How Does A Fee For Service State Respond to the Need for Care Integration? Robert Applebaum Scripps Gerontology Center Miami University American Society on Aging April 2011

Ohio Allocation of State-Only General Revenue Funds, 2008 (about 22 billion dollars) Medicaid 24%

Who Are the Medicaid Consumers in Ohio? Families, Women & Children 80% (All managed care) Aged Blind & Disabled 20%(little managed care) 68% 32% Source: Health Policy Institute of Ohio. Ohio Medicaid basics 2009

Ohio Medicaid Spending by Major Categories, 2008 ($13 Billion) Hospitals 26 Cents Nursing Facilities 19.6 Cents ICFDD 5.7 Cents Pres. Meds 8.7 Cents HCBS Waivers 10.7 Cents Physicians 8.7 Cents Adm. 3.1% All others 17.4 Cents Breakdown approx 55% acute costs 45% long-term care

Ohio’s Medicaid Challenge (s) No question that we have to make major changes-- Problem is we have multiple Medicaid challenges and there may not be one solution. Problem # 1 Higher institutional use and expenditures for the over 65 group, bad integration of care, but not high acute care costs, under Medicaid. Problem # 2 High per member per month (both acute and long- term care) expenditures for individuals under age 65 with physical disability- growing nursing home use, bad integration. Problem # 3 High per member per month expenditures for individuals with developmental disabilities. Balance a problem. Problem # 4 Medicaid grows when unemployment rises for all under age 65. Today will focus on problems 1 and 2.

Ohio uses nursing homes at a higher rate then most other states (for age 75 and over ranks 6 th ). About 25% of Ohio’s severely disabled population are long stay nursing home users (Low use states 16%). Ohio has a higher Medicaid payment rate than most states (ranks 7 th ) --although rate has been flat for last 6 years– Two-thirds of Ohio NF residents on Medicaid. Ohio per person institutional expenditures are higher than most states (ranks 7 th ). ODH estimates in 2015 state will be overbedded by 5200 beds, if occupancy rates are 90%. Problem # 1 Higher Use and Costs of Nursing Homes

Ohio's Total Medicaid Expenditures for Facilities and HCBS (All Individuals with Disability) $4.85 Billions of dollars

Medicaid Expenditures for LTCSS, 2009 (in Millions of Dollars) Physical/Cognitive Developmental Disabilities NF $2,544 (80%)ICFDD (44%) $744.2 HCBS Waivers PASSPORT $341.0Individual Options $807.7 Ohio Home Care $196.9Level One $58.4 Transitions Aging Carve-Out $44.1 Transitions Developmental Disabilities $68.2 Assisted Living $19.4 PACE $22.5 Choices $7.0 Total HCBS waivers $631.2Total HCBS waivers $934.3

Medicaid Utilization of LTCSS, 2009 Physical/Cognitive Developmental Disabilities NF (56%) 49,650ICF (24%) 7,299 HCBS Waivers PASSPORT 26,649Individual Options 14,326 Ohio Home Care 7,692Level One 5,702 Transitions Aging Carve-Out 1,573 Transitions Developmental Disabilities 2,888 Assisted Living 1,066 PACE 710 Choices 390 Total HCBS waivers 38,338Total HCBS waivers 22,916

How Nursing Home Use has Changed In last 10 years overall Medicaid nursing home census has dropped by 6%, private nursing home use has dropped by 26%, and Medicare has increased by 150%. In last 10 years the over age 60 Medicaid nursing home use has dropped by 10%, even though we have increased the over 85 population by 75,000. In last 10 years the under age 60 Medicaid nursing home use has increased by 17%.

Six Month Follow-Up Results of AAA Diversion and Transition Intervention (March February 2011) Total (3233) (1974) (1259) Placement at 6 monthsDiversionTransition (percent) Home/Community AL 3 14 NF Deceased 17 10

Solutions to Problem # 1 Remove excess NF bed capacity from system. Achieve better balance between NF and HCBS expenditures. Continue focus on transitions and diversions. Figure out workable system to better integrate care for dual eligibles– one that really works! ACO, Medical- Health Homes, Managed Care, PACE, Hybrid, 65 plus very low Medicaid acute Recognize that systems have developed separately across the state and reform needs to build on what works. Better efforts to keep individuals from needing Medicaid– prevention efforts, support for non-Medicaid services, family 51% older people with severe disability on Medicaid– will grow by 25% in next 10 years. 66% NF Medicaid, 8% 65 plus in community on Medicaid.

Problem # 2 High Per Member Per Month Cost for Long- Term and Acute Care, Growing Nursing Home Use, More Balance (For Individuals Under Age 65) Very high waiver and Medicaid acute care costs. Increased use of nursing homes (up 17% last ten years). Demographic challenges upon us right now. Increased concerns about growth in individuals with mental health needs. Current health and long-term care systems not well integrated.

Medicaid Per-Member, Per-Month (PMPM) Expenditures for People Who Received Long-Term Services & Supports (LTCSS), 2009 Type of Facility or Program Acute care cost/Total cost LTCSSHealth-CareTotal Nursing Facility (14%) $4,281$697$4,978 ICFDD (6%) $8,520$547$9,067 PASSPORT 65+ (28%) PASSPORT (58%) $1,100 $980 $430 $1,388 $1,530 $2,368 Ohio Home Care (53%) $2,133$2,441$,4574 Assisted Living (18%) $1,518$325$1,843 Aging Carve-Out (42%) $2,339$1,701$4,040 PACE Capitated rate$2,645 Choices (22%) $1,500$432$1,932 Individual Options (12%) $4,698$639$5,337 Level One (35%) $854$451$1,305 Transition Developmental Disabilities (57%) $1,968$2,653$4,621

Solutions to Problem # 2 Develop a plan to better integrate acute and long-term care and better allocate costs for under 60 waiver participants. Relatively stable enrollment, high health needs group. Explore managed care options. Develop a plan to better integrate care and better allocate costs for PASSPORT participants age Explore ACO’s or AAA demonstration. Address growing population of individuals with mental health needs using nursing homes. Improve housing options for adults with physical disabilities and mental health needs. Use the diverse care options as a strength by evaluating natural field labs in preparation for the demographic changes ahead.

Lessons From the Data Window for reform is now– I0-15 years to transform the system– current approach is unsustainable Tremendous current budgetary pressure to do something– our challenge is to not just do something, but to do the right something. We have not figured out how to really integrate acute and long-term care, but we must! We need to build our system from strength, but be willing to experiment and change. Data and outcomes should drive policy decisions to create an efficient and effective system. We need every ounce of innovation that we can muster.