the Department of Housing and Urban Development (202 and public housing authority programs) and through Farmers Home Administration funding, though few of these projects can accurately be called "assisted living." The percentage of frail elderly served across these facilities and the services provided within them vary widely across facilities; however, in the aggregate approximately 40 percent of all federally assisted units are estimated to be occupied by the elderly (Special Committee on Aging, United States Senate, 1991). This funding has traditionally focussed on the housing and not the services components of these facilities.

  • Federal programs that can promote the construction of new units by providing incentives for other investors to fund units.
    The mainstays of the types of federal incentives designed to generate investments in low-income housing by other investors are federal mortgage insurance, tax-exempt bonds, and more recently low income tax credits. These incentives are available to both the for-profit and non-profit sectors.

  • Federal programs that can promote assisted living by paying rental subsidies directly to low income households.
    In addition to providing project based housing assistance, the federal government provides rental subsidies directly to households. These subsidies are in the form of rental certificates which are limited to the difference between 30 percent of tenants' income and fair market rent as set by HUD, and more recently rental vouchers which, unlike rental certificates, allow tenants to pay any excess between 30 percent of income and fair market rents out-of-pocket. Housing vouchers are intended to provide tenants with more flexibility in their choice of housing arrangements.

  • Traditional sources of federal/state funding that can be used to provide services in housing for the elderly.
    Traditional sources which have been used to finance services in elderly housing include Medicare, Medicaid, Social Services Block Grants, the Older Americans Act, and the Supplemental Security Income Program. Medicare and Medicaid in particular largely have been limited to funding medical models of care in institutional settings.

  • Options for financing additional home and community-based services in assisted living settings under Medicaid waivers and new optimal services provisions.
    It is frequently said that the availability of Medicaid to pay for nursing home care and limited public funds for community-based care creates a "bias" toward institutionalization. Partly in response to those concerns, Congress amended the Social Security Act (which governs state options under Medicaid) to expand states' ability to pay for home and community care. The federal government has authorized a selective expansion of Medicaid services to the frail elderly in the community under Medicaid Home and Community Based Service Waivers.

  • Federal programs designed to integrate financing for housing and services.
    A major criticism of policies for funding assisted living is that historically disparate funding sources for housing ana service have created a fragmented delivery system that does not optimally address the needs of the frail elderly. Recently, more coordinated programs (albeit limited in scope) have been developed to begin to address these concerns. One of the earlier programs was the congregate housing services program: more recently. the National Affordable Housing Act of 1990 has generated combined housing/services initiatives as well.

  • Additional ways in which states finance assisted living.
    States rely on a variety of sources to finance assisted living that include: state general revenue appropriations, state-levied fees or trust funds, and state general obligation bonds.

This chapter focuses only on the major sources of public financing and not the myriad of other programs through which assisted living could be funded. An extensive listing of the programs available through 1988 has been developed by Pynoos (1988).

 

CHAPTER VIII: STATE EXPERIENCES

Many states have under development or are currently considering assisted living programs for the frail elderly. Different states have different goals in pursuing assisted living as a housing alternative: cost savings by reducing nursing home care; promoting independence among the frail elderly; improving health and psychosocial outcomes; and the range of other assisted living goals discussed in this synthesis. Several recent works have described in detail state programs in assisted living, as summarized in Exhibit VIII.1. Rather than replicate this extensive work, this chapter identifies some major issues faced by states in developing assisted living for the frail elderly, and how various states have addressed these issues. The chapter is divided into two parts. Part One highlights the important challenges faced by states considering assisted living for the frail elderly, reviews how various states have dealt with these issues, and discusses the pros and cons of these approaches:

  • Should states develop assisted living programs by investing in new assisted living facility stock, or by supplementing services available in existing settings that provide some level of care (e.g., board and care homes or congregate living apartments)?
    The answer depends on which segment of the frail elderly population the state intends to serve, how quickly the state wants to implement its program, cost containment considerations, and the availability of existing facilities that can be used, or adapted for use, for assisted living purposes.

  • How should a state fund its assisted living program? Through Federal Medicaid Waivers? Through Use of State Funds Only? What are the pros and cons of different funding mechanisms?
    The answer depends on how much a state needs federal matching funds, the degree of flexibility the state needs (i.e., freedom from federal restrictions), a state's cost containment goals, and funding stability issues.

  • How should states approach regulation of assisted living? What are regulations intended to achieve?
    The answer depends, in large measure, on the philosophy of assisted living the state wants to advance. The benefits of regulation (assuring quality of care) must be balanced against the risk of overregulation; i.e., inadvertently creating an "institutional" environment and infringing on the frail elderly's autonomy and independence.

  • How much should a state aggressively develop assisted living for the frail elderly as compared with state subsidized programs for other groups (such as the developmentally disabled, or children)?
    The answer depends on political and equity issues peculiar to each state. Fundamentally, states must decide how to allocate state funds between worthy recipients. If state officials believe assisted living can save money as compared to current long term care alternatives (e.g., nursing homes), the allocation decision might be easier to make.

  • Should states consolidate assisted living programs into a single agency, combining funding, programmatic, and regulatory functions?Some states have found consolidation of financing, regulatory. and programmatic functions into a single agency to be more efficient from economic and operations perspectives.

  • Should states control the supply of assisted living facilities through regulatory means?
    Some states view assisted living as an integral part of the continuum of their long term care system. As such, they have chosen to monitor supply through traditional regulatory means (e.g.. licensing).

Part Two presents a more detailed summary of assisted living programs in Oregon, New York, Florida, Washington state, Maryland, New Jersey, Maine, Rhode Island, Connecticut, and New Hampshire.

Topics
Long-Term Services & Supports (LTSS) | Behavioral Health | Assisted Living Facilities & Residential Care
Populations
Older Adults