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 Department'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 home placements, so costs increased. The exception is the On Lok program where day care is the core of the service package. While On Lok results do suggest that day care can be cost effective, this demonstration has some unique features which make it quite different from the others. On Lok was able to authorize the full continuum of physician, hospital, and nursing home care, making it look much more like an HMO than a typical community care program. Because of these unique characteristics, its findings may not be able to be replicated in other situations. Our community care and adult day care demonstrations have identified some very positive benefits to participants: Increased independence for the impaired person and valuable support for their family caregivers. However, these benefits do end up costing additional money since, as research has consistently shown, adult day care does not offset nursing home costs. Thank you very much. I will be happy to answer any questions you may have. [The prepared statement of Ms. Shillinglaw follows:] Mr. Chairman and Members of the Committee, I am Ellen Shillinglaw, Director of the Health Care Financing I am pleased to be here this morning to discuss with you the - 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 care and the cost effectiveness of this care. I would like to begin by offering some background on the 50,000 Americans are served in some 1,200 adult day care ago; most clients of these centers are elderly and physically disabled; many clients are developmentally disabled, mentally retarded, or mentally ill; one in thirteen clients is incontinent; nearly half are cognitively impaired, and one in five is so cognitively impaired that constant supervision is needed; one in eight is in a wheelchair and one in five relies on a walker or a cane to get around. The average participant in adult day care is a 73 year old white, She lives with a spouse, female with a monthly income of $478. relatives or friends. She may be Medicaid eligible since a reported 43 percent of participants are Medicaid recipients. The average adult day care center client attends the center for The typical center is six hours, two to three days per week. open Monday through Friday for eight or more and has 37 participants. The centers generally provide a variety of services such as nursing, nutritional services, counseling, personal care, reality therapy, exercise, social services, and transportation to and from the center. Staffing varies according to the types of services offered, but may include physicians, nurses, or social workers. Volunteers play an important role in the functioning of these centers. Most centers rely on funding from a number of sources including Federal, State, and local governments; private insurance; foundations; and donations. In the National Council on the Aging's survey, centers indicated that their major source of funding is the Medicaid program. Participant fees are next, followed by Department of Health and There were Human Services' Social Services Block Grant program. various additional sources of funding, including HHS' Administration on Aging, private donations, and State dollars. |