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MEDICARE EXPENDITURES FOR MEDICARE EXPENDITURES FOR RESIDENTS IN ASSISTED RESIDENTS IN ASSISTED LIVING: DATA FROM A LIVING: DATA FROM A

NATIONAL STUDY NATIONAL STUDY Phillips CPhillips C11, Holan S, Holan S22, Sherman M, Sherman M22, Spector , Spector

WW33, Hawes C, Hawes C11..

Texas A&M University System Health Texas A&M University System Health Science CenterScience Center11

Texas A&M UniversityTexas A&M University22

Agency for Healthcare Research and Agency for Healthcare Research and QualityQuality33

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ACKNOWLEDGEMENTSACKNOWLEDGEMENTS

Grant RO1-HS-10606 (C. Phillips, PI) Grant RO1-HS-10606 (C. Phillips, PI) from the Agency for Healthcare from the Agency for Healthcare

Research and Quality supported this Research and Quality supported this research. research.

Collection of the resident and facility Collection of the resident and facility data was supported by contracts HHS-data was supported by contracts HHS-

100-94-0024 and HHS-100-98-0013 100-94-0024 and HHS-100-98-0013 from the Office of Disability, Aging, and from the Office of Disability, Aging, and

Long-Term Care Policy, Office of the Long-Term Care Policy, Office of the Assistant Secretary for Planning and Assistant Secretary for Planning and

Evaluation (ASPE), U.S. Department of Evaluation (ASPE), U.S. Department of Health and Human Services. Health and Human Services.

Claims data were provided by the Claims data were provided by the Centers for Medicare and Medicaid Centers for Medicare and Medicaid

Services.Services.

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RESEARCH OBJECTIVESRESEARCH OBJECTIVES

To investigate Medicare To investigate Medicare expenditures for assisted living expenditures for assisted living facility (ALF) residents and facility (ALF) residents and

To investigate whether ALF To investigate whether ALF characteristics were related to characteristics were related to Medicare expenditures for ALF Medicare expenditures for ALF residents.residents.

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AASSISTED LIVING IN SSISTED LIVING IN UNITED STATES, 1998UNITED STATES, 1998

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DEFINING ASSISTED LIVINGDEFINING ASSISTED LIVING

““A congregate residential setting A congregate residential setting that provides or coordinates personal that provides or coordinates personal services, 24-hour supervision, and services, 24-hour supervision, and assistance (scheduled and assistance (scheduled and unscheduled), activities, and health unscheduled), activities, and health related services....” (ALQC, 1998)related services....” (ALQC, 1998)

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ALF “PHILOSOPHY”ALF “PHILOSOPHY”

“…“…to minimize the need to move; …. to minimize the need to move; …. to accommodate residents’ changing to accommodate residents’ changing needs and preferences; …. to needs and preferences; …. to maximize residents’ dignity, maximize residents’ dignity, autonomy, privacy, independence, autonomy, privacy, independence, and safety; and …. to encourage and safety; and …. to encourage family and community involvement.” family and community involvement.” (ALQC, 1998)(ALQC, 1998)

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Hypothesized Relationship Between Assisted Living andOther Types of Residential Long-Term Care

ACUITY High

Low low $ AVERAGE MONTHLY CHARGE

High $

CongregateLiving

Nursing Homes

B&C Homes

Assisted Living

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AL INDUSTRY IN USA – AL INDUSTRY IN USA – 1998*1998*

CALLED ALFs, OR PROVIDE PERSONAL CARE, 24 CALLED ALFs, OR PROVIDE PERSONAL CARE, 24 HR. SUPERVISION, MORE THAN 10 BEDSHR. SUPERVISION, MORE THAN 10 BEDS 11,459 ALFs operated nationwide11,459 ALFs operated nationwide 611, 000 beds 611, 000 beds 521,000 residents. 521,000 residents. $1,600 most common monthly charge $1,600 most common monthly charge Almost exclusively private-payAlmost exclusively private-pay 77% in metropolitan areas77% in metropolitan areas Avg. number of units is 53Avg. number of units is 53 <50% of total units are apartments<50% of total units are apartments 1/3 of ALF offer minimal service or privacy1/3 of ALF offer minimal service or privacy*Estimates based on national sample of 1,500 facilities*Estimates based on national sample of 1,500 facilities

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ALF RESIDENTS AND CLAIMS ALF RESIDENTS AND CLAIMS DATADATA

On-site data collection in facilities with either high On-site data collection in facilities with either high services or high privacy --, those consistent with services or high privacy --, those consistent with ALF philosophy (40% of 1,500; sample of 300 ALF philosophy (40% of 1,500; sample of 300 facilities; 1,500 residents)facilities; 1,500 residents)

Analyzed Medicare claims data for six months Analyzed Medicare claims data for six months after baseline ($ paid)after baseline ($ paid)

Only for residents still in ALF at 7 month follow-up Only for residents still in ALF at 7 month follow-up (n= 1,202)(n= 1,202)

Only 545 (46%) supplied HIC number that could Only 545 (46%) supplied HIC number that could be matched with claims databe matched with claims data

Compared 545 with 1202 on 17 characteristics Compared 545 with 1202 on 17 characteristics with only one significant difference (% w/ with only one significant difference (% w/ hospitalization in 12 months prior to baseline)hospitalization in 12 months prior to baseline)

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ALF RESIDENT CHARACTERISTICS AT BASELINE (N=66,092 ; n=545)

Age 84

Female 76%

Married 13%

Some ADL assistance 18%

Intact or Mild Cognitive Impairment 82%

Never Incontinent of urine 67%

Length of stay in facility 2-3

ER visit in last year 25%

Hospital stay in last year 38%*

Multi-level campus 64%

Full-time nurse on staff 71%

High privacy 66%

Average Price $1,757

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MEDICARE EXPENDITURES MEDICARE EXPENDITURES FOR INDIVIDUALS FOR INDIVIDUALS RESIDING IN ALFsRESIDING IN ALFs

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MEDICARE EXPENDITURES FOR ALF RESIDENTS, 1998 (N=66,092 ; n=545)

Acute/post-acute

Outpatient Total

Six MonthMean (Std. Error)

$1,507($237)

$883($99)

$2,391($286)

Annualized Mean $3,014 $1,764 $4,782

Residents With Claims 22.12% 84.42% 84.62%

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MEDICARE EXPENDITURESMEDICARE EXPENDITURES

On an annualized basis, average On an annualized basis, average Medicare expenditures for an ALF Medicare expenditures for an ALF resident were $4,782.resident were $4,782.

1996 average Medicare expenditures 1996 average Medicare expenditures for community-dwelling beneficiaries for community-dwelling beneficiaries adjusted for two years of inflation are adjusted for two years of inflation are $4,465. $4,465.

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MEDICARE EXPENDITURESMEDICARE EXPENDITURES

In 1997, the 15% of beneficiaries In 1997, the 15% of beneficiaries incurred annual Medicare costs of $10,000 or incurred annual Medicare costs of $10,000 or

greater,greater, received over 75% of total Medicare expenditures received over 75% of total Medicare expenditures

Among AL residents, in six months of data, Among AL residents, in six months of data, 14.8% of the residents 14.8% of the residents had Medicare claims that totaled $5,000 or more. had Medicare claims that totaled $5,000 or more. represented 78% of Medicare expenditures for the represented 78% of Medicare expenditures for the

sample. sample.

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MEDICARE EXPENDITURESMEDICARE EXPENDITURES

For those beneficiaries using For those beneficiaries using services, the annual average is services, the annual average is approximately $5,800. approximately $5,800.

The average Medicare program The average Medicare program payment for aged beneficiaries payment for aged beneficiaries served in calendar year 1999 was served in calendar year 1999 was $5,635$5,635

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FACTORS ASSOCIATED FACTORS ASSOCIATED WITH MEDICARE WITH MEDICARE EXPENDITURESEXPENDITURES

FOR ALF RESIDENTSFOR ALF RESIDENTS

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TWO-PART UTILIZATION TWO-PART UTILIZATION MODELMODEL

Logistic regression Logistic regression Inpatient $, outpatient $, total $Inpatient $, outpatient $, total $ Individual characteristicsIndividual characteristics Facility characteristicsFacility characteristics

OLS regression OLS regression Inpatient $, outpatient $, total $ (logged)Inpatient $, outpatient $, total $ (logged) Individual characteristicsIndividual characteristics Facility characteristicsFacility characteristics

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RESULTS FOR LOGISTIC RESULTS FOR LOGISTIC REGRESSION FOR ALL REGRESSION FOR ALL

RESIDENTSRESIDENTS INDIVIDUAL CHARACTERISTICSINDIVIDUAL CHARACTERISTICS

Variables with significant effects (p<.05) Variables with significant effects (p<.05) -- age, ADL status, incontinence-- age, ADL status, incontinence

Variables without significant effects Variables without significant effects (p>.05) – gender, cognitive function, (p>.05) – gender, cognitive function, marital status, length of stay, marital status, length of stay, hospitalization in prior year, ER visit in hospitalization in prior year, ER visit in prior yearprior year

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RESULTS FOR LOGISTIC RESULTS FOR LOGISTIC REGRESSION FOR ALL REGRESSION FOR ALL

RESIDENTSRESIDENTS FACILITY CHARACTERISTICSFACILITY CHARACTERISTICS

Variables with significant effects (p<.05) – Variables with significant effects (p<.05) – nonenone

Variables without significant effects (p>.05) Variables without significant effects (p>.05) – ownership, size, occupancy, multi-level – ownership, size, occupancy, multi-level campus, privacy level, service level, price, campus, privacy level, service level, price, and locationand location

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OLS RESULTS FOR RESIDENTS OLS RESULTS FOR RESIDENTS UTILIZING SERVICESUTILIZING SERVICES

INDIVIDUAL CHARACTERISTICSINDIVIDUAL CHARACTERISTICS

Variables with significant effects (p<.05) – Variables with significant effects (p<.05) – cognitive status, ADL status, length of staycognitive status, ADL status, length of stay

Variables without significant effects (p>.05) Variables without significant effects (p>.05) – gender, age, marital status, incontinence, – gender, age, marital status, incontinence, hospitalization in prior year, ER visit in prior hospitalization in prior year, ER visit in prior yearyear

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OLS RESULTS FOR RESIDENTS OLS RESULTS FOR RESIDENTS UTILIZING SERVICESUTILIZING SERVICES

FACILITY CHARACTERISTICSFACILITY CHARACTERISTICS

Variables with significant effects (p<.05) – Variables with significant effects (p<.05) – size, occupancysize, occupancy

Variables without significant effects (p>.05) Variables without significant effects (p>.05) – ownership, multi-level campus, privacy – ownership, multi-level campus, privacy level, service level, price, and locationlevel, service level, price, and location

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CONCLUSIONSCONCLUSIONS

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Medicare expenditures for individuals in Medicare expenditures for individuals in assisted living are very similar to those of assisted living are very similar to those of other community-dwelling elderlyother community-dwelling elderly

Medicare expenditures for ALF residents are Medicare expenditures for ALF residents are largely driven by individuals characteristicslargely driven by individuals characteristics

Facility size may affect the level of Facility size may affect the level of Medicare expenditures for those using Medicare expenditures for those using services -- lower expenditures for residents services -- lower expenditures for residents in smaller facilitiesin smaller facilities