Testimony on
Long-Term Living
Linda Blanchette, Acting Executive Director of the Governor’s Long Term Living Council
House Democratic Policy Committee
March 29, 2007
Good afternoon Chairman Eachus, Representative Wagner, committee members and staff. Thank you for the opportunity to testify this morning on the critical topic of long term living.
Pennsylvania has the third oldest population in the nation: one in five Pennsylvanians is over the age of 60, and with the aging of the baby boomers, by the year 2020, one in four Pennsylvanians will be over the age of 60.
Among our older population, the proportion of those who are 85 years of age or older has been growing rapidly since 1990. That trend is expected to continue – the US Census Bureau predicts that in this decade the over 85 cohort will grow by 42 percent, to 338,000 people, compared to the overall population growth in the state of only 2 percent.
In essence, Pennsylvania is currently experiencing the kind of demographic changes that other states will not experience for another 10 to 15 years. Pennsylvania is aging first and it is aging rapidly.
In addition to the large number of older Pennsylvanians, there are over 160,000 Pennsylvanians with disabilities who require assistance with activities of daily living. It is important not to overlook this group – or consider them to be "just like" Pennsylvania seniors – as they have their own unique set of needs and concerns.
As you know, Medicaid is the largest public source of funding for long-term care in the United States and Pennsylvania is no exception.
Since the 2002-03 fiscal year, Pennsylvania’s long term living costs have increased by $1 billion. In fiscal year 2007-08, Pennsylvania expects to spend about $3.6 billion dollars on long term care for seniors and younger people with disabilities. That represents about 28 percent of Pennsylvania’s state Medicaid budget.
Over 80 percent of PA’s Long Term Care cost is driven by nursing facility payments: Pennsylvania has the second highest per capita public spending on nursing homes in the nation. While we have significantly expanded the use of home and community based services over the last three fiscal years, Pennsylvania continues to rely heavily on nursing home care.
If we do not implement aggressive system reform efforts and expand the array of care options, it is projected that by 2011 the cost to Pennsylvania taxpayers will grow by 27 percent, an increase of $350 million over current spending.
Ninety percent of Americans age 50 and older prefer to stay in their own homes and communities as they age. For younger persons with disabilities, receiving support in their homes and communities ensures that they have the same opportunities to learn and develop skills, to engage in productive work, to make choices about their daily lives and to participate fully in community life.
At the federal level, CMS is encouraging states to expand the use of home and community based services based on the strong evidence supporting the efficacy of this care option – evidence that personal control leads to much better consumer satisfaction, better health outcomes, and lower costs per person served.
The 2007-08 long term care budget proposes a strategic plan that is guided by these key principles:
Consumers will have more options to receive appropriate long term living services in cost effective settings that promote quality care.
The long term living system should be rebalanced so both institutional and home and community based services are available, with the goal of achieving a balance of 50 percent institutional care to 50 percent home and community based care over the next five years.
State and federal funds should be prudently managed and leveraged, and individual assets optimized to ensure that the commonwealth is able to meet the needs of Pennsylvania’s aging population and continue to support people with disabilities to maintain their independence and dignity.
The 50/50 balance goal is very ambitious, but serves to illustrate just how critical it is for Pennsylvania to reduce our reliance on costly institutional care. Currently, 70 percent of persons receiving long term care are in nursing facilities and 30 percent are receiving home based care. Toward shifting that balance, the 2007-08 budget provides $12.7 million in state funds to serve an additional 2,200 consumers in the PDA waiver and 1,000 additional consumers with disabilities in DPW waiver programs.
An important part of the rebalancing effort is our continuing effort to help nursing home residents to return to their homes and communities, when it is safe and appropriate for them to do so.
Since January 2004, Pennsylvania’s nursing home transition program has helped over 1000 people regain their independence. The FY2007-08 budget includes $3.8 million to fund long term living counseling and transition support services for the Area Agencies on Aging and DPW Nursing Home Transition partners to expand this successful program.
Nursing facilities will continue to be an important and necessary component of a balanced long term living system. They provide the skilled care that is essential to the health and welfare of many Pennsylvanians. However, consumer preference, demographic trends and fiscal challenges mean that changes are ahead.
The 2007-08 budget proposes $4.7 million to help nursing facilities to ‘right-size’ and reconfigure their businesses to respond to the dynamic long term living market. This investment builds on the successful work we have been doing with county based nursing homes.
Since 2003, through the County Commissioners Association of Pennsylvania project, the commonwealth has invested over $84 million dollars to take Medicaid certified beds off line and increase the number of PDA waiver slots available to counties.
Meeting the 50/50 balance goal will also require us to expand the array of long term living service options. Pennsylvania is one of only a few states that does not license assisted living residences. Assisted living is a less costly alternative to nursing home care for individuals who need the availability of 24 hour support.
This is one of our key initiatives and the administration will be introducing legislation to create an assisted living licensure category that will allow individuals to age in place as their needs change. We need this legislation in order to create new housing options for persons who need nursing home care but can reside in a safe environment that is designed to accommodate someone with these needs. Several assisted living bills have already been introduced and the Administration’s legislation is under final review.
Other initiatives intended to expand the array of home and community based services and supports include $3.7 million to strengthen the Domiciliary Care program, and to expand our LIFE programs and additional funding for the home modification program to help Pennsylvanians to remain safely in their own homes.
Last year the Governor established the Long Term Living Council and appointed an Executive Director to coordinate activities among the departments. The Council is comprised of the Secretaries of Budget, Policy, Aging and Public Welfare, the Director of the Governor’s Office of Health Care Reform and the Governor’s Deputy Chief of Staff. The council was created in the fall of 2005 to provide oversight and strategic direction of the long term living system in Pennsylvania.
The new Office of Long Term Living builds upon that success. The Deputy of Long Term Living, Mike Hall, reports to both the Secretary of Aging and the Secretary of Public Welfare and is accountable for the fiscal, policy and program operations of the long term living system for the elderly and adults over age 18 with physical disabilities.
The single point of accountability created by the joint office will accelerate reform efforts, increase the quality and efficiency of the system, and prepare Pennsylvania for the challenges ahead.
Other initiatives that will strengthen the infrastructure of the system include:
Creating a special unit to develop and implement a comprehensive public education campaign so that more people will know about long term care options and about the costs of long term care, and so can be better prepared to help themselves or a loved one meet immediate needs and plan for the future;
Establishment of a centralized quality management unit that will provide monitoring and technical assistance across all waiver programs, reducing duplication and administrative burden at the state and local levels.
Creating accessible one-stop shopping for information on long-term living planning, insurance, and application for services by expanding the LINK model to two additional counties.
Implementing a Long Term Care Partnership Program that will promote the purchase of long term care insurance and help Pennsylvania families conserve their resources should they eventually need publicly funded long term care services.
Implementing a clear, equitable and efficient eligibility determination process using an automated tool that simplifies the process and speeds connection to appropriate services.
Creating a training institute to help all employees at all levels of the long term living system to perform efficiently in a changing LTL environment. Through regular training, technical assistance and communication, the Commonwealth can achieve higher quality services and better outcomes for our consumers.
The FY2007-08 long term living budget proposal represents a strategic and focused effort to address the changing long term living needs and preferences of Pennsylvania residents by creating a system that is based on the principle of consumer choice, that is balanced, and that uses resources efficiently.
Thank you for the opportunity to testify today. I welcome any questions you may have at this time.