Good Morning. My name is Kevin Hefty. I am the Vice President for Long Term Care of Pennsylvania’s Health Care Union, SEIU 1199P. We are the largest union of health care workers in Pennsylvania, representing approximately 20,000 direct care workers in nursing facilities and in home and community-based settings, registered nurses and other employees in hospitals, and State employed health care professionals. We are part of the largest health care union in North America, uniting nearly 1 million caregivers in the U.S., Canada, and Puerto Rico.

I am testifying this morning with Ray Landis, the Associate State Director for Advocacy Issues for AARP Pennsylvania. AARP has approximately 1.9 million members in Pennsylvania and 38 million nationwide, and is a non-profit organization of persons 50 and older dedicated to addressing their needs and interests.

Recently SEIU and AARP, along with the Business Roundtable, announced a partnership to address the health and financial security of all Americans. This partnership is called Divided We Fail. Our organizations believe that all Americans must have access to affordable, quality health care and we're going to mobilize our members and the public to demand solutions.

In Pennsylvania, SEIU and AARP are working together on another aspect of affordable quality health care – long-term care. Divided We Fail brings together the two stakeholders who know the most about long term living. We are seniors, the people who consume the most long term care, and we are front line caregivers, the people who deliver that care. Seniors and caregivers are experts on Pennsylvania’s broken, dysfunctional long term living system. Seniors and caregivers know what it will take to fix it. This morning we will focus our testimony on three reforms that must be achieved if Pennsylvanians are to receive the long term care that they deserve – and the care that they pay for.

The Governor’s Prescription for Pennsylvania makes a clear commitment to increase the availability of home and community-based long term living services and to make the Commonwealth’s long term living system simple, seamless and efficient.

We applaud this commitment. Pennsylvanians and their families have an overwhelming preference for receiving care in their homes. Yet Pennsylvania’s long term living arrangements are the inverse of what seniors desire —and we have the nursing homes to prove it. The commonwealth’s 67 counties are home to 732 nursing facilities, a number greater than the state’s public high schools. More than 80,000 older Pennsylvanians are residents of nursing homes, putting our state fourth in the nation for nursing home use.

At the start of 2005, 54,602 of these residents had their care funded through Medicaid.

At the same time, Medicaid paid for only 13,231 seniors to receive care in their communities. This means that for every three people receiving their services at home, another seven still reside in a nursing facility.

It is widely known that in the 2000 census, the percentage of Pennsylvania’s population over the age of 65 was the second highest of all states, next to Florida. What is less well known about the state’s demographics is that the distribution of Pennsylvania’s elderly population is highly skewed toward older seniors. Pennsylvania has the fourth highest proportion of residents aged 85 and older. This is the group of people most likely to need some form of long term care. And it is a group of people that is growing quickly. Between 2000 and 2004, the over-85 age group grew by almost 13 percent, from approximately 278,000 to 313,000 people, while the state’s general population grew by less than 1 percent. By the year 2010, the over-85 age group will grow to more than 365,000 persons, a further increase of 18 percent from 2004. By 2020, 18.8 percent of Pennsylvanians will be over 65, representing an increase of nearly half a million seniors since the 2000 census. The over-85 population will have increased by 52 percent. If we do nothing to change Pennsylvania’s long term living system, many of these seniors will also find themselves in nursing homes.

Apart from badly serving our seniors, the State’s reliance on nursing homes is expensive. Today, Pennsylvania’s elderly represent 12.4 percent of all Medicaid enrollees, but the cost associated with their care represents 34.8 percent of all Medicaid expenditures. Many people are surprised to learn that one year in a Pennsylvania nursing home costs upward of $60,000. Pennsylvania’s over-reliance on nursing homes -- fourth in the nation -- combined with its large senior population -- second in the nation -- understandably have taxpayers concerned.

As Pennsylvania contemplates serving more seniors, it’s encouraging to know that the care seniors prefer is also less expensive. On average, the annual cost of supporting a senior at home through the PDA Waiver is a third that of supporting her in a nursing home. This difference in cost has a tremendous impact on the number of seniors that we can serve. Over the past three years, Pennsylvania’s Medicaid spending on nursing facilities increased by $400 million—yet only 3,300 additional residents received care. The increase in home and community-based care spending over the same period of time—about $250 million—resulted in 11,300 more Pennsylvanians receiving assistance. That’s three and a half times more seniors for two-thirds the money.

To achieve the correct balance between in home and institutional care we must transform our system and our outlook. We must remove obstacles to community living. Obstacles include procedural barriers, such as lengthy and confusing enrollment processes; informational barriers, such as lack of knowledge about what services are available; and systemic barriers, such as the lack of an entitlement to home care similar to seniors’ entitlement to nursing facility care. There are also attitudinal barriers, the most important being the belief that nursing homes are the natural setting for senior care.

In many states, SEIU and AARP have already participated in building a system that provides quality care across a spectrum of settings, allowing seniors to reside where they choose and move from setting to setting as their condition or preference dictates. We plan to build such a system in Pennsylvania as well.

In addition to home care, quality assisted living is a part of home and community based care equation. With a proper definition and effective regulations, assisted living can be a safe, less expensive alternative to a nursing home for those who desire independence but cannot live on their own any longer. Pennsylvania has spent many years debating how to define assisted living – it is now time to end the discussion and enact a new law that will help Pennsylvanians get affordable, quality care in a setting that permits independence.

Beyond “rebalancing” our long term living system we must ensure that care is of the highest quality, regardless of setting. Today, the quality of long term care in Pennsylvania is frequently not what it should be.

A recent Government Accounting Office report shows Pennsylvania’s nursing facilities lagging behind other states on a variety of quality indicators. Between July 2003 and January 2005, more than 20 percent of Pennsylvania’s nursing homes were cited for serious deficiencies. This compares poorly to the national average of 15.5 percent and to neighboring Ohio, where the percentage of homes cited was only 11.6 percent. The Kaiser Family Foundation notes that only 7.8 percent of Pennsylvania’s nursing homes have no deficiencies whatsoever, as compared to a national average of 9.5 percent.

Similarly, the Center for Consumer Health Choices, the health research affiliate of Consumer Reports, has published three “Watch Lists” of nursing homes whose inspection reports raise questions about the quality of care delivered to residents. Pennsylvania is one of 10 states with the highest percentage of nursing homes on all three Watch Lists.

The quality of homecare must also improve, particularly if we intend to expand home and community based services. Until recently, much of Pennsylvania’s home care industry was completely unlicensed and thinly regulated. Even where quality standards are in place, care managers routinely report too little staff or time to do much more than check paperwork. When the inevitable results make the headlines, we are shocked, but we should not be surprised.

SEIU and AARP support recent licensure legislation and the new tools that it gives to regulators. But they are minimal, and Pennsylvania could do much more to ensure the quality of homecare. At least where publicly funded services are concerned, Pennsylvania should reform its contracting system so that scarce long term dollars purchase maximum quality.

To purchase more quality for its homecare dollar, Pennsylvania needs to shift from its current system of “any willing provider” to a system that deliberately favors the best providers. Because reimbursement rates for in-home services are low -- and the Commonwealth wishes them to remain low -- the overarching problem for the long term living system is to develop economies of scale that squander less on fixed administrative costs in order to spend more on enhancing the quality of services. Conversely, the failure to achieve sufficient volume shunts too high a proportion of revenues to fixed administration costs. Providers who demonstrate a commitment to quality should be rewarded with the volume necessary to provide it.

“Selective contracting” along these lines is already used in a number of states whose long term care systems are better regarded than our own. Established quality measures used to bid for business might include, but not be limited to the ability of the agency to serve clients, answer phones and respond to problems 24 hours a day, seven days a week; the ability of the agency to use telephony; the frequency of supervisory visits provided to the consumer's home, the results of client satisfaction surveys; the ability to recruit and retain direct care workers; the amount and quality of training that is provided to home care aides, both pre-service and through ongoing in-service; the percentage of revenue that the agency spends on direct care.

We believe that the Commonwealth ought to create home care “report cards” of the sort that exist for nursing homes. Today, seniors and families looking to choose homecare have almost no information about Pennsylvania agencies. Agency report cards should be readily accessible from agencies and also from the Commonwealth so that families can easily make comparisons.

Finally, we should recognize that in long term living as in all things, we get what we pay for. Reimbursement rates, whether for nursing homes or home care, must be sufficient to do the job well; at present they simply are not. As taxpayers themselves, seniors and direct care workers fully appreciate the cost of a good long term living system. But we also believe that if current budgets –at both the state and federal levels –adequately reflected Pennsylvanian’s priorities, we would see more, not less money devoted to long term living. We would welcome the opportunity to join with Pennsylvanians in open and honest discussion of these matters.

At present, Pennsylvania does not have enough caregivers to deliver the care that seniors need. In 2005, Pennsylvania’s estimated shortage of direct care workers was about 10,000. This so-called “caregiver gap” threatens to become a chasm in coming years. Pennsylvania Department of Labor and Industry projects an increase of 41,950 job openings for direct care workers in the next decade, the decade in which our senior population will grow by about 40%. The state's traditional care-giving population, women between the ages of 25 and 54, is expected to shrink by 12 percent over the same time frame.

Besides having too few workers, Pennsylvania has too few workers with experience on the job. Despite the importance of long-term relationships in long term care, Pennsylvania’s providers have tremendous difficulty recruiting and retaining caregivers. A recent survey of direct care providers in Pennsylvania found 60 percent of homecare providers reporting significant problems with either recruitment or retention; 19 percent reported that their problems were very serious. The job vacancy rate for all frontline care workers in Pennsylvania was 9.2 percent; rates were higher among home care agencies. Across the state, 32 percent of unlicensed home care agencies reported vacancy rates of between 10 percent and 20 percent, with another 12 percent reporting vacancy rates greater than 20 percent. Thirteen percent of licensed home health agencies reported vacancy rates of between 10 percent and 20 percent, and 32 percent of these providers had vacancy rates in excess of 20 percent. In Pennsylvania, roughly 40 percent of all home care workers have been with their employer for less than one year.

Instability in the long term care workforce should surprise no one. According to the most recent BLS data, the average wage for a Pennsylvania personal care worker was $8.25 per hour, making Pennsylvania 27^th among all states. And unless she was very unusual, this worker received no employer-paid health insurance, no retirement, and no sick time. Poor pay and no benefits in long term care are so ubiquitous that Pennsylvania’s Department of Aging publishes a handbook for direct care workers to help them find and apply for public assistance; many of the Pennsylvanian’s who will receive coverage through the Governor’s new plan will be direct care workers.

As if their pay were not already low enough, many homecare providers fail to pay aides for time they are owed under federal and state statute. We are currently supporting two class action suits against Pennsylvania providers who fail to pay workers for every hour worked. Because these providers do not pay for all the time worked, their workers do not always receive overtime. And in some cases, because workers are not compensated for all their time on the job, they are failing to earn minimum wage. Providers frequently institute punitive and degrading pay policies, such as dropping workers’ rate if timesheets are late, or if their scheduled hours decrease.

It cannot be argued that direct care workers are paid poorly and treated poorly because their jobs are unskilled, or carry little responsibility or risk. Direct care workers hold the lives of our most vulnerable citizens in their hands. Frontline workers bathe, dress, feed, transport and befriend their clients. They notice and report changes in a client’s physical and emotional condition. They arrange – or simply are – crucial social contact. And they advocate for patients every day. In long term care, quality is not about high tech equipment, fancy procedures or heroic interventions. It is about the quality of the hands-on care provided by a worker.

Direct care workers also hold the some of the most dangerous jobs in America. The rate of worker injuries within nursing and personal care facilities is second among all industries, ranking with construction, trucking, and meatpacking in nonfatal injury rates. Their findings further suggest that short-staffing at our nursing facilities significantly increases the likelihood of injury.

Long term care workers have dangerous, poorly paid jobs because our system has the wrong priorities and because workers and seniors are denied a voice in setting those priorities.

But direct care workers know what they are worth and what the people they care for are worth. They also know that direct care workers can, and should, and have the right to stand up for themselves and for their residents and clients. In many of Pennsylvania’s nursing homes and some homecare agencies, direct care workers have succeeded in coming together to improve conditions for themselves and the people they care for. But far too often employers choose to oppose their efforts, frequently in ways that are unlawful. It should trouble Pennsylvanians that in a system with too little money to provide good care, long term providers routinely spend hundreds of thousands of dollars to thwart workers’ efforts to unionize. It should trouble Pennsylvanians that employers routinely fire union leaders – the women and men who are often also the most powerful patient advocates. It should trouble Pennsylvanians that workers wishing to use their collective power to affect the way the system is run are pulled from consumers’ sides into anti-union meetings, bombarded with anti-union literature, and blackballed by anti-union companies.

If we are serious about improving long term care, we must be serious about supporting the workers who deliver it. At a minimum, Pennsylvania’s long term living system should insist on compliance with existing labor law. It surprises caregivers when they learn that long term living regulations exist to protect the consumer of care but not those who give the care. Pennsylvania’s long term living regulations and contracting standards should incorporate specific mechanisms for enforcing existing labor protections and for enforcing existing regulations regarding how public dollars may be spent.

Specifically, providers with a record of violating wage and hour law should not be given the opportunity to do business with the Commonwealth or its agents. Providers should also commit to a method of financial reporting that permits authorities and taxpayers to verify that expenses incurred in assisting, promoting or deterring employee associations are not claimed as allowable costs under Medicaid. The State might also require that Commonwealth funds made available through the contract be used solely for services and administration and not to assist, promote or deter employee associations. This latter provision would be akin to the prohibition that is in many of the standard contracts issued by the AAAs and the Commonwealth, which prohibits contractor agencies from using state funds for lobbying.

We believe that the State could go well beyond these minimal standards by affirmatively engaging providers who wish to join with caregivers to promote quality care. Selective contracting of the sort discussed above should include workforce improvement standards. Providers bidding for public monies should show their plans to improve the direct care workforce, including plans to increase salaries, wages, or benefits of existing and newly hired workers during the rate year. And since consumers and families know very well that how workers are treated is a good index of quality, information about provider performance around the workforce – such as wages and benefits, vacancy and turnover rates, and average tenure of workers, must be made available to in report cards.

We support cooperative training models that involve workers and employers in upgrading the current workforce and recruiting new entrants to the healthcare field. The Commonwealth has recently sponsored several innovative and successful workforce development programs that involve health care unions, employers, and the State; these training partnerships should be extended and elaborated as we move forward to improve our long term care system.

Finally, we would like our discussion of the workforce to include a note about seniors who would choose to direct their own care. Consumer-direction is a long term living model in which seniors hire, fire and direct the work of their own caregivers, using a so-called fiscal intermediary to arrange payroll, employment taxes, workers’ compensation and so on. In this model of care delivery, seniors are enlisted in overcoming the shortage of caregivers by taking a hands-on approach to workforce development. Whereas friends and family members are often reluctant to hire on with a home care company, they are generally willing to work for a senior they know and are often more willing than agency employees to work nights, weekends, and holidays. By helping to recruit their own workers, seniors also increase the likelihood of obtaining a good match. They develop their own schedules of care, determining when and where assistance best serves their needs.

Pennsylvania has recently begun to develop consumer-directed home care options, but as with home and community-based services more generally, the state lags behind. Of the roughly 15,000 Pennsylvania seniors receiving services through the PDA Waiver, only about 4,500 now participate in recruiting workers, setting their schedule, or directing their work.

In several states across the country, SEIU and AARP have supported the creation of homecare commissions – agencies that assist seniors to take on consumer-direction and assist the workers who care for them to get the training and benefits that they need. We are eager to help pioneer this important piece of a quality long term living system in Pennsylvania as well.

Governor Rendell’s health care reform initiative, Prescription for Pennsylvania, takes as its premise that our health care system is in need of thoroughgoing reform, and that after six disgraceful years of inaction in Washington, DC, we in Pennsylvania must act. SEIU and AARP fully agree. We strongly support the major elements of the plan and have committed to work hard over the coming months to help overcome the opposition of entrenched interests that would seek to preserve the status quo and deny Pennsylvanians the quality long term care we deserve.

The ultimate goal of our long term living system should be to deliver quality care in the setting people desire. Providing the services that we really deserve will require significant redesign of long term care standards and delivery systems. It will require changed attitudes and priorities. It will require more control of the system by seniors and by the caregivers who deliver care.

It is possible to rearrange our system. Last year, Pennsylvania spent $1.7 trillion on long term care. Approximately 65 percent of patient days in Pennsylvania nursing homes are paid for by Medicaid. Another 10 percent are paid by Medicare. The proportions in homecare are higher still. Long term care providers are dependent on government for viability, and courageous government can create the system that we need and deserve.

Thank you.