1. 2013-2018 NURSING HOME BED PROJECTIONS July 25 th, 2013 1

2. Nursing Home Bed Projections: Summary IntervalLicensed SupplyProjected Need Net Shortage / Surplus Detailed Shortage / Surplus 2009-20155,2005,309-109 NC: +35 Kent: +38 Sussex: -182 2010-20155,2105,830-620 NC: -314 Kent: -82 Sussex: -224 2011-20165,1485,494-346 NC: -178 Kent: +28 Sussex: -196 2012-20175,1054,973+132 NC: +169 Kent: -121 Sussex: +84 2013-20185,0815,520-438 NC: -217 Kent: +55 Sussex: -276 2

3. Bed Shortage / Surplus Stats: Trends Over Time 3

4. Variability in Projections: Why So Much Fluctuation? Data In Analysis Methods (HRMP) Data Out (NH Bed Projections) 4

5. Variability in Projections: Why So Much Fluctuation? Data In Analysis Methods (HRMP) Data Out (NH Bed Projections) Population Estimates Current Patient Day Data Current NH Bed Counts Allocation of Public NH Billable Pt Days 5

6. Private Facilities Public Facilities Year New Castle County Kent County Sussex County Total Private All Facilities HomesBedsHomesBedsHomesBedsHomesBedsHomesBedsHomesBeds 2002 262,4255530101,161414,1164655454,771 2003 262,4275530101,144414,1014655454,756 2004 262,4005521101,133414,0544653454,707 2005 272,5165521101,133424,1704652464,822 2006 262,4275530101,144414,1014655454,756 2007 272,5236642101,143434,3084626474,934 2008 262,4986642121,323444,4634626485,089 2009 262,5196642111,234434,3954626475,021 2010 262,5196642111,234434,3953591464,986 2011 262,5196642111,234434,3953591464,986 2012 272,5696672111,264444,5053576475,081 Variability in Projections: Why So Much Fluctuation? Number of NH B EDS by Year 6

7. Number of B ILLABLE P ATIENT D AYS Utilized by Year Private Facilities Public Facilities Year New Castle County Kent County Sussex County Total Private All Facilities 2002801,927171,659381,1521,354,738153,4631,508,201 2003793,095178,907380,1561,352,158144,0121,496,170 2004816,613177,472382,2531,376,338132,6031,508,941 2005800,955176,226367,3911,344,572135,6221,480,194 2006809,733175,027373,2211,357,981144,3571,502,338 2007830,921179,315371,5201,381,756142,8931,524,649 2008833,344208,235387,7151,429,294143,6401,572,934 2009824,262219,019404,2341,447,515137,5841,585,099 2010838,037218,593402,1881,458,818137,8241,596,642 2011829,974219,302398,5501,447,826131,6751,579,501 2012843,039219,558403,8421,466,439114,1771,580,616 Variability in Projections: Why So Much Fluctuation? 7

8. 8  The context for LTC is changing  Shifting toward a more community-based structure where older individuals age in place with the assistance of expanded services  Delaware has implemented more robust, wrap-around, comprehensive care for its seniors  As a result, less need for NH beds (as illustrated by decreasing utilization rates in DE public NHs)

9. Variability in Projections: Why So Much Fluctuation? Delaware P OPULATION E STIMATES (DPC) 9

10. Variability in Projections: Why So Much Fluctuation? Year Public NH Billable Patient Days (Total) % Admissions to Public NH (by County) Public NH Billable Pt Days (by County) 2009 137,584 NC: 66.7% Kent: 21.1% Sussex: 12.2% NC: 91,769 Kent: 29,030 Sussex: 16,785 2010 137,824 NC: 63.0% Kent: 21.0% Sussex: 16.0% NC: 86,829 Kent: 28,943 Sussex: 22,052 2011 131,675 NC: 60.0% Kent: 35.4% Sussex: 3.1% NC: 79,005 Kent: 46,613 Sussex: 4,082 2012 114,177 NC: 64.5% Kent: 22.6% Sussex: 13.0% NC: 73,644 Kent: 25,804 Sussex: 14,843 A LLOCATION OF P UBLIC NH B ILLABLE P T D AYS 10

11. Variability in Projections: Why So Much Fluctuation? Data In Analysis Methods (HRMP) Data Out (NH Bed Projections) Population Estimates Current Patient Day Data Current NH Bed Counts Allocation of Public NH Billable Pt Days 11

12. Variability in Projections: Why So Much Fluctuation? Data In Analysis Methods (HRMP) Data Out (NH Bed Projections) DE Veterans Home (Kent Co. Only) DE Veterans Home (Kent Co. Only) Calculation of Population Change Factor (PCF) Calculation of Population Change Factor (PCF) 12

13.  PCF = weighted average of projected population changes, from the first to the last year of the projected period  2013-2018 projection period: 2013 = first year2018 = last year  PCFs are usually greater than 1.0  When PCF > 1.0, the population is expected to increase from the first to the last year  Example: a PCF of 1.17 calculated for the 2013-2018 projection period means that from 2013 to 2018, the weighted population increase is expected to be 17% Analysis Methods (HRMP) : Population Change Factor (PCF) 13

14.  **Special PCF Rule** If the base year (2012) Average Daily Census is LESS THAN the Average Daily Census in the previous year (2011) AND If the percentage of occupancy in private NHs in the base year (2012) is LESS THAN 95%, A PCF of 1.0 will be used. Analysis Methods (HRMP) : Population Change Factor (PCF) 14

15.  **Special PCF Rule** -- Why? Rationale: Analysis Methods (HRMP) : Population Change Factor (PCF) If the base year ADC fell from the previous year, and the base year occupancy rate is less than 95%, it is assumed that the current level of NH resources in a particular county are not “maxed out”. And, if the current level of NH resources are not “maxed out”, using a PCF of 1.0 eliminates population growth as a factor in future bed projections. Using a PCF of 1.0 “freezes” the base year Average Daily Census (2012) and holds it constant for the projected year (2018). 15

16. Analysis Methods (HRMP) : Population Change Factor (PCF) E XAMPLE : K ENT C OUNTY Prior YearBase Year (2011)(2012) Private (Kent)219,302219,558 Public (Kent)46,61325,804 Total (Kent)265,915245,362 Prior YearBase Year (2011)(2012) Private (Kent)600.8601.5 Public (Kent)127.770.7 Total (Kent)728.5672.2 ÷ 365… Billable Patient DaysAverage Daily Census (ADC) (2012 ADC) / (2011 ADC) Total (Kent)92.3% 16

17. Analysis Methods (HRMP) : Population Change Factor (PCF) E XAMPLE : K ENT C OUNTY For Kent County, base year ADC (2012; 672.2) is LESS THAN the prior year ADC (2011; 728.5 ) AND the percentage occupancy for private NHs in Kent Co. in the base year (2012) is LESS THAN 95%. So, a PCF of 1.0 will be used to calculate NH bed needs for 2013-2018. 17

18. Analysis Methods (HRMP) : Population Change Factor (PCF) E XAMPLE : K ENT C OUNTY Kent County Age GroupDE Pt Days (N) DE Pt Days (%)Kent Pop ChangeWeights (2012) (2018/2013) <65 166414.2 1.0314.59 65-74 228719.5 1.1622.6 75-84 393733.5 1.1739.24 85+ 385032.8 1.2340.34 Total11738 Weighted Avg. of Projected Pop Changes:117 Calculated PCF: 1.17 Calculated Projected ADC: 786.5 Calculated Future Bed Need: 874 FINAL PCF 1.0 FINAL Projected ADC: 672.2 FINAL Calculated Future Bed Need: 747 18

19.  **Special PCF Rule** -- Why? Effect: There is fairly strong year-to-year variability in counties’ allocation of public NH beds. Also, based on the shifting context of LTC in Delaware, a larger proportion of Delawareans are choosing to “age in place” (with the assistance of community-based services), which reduces the need for public NH beds. Thus, it is more likely that counties’ public NH billable patient days will continue to decline (which, in turn, lowers the base year ADC). If a county has fewer public NH admissions in a given year (like Kent County in 2012 or Sussex County in 2011), the base year ADC will likely be lower than the previous year ADC. Analysis Methods (HRMP) : Population Change Factor (PCF) 19

20.  The current NH bed projection methodology relies heavily on population growth and county of admission as factors for calculating future bed need.  Given the shifting context of LTC, a change in projection methodology – one in which home- and community-based services are factored into the equation – might serve to smooth out some of the variability in future projections, while also providing a more accurate picture of LTC needs in Delaware. Analysis Methods (HRMP) : Population Change Factor (PCF) 20

21. Variability in Projections: Why So Much Fluctuation? Data In Analysis Methods (HRMP) Data Out (NH Bed Projections) DE Veterans Home (Kent Co. Only) DE Veterans Home (Kent Co. Only) Calculation of Population Change Factor (PCF) Calculation of Population Change Factor (PCF) 21

22.  In 2012, the Delaware Veterans Home (officially located in Kent County), operated 150 licensed beds  Unlike other private NHs in Kent County, the DE Veterans Home operated at a lower occupancy rate Analysis Methods (HRMP) : Delaware Veterans Home (Kent Co. Only) Nursing Home Billable Patient Days 2012 Number of Licensed Beds (2012) Weighted Occupancy Rate (2012) Kent County (Private) Capitol Healthcare41,92612095.7% Courtland Manor21,6857084.9% Delaware Veterans Home41,87415076.5% Pinnacle Rehab51,80815194.0% Silver Lake Center41,53112094.8% Westminster Village20,7346193.1% Kent County (Private)219,55867289.5% 22

23.  The DE Veterans Home also had fewer 2012 admissions compared to other private NHs of similar bed size Analysis Methods (HRMP) : Delaware Veterans Home (Kent Co. Only) Similarly-Sized Private NHsCounty# Licensed Beds# 2012 Admissions DE Veterans HomeKent15033 ParkviewNew Castle150270 ManorCare WilmingtonNew Castle139576 PinnacleKent151474 Harrison HouseSussex139277 23

24.  And, unlike other private NHs in Kent County, the majority of 2012 admissions to the DE Veterans Home were not Kent County residents  In 2012, 36.4% of admissions to the DE Veterans Home were among Kent County residents Analysis Methods (HRMP) : Delaware Veterans Home (Kent Co. Only) Nursing HomeNCCKentSussexMDNJPAOther Kent County (Private) Capitol Healthcare0.0%99.7%0.3%0.0% Courtland Manor10.6%84.8%2.3%0.8% 0.0%0.8% Delaware Veterans Home24.2%36.4% 0.0%3.0%0.0% Pinnacle Rehab11.6%82.5%1.7%1.5%0.6%1.9%0.2% Silver Lake Center1.2%95.4%2.2%0.6%0.2% Westminster Village4.4%89.9%4.4%0.0% 1.3%0.0% Kent County Total5.3%90.3%2.5%0.6%0.4%0.7%0.2% Percentage of Admissions by County and State of Residence, 2012 24

25.  In summary, based on the current NH bed projection methods, the DE Veterans Home is categorized as a private NH in Kent County  Yet, it represents an “outlier” in terms of other Kent Co. private NHs  Despite differences in number of admissions, occupancy rates, and the proportion of Kent County residents admitted, all 150 beds from the DE Veterans Home are assigned to Kent County as available private NH beds  This inflates the picture of total private NH beds available to the general Kent County public and works to create a surplus bed scenario for the county Analysis Methods (HRMP) : Delaware Veterans Home (Kent Co. Only) 25

26. Variability in Projections: Why So Much Fluctuation? Data In Analysis Methods (HRMP) Data Out (NH Bed Projections) DE Veterans Home (Kent Co. Only) DE Veterans Home (Kent Co. Only) Calculation of Population Change Factor (PCF) Calculation of Population Change Factor (PCF) 26 Population Estimates Current Patient Day Data Current NH Bed Counts Allocation of Public NH Billable Pt Days

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