Integrating Acute and Long-Term-Care Services and Financing
Persons with chronic illness often find themselves negotiating a bureaucratic maze of fragmented and unresponsive services, shuttling back and forth between acute and long-term-care settings. In the former, the acute interventions often have to be modified to take into account the patients' chronic conditions; in the latter, patients are isolated from home and community.

The divisions between acute and long-term care are reinforced by professional and institutional boundaries. Financing typically originates from separate sources that are difficult to blend (Medicare and Medicaid, for instance) and are often inadequate and targeted too narrowly.

As part of the Building Health Systems for People With Chronic Illness national program, RWJF supported several projects that tested models of care that integrated medical, social and long-term-care services, along with their funding streams, for the chronically ill. (See Program Results.)

• Cincinnati. A public/private partnership in Cincinnati, funded by a property tax levy that generated $12.6 million annually, provided comprehensive in-home care and community services to disabled older citizens. (See Program Results on ID# 024817.)
  
  Findings
  • Project staff hypothesized that program participants would experience lower levels of health care use, lower cost and higher satisfaction, compared to seniors receiving traditional case-managed services.
  • An evaluation of the program, however, found no major differences in outcomes between the project participants and nonparticipants.
• Rochester. For a five-year period beginning November 1993, staff at the Community Coalition for Long Term Care—a coalition of public agencies, private providers, insurers and advocacy organizations—created a network that integrated primary, acute and long-term care for 322 Monroe County, N.Y., residents age 65 and over. (See Program Results on ID# 031311.)
  
  They also conducted a study of the feasibility of linking the network to a public/private partnership that enabled purchasers of qualified, private, long-term-care insurance to be eligible for Medicaid without having to spend their life savings once their insurance benefits are exhausted.
  
  Findings
  • The feasibility study found that the individuals most interested in an integrated managed care/long-term-care insurance product were already enrolled in a Medicare managed care plan and had purchased a long-term-care insurance policy.
• Philadelphia. The Albert Einstein Health Care Network and the Philadelphia Corporation for Aging integrated acute and long-term care for chronically ill elderly individuals living in personal care homes—assisted living facilities without skilled nursing care. (See Program Results on ID# 042438.)
  
  Results
  • The program reached a peak enrollment of 213 residents in 18 personal care homes by November 2001. But because of state budget shortages, enrollment dropped by February 2006 to 47 residents in nine homes.
• Wisconsin. In 1995, the state Department of Health and Family Services developed and implemented a community-based managed care program for frail elderly people and people with physical disabilities. (See Program Results on ID# 023246.)
  
  Results
  • The partnership created two models of integrated acute and long-term care, one for the frail elderly and the other for people with physical disabilities. Both models provided comprehensive care under full Medicare and Medicaid capitation—in which a flat rate per person per year is paid, regardless of what services are provided.
  • The partnership served 900 members by the end of 2000.
  • After the first five years of operation, all four contracting organizations were operating within their budgets.
• Minneapolis. A group of acute and long-term-care providers created a health network that collected funds from Medicare and created a risk pool so that all the providers, including the nursing homes, shared the total financial and operational risk for delivering care to project enrollees. The network, Fairview Health Partners, provided long-term-care services at internal costs. (See Program Results on ID# 024818.)
  
  Results
  • Staff of the network reported that the network improved communication and decision-making among care providers.
  • The evaluation found that the control group was hospitalized 2.4 times more often than the Fairview Health Partners group and averaged a total of 2.5 times more hospital days.
  • In 1998, the partnership earned $1.4 million from Medicare, providing the corresponding medical services at internal costs that left it with a surplus of approximately $500,000, which was shared among partners. The partnership became profitable and self-supporting.

Reverse Mortgages
The National Council on the Aging outlined steps to encourage the use of reverse mortgages to help older Americans pay for long-term-care services at home.

Reverse mortgages are a special type of loan that allow people age 62 and older to tap into the equity they have accumulated in their homes and convert it into cash, which they may use to pay for home and community-based long-term-care services and insurance. (See Program Results on ID# 047349.)

Findings

• Many seniors could benefit from reverse mortgages. Almost half (48 percent) of homeowners age 62 and older (13.2 million) are candidates for using a reverse mortgage to pay for long-term care at home.
• Seniors could receive an average of $72,000. Older members of households could receive $72,128 on average from a home equity conversion mortgage (the most popular form of reverse mortgage) to pay for immediate needs and to help prevent premature institutionalization.
• Reverse mortgages could save public funds. Increasing the market for reverse mortgages could save Medicaid from $3.3 billion to $5 billion annually by 2010, representing 6 to 9 percent of total projected annual Medicaid expenditures.

Recommendations
The report recommends the following policy changes to encourage reverse mortgages:

• Educate consumers. Expand educational efforts to increase older people's awareness and acceptance of reverse mortgages through national education campaigns, counseling by aging and disability resource centers and programs conducted by community groups.
• Create standards. Strengthen consumer protections with marketing standards, along with counseling for impaired borrowers and enhanced decision-support tools.
• Promote public/private partnerships. Public/private partnerships such as Medicaid buy-in programs could expand the mix of financing options and reduce fears of impoverishment among impaired seniors who live at home.
• Provide innovative products. Reduce the cost of reverse mortgages through new loan products and features such as shorter-term loans or medical underwriting that would provide higher payouts to impaired seniors. Government incentives, including paying some or all of the closing costs, could also encourage impaired homeowners at risk of needing Medicaid to consider this option.