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INTRODUCTION

Nr. Chairman, Members of the Committee, my name is Charles Reed. I have responsibility for administering the Older Americans Act program in the State of Washington. I am pleased to have this opportunity to share with you my views on the role of the Aging Network in long-term care.

This morning I would like to touch on three general subject areas. First, I will describe how we have managed long-term care system development in Washington State. This will include specific examples of the critical role played by the State and Area Agencies on Aging. Secondly, I will summarize what I believe should be the goals of national long-term care refors. And finally, I will suggest ways in which the Older Americans Act and the Aging Network can most effectively support and participate in a new, more comprehensive long-term care system for all Americans.

THE EVOLUTION OF LONG-TERN_CARE IN WASHINGTON STATE

In the absence of strong federal leadership the states, in recent years, have been the laboratories for program development and innovation in long-term care. There is great diversity among the states in terms of population, geography, resources, political environment and administrative organization. Nonetheless, we all share the challenge of responding to growing long-term care needs within the limited constraints of the Medicaid Program and whatever other federal, state and local resources we can muster.

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Prepared Statement of Charles E. Reed

Washington State is often recognized as one of the leaders in this effort. Let me briefly mention some of the major developments which characterize our experience:

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In the mid-seventies the Washington State Office on Aging established a Network of thirteen Area Agencies with strong local community sponsorship.

From the beginning the Aging Network has operated with an organizational "Culture of Advocacy and with close collaboration between the State and Area Agencies.

Our state took the Older Americans Act seriously. Re adopted as our Mission the promotion, planning and coordination of a "comprehensive system of services" for older persons.

Each of our Area Agencies has established one or more Senior Information and Assistanca programs which facilitate access to all available benefits and services.

Over the years we have increasingly targeted our efforts to assist those older persons in the greatest social and economic need. We were one of the first states to allocate QAA resources according to a formla designed to benefit low income and minority elders.

In the early eighties we assumed responsibility for managing access to state and federally funded home and community care programs for disabled adults as well as the elderly. We also secured a Medicaid Waiver allowing greater flexibility in the use of Title XIX.

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By the mid eighties our commitment to case management was such that we became one of the first states to codify written performance standards. During this period we used Older Americans Act funds to expand case management within the Aging Network to support the expansion of home/community care.

We conducted a Strategic Planning exercise with the entire Aging Network in 1986 and confirmed that we ware definitely in the long-term care business".

Late in 1986 we assumed responsibility for administering the state's nursing home program. This assignment consolidated our management authority and facilitated further progress in long-term care system coordination.

Currently we chair a Long-Term Care Policy Group within the "umbrella agency" for social and health services. This Policy Group allows the State Agency on Aging to work together with specialized divisions serving the mentally ill, developmentally disabled, medically fragile children and others.

As we work together to improve long-term care for all ages and disabilities, the Aging Network remains a prominent and successful model for local advocacy, planning and service coordination for a vulnerable population with specialized needs.

I believe the Aging Network's greatest success has been in the establishment of a solid foundation of Senior Information and Assistance and Case Management services which provide effective access to health promotion, community support and long-term care services. Area Agencies have also demonstrated the ability to develop and manage contracts with specialized service providers. It is important to note that the Area Agencies on Aging have been allowed to freely exercise their Advocacy role in Washington State. While they mast live within the bounds of their own fixed budgets, they have not been accountable for managing client eligibility and expenditures under the large Medicaid entitlements. Our state agency performs these functions, for both disabled adults and elderly, through a separate network of field offices staffed with state employees.

The Washington State long-term care system includes full range of family caregiver support, in-home care, community support services and nursing home care. Our own State Agency serves nearly 20,000 disabled adults and older persons in the community. We have about 17,000 in nursing home settings. Half our budget is financed with state revenues.

Despite our considerable progress, I must report to you that Washington State is unable to keep up with the growing need for long-term care services.

Unfortunately, our experience is in many ways typical of most other states. Our long-term care system remains fundamentally biased toward nursing home services because of the Medicaid entitlement and the limitations of our Home/Community Care Waiver. The nursing

home budget is so large and rapidly growing that it threatens to crowd out funding for discretionary home care and community services. We must compete for resources with education, public welfare and other state priorities.

The bottom line is that states don't have the resources to solve this problem alone. We need greater and much more flexible federal assistance. This is particularly true now that the middle class is becoming aware of the risks associated with disability. This is no longer a question of providing adequate services for the low income population. As Bob Ball said, in the title of his recent book on the subject: .We're all in this together."

RECOMMENDATIONS FOR A NATIONAL POLICY ON NG-TERM CARE

The Brookings Institution completed a major study of long-term care financing in 1988. The conclusion was that private sector initiatives, including private long-term care insurance, would play an important but secondary role in shaping the long-term care system of the future. In the Fall of 1990, concurring with the Brookings conclusion, the Pepper Commission emphasized the paramount need to develop a new and more comprehensive public long-term care program.

The recommendations which I will make reflect the sense of urgency which is growing at the state level across the country. I present for your consideration a set of principles for long-term care reform which are based on a detailed legislative proposal developed by the National Association of State Units on Aging (KASUA).

NASUA is comprised of the state administrators responsible for operating this country's aging and long-term care programs. These are the people who understand the strengths and weaknesses of the current system.

The basic principles are

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marized below:

In the face of a rapidly growing population of disabled persons of all ages, and the imminent risk to families of all income levels, a federal social insurance program must provide the basis for long-term care financing.

The program should provide equitable benefits based on an individual assessment of functional capacity, regardless of age, income or particular disability.

The new program should fully cover home and community support services and at least the first three months of nursing home care.

Case management should be an integral component of the new program to ensure advocacy protection for vulnerable individuals, as well as cost-effective coordination with the acute health care system and informal caregivers who may be available.

Administration of the program should be delegated, under federal guidelines, to the states, the governmental level with the most experience in long-term care.

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THE AGING NETWORK ROLE IN LONG-TERM CARE REFORM

The Older Americans Act, notwithstanding its limited budget, has been successful in raising public awareness of the unique interests and needs of the elderly. More importantly, the Act created a National/State/Local Aging Network to promote, develop and deliver specialized programs. In some parts of the country the Network has been instrumental in moving the long-tem care system from an institutional focus to home and community-based care.

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As we begin to anticipate comprehensive refom of our national long-term care system, it is important to consider what continuing role might be played by the Older Americans Act and the Aging Network. The following are my own personal observations on this timely question:

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Financing for LTC social insurance should be primarily a federal responsibility. The tax or combination of taxes designated for this purpose should reflect "ability to pay, produce revenue commensurate with expected benefit growth and require contributions from taxpayers of all ages.

Effective quality assurance mechanisms must be included.

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The "Field of Aging" is not synonymous with "Long-Term Care". The status and wellbeing of older persons in our society is multifaceted. The Aging Network must resist the temptation to put all its eggs in the LTC basket.

Long-term care is, of course, one of the most critical
issues and two-thirds of the consumer population are over
aga 65.
However, a very important one-third is made up
of younger groups with a multiplicity of very different
interests. The Aging Network must work with many
partners to design the new system.

Recent reorganization of the Office of Human Development Services has resulted in the elevation of AQA to the Office of the Secretary of HHS. This is an important development. The Administration on Aging should be led by someone with the rank and status of an Assistant Secretary, with authority to exercise leadership in coordinating the many federal agencies involved in aging and long-term care.

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The key objective in long-term care reform is the
establishment of a universal and equitable benefit,
regardless of age, income or particular disability.
this extent the long-term care system should be, in
effect, "generic". The organization of the service
delivery system is a very different matter. Specialized
service programs and specialized case management may be
more effective than a single integrated system for all
disabled persons.
I described earlier the approach we
have used successfully in Washington State. However, I
can not recommend this as a national model. One of the
most important principles of long-term care reform must
be respect for state flexibility in the design of service
delivery systems. It would be a great mistake to
underestimate the unique traditions and circumstances
that we find across this country.

5. Many Area Agencies on Aging have acquired considerable experience as a key component of their local long-tem care systems. This is true in my own state. However, I think it is important to carefully examine the assumption that the long-term care system of the future should be built around the AAAS. This is a judgement which must be left to the states. There are numerous policy and organizational consideratioas associated with the management of social, health and long-term care programs. The states are in the best position to work with local communities to resolve these issues.

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These words of caution are not meant to discourage an assertive role in long-term care for Area Agencies on Aging. On the contrary, both State and Area Agencies should play an active role in this debate and in the planning process which will eventually follow. Xy purpose is merely to guard against the common mistake of generalizing too much from our ONE state or local experience.

I certainly join others in pointing out the fact that OAA funding, modest as it is, has not kept pace with inflation and population growth in recent years. The Aging Network will need stable resources if it is to continue providing specialized advocacy for elder rights. Additional resources will be needed to plan and support the specialized aging components of long-ter care reform.

In conclusion, let me put in a word of praise and gratitude for the Long-Term Care Resource Centers which have been funded under the Older Americans Act. Re and many other state agencies have been assisted and look forward to a continuing working relationship.

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