when, but this is our number one priority for this year, and we hope to have it done within a year or so if funds can be obtained. The CHAIRMAN. Thank you. Thank you both for giving us some excellent testimony and good background.

Mr. PETERSON. Thank you.

The CHAIRMAN. The next witness is Ellen Shillinglaw, Director of the Office of Legislation and Policy for the Health Care Financing Administration.

STATEMENT OF ELLEN SHILLINGLAW, DIRECTOR, OFFICE OF LEGISLATION AND POLICY, HEALTH CARE FINANCING ADMINISTRATION

Ms. SHILLINGLAW. My name is Ellen Shillinglaw, and I am the Director of the Office of Legislation and Policy for the Health Care Financing Administration.

I am pleased to be here this morning to discuss with you the issue of day care for non-institutionalized adults. There are thousands of young as well as elderly adults with serious health impairments being cared for at home who benefit from the extra assistance provided by an adult day care center.

Adult day care centers are designed to afford relief for family care givers, allowing the family members to continue working and attending to the needs of children and other family members.

The Department of Health and Human Services has a key role in funding adult day health care. My statement will focus on a profile of our experience with community based care, including adult day health, and the cost effectiveness of this care.

I will go into some detail later in my testimony about cost effectiveness, but would like to indicate that adult day health care should be viewed, by and large, as additional services to additional clients and not as a substitute for nursing home care.

I would like to begin by offering some background on the clientele and services of adult day care centers.

Adult day care centers vary a great deal in the services they provide to their clientele, but there are similarities in the programs and populations served. The most comprehensive analysis of adult day care is from a 1985 National Council on Aging survey of adult day care centers that found 50,000 Americans are served in some 1,200 adult day care centers.

Most clients of these centers are elderly and physically disabled, and many clients are developmentally disabled, mentally retarded, or mentally ill. The average participant in adult day care is a 73year-old, white female with a monthly income of $478. She lives with a spouse, relatives, or friends, and she attends the center for 6 hours 2 to 3 days a week.

The typical center is open Monday through Friday for 8 or more hours a day and has 37 participants. It provides a variety of services such as nursing, nutritional services, counseling, and transportation.

The largest single funding source of adult day care is the Medicaid program, but centers do rely on a variety of funding mechanisms. Medicaid permits coverage of these services primarily through home and community based waiver programs. However,

States may choose to provide them through clinic, rehabilitation, or outpatient service options.

There are 31 States which operate 47 home and communitybased care waivers that include adult day health as a part of a program to avoid institutionalization. Between 1985 and 1987, these programs spent $28.4 million specifically on adult day care services.

For example, a Minnesota waiver pays $8,916 per person per year for community-based services which include adult day care. Institutional care would cost approximately $10,000. In a Rhode Island program, community care runs $7,393 per year compared to $8,050.

Although these numbers indicate that annual community-based care costs per client are less than nursing home costs, it is important that one not reach the conclusion that such care is cost effective in the aggregate.

The Department has initiated two kinds of demonstrations which contribute to our understanding of the cost effectiveness of adult day care and its capacity to substitute for nursing home care. One tested the cost effectiveness of community care, including adult day care. The other looked specifically at adult day care programs.

The first includes over 15 years of experience in operating case management and community-based care demonstrations intended to provide cost-effective care to the frail elderly. The largest of these initiatives are the Channeling Demonstration and the recently completed evaluation of the home and community-based waivers program under Medicaid.

In 1980, the long-term care Channeling Demonstration program was launched to test whether a carefully managed approach to the provision of community-based long-term care could control overall long-term care costs for frail elderly individuals who were at risk of being placed in nursing homes.

Under this study, over 6,000 individuals received expanded inhome and community-based services including day care services. While these services reduced unmet needs and improved client and informal caregiver satisfaction, they did not result in substantial reductions in nursing home use, even though the targeted group was made up of extremely frail individuals.

In fact, the rate of institutionalization of the demonstration group and the control group were virtually identical and relatively low, about 13 percent at the end of the first year.

In a recent comprehensive review of the Ďepartment's community care demonstration experience, the National Center for Health Services Research reports that the populations served by these demonstrations turned out to be at relatively low risk of nursing home placement, precluding large reductions in nursing home use. In short, our work has repeatedly shown that expanding publicly financed community care does not reduce aggregate costs. In fact, it dramatically increases costs.

We looked at the cost effectiveness of adult day care as a more discrete service in at least three studies, the adult day care homemaker experiments, the Georgia Health Alternative Project, and On Lok in California.

The results of these studies largely confirm the previous findings, that the populations served turned out to be at low risk of nursing

Medicare funding will result in the development of national certification standards and a method of quality assurance. Although NIAD and NCOA have developed national standards, they are generic and voluntary. It would be helpful to the field to ensure that centers provide quality programs through a national certification process.

NIAD and NCOA would be happy to work with HCFA not only in developing standards for certification but also for procedures and training for State employees.

Medicare reimbursement would also increase center resources, thus enabling those centers who wish to qualify for certification to add additional services if needed.

In my opinion, we have about 50 to 65 percent of the persons currently enrolled in adult day care who would be eligible under the intermediate care or skilled care criteria for nursing home care.

Senators, adult day health care has had over 10 years of experience. It exists in every State. The fact that four bills in Congress include adult day care means there is growing interest and recognition of the value of this service.

NCOA/NIAD believes the time for Federal legislation is now. We do not need further research, studies, or demonstrations. Financially, we cannot wait. Clearly, the present system is insufficient, inequitable, and bankrupts our Nation's frail and impaired population.

Thank you.

[The prepared statement of Ms. Larmer follows:]

Testimony

of

The National Council on the Aging, Inc.

and

The National Institute on Adult Daycare

Before The

Special Committee on Aging

United States Senate

April 18. 1988

Presentation to

Senate Special Committee on Aging

Monday, April 18. 1988

Senator Melcher, Honorable Committee Members. I am Kay Larmer. Coordinator for Fairfax County's Adult Day

Health Care Centers and past

National Institute on Adult

Chairperson of the

Daycare (NIAD). a

membership unit of the National Council on the Aging. Inc. (NCOA). the National Council on the Aging. Inc.. founded in 1950. i national nonprofit

anization.

Its membership includes individuals, voluntary agencies and associations, business organizations and labor unions united by a commitment to the principle that the nation's older people are entitled to lives of dignity. security. physical. mental and social well-being. and to full participation in society.

is the only

The National Institute on Adult Day care organization composed of professionals in the field working to develop and expand the adult daycare field. to advocate for those who rely on adult daycare for daily and continuing support and care. and for those working to ensure that adult daycare is of the highest quality, based on solid standards of

available throughout the nation.

excellence and

I

a m

very pleased to be here today and have the opportunity to testify on behalf of Adult Day Health Care and its benefits to older people and their families/caregivers.

Though the majority of older persons can be expected to live out their lives with minimal difficulty, there is an alarming increase of der people who have · jor disabilities and chronic diseases. There are well

documented statistics, which I am sure this Committee has on record, about the increasing number of people over age 75, persons most likely to be "at risk" and

поге

susceptible to impairments.

These statistics

coupled with the high cost of institutional care, the long waiting lists for nursing homes, and the large numbers of inappropriate and premature institutional placements, have mandated the development of cost effective, yet quality community-based care for the

nation's frail and impaired adults.

During the past ten years. Adult Day Health Care has developed to meet the needs of this population. It provides a variety of services and activities that enable impaired adults to remain in their homes and communities. As the term implies, adult day health care is a program of care during the day in a protective group setting. It is an innovative and effective way to organize and blend traditional health and social services for impaired adults. Although day health care is not a new concept, it is still not an integral part of long term care in many areas. It was first introduced in the early 1960s, but it has been very slow to develop largely due to the lack of stable funding sources. In 1973 there were only 15 programs nationwide; today however, there are over 1400 serving approximately 66,234 persons daily. This growth has been largely a grassroots movement.