Handbook of

Long-Term Care
Administration
and Policy

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 PUBLIC ADMINISTRATION AND PUBLIC POLICY

A Comprehensive Publication Program

EDITOR-IN-CHIEF

EVAN M. BERMAN
Huey McElveen Distinguished Professor
Louisiana State University
Public Administration Institute
Baton Rouge, Louisiana

Founding Editor

JACK RABIN
Professor of Public Administration and Public Policy
The Pennsylvania State UniversityHarrisburg
School of Public Affairs
Middletown, Pennsylvania

1. Public Administration as a Developing Discipline,

Robert T. Golembiewski
2. Comparative National Policies on Health Care, Milton I. Roemer, M.D.
3. Exclusionary Injustice: The Problem of Illegally Obtained Evidence,
Steven R. Schlesinger
5. Organization Development in Public Administration, edited by
Robert T. Golembiewski and William B. Eddy
7. Approaches to Planned Change, Robert T. Golembiewski
8. Program Evaluation at HEW, edited by James G. Abert
9. The States and the Metropolis, Patricia S. Florestano
and Vincent L. Marando
11. Changing Bureaucracies: Understanding the Organization before
Selecting the Approach, William A. Medina
12. Handbook on Public Budgeting and Financial Management, edited by
Jack Rabin and Thomas D. Lynch
15. Handbook on Public Personnel Administration and Labor Relations,
edited by Jack Rabin, Thomas Vocino, W. Bartley Hildreth,
and Gerald J. Miller
19. Handbook of Organization Management, edited by William B. Eddy
22. Politics and Administration: Woodrow Wilson and American Public
Administration, edited by Jack Rabin and James S. Bowman
23. Making and Managing Policy: Formulation, Analysis, Evaluation,
edited by G. Ronald Gilbert
25. Decision Making in the Public Sector, edited by Lloyd G. Nigro
26. Managing Administration, edited by Jack Rabin, Samuel Humes,
and Brian S. Morgan
27. Public Personnel Update, edited by Michael Cohen
and Robert T. Golembiewski

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 28. State and Local Government Administration, edited by Jack Rabin
and Don Dodd
29. Public Administration: A Bibliographic Guide to the Literature,
Howard E. McCurdy
31. Handbook of Information Resource Management, edited by Jack Rabin
and Edward M. Jackowski
32. Public Administration in Developed Democracies: A Comparative Study,
edited by Donald C. Rowat
33. The Politics of Terrorism: Third Edition, edited by Michael Stohl
34. Handbook on Human Services Administration, edited by Jack Rabin
and Marcia B. Steinhauer
36. Ethics for Bureaucrats: An Essay on Law and Values, Second Edition,
John A. Rohr
37. The Guide to the Foundations of Public Administration,
Daniel W. Martin
39. Terrorism and Emergency Management: Policy and Administration,
William L. Waugh, Jr.
40. Organizational Behavior and Public Management: Second Edition,
Michael L. Vasu, Debra W. Stewart, and G. David Garson
43. Government Financial Management Theory, Gerald J. Miller
46. Handbook of Public Budgeting, edited by Jack Rabin
49. Handbook of Court Administration and Management, edited by
Steven W. Hays and Cole Blease Graham, Jr.
50. Handbook of Comparative Public Budgeting and Financial Management,
edited by Thomas D. Lynch and Lawrence L. Martin
53. Encyclopedia of Policy Studies: Second Edition, edited by
Stuart S. Nagel
54. Handbook of Regulation and Administrative Law, edited by
David H. Rosenbloom and Richard D. Schwartz
55. Handbook of Bureaucracy, edited by Ali Farazmand
56. Handbook of Public Sector Labor Relations, edited by Jack Rabin,
Thomas Vocino, W. Bartley Hildreth, and Gerald J. Miller
57. Practical Public Management, Robert T. Golembiewski
58. Handbook of Public Personnel Administration, edited by Jack Rabin,
Thomas Vocino, W. Bartley Hildreth, and Gerald J. Miller
60. Handbook of Debt Management, edited by Gerald J. Miller
61. Public Administration and Law: Second Edition, David H. Rosenbloom
and Rosemary O'Leary
62. Handbook of Local Government Administration, edited by
John J. Gargan
63. Handbook of Administrative Communication, edited by
James L. Garnett and Alexander Kouzmin
64. Public Budgeting and Finance: Fourth Edition, edited by
Robert T. Golembiewski and Jack Rabin
67. Handbook of Public Finance, edited by Fred Thompson
and Mark T. Green
68. Organizational Behavior and Public Management: Third Edition,
Michael L. Vasu, Debra W. Stewart, and G. David Garson
69. Handbook of Economic Development, edited by Kuotsai Tom Liou
70. Handbook of Health Administration and Policy, edited by
Anne Osborne Kilpatrick and James A. Johnson

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 72. Handbook on Taxation, edited by W. Bartley Hildreth
and James A. Richardson
73. Handbook of Comparative Public Administration in the Asia-Pacific
Basin, edited by Hoi-kwok Wong and Hon S. Chan
74. Handbook of Global Environmental Policy and Administration, edited by
Dennis L. Soden and Brent S. Steel
75. Handbook of State Government Administration, edited by
John J. Gargan
76. Handbook of Global Legal Policy, edited by Stuart S. Nagel
78. Handbook of Global Economic Policy, edited by Stuart S. Nagel
79. Handbook of Strategic Management: Second Edition, edited by
Jack Rabin, Gerald J. Miller, and W. Bartley Hildreth
80. Handbook of Global International Policy, edited by Stuart S. Nagel
81. Handbook of Organizational Consultation: Second Edition, edited by
Robert T. Golembiewski
82. Handbook of Global Political Policy, edited by Stuart S. Nagel
83. Handbook of Global Technology Policy, edited by Stuart S. Nagel
84. Handbook of Criminal Justice Administration, edited by
M. A. DuPont-Morales, Michael K. Hooper, and Judy H. Schmidt
85. Labor Relations in the Public Sector: Third Edition, edited by
Richard C. Kearney
86. Handbook of Administrative Ethics: Second Edition, edited by
Terry L. Cooper
87. Handbook of Organizational Behavior: Second Edition, edited by
Robert T. Golembiewski
88. Handbook of Global Social Policy, edited by Stuart S. Nagel
and Amy Robb
89. Public Administration: A Comparative Perspective, Sixth Edition,
Ferrel Heady
90. Handbook of Public Quality Management, edited by Ronald J. Stupak
and Peter M. Leitner
91. Handbook of Public Management Practice and Reform, edited by
Kuotsai Tom Liou
93. Handbook of Crisis and Emergency Management, edited by
Ali Farazmand
94. Handbook of Comparative and Development Public Administration:
Second Edition, edited by Ali Farazmand
95. Financial Planning and Management in Public Organizations,
Alan Walter Steiss and Emeka O. Cyprian Nwagwu
96. Handbook of International Health Care Systems, edited by Khi V. Thai,
Edward T. Wimberley, and Sharon M. McManus
97. Handbook of Monetary Policy, edited by Jack Rabin
and Glenn L. Stevens
98. Handbook of Fiscal Policy, edited by Jack Rabin and Glenn L. Stevens
99. Public Administration: An Interdisciplinary Critical Analysis, edited by
Eran Vigoda
100. Ironies in Organizational Development: Second Edition, Revised
and Expanded, edited by Robert T. Golembiewski
101. Science and Technology of Terrorism and Counterterrorism, edited by
Tushar K. Ghosh, Mark A. Prelas, Dabir S. Viswanath,
and Sudarshan K. Loyalka

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 102. Strategic Management for Public and Nonprofit Organizations,
Alan Walter Steiss
103. Case Studies in Public Budgeting and Financial Management:
Second Edition, edited by Aman Khan and W. Bartley Hildreth
104. Handbook of Conflict Management, edited by William J. Pammer, Jr.
and Jerri Killian
105. Chaos Organization and Disaster Management, Alan Kirschenbaum
106. Handbook of Gay, Lesbian, Bisexual, and Transgender Administration
and Policy, edited by Wallace Swan
107. Public Productivity Handbook: Second Edition, edited by Marc Holzer
108. Handbook of Developmental Policy Studies, edited by
Gedeon M. Mudacumura, Desta Mebratu and M. Shamsul Haque
109. Bioterrorism in Medical and Healthcare Administration, Laure Paquette
110. International Public Policy and Management: Policy Learning Beyond
Regional, Cultural, and Political Boundaries, edited by David Levi-Faur
and Eran Vigoda-Gadot
111. Handbook of Public Information Systems, Second Edition, edited by
G. David Garson
112. Handbook of Public Sector Economics, edited by Donijo Robbins
113. Handbook of Public Administration and Policy in the European Union,
edited by M. Peter van der Hoek
114. Nonproliferation Issues for Weapons of Mass Destruction,
Mark A. Prelas and Michael S. Peck
115. Common Ground, Common Future: Moral Agency in Public
Administration, Professions, and Citizenship, Charles Garofalo
and Dean Geuras
116. Handbook of Organization Theory and Management: The Philosophical
Approach, Second Edition, edited by Thomas D. Lynch
and Peter L. Cruise
117. International Development Governance, edited by
Ahmed Shafiqul Huque and Habib Zafarullah
118. Sustainable Development Policy and Administration, edited by
Gedeon M. Mudacumura, Desta Mebratu, and M. Shamsul Haque
119. Public Financial Management, edited by Howard A. Frank
120. Handbook of Juvenile Justice: Theory and Practice, edited by
Barbara Sims and Pamela Preston
121. Emerging Infectious Diseases and the Threat to Occupational Health
in the U.S. and Canada, edited by William Charney
122. Handbook of Technology Management in Public Administration,
edited by David Greisler and Ronald J. Stupak
123. Handbook of Decision Making, edited by Göktug Morçöl
124. Handbook of Public Administration, Third Edition, edited by Jack Rabin,
W. Bartley Hildreth, and Gerald J. Miller
125. Handbook of Public Policy Analysis, edited by Frank Fischer,
Gerald J. Miller, and Mara S. Sidney
126. Elements of Effective Governance: Measurement, Accountability
and Participation, edited by Kathe Callahan
127. American Public Service: Radical Reform and the Merit System,
edited by James S. Bowman and Jonathan P. West
128. Handbook of Transportation Policy and Administration, edited by
Jeremy Plant

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 129. The Art and Practice of Court Administration, Alexander B. Aikman
130. Handbook of Globalization, Governance, and Public Administration,
edited by Ali Farazmand and Jack Pinkowski
131. Handbook of Globalization and the Environment, edited by Khi V. Thai,
Dianne Rahm, and Jerrell D. Coggburn
132. Personnel Management in Government: Politics and Process,
Sixth Edition, Norma M. Riccucci and Katherine C. Naff
133. Handbook of Police Administration, edited by Jim Ruiz
and Don Hummer
134. Handbook of Research Methods in Public Administration,
Second Edition, edited by Kaifeng Yang and Gerald J. Miller
135. Social and Economic Control of Alcohol: The 21st Amendment
in the 21st Century, edited by Carole L. Jurkiewicz
and Murphy J. Painter
136. Government Public Relations: A Reader, edited by Mordecai Lee
137. Handbook of Military Administration, edited by Jeffrey A. Weber
and Johan Eliasson
138. Disaster Management Handbook, edited by Jack Pinkowski
139. Homeland Security Handbook, edited by Jack Pinkowski
140. Health Capital and Sustainable Socioeconomic Development, edited by
Patricia A. Cholewka and Mitra M. Motlagh
141. Handbook of Administrative Reform: An International Perspective,
edited by Jerri Killian and Niklas Eklund
142. Government Budget Forecasting: Theory and Practice, edited by
Jinping Sun and Thomas D. Lynch
143. Handbook of Long-Term Care Administration and Policy, edited by
Cynthia Massie Mara and Laura Olson

Available Electronically

Principles and Practices of Public Administration, edited by

Jack Rabin, Robert F. Munzenrider, and Sherrie M. Bartell

PublicADMINISTRATIONnetBASE

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 Handbook of
Long-Term Care
Administration
and Policy

Edited by
Cynthia Massie Mara
Pennsylvania State University
Middletown, Pennsylvania, U.S.A.

Laura Katz Olson

Lehigh University
Bethlehem, Pennsylvania, U.S.A.

Boca Raton London New York

CRC Press is an imprint of the

Taylor & Francis Group, an informa business

CRC_AU5327_FM.indd vii 2/22/2008 10:07:32 AM

 CRC Press
Taylor & Francis Group
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© 2008 by Taylor & Francis Group, LLC
CRC Press is an imprint of Taylor & Francis Group, an Informa business

No claim to original U.S. Government works

Printed in the United States of America on acid-free paper
10 9 8 7 6 5 4 3 2 1

International Standard Book Number-13: 978-0-8493-5327-7 (Hardcover)

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CRC_AU5327_FM.indd viii 2/22/2008 10:07:33 AM

 Dedication

To our children, Shannon, Heather, and Alix, that the long-term

care system may be transformed by the time you may need it.

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CRC_AU5327_FM.indd x 2/22/2008 10:07:33 AM
 Contents

Foreword ....................................................................................................... xv
Preface .........................................................................................................xvii
Acknowledgments ........................................................................................xix
Editors ..........................................................................................................xxi
Contributors.............................................................................................. xxiii

PART I: SETTING THE STAGE

1. History, Concepts, and Overview ..........................................................3
CYNTHIA MASSIE MARA

2. Public Perceptions of Long-Term Care.................................................19

LAURA KATZ OLSON

3. Looking for Care in All the Wrong Places ...........................................35

DEBORAH STONE

4. The Medicalization of Long-Term Care: Weighing the Risks ..............47

COLLEEN M. GROGAN

PART II: PROVIDING AND RECEIVING CARE

5. Older Long-Term Care Recipients ........................................................73
MEGAN E. McCUTCHEON AND WILLIAM J. McAULEY

6. Younger Individuals with Disabilities: Compatibility

of Long-Term Care and Independent Living ........................................85
ARTHUR W. BLASER

7. Informal Caregivers and Caregiving: Living at Home

with Personal Care .............................................................................105
SHARON M. KEIGHER

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 xii 䡲 Contents

8. Trends and Challenges in Building a Twenty-First Century

Long-Term Care Workforce................................................................133
EDWARD ALAN MILLER AND VINCENT MOR

9. The Role and Responsibilities of the Medical Director

and the Attending Physician in Long-Term Care Facilities................157
DANIEL SWAGERTY

PART III: FOCUSING ON SERVICES

10. Long-Term Care Services, Care Coordination,
and the Continuum of Care ...............................................................173
MEGAN E. McCUTCHEON AND WILLIAM J. McAULEY

11. Legal Issues Related to Long-Term Care: Elder Law,

Estate Planning, and Asset Protection ...............................................197
JAN L. BROWN

12. Long-Term Care Housing Trends: Past and Present ..........................221

SHANNON M. CHANCE

PART IV: ADMINISTERING CARE

13. Long-Term Care Governance and Administration:
A Historical Perspective .....................................................................241
STEPHEN E. PROCTOR

14. Improving the Quality of Long-Term Care

with Better Information .....................................................................267
VINCENT MOR

15. Long-Term Care Housing Types and Design .....................................293

SHANNON M. CHANCE

PART V: POLICY MAKING AND FINANCING

16. Long-Term Care Politics and Policy ................................................... 319
WILLIAM WEISSERT

17. Geriatric Mental Health Policy: Impact on Service Delivery

and Directions for Effecting Change..................................................339
BRADLEY E. KARLIN AND MICHAEL DUFFY

18. Private Financing for Long-Term Care...............................................363

GALEN H. SMITH AND WILLIAM P. BRANDON

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 Contents 䡲 xiii

19. Public Financing of Long-Term Care .................................................387

STEPHEN A. STEMKOWSKI AND WILLIAM P. BRANDON

PART VI: LOOKING AHEAD

20. Focal Points of Change.......................................................................415
CYNTHIA MASSIE MARA

Index ...........................................................................................................425

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CRC_AU5327_FM.indd xiv 2/22/2008 10:07:34 AM
 Foreword

Long-term care has been and remains the distant cousin of health policy. News-
papers are full of commentary on what 2008 presidential candidates have to say
about “universal health coverage,” the new expression for what used to be called
national health insurance. However, one would be hard-pressed to describe what
any of them think about long-term care. The discussion of how America is aging
touches on familiar themes: the pressure on the Medicare budget, the implications
for Social Security pensions, and whether the savings or the sports behavior of baby
boomers is adequate for their future. It is hard to avoid endless comments on which
diet should be followed for healthy living, whether lead or benzene poisoning is
to become the asbestos story of the twenty-first century, or whether the impact of
a growing proportion of those above 65 years should prompt smaller apartments
or more handrails in modern bathrooms. But one would look in vain for straight-
forward discussion of long-term care—its likely scale, its financing, its connection
to Medicaid spending, or its impact on family caregivers, let alone what other coun-
tries have done in this area of social policy.
This handbook brought together by Mara and Olson is precisely directed
toward that relative neglect. As writing has increased about the administration
and policy struggles in medical care, comparable attention has not been given to
long-term care. This handbook presumes that the sharp increases forecasted in
older Americans for the next three or four decades warrant extended discussion.
What training will administrators in this sphere of social and medical life require?
What can we learn from the experience of other industrial democracies about the
financing of care for the frail? If all of us have a modest probability of needing such
care, does social insurance make sense? What are the prospects for private financ-
ing, or for the continued role of Medicaid as a funder of last resort? The realities of
both providing and receiving care are too readily masked. How many Americans,
for example, know anything about the scale of nonelderly recipients of long-term
care? The list of neglected topics, as the table of contents reveals, is long.
That is the justification of gathering such a wide range of policy and administra-
tive writers to contribute to this handbook. The editors have for years been writing,
teaching, and conducting research in long-term care. They have made presentations

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 xvi 䡲 Foreword

on the state, national, and international levels. They have also organized panels and
lectures related to long-term care. This is the product of their scholarly search for
the complete range of commentaries about the world of American long-term care,
now and in the future. It is a welcome addition to the literature.

Ted R. Marmor
School of Management
Yale University
New Haven, Connecticut

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 Preface

The fastest growing part of the population is the 85-years-and-older cohort. The
baby boomers have already begun to enter their 60s and the need for long-term care
will escalate as they age. The growing requirement for services, with its associated
opportunities and challenges, necessitates the presence of additional skilled long-
term care administrators and policy makers. Moreover, long-term care administra-
tion is undergoing a process of professionalism similar to the one that took place
decades ago in hospital administration. This evolution heightens the need for effec-
tive preparation for administrators and policy makers.
This text grew out of my long-standing interest in long-term care. During varied
work experiences, I have seen that:

䡲 A person, even one with diminishing abilities, could remain safely at home if
there is adequate support from family and the community.
䡲 Mistreatment of nursing home residents existed as well as conditions that put
their lives in jeopardy.
䡲 Apathy was apparent on the part of some officials whose job it was to ensure
the delivery of safe, adequate long-term care.
䡲 Isolation was often experienced during extended hospital stays by people who
were dying;* their call lights tended to be answered only after considerable
delay, and their requests to talk about the seriousness of their illness were
frequently ignored.
䡲 Public policy, and its many modifications, had the potential to improve the
long-term care system and the lives of the people it served.
䡲 Positive changes in institutional and home and community-based care could
be made through both the public and private sectors.
䡲 Individuals needing long-term care comprised a diverse population.

* Extended hospital stays took place before the implementation of a prospective payment system
for hospitals. More about this change in hospital reimbursement can be found in the chapters
on the financing of long-term care.

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 xviii 䡲 Preface

䡲 Advocates for younger and older people with chronic illnesses or disabili-
ties often saw themselves in competition for the same resources and resisted
cooperating to improve the lives of people of all ages who need assistance
with daily activities.

My experiences have also shown me the relationship between the quality of an

organization’s administration and that of the services provided. The need for edu-
cated, prepared administrators and policy makers is abundantly clear. This hand-
book is designed as an instructive tool for the education of individuals planning to
work in long-term care. It contains a wide range of information they will need as
they provide leadership in the long-term care arena. This handbook is also intended
as a reference for individuals already employed in this field.
Laura Katz Olson’s deep interest in aging and long-term care prompted me
to ask her to serve as the coeditor of this text. I was pleased that she accepted the
invitation.

Cynthia Massie Mara

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 Acknowledgments

The preparation of this handbook has involved our collaboration with many tal-
ented individuals in the field of long-term care. First, we express great appreciation
to the authors for writing about and sharing their particular areas of expertise.
Through their work, each of them participates in the preparation of leaders for the
long-term care system.
The editors would like to thank the following individuals for their review of and
comments on various materials: Mary Brundage DeLashmutt, Susan Donckers,
and Elizabeth Revell. The continual support and encouragement provided by Kay
Morhard is also very much appreciated.
Three former and one current graduate student in the Penn State’s Master
of Health Administration program are to be particularly thanked. Nidhi Daga
and Supraja Vija conducted literature reviews and provided much assistance at
the beginning of the project. Deb Kephart, who is now participating in a long-
term care research project, also provided helpful input. Graduate student Patsy
Taylor-Moore, who has years of experience in the long-term care endeavors of state
government, is especially thanked for applying her many skills as work on the
handbook was brought to completion.
We acknowledge with gratitude the many clients whom we have met during our
various work experiences in long-term care. They have been our teachers.

Cynthia Massie Mara

Laura Katz Olson

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CRC_AU5327_FM.indd xx 2/22/2008 10:07:34 AM
 Editors

Cynthia Massie Mara is Associate Professor of Health Care Administration and

Policy at The Pennsylvania State University, where she has worked since 1994. She is
the coordinator of the Master of Health Administration program and the developer
and coordinator of the Graduate Certificate Program in Long-Term Care Admin-
istration and Policy. She serves as adjunct Associate Professor of Management and
Health Systems at The Pennsylvania State University College of Medicine.
Dr. Mara’s research interests include health and long-term care administration
and policy, the long-term care system, aging and disability, and organizational
theory. Her current research focuses on assisting state government in planning
for Medicaid-funded long-term care services and expenditures as the demands on
these public programs continue to expand. Other studies on the state level have
addressed programs financed through the Older Americans Act. Dr. Mara has
conducted research for the U.S. Department of Justice on developing strategies
to address long-term care needs in prison systems. She has been an invited grant
reviewer for the U.S. Department of Health and Human Services Administration
on Aging and the National Institutes of Health.
Dr. Mara has authored a number of professional articles; has made presenta-
tions at meetings of state, national, and international organizations; and serves as
the long-term care editor of an academic journal and an editorial board member
for two additional journals. She organized the Aging Politics and Policy Group
at the American Political Science Association meetings and serves as president of
the organization. Dr. Mara was the founder and executive director of a Medicare-
and Medicaid-funded not-for-profit hospice organization. She has worked on the
U.S. Senate Subcommittee on Aging and for the New York City Department for
the Aging. Earlier, as an Assistant Professor of Nursing, she worked with two col-
leagues to establish a baccalaureate nursing program.

Laura Katz Olson has been Professor of Political Science at Lehigh University since
1974 and chair of the department since 2003. She has published six books: The
Political Economy of Aging: The State, Private Power and Social Welfare; Aging and
Public Policy: The Politics of Growing Old in America; The Graying of the World: Who

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 xxii 䡲 Editors

Will Take Care of the Frail Elderly; Age through Ethnic Lenses: Caring for the Elderly
in a Multicultural Society; The Not So Golden Years: Caregiving, the Frail Elderly and
the Long-Term Care Establishment; and Heart Sounds (her first novel). Currently,
she is working on a book project titled The Politics of Medicaid: Stakeholders and
Welfare Medicine.
Dr. Olson has published widely in the field of aging and women’s studies. Her
articles address topics such as pensions, Social Security, problems of older women,
and long-term care. She has been a scholar at the Social Security Administration,
a gerontological fellow, and a Fulbright scholar. She has also lectured throughout
Pennsylvania on Social Security, Medicare, and long-term care policies funded by
the Pennsylvania Humanities Council. Dr. Olson is on the editorial board of the
Journal of Aging Studies and New Political Science.

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 Contributors

Arthur W. Blaser, Ph.D. Bradley E. Karlin, Ph.D.

Department of Political Science Office of Mental Health
Chapman University Services
Orange, California Veterans Administration Central
Office
William P. Brandon, Ph.D., M.P.H. Washington, DC
Department of Political Science
University of North Carolina Sharon M. Keigher, Ph.D., ACSW
at Charlotte Helen Bader School of Social Welfare
Charlotte, North Carolina University of Wisconsin—
Milwaukee
Jan L. Brown, J.D. Milwaukee, Wisconsin
Jan L. Brown & Associates
Harrisburg, Pennsylvania Cynthia Massie Mara, Ph.D.
School of Public Affairs
Shannon M. Chance, AIA The Pennsylvania State University
Department of Architecture Middletown, Pennsylvania
Hampton University and
Hampton, Virginia College of Medicine
The Pennsylvania State University
Michael Duff y, Ph.D., ABPP Hershey, Pennsylvania
Department of Educational
Psychology William J. McAuley, Ph.D.
Texas A&M University Department of Communication
College Station, Texas George Mason University
Fairfax, Virginia
Colleen M. Grogan, Ph.D.
School of Social Service Megan E. McCutcheon, M.A.
Administration Department of Communication
University of Chicago George Mason University
Chicago, Illinois Fairfax, Virginia

xxiii

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 xxiv 䡲 Contributors

Edward Alan Miller, Ph.D. Stephen A. Stemkowski, M.H.A.

Departments of Political and Doctoral Candidate
Science and Community Public Policy Program
Health Center, and University of North Carolina
Centers for Public Policy at Charlotte
and Gerontology and Charlotte, North Carolina
Health Care Research
Brown University Deborah Stone, Ph.D.
Providence, Rhode Island Department of Government
Dartmouth College
Vincent Mor, Ph.D. Hanover, New Hampshire
Department of Community
Health Center, and Center Daniel Swagerty, M.D., M.P.H.
for Gerontology and Landon Center on Aging
Health Care Research Department of Family Medicine
Brown University University of Kansas
Providence, Rhode Island Kansas City, Kansas
and
Laura Katz Olson, Ph.D. American Medical Directors
Department of Political Association
Science and Public Columbia, Maryland
Policy
Lehigh University William Weissert, Ph.D.
Allentown, Pennsylvania Department of Political Science
Florida State University
Stephen E. Proctor Tallahassee, Florida
President and CEO
Presbyterian Homes, Inc.
Camp Hill, Pennsylvania

Galen H. Smith III, M.H.A. and

Doctoral Candidate
Public Policy Program
University of North Carolina
at Charlotte
Charlotte, North Carolina

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 SETTING THE STAGE I

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CRC_AU5327_S001.indd 2 1/1/2008 3:20:06 PM
 Chapter 1

History, Concepts,
and Overview

Cynthia Massie Mara

Contents
Early History ...............................................................................................4
Local Government Contracting for Provision of Care:
Outdoor Relief ........................................................................................4
Development of Almshouses: Indoor Relief.............................................5
The Development of Specialized Care .....................................................5
Basic Concepts .............................................................................................8
Functional Limitations ............................................................................8
Denial .....................................................................................................9
Administrators and Policymakers ..........................................................10
Long-Term Care Recipients, Services, and Providers .............................10
Factors Affecting Demand for and Supply of Services ...........................10
Location of Care ...................................................................................11
Overview of the Book ................................................................................11
Conclusion.................................................................................................15
References ..................................................................................................16

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 4 䡲 Handbook of Long-Term Care Administration and Policy

Early History
Local Government Contracting for Provision of Care:
Outdoor Relief
A complete understanding of long-term care (LTC) in the United States must begin
with knowledge of its past so as to foster awareness of the roots of current challenges
and facilitate the development of innovative responses. In the early years, elder care
was not of great concern. With the exception of the Native American population,
inhabitants were generally young immigrants who came either on their own accord
or involuntarily as slaves. Older people, especially those who were ill, seldom made
the arduous oceanic voyage. Those who did were likely to die on the trip (Stevenson,
2007). After arrival, in the colonies, people often experienced cycles of poverty and
disease resulting in relatively short life spans.
For those who did reach old age, illness, accompanied by medical and LTC
needs, often precipitated a descent into poverty. Aging individuals who lacked rela-
tives to provide care relied on either neighbors or, less often, on the charity of their
communities. The Elizabethan Poor Law, adopted in England in 1601 and later
adapted to the needs of the colonies, designated communities as responsible for
disadvantaged residents. Local autonomy was fostered by distance between settle-
ments and by unsophisticated methods of transportation (Deutsch, 1941).
The Elizabethan goal of adopting three different responses to social need did
not materialize. In that scenario, the objectives were to assign people who were sick
and not able to work to infirmaries, people able to work but who could not find
employment to a workhouse, and individuals able to work but refusing to do so to
a House of Correction. Instead, in the colonies, all were generally grouped together
in the almshouse which was also called a poorhouse or a county home or infirmary
(Stevenson, 2006; Starr, 1982).
One exception was New York City, which purchased Blackwell’s Island in 1829.
Isolated from the city, the facilities included “the Charity Hospital, Penitentiary,
Alms House, Hospital for Incurables, Workhouse, Asylum for the Insane, among
others.” Although the functions were separated, all were under the authority of the
Almshouse Commissioners. In the 1930s, with increasing specialization of care,
Welfare Island as it came to be known became dedicated solely to the care of older,
sick individuals (NYC DOC, 2007).
Destitution was the central criterion for receipt of public assistance, which in
the early years began as “outdoor support.” Using the current terminology, the local
government contracted out the provision of housing, food, and care for people who
were unable to provide for themselves. Some of these individuals were boarded at a
physician’s residence, others were “boarded round the town.” At times, family mem-
bers would be paid to provide care. Alternatively, the care of poor people might be
auctioned and assigned to the lowest bidder. The range in quality of care was vast,
although for the most part it was inadequate and of poor quality. Communities

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 History, Concepts, and Overview 䡲 5

were also known to ward off people with disabilities whom they thought would
become dependent on public assistance.

Development of Almshouses: Indoor Relief

Although almshouses appeared as early as the 1600s, a general shift to this more
structured, institutional approach to social need, called indoor relief, was not made
until the eighteenth century. Outdoor support had become increasingly expen-
sive, inexpedient. Almshouses, the prime examples of indoor relief, were generally
regarded with dread. People with an amalgam of problems, including poverty and
challenges related to aging and physical and mental illness, were housed together.
Moreover, widows and orphans who lacked a source of income also lived there. In
an 1881 edition of The Atlantic Monthly, almshouses were described as “wretched
places [where] cleanliness is an unknown luxury; all is filth and misery . . . inmates,
sane and insane, were found, in many instances, huddled together without dis-
crimination of age, sex, or condition” (Thanet, 1881).
Residents, who were called inmates, offered almost all of the available care.
Although services were sparse, the almshouse approach was not inexpensive.
For instance, in 1880, Pennsylvania spent over $1.5 million for the support of
20,310 people. Such expenses in Massachusetts totaled approximately $1.7 million.
New York’s 1879 costs for 57,925 people in these “poor houses” were more than
$1.6 million; an additional 79,852 people received temporary assistance at an
expense of more than $690,000 (Th anet, 1881).
In his classic volume, The Transformation of American Medicine, Starr (1982)
notes that by the 1830s, outdoor relief was ending and almshouses had become
the sole provider of publicly funded care for the poor. It was hoped that the repel-
lent nature of almshouses would motivate people to avoid poverty and subsequent
reliance on public assistance.

The Development of Specialized Care

From almshouses, where people with a wide range of conditions and situations were
housed, emerged more specialized institutions. Separate organizations were devel-
oped for the care of people with long-term mental illness; curable, acute diseases;
and chronic or terminal illnesses.
In almshouses, mentally ill individuals tended to receive the harshest treatment
described as “simply shocking” (Thanet, 1881). In response, in the 1830s, state-run
institutions for these individuals expanded. Although the function of these hospi-
tals initially was therapeutic, over time, custodial duties took priority (Starr, 1982).
The facilities, located at a distance from populated areas, had a secondary purpose.
As the cities grew, so did the number of residents with mental illness, contributing

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 6 䡲 Handbook of Long-Term Care Administration and Policy

to public concerns regarding security. The state-run institutions were seen as one
way to address societal fears by providing housing for these individuals in a remote
location. As a result, LTC for people with mental illness was separated from the rest
of healthcare.
Younger disabled people did not fare better. In the second half of the nineteenth
century, a physician, Samuel Howe, led a commission exploring “feebleminded-
ness” and ways to address the related challenges. The Industrial Revolution helped
shape the term’s definition. During the transformation of the country from a rural
to an urban society, educational requirements increased to the current equivalent
of a third grade education. Anyone not reaching that level was deemed to be feeble-
minded. The term included people with a sensory impairment, for instance, blind-
ness or deafness, that interfered with communication and, therefore, with learning.
Difficulty with mobility, rendering a person unable to attend school, also resulted
in such labeling.
Howe recommended the development of a special school for children with
disabilities.* The Massachusetts legislature approved funds for this project. Howe
intended to teach the children life skills and return them to their families. How-
ever, families resisted taking their children home. Some did not want to assume
the child’s care; many believed that institutional care was better for their children.
Thus, although Howe opposed separation of people with disabilities from the rest
of society, his work served as a basis for permanent institutionalization of these
individuals (Pfeiffer, 1993). As a result, the younger LTC population was isolated
from society and the mainstream of healthcare.
Similarly, acute care was separated from the LTC of older people with chronic
physical or mental disabilities. By the late nineteenth century, there was a rapid
growth in hospitals for individuals with short-term, curable illnesses. Before the
use of antisepsis and aseptic technique, the discovery of antibiotics, and the safe use
of anesthetics, hospitals had been avoided. They were called Death Houses. Better
care could be received at home. Only people lacking home and family would seek
services there.
Anesthesia allowed surgery to be completed without pain. Antisepsis and asep-
sis helped prevent the infections that had often resulted in death. If infection did
occur, antibiotics helped control it. These advances and others that followed greatly
improved the image of the hospital. As medical capability continued to expand,
the treatment of curable, acute illnesses became the focus of the hospital. In fact,
admission was denied to people with chronic or terminal illnesses. Care of these
individuals continued to be the responsibility of almshouses (Starr, 1982). Tech-
nological advances similar to those in the hospitals did not occur in these “poor
houses” and public attitude toward them remained negative.
Chronically or terminally ill people without wealth or family remained in the
almshouses. Changing public policy, however, expanded the housing opportunities

* Children who lacked family and who did not have disabilities were sent to orphanages.

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 History, Concepts, and Overview 䡲 7

for this group. Holstein and Cole (1996) marked six factors, occurring from 1930
to 1970, as critical to the formation of modern LTC.

䡲 The Social Security Act of 1935 provided pensions to older people with the
stipulation that anyone housed in a public facility could not receive them. The
aim of this provision was to bring about the end of the almshouses. An unin-
tended consequence of the policy was to stimulate the growth of voluntary and
proprietary nursing homes. Most were more similar to board-and-care homes
than to today’s nursing homes. Some older people remained in almshouses;
others went to state-run mental institutions. Commercial homes, however,
accepted persons with both physical and mental infirmities.
䡲 Beginning in 1950, the federal government began making direct payments
to LTC facilities for the care of older residents and others with disabling,
chronic conditions. This type of disbursement made nursing homes more
appealing to entrepreneurs.
䡲 Congress enacted legislation to support the construction of health-related
facilities, including nursing homes. The Hill–Burton Act of 1946, which
funded the construction of hospitals in rural and low-income areas, was
amended in 1954 to extend coverage to the construction of public and not-
for-profit nursing homes (Perlstadt, 1995). Medicalization of these facilities
was fostered by the amendment’s requirement that they be associated with a
hospital (Holstein and Cole, 1996).
䡲 The Kerr–Mills Act encouraged home care by providing federal funding for
a variety of services, but only if the state covered community-based as well
as institutional care. However, states were not required to participate in the
program and many chose to ignore it.
䡲 The formation of the American Association of Nursing Homes, resulted
in more effective lobbying on behalf of the interests of the new nursing
home industry. For instance, in 1956, the organization successfully induced
Congress to authorize loan programs for proprietary nursing homes, some of
which were freestanding facilities; they had not been included in Hill–Burton
funding. These loan programs resulted in the rapid expansion of for-profit
institutions (Vladeck, 1980).

Although the intent of the federal government was to regulate nursing homes,
an unexpected impact on the development of these facilities ensued. Regulations
were implemented, but enforcement was rare and had the unintended result of driv-
ing smaller facilities out of the market. Subsequently, the larger, more medically
focused homes thrived.
Between 1940 and 1970, the percentage of institutionalized older people
living in nonmedical locations such as boarding homes declined from 41 to
12 percent. During the same time period, a dramatic increase in nursing home
occupancy occurred. Certainly, the passage of Medicaid and Medicare in 1965

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 8 䡲 Handbook of Long-Term Care Administration and Policy

sparked an even greater growth in the nursing home industry (Holstein and
Cole, 1996).
Themes from the past can be seen in the present. Negative attitudes toward
LTC, especially institutional facilities, remain. Poor quality of care persists. Costs
continue to be high and the funding of LTC presents numerous challenges both
to individuals and to their government. The shift in public funding from outdoor
to indoor support today plays itself out in the tension between institutional and
community-based care. Such issues in LTC will most likely continue into the
foreseeable future.

Basic Concepts
LTC can be thought of as a variety of services and equipment provided over an
extended period of time* to people of any age who need assistance with daily
activities. It can also be viewed as a difficult-to-navigate journey because passage
into and through the LTC system in the U.S. can be daunting. When people
realize that they need such assistance, more times than not, they do not know
the route to take or even where to start. There are no signs saying “Enter Here”
or “Detour Ahead.” Moreover, their families and friends often find themselves on
the journey as well, unaware of the ways in which LTC needs are assessed and
addressed.
Answers to critical questions have often been hard to find: What services do I
need? Where can I get them? Who will provide them? What will they cost? How
will they be funded? When individuals develops one or more limitations in func-
tion necessitating assistance with daily activities, where do they turn? Sometimes,
when care can be provided at home, they turn to their family or friends. If no one is
available, especially for full-time help, they search the want ads in the local newspa-
per. Attention may be drawn to a notice that says, “Will care for an elderly person.
Experienced.” But how can people needing assistance know if the individual is
really prepared to provide quality care? What happens when the helper becomes
ill, needs days off, or quits? How can informal, unpaid care be coordinated with
formal, paid care?

Functional Limitations
An injury or chronic condition† can result in functional limitations. For instance,
arthritis may restrict a person’s movement to the extent that he or she requires help
with daily activities. Tasks such as bathing, dressing, eating, using the toilet, and

* Generally, the time span is three months or longer.

†
Chronic conditions can be associated with long-term physical, developmental, mental, intel-
lectual, or cognitive challenges.

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 History, Concepts, and Overview 䡲 9

transferring from a bed to a chair are called activities of daily living (ADLs). Other
chores needed to remain independent, including grocery shopping, cooking, tak-
ing medications, and handling finances, are termed instrumental activities of daily
living (IADLs). A primary focus of LTC is the maintenance or enhancement of
these functional abilities for people of any age.

Denial
Many people and their families who lack financial and emotional preparation are
surprised when they need assistance with daily activities; they are also distressed by
the price tag, especially for institutional care. With the average annual cost of nursing
home care being approximately $70,000 (Kaiser Family Foundation [KFF], 2004),
only the wealthy can afford an extended stay. Others “spend down” or exhaust their
resources on medical and LTC outlays and then qualify for Medicaid. Indeed, Med-
icaid is the primary public payer for LTC. Funded both by the states and the federal
government, this social welfare program requires impoverishment as a prerequisite
to receive funding.
Often, people think that private health insurance or Medicare, neither of which
requires poverty to qualify for assistance, will pay the bill. But both of them provide
reimbursement primarily for acute and primary care services, not LTC. In addition,
they only cover relatively short-term care that occurs after acute episodes. Such
services can be provided by a home health agency (HHA), a rehabilitation facility,
or a postacute care unit that can be located in a nursing home.
The financial stakes in LTC are high. Although not everyone will need this
type of assistance, for those who do, the costs can be catastrophic. Regardless, it is
common for people to deny even to themselves that they will ever need LTC. A
majority of people report not having planned for potential occurrence. A recent
survey conducted by Greenwald & Associates (2006) indicates that the percent-
age of nonplanners has been increasing. Minimal or no LTC planning had been
undertaken by 69 percent of the 21- to 75-year-old respondents as compared to
49 percent in a similar study conducted in 1997.
When asked, most people say they would not want to go to a nursing home,
and many equate nursing homes to LTC. This strong preference to avoid institu-
tionalization can be another factor in the resistance to considering any future LTC
needs. For many it is easier to think, “I’ll never need long-term care,” and neglect to
plan for this possibility, especially if the person is convinced that a nursing facility
is the only option. Considering that 69 percent of people aged 65 and above will
require some LTC, and 35 percent are projected to become nursing home residents
for at least a short period of time (Kemper et al., 2005/2006), denial and lack of
knowledge are critical issues that need to be addressed. At the same time, given
the uncertainties and exorbitant costs, a significant percentage of the population is
incapable of saving for these needs on its own.

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 10 䡲 Handbook of Long-Term Care Administration and Policy

Administrators and Policymakers

The LTC path is not always clear even for administrators as they seek to provide
information and services to people needing assistance and to their families. Nor
is the journey uncomplicated for policymakers as they search for solutions to the
problems in LTC. Changing socioeconomic factors such as demography and the
economy create the need for policy modification. In turn, the changing policies
impact the management of LTC organizations. Clearly, providing leadership in
LTC is challenging. Such work, however, is crucial in addressing current and future
LTC needs.

Long-Term Care Recipients, Services, and Providers

More and more people will require assistance with their daily activities in the
coming years. The U.S. Department of Health and Human Services (DHHS,
2007) estimates that between 2006 and 2020 the number of individuals above
the age of 65 will increase from nine to twelve million (Barrett, 2006). Although
about 19 percent of people aged 65 years or older have functional impairments, the
percentage among people aged 85 or above—the fastest growing segment of the
elderly population—is approximately 55 percent (Hagen, 2004). Moreover, older
people have an estimated 40 percent chance of entering a nursing home and one-
tenth of them will remain there for five years or longer (DHHS, 2007). Although
the proportion of younger individuals needing assistance is much lower, because
of their greater numbers, they represent between 30 and 50 percent of the LTC
population (Feder, 2000, 2001; KFF, 2004a, b).
LTC providers, whether paid or unpaid, assist individuals in carrying out both
ADL and IADL tasks. Family members, especially adult daughters and wives, offer
the bulk of LTC. Despite this dependence on informal services, various societal
forces are impinging on the ability of loved ones to make the associated sacrifices.
Decreasing family size, increasing divorce rates, and greater employment of women
have been bringing about a growing need for formal care. Yet a workforce shortage
already exists and, in the face of an aging population, is expected to worsen consid-
erably (Holahan et al., 2003; Johnson et al., 2007).

Factors Affecting Demand for and Supply of Services

Certain factors such as declines in the disability rate among older people and
emergent technology can help in addressing the shortage. Disability rates declined
between 1982 and 2004. However, Lakdawalla et al. (2004) argue that increasing
rates of obesity in younger people may lessen this trend by 2015–2020. Alterna-
tively, Manton et al. (2007) are unconvinced that the current obesity epidemic
will necessarily have a significant impact on the future disability rates of older

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 History, Concepts, and Overview 䡲 11

Americans. Regardless, Johnson et al. (2007) found that even with an optimistic
annual decline of one percent in the disability rate, the number of older people with
impairments will increase by 50 percent between 2000 and 2040.
Advances in technology can also contribute to a reduction in the need for
hands-on care. Although long-term services are generally considered low-tech,
scientific advances that reduce the need for human assistance are expanding. For
instance, telehealth can provide for the monitoring of a person’s vital signs from
a distance. Also, the range of conditions for which home care is possible is wid-
ening. Individuals whose medical needs, in the past, would have necessitated
hospital care are increasingly receiving the required services at home (Berkman
et al., 2005). As such, as Stone (2000) states, we are witnessing a blurring of acute
services and LTC.

Location of Care
There exists a variety of places for the provision of LTC exists. A person’s home or
apartment is the location of preference. Assisted living and personal care facilities
generally supply housing, meals, housekeeping, laundry, social activities, transpor-
tation, and help with medications. Assistance with ADLs may be offered by the
facility or by community service providers. Continuing care retirement communi-
ties (CCRCs) offer a variety of housing options on their campuses. They include
houses or apartments for independent living and assisted living and skilled nursing
facilities. Adult day service centers may also be included.
Because LTC entails concern for the place within which it is provided, con-
sideration of housing is essential. The space within which a person with dis-
abilities lives can range from supportive to risky. Efforts to create or modify the
setting to facilitate its use by persons with disabilities can help them age in place.
In other words, a person with increasing functional limitations can remain in
the location with which he or she is familiar and receive services at home. The
person’s current environment, of course, must be adapted regularly to meet his or
her changing needs.

Overview of the Book

Part I of this handbook provides the context for the rest of the volume. As suggested
earlier in this chapter, past attitudes toward LTC have left a strong residue in today’s
society. Current problems in the LTC system have served to augment such percep-
tions. In Chapter 2, Laura Katz Olson examines opinion polls that reflect current
public attitudes toward and understanding of issues surrounding LTC, including
the role of Medicaid. Consideration is given to attitudes of caregivers whose older
relatives have been placed in nursing homes as well as to the preferences of older
people themselves. She also examines opinions about the quality of care in, and

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 12 䡲 Handbook of Long-Term Care Administration and Policy

regulation of, nursing homes. She notes that there are many misconceptions about
LTC, particularly those related to its funding.
Chapter 3 by Deborah Stone forms the “heart” of the text. In it, she details her
mother’s experiences with LTC and her own responses to that care. Stone points
out that efficiency-oriented care, although meeting regulations, lacks the human
contact so craved by care recipients. The need for caregivers to provide a high-touch
approach in the delivery of assistance shines through the pages.
Tension exists in LTC between the social model and the medical model of care.
The former provides the recipient with more independence; the latter, it is pre-
sumed, offers more safety. In Chapter 4, Colleen Grogan examines the history of
LTC to find an explanation for the deep societal conflict between these two ideals.
She reviews policy changes, including those developed in response to the squalid
conditions in the almshouses, to show how U.S. policy moved toward a medical
model. She emphasizes the enduring conflict between the social and medical mod-
els. Do we view aging as an illness to be treated or as a natural part of life to be
experienced with all its risks? Our answer seems to teeter between the two but falls
more heavily on the former.
Part II focuses on the recipients of care and their caregivers. Megan McCutcheon
and William McAuley in Chapter 5 present a picture of older people who receive
LTC. Among other issues, they detail the characteristics of these individuals with
functional impairments and their use of LTC services.
In Chapter 6, Arthur Blaser describes the characteristics of younger people who
require LTC. Noting that, too often, LTC is seen only as an aging issue, Blaser
focuses on the similarities and differences between the needs of younger and older
consumers of care. He emphasizes that both groups would benefit from greater
control over LTC decisions affecting their lives.
The high levels of informal LTC provided by family members and friends is
addressed in Chapter 7 by Sharon Keigher. Keigher answers the questions: Who are
the 44.2 million people who provide more than $270 billion of volunteer assistance
each year to family members and friends? What benefits and sacrifices are involved?
What differences are there in providing care to a spouse, parent, or a child? What
policies most effectively provide support to informal providers of care? Keigher con-
cludes by recommending the formation of more effective partnerships between for-
mal and informal caregivers, improved integration among service providers overall,
and, similar to Blaser, more participation on the part of the consumer.
The relationship between the competency of the paid workforce and the quality
of care is addressed in Chapter 8 by Edward Miller and Vincent Mor. Not only do
the authors explore barriers to recruiting and retaining skilled caregivers, but they
also propose strategies to improve these processes, such as redesigning the work-
place; improving benefits and training; and providing career ladders, loan forgive-
ness programs, and scholarships.
Until 1974, skilled nursing facilities were not required to employ a medical
director. Daniel Swagerty in Chapter 9 notes that involvement of physicians,

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 History, Concepts, and Overview 䡲 13

however, is essential for the provision of quality care. He discusses guidelines for
performing the tasks of the medical director as well as the working relationship
between the attending physician and the medical director.
The services themselves are emphasized in Part III. The idea of a continuum
of LTC that is more ideal than real is discussed by William McAuley and Megan
McCutcheon in Chapter 10. They argue that, in this country, there is no system in
which a person can pass seamlessly from one type of service to another. They present
a number of models that attempt to confront the barriers for achieving coordina-
tion of care, including the Program of All-Inclusive Care for the Elderly (PACE),
Web-based care coordination, social health maintenance organizations (SHMOs),
and Coordination and Advocacy for Rural Elders (CARE). They also discuss LTC
services, ranging from home and community-based approaches to care offered in
nursing homes, assisted living facilities, personal care settings, and continuing care
retirement communities (CCRCs).
In Chapter 11, Jan Brown provides information about the changing legal envi-
ronment surrounding LTC. She describes the various legal documents used in
preparing end-of-life decisions, forms that can be confusing for the layperson. Cau-
tioning that her writing is meant to convey information of general scope and not
legal advice, Brown also describes four types of legal documents with which all
adults should be familiar. Although an understanding of these materials is helpful
to anyone above 18 years of age, it is especially useful for LTC care administrators
and policymakers. Finally, Brown discusses asset protection, a topic about which
there has been much controversy in recent years. She provides information about
changes in asset transfer policy contained in the Deficit Reduction Act of 2005.
Supportive housing is an essential issue in LTC. In Chapter 12, Shannon
Chance reviews the history of LTC from an architect’s point of view. She first
discusses the relationship between the physical environment and the need for and
receipt of hands-on care. She then presents the evolution of construction technolo-
gies and their impact on LTC facilities. Chance interweaves national policymaking
with the changing locations for the provision of care. She takes the reader from the
nonresident focus of the almshouses to the emergence of housing options that are
designed with consumers’ needs and wants in mind. She includes the preferences of
baby boomers and their likely effects on LTC architecture.
Part IV addresses issues related to the administration of care. In Chapter 13,
Steven Proctor discusses not-for-profit LTC entities, including almshouses with
names such as The Home for the Friendless. Although other authors describe the
negative aspects of almshouses, Proctor points to the charitable intent of many
persons who provided time-intense, detail-oriented leadership for these organi-
zations. Proctor also describes the context within which governing bodies have
evolved. Over time, different skill sets have been required of board members. He
then discusses the changing relationships among staff, the governing body, and the
chief executive officer (CEO). He reviews the responsibilities of the board, with
the financial integrity of the organization as a key concern. In addition, Proctor

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 14 䡲 Handbook of Long-Term Care Administration and Policy

addresses ethical concerns as well as the importance and benefits of transparency of

information. He offers strategies for providing board members with clear data with-
out overwhelming them, and includes an example of a “dashboard” that contains
key indicators of the health of the organization. Proctor reminds the reader of the
administrator’s importance in the culture of an organization, saying, “in long-term
care, leadership is the soil in which a culture of care can grow.”
In Chapter 14, Vincent Mor addresses quality from an information standpoint.
He presents the development of uniform quality measures for nursing homes and
HHAs over time. The reader gains an understanding of the development of vari-
ous measurement tools such as the Minimum Data Set (MDS) and the outcome
and Assessment Information Set (OASIS) now used in nursing facilities and HHAs,
respectively. Mor presents not only the original goals of quality measures, but also
subsequent uses to which they have been put. He includes the measures’ strengths
and limitations and explores the potential of these indicators to influence consumer
decision making.
In Chapter 15, Shannon Chance defines the administrator’s role in the plan-
ning and design of LTC facilities. An understanding of the design process, and the
series of steps it entails, is needed by administrators as they work with development
teams. Chance presents a description of the roles of other team members as well.
She begins by describing the types of LTC housing and related services, detailing
the medical and residential models of care and addressing the emergence of hybrid
forms of care. She targets often-overlooked features that can greatly affect quality
associated with living and working in each of the places.
Part V concentrates on policymaking and funding for LTC. Many policy issues
regarding LTC, including its financing, face the nation. However, LTC is not an
issue that is often on the public agenda. William Weissert, in Chapter 14, contends
that the elements essential for reform are largely absent in the formulation of LTC
policy. He presents his thesis using Kingdon’s (1995) model of the policy process as
a framework. According to Weissert, even getting on the public agenda has proven
to be a largely insurmountable task for LTC, particularly because the issue often
lacks a public official who is willing to bear the LTC banner. He points to the strug-
gles of those members of Congress and heads of public agencies who have carried
that banner for a time. As a policy area with little current promise of success, LTC
continues to have difficulty garnering sustained political support. As Weissert takes
the reader through a story of the many barriers to LTC reform, he makes the gar-
gantuan nature of the task ahead increasingly evident. Weissert concludes, “There
is nothing easy about long-term care.”
The care of persons with long-term mental illness has advanced since the days of
the almshouses and custodial state institutions. Yet, as Bradley Karlin and Michael
Duff y state in Chapter 17, there is a continuing, significant neglect of older people’s
mental health needs, especially those of nursing home residents. The authors discuss
such problems, including the obstacles to services created by administrative prac-
tices and regulatory policies. Karlin and Duff y then formulate recommendations

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 History, Concepts, and Overview 䡲 15

for change and point to the value of advocacy as a means of changing the public
agenda and modifying policy.
If the financing of LTC could be satisfactorily resolved, the system’s other
challenges would seem less daunting. From the times of the almshouses up to
today, public funding, private payments, or a combination of the two have not
been sufficient to support this type of care adequately or meet people’s LTC needs
completely. Given the government’s increasing reluctance to assume more of the
financing of LTC, Galen Smith and William Brandon examine private financing
for LTC in Chapter 18. The authors’ assessment of private LTC insurance includes
information on related economic principles and an exploration of the reasons for the
slow growth of the private market. They discuss financing strategies such as various
forms of risk pooling and ways for individuals to accumulate assets. Attention is
given to government initiatives that stimulate private market mechanisms for fund-
ing LTC expenses and policy proposals to augment these efforts.
In Chapter 19, Stephen Stemkowski and William Brandon point out the
complex funding mechanisms that have fostered fragmentation in LTC pro-
grams. In presenting an overview of public fi nancing, they discuss the various
government programs related to LTC and include the reasons for the current
lack of success of private LTC insurance. They also address policy initiatives that
would shift some of the fi nancial responsibility for LTC from the government to
the individual. In addition, the authors discuss the failure of the federal govern-
ment to adopt LTC reform, the role of the states in providing strategies for change,
and principles and examples of social insurance. They conclude with reasons for the
reluctance to implement LTC social insurance in this country.
Finally, in Part VI we look toward the future. In Chapter 20, Cynthia Mara
calls for a national debate about LTC. She examines the areas of change in LTC,
topics that would surely be part of the debate. Denial about chronic illness and
disability is very strong in this country and serves as a barrier to meaningful inter-
change about LTC. When fear about the related costs exceeds the emotion sur-
rounding denial, discussion may well be possible. It will likely, however, be a time
of crisis, fiscal and otherwise, in LTC.

Conclusion
This time in history is pivotal for LTC. Clearly, increasing demand, coupled with
resource restraints, will force change. Administrators and policymakers face a myriad
of challenges as they attempt to contain costs while maintaining quality of and access
to care. Too often the seeming intractability of the problems has fostered public denial
and inaction. Increased knowledge and understanding of LTC, however, can aid in
the formulation of effective policies and the administration of thriving programs. The
ultimate aim of these efforts is to help people with functional limitations and their
families to travel more smoothly and effectively through the LTC system.

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 16 䡲 Handbook of Long-Term Care Administration and Policy

References
Barrett, L. (2006). The Costs of Long-Term Care: Public Perceptions Versus Reality in 2006.
Washington: AARP Knowledge Management. http://www.aarp.org/research/long-
termcare/costs/ltc_costs_fs_2006.html (accessed May 26, 2007).
Berkman, B., Gardner, D. S., Zodikoff, B. D., and Harootyan, L. K. (2005). Social work in
health care with older adults: Future challenges. Families in Society, 86(3), 329–337.
Department of Health and Human Services (DHHS). (2007). What Is Long-Term Care?
Washington: Centers for Medicare and Medicaid Services. http://www.medicare.
gov/LongTermCare/Static/Home.asp (accessed May 27, 2007).
Deutsch, A. (1941). The sick poor in colonial times. The American Historical Review, 46(3),
560–579. http://links.jstor.org/sici?sici=0002-8762%28194104%2946%3A3%3C5
60%3ATSPICT%3E2.0.CO%3B2-Y&size=LARGE&origin=JSTOR-enlargePage
(accessed April 30, 2007).
Feder, J. (2000). Long-term care: A public responsibility. Health Aff airs, 20(6), 112–113.
Feder, J. (2001). Long-term care in the United States: An overview. Health Aff airs, 19(3),
40–56.
Greenwald & Associates. (2006). Survey of consumer attitudes toward long-term care. In
Senior Journal. Money Management & Insurance for Senior Citizens: Americans Less
Concerned about Long-Term Care Than 10 Years Ago. http://www.seniorjournal.
com/NEWS/Money/6-07-05-AmericansLess.htm (accessed June 25, 2007).
Hagen, S. (2004). Financing Long-Term Care for the Elderly. Washington: United States
Congressional Budget Office.
Holahan, J., Wiener, J., and Lutzky, A. W. (2003). Health policy for low-income people:
States’ responses to new challenges. Health Aff airs, W187.
Holstein, M. and Cole, T. (1996). The evolution of long-term care in America. In
Binstock, R., Leighton, C., and von Mering, O. (Eds.). Th e Future of Long-Term
Care: Social and Policy Issues, pp. 19–47. Baltimore, MD: The Johns Hopkins
University Press.
Johnson, R. W., Toohey, D., and Wiener, J. M. (2007). Meeting the Long-Term Care Needs
of Baby Boomers: How Changing Families Will Aff ect Paid Helpers and Institutions.
Washington: The Urban Institute.
Kaiser Family Foundation (KFF). (2004a). Health Care and the 2004 Elections: Long Term
Care. http://www.kff.org/medicaid/7208.cfm (accessed July 4, 2007).
Kaiser Family Foundation (KFF). (2004b). Health Care and the 2004 Election: The Unin-
sured. http://www.kff.org/uninsured/7155/cfm (accessed July 4, 2007).
Kemper, P., Komisar, H. L., and Alecxih, L. (2005/2006). Long-term care under an uncer-
tain future: What can retirees expect? Inquiry, 42(4), 335–350.
Kingdon, J. (1995). Agendas, Alternatives and Public Policies, 2nd edition. London:
HarperCollins.
Lakdawalla, D. N., Bhattacharya, J., and Tolley, H. D. (2004). Are the young becoming
more disabled? Rates of disability appear to be on the rise among people ages eighteen
to fifty-nine, fueled by a growing obesity epidemic. Health Aff airs, 23(1), 168–176.
Manton, K. G., Lamb, V. L., and XiLiang, G. (2007). Medicare cost effects of recent
U.S. disability trends in the elderly: Future implications. Journal of Aging and Health,
19(3), 359–381.

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 History, Concepts, and Overview 䡲 17

New York City Department of Corrections (NYC DOC). (2007). New York City Depart-
ment of Corrections History. http://www.correctionhistory.org/html/chronicl/nycdoc/
html/blakwel1.html (accessed May 24, 2007).
Perlstadt, H. (1995). The development of the Hill–Burton legislation: Interests, issues and
compromises. Journal of Health & Social Policy, 6(3), 77–96.
Pfeiffer, D. (1993). Overview of the disability movement: History, legislative record, and
political implications. Policy Studies Journal, 21(4), 724–734.
Starr, P. (1982). The Social Transformation of American Medicine. New York: Basic Books.
Stevenson, K. (2006). The History of Long-Term Care. http://www.elderweb.com/home/node/
2832 (accessed May 19, 2007).
Stevenson, K. (2007). The History of Long-Term Care 1776–1799: Poorhouses Become
Homes for the Indigent Elderly. http://www.elderweb.com/home/node/9641 (accessed
May 12, 2007).
Stone, R. (2000). Long-Term Care for the Elderly with Disabilities: Current Policy, Emerging
Trends, and Implications for the Twenty-First Century. New York: Milbank Memorial
Fund.
Thanet, O. (1881). The indoor pauper: A study. The Atlantic Monthly, 47(284). Text from:
Library of Congress American Memory Collection. http://www.elderweb.com/home/
book/export/html/2832 (accessed April 22, 2007).
Vladeck, B. (1980). Unloving Care. New York: Basic Books.

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CRC_AU5327_CH001.indd 18 12/29/2007 4:03:02 PM
 Chapter 2

Public Perceptions
of Long-Term Care

Laura Katz Olson

Contents
Introduction...................................................................................................20
Views on Institutional Care ...........................................................................20
Caregivers..............................................................................................20
Older People..........................................................................................21
Public Policy..............................................................................................22
Paying for Long-Term Care........................................................................23
Medicaid, Long-Term Care, and Public Support ...........................................25
Medicaid and “Spend Down”................................................................25
Public Views on Medicaid .....................................................................26
Medicaid and Long-Term Care .............................................................28
Concern about Personal Long-Term Care Needs...........................................28
Perceptions or Misconceptions: Medicare..............................................29
Perceptions or Misconceptions: Private Insurance .................................. 29
Conclusion.................................................................................................31
References ..................................................................................................32

19

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 20 䡲 Handbook of Long-Term Care Administration and Policy

Introduction
Using a variety of opinion polls over the last several years, this chapter seeks to
address issues related to perceptions of long-term care in the United States.
It begins with an assessment of views of caregivers about placing their elders in
nursing homes, followed by the preferences of frail older people themselves. Then
opinions about long-term care public policies, especially the regulation of insti-
tutional facilities and quality of care issues, are discussed. Payment for long-term
care is the focus of the next section: it looks at whether Americans understand how
long-term care is funded, their ability to afford such services, and their interest in
the subject generally. Subsequent sections concentrate on attitudes about Medicaid,
including points of view about middle-class participation in the program, reduc-
ing government funding, and the relationship between support for Medicaid and
its long-term care coverage. Finally, the chapter looks at how concerned people are
about their own long-term care needs and the perceptions and misconceptions they
have about Medicare and their private insurance policies.

Views on Institutional Care

Caregivers
One of the more difficult challenges faced by the United States and nations world-
wide is the care of the frail elderly. Currently in the United States, about 10 million
people of all ages are estimated to need long-term care; 60 percent are aged 65 and
above. Certainly, adult children and spouses, especially women, do the majority
of the caring work, although this is becoming increasingly burdensome for many
households. This kind of labor has intensified over the decades, as increasing lon-
gevity at older ages has fostered greater physical and mental disabilities and for
longer periods.
At the same time, more women must rely on their paid labor to support them-
selves and their families; they are often caught between nurturing their young
children and tending to the needs of aging parents or parents-in-law; and the
number of dependent elderly per caregiver is growing due to declining family size
and more living generations. Consequently, growing numbers of middle-aged and
older adults must face long-term care questions regarding one or more of their
increasingly disabled aging kin. In a recent poll, sponsored by Genworth Financial
National (GFN; 2006), for example, half of the respondents above 40 years replied
that they have a parent or other relative who needs or has needed home care or long-
term care in a nursing home or assisted living facility.
Despite the difficulties, American adult children, spouses, and others generally
provide hands-on care for their chronically disabled family members for as long as
they can. Only after they are exhausted, too ill, or frail themselves, and only as a
last resort, do they seek institutional care for their kin. One reason many families

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 Public Perceptions of Long-Term Care 䡲 21

are extremely reluctant to place their loved ones in a nursing home is because of
the dearth of quality—or even acceptable—facilities. In her study, Abel (1991)
found that many caretakers refuse to place even their severely debilitated elders
in institutions, mostly because of the notoriously abusive conditions or their own
firsthand observations of the facilities during their search for a home. Others have
personal experience through visiting relatives, neighbors, and friends or even their
own stays, such as after a hospitalization.
Current data suggests that many people do have direct experience with nursing
homes and understand the negative implications of institutional placement. When
asked if they had ever been in a nursing home, either as a patient or as a visitor,
84 percent of the respondents in a Kaiser Family Foundation Survey (Kaiser Health
Poll, 2005) said “yes.” Moreover, 46 percent of the total had a member of their
immediate family, or someone they knew well, in a nursing home within the past
three years. When asked where they get their views on nursing homes, 31 percent
replied from their own experience and another 43 percent from the experiences of
friends and family; only 21 percent said that they received such information from
television, radio, newspapers, and other media.
Clearly, such firsthand experience does not engender a positive impression, espe-
cially in comparison with other healthcare sectors. Only 35 percent of respondents in
the Kaiser Health Poll (2005) thought that nursing homes were doing a “good job”
serving healthcare consumers, as compared to 84 percent for nurses, 69 percent for
doctors, 64 percent for hospitals, and 43 percent for pharmaceutical companies.
Interestingly, the public’s generally low opinion of nursing homes appears com-
mensurate with their estimation of health insurance companies and managed care
plans: only 34 and 30 percent of respondents, respectively, gave these entities such
approval.* Moreover, 41 percent of the respondents regarded residency in a nursing
home as making frail elders worse off than they were prior to entering the facility;
another 23 percent stated that it did not make much of a difference, not exactly an
endorsement of institutional care. Only 19 percent assumed that the facility would
improve their situation.

Older People
In addressing the issue of long-term care, we must include not only the needs but
also the preferences of the frail elderly themselves. The evidence suggests that older
people, similar to their caregivers, do not have a positive view of nursing facilities.
Accordingly, an overwhelming majority do not want to be institutionalized and
dread the prospect of entering a nursing home. Ultimately, frail elders want to live

* Managed care, viewed by public officials and employers alike as a means of reducing medical
costs, has been proliferating throughout the United States. Yet, similar to nursing homes, the
quality of care has been an issue.

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 22 䡲 Handbook of Long-Term Care Administration and Policy

as independently as possible, preferably in a community setting and without over-

whelming their family members, whether a spouse or an adult child.
In a survey of 3000 seriously ill hospitalized patients, 26 percent said they were
unwilling to, and 30 percent said they would rather die than live in a nursing
home—only 2 percent said they would do so voluntarily (Kane et al., 1998). In a
USA Today (2005) poll, one-third of the respondents indicated that they “worried
a great deal,” and another 20 percent were “somewhat worried” about eventually
winding up in a nursing home; 16 percent and 32 percent, respectively, were “not
so worried” or “not worried at all.” Perhaps the lack of concern by some of these
latter respondents could be attributed to the fact that they incorrectly assumed, for
a variety of reasons, that they were bulletproof from such an eventuality.
Regardless, such facilities do become “home” to a significant percentage of
vulnerable older people. Currently, about 1.5 million, or 14 percent of the age 85
or older population lives in nursing homes (Houser, 2007). Moreover, studies show
that over 50 percent of women and nearly one-third of men age 65 and above will
reside in a nursing home at some time during their life span; about 10 percent—
primarily females—will stay for five years or more (U.S. Senate, Committee on
Finance [SFC], 2005b).
Critically, a significant minority of disabled elders have no family to provide
help. Given the dearth of publicly supported home and community care, older
people who cannot pay for themselves are forced to enter an institution. Such indi-
viduals are most likely to be single women: despite a lifetime of expectations that
they provide care to others, they are more at risk than men of lacking any care for
themselves (Hooyman, 1999). Because older men are more likely than women to
be married and even to remarry in their later years, when they become chronically
ill they generally receive hands-on assistance from their wives; over 50 percent of
women aged 75 years and above are single. Moreover, about one-fifth of all older
people have no children on whom they can rely on for everyday assistance, and
about 10 percent are without any living kin (Abel, 1991; Brody, 1995).

Public Policy
Notwithstanding the generally negative views on nursing homes by caregivers and
older people alike, our public policies continue to promote institutionalization.
Recently, there has been some expansion of home and community services under
Medicaid; nevertheless, the national government and states continue to fund nurs-
ing facilities at ever-increasing costs.* Ostensibly a private sector industry, nursing
homes appropriate billions from the public coffers annually. Currently, Medicaid

* In the past decade, Medicaid home care spending increased from 14 to 29 percent of Med-
icaid’s long-term care spending (SFC, 2005a, p. 112); about 1.2 million people now receive
in-home services through the program.

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 Public Perceptions of Long-Term Care 䡲 23

is paying for nearly 50 percent of the more than $100 billion total nursing home
bill,* with Medicare subsidizing another 6 percent. A significant reason that states
struggle with escalating Medicaid budgets is because of such long-term care costs.
Indeed, institutional care represents about 35 percent of all state spending on the
program.
Despite such large public sums, the private, mostly proprietary nursing home
industry, which is answerable mainly to its stockholders, has relatively little pub-
lic accountability or serious government oversight. As I discuss elsewhere (Olson,
2003), its workers continue to be underpaid and overworked; most facilities are
understaffed, particularly with regard to nurses and nurse’s aides; and financial
fraud is unchecked, as is patient neglect and abuse (Olson, 2003). For instance,
Turiel (2005) provides evidence that over 90 percent of nursing homes do not
have sufficient staff, a situation associated with festering bedsores and other serious
infections, malnutrition, weight loss, dehydration, pneumonia, and other seriously
negative patient outcomes. Clearly, a significant number of Americans are acutely
aware of these failings. As opposed to political leaders, studies show that the public
understands some of the serious, ongoing problems related to U.S. nursing homes.
In the Kaiser Health Poll (2005), 63 percent of the respondents agreed that
there is not enough government regulation of the quality of nursing homes, and
59 percent that government is not enforcing quality standards for these facilities.
Similarly, 74 percent strongly or somewhat agreed that nursing homes do not have
enough staff; 60 percent that its staff is often poorly trained; and 58 percent that
there is too much waste, fraud, and abuse by facility managers: relatively few people
strongly disagreed with such statements.
However, some aspects of the nursing home industry’s public relations efforts
may be paying off: nearly half of the respondents (48 percent) concurred that nurs-
ing homes are not paid enough money by Medicare, Medicaid, and other insurers.
About one-fourth (26 percent) did not know, probably indicating that a signifi-
cant minority of people are unaware of public expenditures for long-term care,
actual daily costs of serving residents, and nursing home profits (Kaiser Health
Poll, 2005).

Paying for Long-Term Care

More and more people require at least some paid assistance, yet the costs of long-
term care have grown dramatically. By 2003, outlays from both public and private
sources reached $183 billion annually, or 13 percent of total healthcare expenses
in the nation.† Nearly half (48 percent or $87 billion) is paid through Medicaid

* Medicaid is the principal payer for nearly 60 percent of all nursing home residents in the
nation.
†
Nursing homes account for about 47 percent of total long-term care spending (HEC,
Subcommittee on Health, 2005).

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 24 䡲 Handbook of Long-Term Care Administration and Policy

alone, mostly for nursing homes.* The government subsidizes another 18 percent
($33 billion) through Medicare; other publicly supported programs pay an addi-
tional 3 percent ($5.5 billion) (U.S. House, Committee on Energy and Commerce
[HEC], Subcommittee on Health, 2005).
Only a relatively limited amount of long-term care is funded privately. In 2003,
families paid for 20 percent ($37 billion) of the national total out-of-pocket, the
vast majority for nursing home care. Even less, only 9 percent ($16 billion) came
from private long-term care insurance and 3 percent ($5.5 billion) from other types
of private sources (HEC, Subcommittee on Health, 2005).
Studies show that people may have an erroneous understanding of how long-
term care is funded. They also tend to have an unrealistic view of whether they
can afford to pay for such costs on their own, or an indifferent attitude toward the
subject. One poll, sponsored by the Employee Benefit Research Institute (EBRI,
1996), indicated that at least half of respondents were confident that they would
have enough money to finance nursing home or home healthcare, if they required it.
Although only 19 percent of respondents in the Kaiser Health Poll (2005) expected
to support their long-term care needs themselves or through family money, 30 per-
cent did not know how they would fund paid help. The reality is that few people
can afford the high costs of such assistance, and even a smaller number can pick up
the tab for as long as may be necessary.
In 2000, the median net worth of elderly households—excluding their
homes—was only $23,885 (SFC, 2005a). Older widowed, divorced, or never-mar-
ried women tend to have even fewer resources. Moreover, such females often do
not have adequate income to meet their daily needs: nearly one-third of all single
women aged 65 and above had incomes at or below 125 percent of the official
poverty threshold. In 2001, a Survey of Income and Program Participation (SIPP)
measured the total assets of single people, aged 85 and above, who required ongo-
ing assistance because of functional or cognitive impairments. Seventy-four percent
of these elders had assets of less than $5000 (SFC, 2005c).
On average, people residing in a nursing home—which currently can cost
$60,000 or more—wipe out their entire life savings after 18 months (GFN, 2006).
The SIPP study showed that 84 percent of the people evaluated could not pay for
even one year of nursing home expenses; another 9 percent could afford slightly less
than three years of institutional care; and only 7 percent could cover three or more
years (SFC, 2005c).
About 44 percent of nursing home users do finance their own care but most of
them have relatively short stays and often deplete much, if not all, of their savings.
Another 16 percent of residents initially pay on their own, exhaust their assets, and

* Nationally, on average approximately 57 percent of Medicaid long-term care is for the elderly,
which amounts to about 35 percent of this group’s total long-term care expenses (HEC,
Subcommittee on Health, 2005).

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 Public Perceptions of Long-Term Care 䡲 25

turn to the public health program. Over one-third is forced to depend on Medicaid
from the start (SFC, 2005a, d).

Medicaid, Long-Term Care, and Public Support

Medicaid and “Spend Down”
One of the more contentious issues today regarding Medicaid’s long-term care pro-
vision is its use by the middle class. In the initial 1965 legislation, the federal gov-
ernment mandated only five basic services, one of which included skilled nursing
home care for individuals aged 21 and above. Frail elders with higher income or
assets than a state’s welfare levels could qualify under its medically needy program;
however, such individuals would first have to impoverish themselves by spend-
ing their own assets and income on medical costs until they reached the state-
established standards. As early as 1975, Medicaid was paying, at least partially,
for more than half of all nursing home residents, many of whom had previously
considered themselves as part of the middle class.
Over the years, Medicaid has remained a key support for older people, at all
income levels, who require long-term care. Indeed, by the 1990s, President Clinton
and many other Democrats were defending Medicaid as “a key support for senior
citizens residing in nursing homes” (Grogan and Patashnik, 2003, p. 844). Fram-
ing Medicaid as an entitlement for middle-class elderly, many Democrats in 1996
defended the program against efforts to reduce its federal outlays (Grogan and
Patashnik, 2003).
Recently, however, there have been concerted attacks on the use of Medicaid
by the nonpoor for long-term care. A particular focus has been on asset transfers:
through various forms of estate planning, enterprising middle-class elders poten-
tially can divest themselves of their money through gifts to their children or by
establishing trusts to become eligible for Medicaid. In an attempt to control this
alleged problem, in 1993 Congress increased the waiting time to five years for shel-
tering assets through certain trusts and to three years for transferring money to rel-
atives before an elder could apply for Medicaid. The Deficit Reduction Act (DRA)
of 2005 has tightened the rules even further: it increases the look back period to five
years for asset transfers; changes the penalty period from the time of transfer to the
date of Medicaid eligibility, and excludes coverage for individuals with home equity
valued at over $750,000 (see Chapter 11 for additional information on changes in
the look back period).
Nonetheless, unlike the current administration, Americans tend to support
middle-class participation in Medicaid, particularly as it pertains to long-term care.
For example, in a Kaiser Family Foundation Poll on Medicaid (2005), 55 percent
of the respondents were opposed to eliminating the ability of middle-class elderly
to transfer their assets to their children for the purpose of qualifying for Medicaid.

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 26 䡲 Handbook of Long-Term Care Administration and Policy

Moreover, a recent American Association of Retired Persons (AARP, 2005) survey

found that fully 75 percent of the respondents opposed an extension of the look
back period to five years for such money transfers.
Notably, as Judith Feder suggests, “Claims that Medicaid serves as an asset
shelter for the wealthy rather than as a safety net are simply not supported by
the evidence” (SFC, 2005a). Taylor et al. (1999) found that the vast majority of
people who could potentially benefit from forming trusts to qualify for Medicaid
did not have any; in fact, it was rare for anyone to do so. The data suggests that
trusts “are far more commonly established by wealthy people seeking to reduce
tax burdens and avoid probate than by modest income people seeking to avoid
spend down for nursing home care” (Taylor et al., 1999, p. 7). Moreover, other
research shows that older people in poor or declining health are not transferring
assets but rather are keeping whatever money they have to pay for their own care
(Feinstein and Ho, 2001).
The reality, as shown earlier, is that most middle-class elders either pay for their
nursing home care with their own money or become impoverished before apply-
ing for Medicaid. Ironically, the new Republicans have passed legislation to lower
inheritance taxes for high-income people, while seeking to prevent the middle class
from preserving their small bequests.

Public Views on Medicaid

Medicaid is the quintessential entitlement program so detested today by the new
conservative forces. Yet, unlike Aid to Families with Dependent Children (AFDC),
it has proven difficult to abolish or even reduce considerably. After years of attack
by conservative and even moderate political officials, AFDC was successfully dis-
mantled as a national program in 1996, resulting in a drastic retrenchment in
cash assistance to poor families. Despite all of the fanfare about its devastating
costs, AFDC outlays were relatively modest, both at the national and state levels.
Although the majority of recipients were Caucasian, the program had been labeled
as a program serving indolent, dependent minority households (Quadagno, 1994;
Teles, 1998).
Medicaid, on the other hand, is now the fifth largest item on the federal budget
(after Social Security, defense, interest payments on the national debt, and Medi-
care) and the second most costly item—and in a few places the highest—in state
budgets. Despite these large and escalating costs, Medicaid was left relatively intact
in the mid-1990s. Since that time, there have been annual efforts to cut billions
at the national and state levels, but they continue to prove relatively unsuccessful.
One main reason for the sustainability of Medicaid is public support: Rushefsky
and Patel (1998) argue that the failure of Republicans to reduce increases in Medi-
care and Medicaid in 1995 and 1996, as opposed to AFDC, “can be attributed
to public opinion” (p. 239). Although many political leaders of both parties have

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 Public Perceptions of Long-Term Care 䡲 27

attempted to curtail Medicaid, polls and focus groups show that a significant per-
centage of Americans approve of the program.
Studies in the early 1990s, such as those by Cook and Barrett (1992), argued
that social welfare programs fared better than might have been expected under
the Reagan and Bush administrations. Their survey data suggests that although
the public may not favor welfare, per se, they do support assistance to the poor,
including the healthcare programs: overall, the public is relatively pleased with the
effectiveness of Medicaid. The researchers found that 47 percent of adults would
increase, and another 46 percent would maintain its funding levels. Their survey
data suggests that the most favored programs, in order of support, are Social Secu-
rity, Medicare, supplementary security income (SSI), and Medicaid; AFDC (wel-
fare) had the least backing.
Recent polls confirm these results. For instance, an AARP (2006) nationwide
poll of adults showed that, if given a choice, 51 percent of respondents would
increase national Medicaid funding in the next budget, and another 34 percent
would keep the expenditures the same; only 10 percent would decrease the amount
of federal money allocated to the program. Notably, the percentage of people who
would boost such outlays compares favorably with that for some of our more popu-
lar programs such as education (74 percent), Medicare (61 percent), and Social
Security (60 percent) as contrasted with only 35, 33, and 42 percent for defense,
transportation, and agriculture, respectively. The earlier AARP Poll (2005) pro-
duced similar results: when asked about current funding levels, 57 percent said
that there was not enough money in the Medicaid budget to pay for health and
long-term care in their state.
Indeed, in the Kaiser Medicaid Poll (2005), 90 percent of the respondents indi-
cated that their state budget was in crisis or had problems and 38 percent of them
viewed Medicaid as one of the major reasons. Yet, when asked if they support or
oppose making some cuts to the Medicaid program in their state to help balance
the budget, 74 percent were against the reductions, with 52 percent of these express-
ing strong opposition. Another survey in Pennsylvania (Hospital and Health Sys-
tem Association of Pennsylvania [HAP], 2005) queried, “Is Medicaid a necessary
health care program that provides an important safety net for the poor, or is it just
another wasteful government program?” It found that 70 percent of the respon-
dents thought the program was necessary; only 5 percent thought it wasteful.*
Although people of both parties view Medicaid as a very important program
(74 percent), it is favored more by Democrats (81 percent) and Independents
(79 percent) than by Republicans (61 percent). Interestingly, the differences are
somewhat larger than those for Social Security (90, 87, and 89 percent, respec-
tively) and Medicare (91, 82, and 78 percent, respectively) (Kaiser Medicaid Poll,
2005).

* Seventeen percent did not know and another 8 percent said it was neither important nor
wasteful.

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 28 䡲 Handbook of Long-Term Care Administration and Policy

Medicaid and Long-Term Care

One main reason for such strong public support for Medicaid may be that Americans
accurately and approvingly view it as more than just a healthcare program: 68
percent of the respondents in the Kaiser Medicaid Poll (2005) indicated that the
need for long-term care was the main reason why people have health insurance
through Medicaid. Critically, an overwhelming percentage considers the program
as a means for assuring long-term care for people in need: 82 percent thought it
essential that Medicaid coverage include nursing home care.
Public support for Medicaid also may be reinforced by the fact that a substantial
number of people have firsthand experience with the programs through its long-
term care coverage. When asked how they knew about Medicaid, over half of the
respondents said that a friend or a family member (40 percent) or they personally
(16 percent) received benefits or had nursing home care paid through the program
(Kaiser Medicaid Poll, 2005).
To be sure, the public may assume that even more frail elderly avail themselves
of long-term care benefits than is actually the case. When asked which group makes
up most of the people enrolled in Medicaid, nearly half (46 percent) inaccurately
stated that it was the low-income elderly and people with disabilities. However,
although 54 percent correctly recognized that these groups received the bulk of the
funding, a significant percentage (38 percent) thought low-income children and
their parents were the main financial beneficiaries (Kaiser Medicaid Poll, 2005).
As a matter of fact, about 25 percent of Medicaid beneficiaries are the aged, blind,
and the disabled, but they receive about two-thirds of the total funding (Fossett
and Burke, 2003).

Concern about Personal Long-Term Care Needs

Although an increasing number of families are currently coping with issues related
to their frail kin, it is unclear whether individuals give a great deal of thought
to their own long-term care needs. In a poll, sponsored by Pew Research Center
(2006), 55 percent of the respondents said it was among their major concerns.
However, a significant minority (43 percent) remained untroubled by any future
long-term care needs. Similarly, in the Kaiser Health Poll (2005), about one-third
of the respondents said that it is not something you ever think about. Moreover,
the GFN (2006) poll showed that only 35 percent of the respondents aged 40 and
above had made any advance preparation for long-term care. As mentioned earlier,
a significant percentage of those who had made plans (25 percent) assumed that
their own savings would be sufficient.
As might be expected, such concerns do increase with age, as shown in the
Kaiser Health Poll (2005) that asked: “When thinking about your financial need
in retirement, how much thought have you given to how to pay for long-term care
in a nursing home or home health care costs not covered by Medicare?” Out of the

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 Public Perceptions of Long-Term Care 䡲 29

respondents above the age of 65, 43 percent had given the issue a lot of thought, as
compared to 10, 23, and 33 percent of those in the age groups 18–29, 30–49, and
50–64, respectively. Still 41 percent of the 65 and above age group had given their
future long-term care situation only a little thought, and 16 percent had given it no
thought at all.

Perceptions or Misconceptions: Medicare

Many people—including the elderly—do not think about long-term care because
they assume that such costs are covered under Medicare. For example, a 1995 poll
found that less than 50 percent of Americans knew that Medicare did not cover
long-term care (Oberlander, 2003). Despite increasing information about the pro-
gram, especially the Department of Health and Human Services’ (HHS) extensive
and expensive Internet endeavors over the past decade, recent polls report that
nearly 25 percent of people still believe that Medicare covers long-term care (Kaiser
Health Poll, 2005; GFN, 2006). Moreover, when asked, “Which of the following
government programs is the primary source of health insurance for low-income
people who need nursing home care over a long period of time?” 32 percent of
respondents incorrectly assumed it was Medicare (Kaiser Medicaid Poll, 2005).*
The reality is that Medicare is primarily an acute healthcare insurance pro-
gram. It only allows up to 100 days in a skilled nursing home (with a daily coin-
surance after 20 days) following hospitalization. Coverage of social supportive or
homemaker services is explicitly prohibited. The program provides for in-home
help only under specific, restricted conditions: a physician prescribes a plan for
recovery and certifies that skilled services are medically necessary; the older person
requires part-time or intermittent nursing care or physical, occupational, or speech
therapy; and he or she is confined to the house. If these criteria are met, Medicare
will fund a home health aide and medical equipment and supplies. Any personal
assistance must be directly related to the medical treatment of an illness or injury
(Kane et al., 1998).

Perceptions or Misconceptions: Private Insurance

Studies show that the public may also have misconceptions about the role that pri-
vate insurance plays in funding long-term care. In the Kaiser Health Poll (2005),
when asked, “If you or a family member had a long term illness or disability and had
to go into a nursing home, how would the bill mainly be paid?” 30 percent of the
respondents assumed they would be covered by their private healthcare insurance
policies. Moreover, long-term care insurance is commonly confused with regular

* Thirty-eight percent correctly answered that it was Medicaid, fourteen percent said other pro-
grams, and seventeen percent did not know (Kaiser Medicaid Poll, 2005).

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 30 䡲 Handbook of Long-Term Care Administration and Policy

health insurance or long-term disability insurance (GFN, 2006). Few individu-

als have actually purchased long-term care policies—about 9 percent nationally—
although some knowledgeable observers estimate the percentage as low as 6 million
people, or 3 percent of the adult population (SFC, 2005a). Yet nearly 20 percent of
the adult population regularly reports having such coverage. For instance, in the
Kaiser Health Poll (2005), 21 percent of the respondents claimed that they had
private long-term care insurance that would pay for nursing home and home care
services over a long period of time; another 11 percent were not sure.
It is unlikely that private long-term care insurance will play a much greater role
in the future (SFC, 2005a). For one, it is—and will remain—more costly than
most families can afford: only from 10 to 20 percent of older households have suf-
ficient income to pay the premiums for a decent policy (Kassner, 2004). Of the
68 percent of respondents in the Kaiser Health Poll (2005) who indicated that they
do not have long-term care insurance, nearly 60 percent gave inability to pay for it
as a major reason.
Significantly, 30 percent of these uncovered respondents accurately understand
that the policies do not cover enough of the expenses (Kaiser Health Poll, 2005).
Policies vary considerably; many do not completely cover the full daily costs of care,
protect individuals for as long as may be needed, include inflation adjustments, or
meet other critical needs. For example, in 2001, the average annual premium for
such a purchaser was $2273. However, although this includes inflation protection,
it only provides for four years of coverage (Kassner, 2004). In addition, premiums
can increase, sometimes annually. There are also questions about the solvency of
some of the insurance companies, including whether they can—or will—pay what
they promise (Quadagno, 2005).
Under the 1996 Health Insurance Portability and Accountability Act (HIPAA),
long-term care insurance premiums are deductible for business owners and the
self-employed. As a result, according to Quadagno (2005), the number of employ-
ers offering long-term care insurance increased nearly 50 percent. Regardless, few
companies currently offer such policies and in the vast majority of places where
they are available, workers must pay the entire premium (Wiener et al., 2000).
Similarly, states that offer long-term care options to their workers shift the entire
premium costs to them. The 2000 federal Long-Term Care Security Act also offers
a voluntary program for its workers, their families, and retirees that must be paid
by the beneficiaries themselves. Understandably, few have taken advantage of the
offerings (Wiener et al., 2000). In the current atmosphere of employee pension and
healthcare cuts overall, it is highly unlikely that we will witness any substantial
growth in either employer- or state-subsidized benefits.
On the other hand, political leaders are attempting to encourage private pur-
chase through tax credits: nearly half of the states offer such assistance. At the fed-
eral level, proposals for tax deductions and tax credits have become the main focus
of federal long-term care policy. Feder argues that such efforts primarily benefit

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 Public Perceptions of Long-Term Care 䡲 31

those households that would have purchased the policies anyway (SFC, 2005a).
Certainly, they will not benefit a significant percentage of the population, materially
improve the situation of current or future frail older people or the disabled younger
population, or even begin to solve the U.S. crisis in long-term care.

Conclusion
On many questions, the response is mixed as to whether the public completely
understands long-term care in this nation. Certainly, the way people comprehend
an issue can be essential to its political outcome (Leech et al., 2002). Similarly, as
Grogan (1999) asserts, if constituents are not interested and aware, politicians have
more leeway and interest groups have more power.
Obviously, there is a growing need for long-term care in the United States,
whether institutional or at-home assistance, given that there are increasing numbers
of frail and disabled people and fewer caregivers per person requiring aid. Although
we continue to publicly subsidize nursing homes, chronically ill older people and
their families perceive that these are not effective, quality, or humane places. How-
ever, despite the reluctance of carer and recipient alike, frail elders—a significant
percentage of single women aged 85 and above—will end up in these facilities. The
evidence suggests that they are not completely aware of such an eventuality.
Nor are most people cognizant of long-term care costs and how they are funded.
Large numbers of people erroneously assume that services will be covered through
Medicare or their private health insurance policies. Yet the reality is that most
chronically ill older people cannot afford to pay for long-term care on their own;
the majority of physically or mentally disabled elderly women will be forced to
spend their meager life savings to qualify for help from Medicaid. As Judith Feder
sums it up: “People who need extensive assistance with basic tasks of living (like
bathing, dressing and eating) face the risk of catastrophic costs and inadequate
care” (SFC, 2005a, p. 2).
Polls and other survey data reveals that the public tends to support Medicaid,
particularly because it serves the long-term needs of the elderly. They also gen-
erally approve its use by middle-class older people. In fact, nearly 70 percent of
respondents in a Kaiser Family Foundation LTC Poll (1996) indicated that the
federal government should spend more money to provide long-term care for the
elderly even if it meant an increase in their taxes. Overall, the data suggests that
the vast majority of the population endorses publicly supported long-term care for
frail older people.
Much needs to be done to improve the U.S. approach to long-term care,
including better government oversight of institutional facilities, something most
adults keenly understand but have not actively demanded. As a result, proprietary
nursing homes, and their influential lobby organizations, have dictated much of

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 32 䡲 Handbook of Long-Term Care Administration and Policy

public policy over the past several decades, undermining a more sound and caring
approach to long-term care. Our elderly—and their caregivers—deserve not only
quality facilities but also greater opportunities for publicly supported home and
community assistance.

References
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Daughters. Philadelphia, PA: Temple University Press.
American Association of Retired Persons (AARP). 2005. Telephone survey of 1,011 adults,
nationally. Poll conducted by ICR International Communications, April 20–24.
Washington: DC.
American Association of Retired Persons (AARP). 2006. Telephone survey of 1,026 adults,
nationally. Poll conducted by ICR International Communications, January 4–9.
Washington: DC.
Brody, E. M. 1995. Prospects for family caregiving: response to change, continuity and
diversity. In R. Kane and J. D. Penrod (eds.), Family Caregiving in an Aging Society.
Thousand Oaks, CA: Sage.
Cook, F. L. and E. J. Barrett. 1992. Support for the American Welfare State: The Views of
Congress and the Public. New York: Columbia University Press.
Employee Benefit Research Institute (EBRI)/The American Savings and Education Coun-
cil. 1996. Telephone survey of 1,252 adults nationally. Poll conducted by Mathew
Greenwald and Associates, January 3–29. Washington: DC.
Feinstein, J. and C.-C. Ho. 2001. Elderly asset management and health. In W. G. Gale,
J. R. Hines, and J. Slemrod (eds.), Rethinking Estate and Gift Taxation. Washington:
Brookings.
Fossett, J. W. and C. E. Burke. 2003. Managing Medicaid Take-Up, Is Medicaid Retrenching?:
State Budgets and Medicaid Enrollment in 2002. Albany, NY: Rockefeller Institute.
Genworth Financial National (GFN). 2006. Telephone survey of 600 adults nationally,
over age 40. Poll conducted by Public Opinion Strategies, February 27–March 1.
Richmond: VA.
Grogan, C. 1999. The influence of federal mandates on state Medicaid and AFDC decision-
making. Publius: The Journal of Federalism, 29(3): 1–30.
Grogan, C. and E. Patashnik. 2003. Between welfare medicine and mainstream entitlement:
Medicaid at the political crossroads. Journal of Health Politics, 28(1): 821–858.
Hooyman, N. R. 1999. Research on older women: Where is feminism? The Gerontologist,
39: 115–118.
Hospital and Health System Association of Pennsylvania (HAP). 2005. Keystone Omnibus
Survey. Telephone survey of 804 adults in Pennsylvania. Poll conducted by Terry
Madonna Opinion Research, January–February. Harrisburg: PA.
Houser, A. N. 2007. Nursing Homes, Research Report. Washington: AARP/Public Policy
Institute.
Kaiser Commission on Medicaid and the Uninsured (Kaiser Commission). 2005. Sur-
vey of Medicaid Officials in 50 States and D.C., States Undertaking New Medicaid

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Cost-Containment Strategies, research conducted by Health Management Associates,

September–December 2003, October 2004, and October 2005. Washington: DC.
Kaiser Family Foundation (Kaiser LTC Poll). 1996. Telephone survey of 1,011 adults,
nationally. Poll conducted by Princeton Survey Research Associates, June 20–July 9.
Menlo Park: CA.
Kaiser Family Foundation (Kaiser Health Poll). 2005. Health Poll Report Survey. Telephone
survey of 1,202 adults, nationally. Poll conducted by Princeton Survey Research
Associates, June 2–5. Menlo Park: CA.
Kaiser Family Foundation (Kaiser Medicaid Poll). 2005. National Survey on the Public’s
Views about Medicaid. Telephone survey of 1,201 adults, nationally. Poll conducted
by Princeton Survey Research Associates, April–May. Menlo Park: CA.
Kane, R. A., R. L. Kane, and R. C. Ladd. 1998. The Heart of Long-Term Care. New York:
Oxford University Press.
Kassner, E. 2004. Private Long-Term Care Insurance: The Medicaid Interaction, Issue Brief
No. 68: 1–8. Washington: AARP/Public Policy Institute.
Leech, B. L., F. Baumgartner, J. M. Berry, M. Hojnacki, and H. Waltzer, 2002. Organized
interests and issue definition in policy debates. In A. Cigler and B. Loomis (eds.),
Interest Group Politics. Washington: CQ Press.
Oberlander, J. 2003. The Political Life of Medicare. Chicago, IL: University of Chicago
Press.
Olson, L. K. 2003. The Not-So-Golden Years: Caregiving, the Frail Elderly, and The Long-
Term Care Establishment. Boulder, CO: Rowman & Littlefield.
Pew Research Center. 2006. Telephone survey of 1,405 adults, nationally. Poll conducted
by Princeton Survey Research Associates, March 8–12. Washington: DC.
Quadagno, J. 1994. The Color of Welfare: How Racism Undermined the War on Poverty.
New York: Oxford University Press.
Quadagno, J. 2005. One Nation Uninsured: Why the U.S. Has No National Health Insur-
ance. New York: Oxford University Press.
Rushefsky, M. E. and K. Patel. 1998. Politics, Power and Policy Making: The Case of Health
Care Reform in the 1990s. Armonk, NY: M. E. Sharpe.
Taylor, D., F. Sloan, and E. Norton. 1999. Formation of trusts and spend down to medic-
aid. Journal of Gerontology: Social Sciences, 54B(4): S194–S201.
Teles, S. M. 1998. Whose Welfare?: AFDC and Elite Politics. Lawrence, KA: University Press
of Kansas.
Turiel, J. S. 2005. Our Parents Ourselves: How American Health Care Imperils Middle Age
and Beyond. Berkeley, CA: University of California Press.
USA Today. 2005. Telephone survey of 1,000 adults nationally. Poll conducted by TNS
Intersearch, October 12–16.
U.S. House, Committee on Energy and Commerce (HEC), Subcommittee on Health.
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Federal and State Budgets, Statement of Kathryn G. Allen, Director, Health Care—
Medicaid and Private Insurance Issues, Government Accounting Office (GAO), April
27. Washington: U.S. Government Printing Office.
U.S. Senate, Committee on Finance (SFC). 2005a. Hearings on Medicaid Waste, Fraud and
Abuse: Threatening the Health Care Safety Net. Testimony of Judith Feder, Professor

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and Dean, Georgetown University Public Policy Institute, June 29. Washington:
U.S. Government Printing Office.
U.S. Senate, Committee on Finance (SFC). 2005b. Hearings on Medicaid Waste, Fraud and
Abuse: Threatening the Health Care Safety Net. Testimony of the American Council of
Life Insurers, June 29. Washington: U.S. Government Printing Office.
U.S. Senate, Committee on Finance (SFC). 2005c. Hearings on Medicaid Waste, Fraud and
Abuse: Threatening the Health Care Safety Net. “Medicaid Asset Transfers and Estate
Planning,” Testimony of Julie Stone-Axelrod, Analyst in Social Legislation, Domes-
tic Social Policy Division, June 29. Washington: U.S. Government Printing Office.
U.S. Senate, Committee on Finance (SFC). 2005d. Hearings on the Future of Medicaid:
Strategies for Strengthening America’s Vital Safety Net. “Medicaid, Costs and Health
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57–102.

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 Chapter 3

Looking for Care in

All the Wrong Places

Deborah Stone

Mom was still groggy from anesthesia when we got home on a Saturday afternoon
and Dad told her the visiting nurses would be coming later on. Not so groggy that
she couldn’t protest, though. “I don’t need a nurse,” she announced, and demanded
to know, “Who asked them to come?” She hated the whole idea. I, on the other
hand, was secretly titillated, for I was thick into a research project on home health-
care. It took all my willpower to refrain from doing field research on my mother,
but I managed to honor her privacy for the entire two hours the nurse stayed in
her bedroom. The instant the nurse was out the door, I couldn’t wait to ask Mom,
“How was it? What did she do?”
“She didn’t do a damn thing,” Mom grumped. “All she did was ask questions
and take notes.”
Mom wasn’t much help to my project, but no matter. As a researcher, I already
had a good idea of what the nurse did that day. She gathered data, lots of it. The
data, according to the high priests of policy, would yield better patient assess-
ment, better outcome measures, better quality of care, and better coordination and
integration of all Mom’s services. (That’s policy speak for what the rest of us call
healing and caring.) The nurse filled out a 100-item questionnaire named OASIS

35

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 36 䡲 Handbook of Long-Term Care Administration and Policy

that Medicare uses to classify home-care patients into payment categories. OASIS
(the acronym for Outcome and Assessment Information Set) is supposed to predict
“resource utilization”—in plain English, how much care someone will need. It’s
also supposed to help the government do “risk adjustment,” which is happy talk for
fi xing a blatantly unfair method of compensating agencies and nursing homes for
taking care of people.
The visiting nurse did some other things for my mother on that Saturday after-
noon besides delivering so much Orwellian promise. She typed all the data directly
into a laptop, creating an instant electronic record and enabling Medicare to keep
up to the minute on Mom’s case. The nurse also briefly ticked off some of the
agency’s rules and policies, and then, having dutifully informed Mom, secured
her informed consent to treatment. I believe my mother signed four pieces of paper
that day, the last of which attested that she had been given the 1-800 hotline num-
ber to the Office of the Inspector General, in case she ever suspected the visiting
nurses were up to any mischief.
In short, the visiting nurse did everything that policy engineers asked of her
to alleviate the nightmare of growing old and sick in America. Yet, on the day my
mother came home from the hospital, the day she was most in need of reassurance,
explanations about her particular condition, and a little human warmth, her first
and by far longest contact with home healthcare amounted to not a damn thing.
The visiting nurse massaged her laptop and never once touched Mom.

A home health aide told me that she was once reprimanded by her supervisor for
taking too long with an elderly client. All the client really needed, it seems, was
help putting on her elastic stockings. The aide recorded the visit as half an hour,
or maybe even 45 minutes. Her supervisor said she ought to have been able to do
it in ten minutes. The aide was incensed, and for her, the episode was emblematic
of the trouble with home healthcare. “You can’t just go in and get out. I’m sorry.
You know, my grandmother had people taking care of her. I wouldn’t want them
to do the same—you know, just come in and wash her up and leave. They have to
have some kind of relationship going.”
I know what you’re thinking. You’re thinking, “Hey, 30 minutes to put on
support hose? Damn right the woman should be reprimanded. That is exactly the
sort of featherbedding government and insurance companies should snuff out.”
But put your grandmother in the story and suddenly this tale of petty corruption
goes Dickens dark. It’s far from the most egregious story of its kind I can think of,
but it does nicely to outline the shadows of the industrial revolution in caregiving.
Like textile weaving, caregiving used to be done in family homes, mostly by
women, using simple methods handed down through generations and learned at
the hearth. Women didn’t so much “provide” care, as current jargon has it; they
just did it, as it was needed, as they thought best, as they were moved to do by their
sense of obligation and their care—in another sense of the word—for the people
around them.

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 Looking for Care in All the Wrong Places 䡲 37

Over the course of the twentieth century, a lot of caregiving moved out of
homes into hospitals and institutions that were often called homes (nursing homes,
congregate homes, and group homes), but that had more in common with a textile
factory than any home. At the same time, a lot of caregiving was organized into
occupations with formal training and licensing, and importantly, with somebody
higher up calling the shots—prescribing care plans (no longer simply “care” but
“care plans”), dictating schedules and pay scales, and generally controlling what
people did when they took care of each other.
The aide’s stocking story is about the Taylorization of caregiving. In the early
twentieth century, an engineer named Frederick Winslow Taylor went into the
factories bent on expunging inefficiency. He timed the workers at their tasks
and observed them with all the stupefied intensity of Scrooge, counting and
recounting his money. While the assembly line rolled on, Taylor disassembled
each job into minute gestures and steps. He figured out the quickest way for
workers to get their work done, and then he reconstituted their jobs, training
them with a stopwatch to within an inch of their lives. Taylor meant to strip
workers of all their quirks, spontaneity, and power to think, leaving nothing but
pure, efficient work.
Today’s home healthcare (indeed much healthcare no matter where it is offered)
takes Taylor’s vision one step further. Now people are disassembled into their
illnesses or disabilities and chalked off on an OASIS chart. Then their illnesses
are disassembled into the necessary care tasks. Somewhere in ComputerLand,
Taylor’s heirs model which tasks need doing for the mythical average person
in each illness category. Somewhere in Washington, Thomas Gradgrind’s heirs
calculate how much money all this care (now called “resource utilization,” lest
anyone get too sentimental about it) ought to cost, or at any rate, how much the
government is willing to pay for it. OASIS happens to be the system Medicare
uses for home care, but virtually all public and private insurers manage their
costs by transforming people into bundles of tasks, then converting the tasks into
hours or dollars.
Before you know it, a woman is just a body that needs to have its elastic stock ings
put on. Even Minerva McGonagall, professor of transmogrification at Hogwarts,
would have a hard time doing this one. But that’s exactly what was going on behind
the closed door of my parents’ bedroom on that day of the Sabbath, and it felt to
me just a mite unholy. The visiting nurse, who herself had been hauled by the hem
of her long skirt out of the nineteenth century to be retrofitted with modem busi-
ness methods, was hard at work transmogrifying my mother into an average, so she
could be further transmogrified into a price. After all, the nurse had to know how
much her agency would get paid for taking care of Mom before she could decide
what to do for her. That’s the magic of capitalism.
Maybe you’re not so sure about the featherbedding anymore. Maybe you now
understand why the extra 20 minutes that an aide wastes talking to a lady before
putting on her stockings is 20 minutes well spent. Maybe those extra minutes

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 38 䡲 Handbook of Long-Term Care Administration and Policy

sustain the lady’s identity as something other than a body that needs fi xing up,
emptying, cleaning, and feeding. That would be magic worth doing.

In the course of my research, I met a physical therapist with a home care practice of
mostly Medicare patients. Joanne told me about a client who had phoned, in tears, a
couple of days before her next appointment because she’d just learned that her breast
cancer had recurred. “I know that on my next visit we’re not going to do any physical
therapy,” Joanne told me. “She’s going to say, ‘Just sit with me ’til I calm down.’”
A physical therapist can’t bill Medicare for just sitting with people ’til they
calm down. Nor can a physical therapist bill for just listening, holding hands, and
being there to help someone face the terrors. There’s no category for that sort of
relationship. But patients and caregivers, even professional caregivers who have
been trained not to get too close to people, believe that good care means just that
sort of relationship.
“What am I going to do—say no?” Joanne continued in an assertive tone that
belied her grammatical interrogative. Taking her cue, I asked her how she would
bill for the visit. She was evasive, so I dropped the subject, not wanting to trap her
any tighter between her ethics and the law.

My friends Susan and Bill separated for a few weeks shortly before Bill died,
although they didn’t call it separation. Susan called it respite. I don’t know what
Bill called it. Probably fear. Bill had polycystic kidney disease, had undergone three
kidney transplants, and was gradually failing from a host of complications. He
had severe neuropathy in his legs, walked with braces and a walker, and in his last
year, fell often. His skin wounds would not heal. He would get pneumonia, get
confused, go to the hospital to get pumped with antibiotics, get better, come home,
get pneumonia, fall. During one of his hospital stays, Susan fled to her friends in
another state, distraught because Bill refused to have ongoing home care or move
to an assisted living place. No less distraught, Bill was desperate to remain inde-
pendent and at home, as well as alive. Susan was undone by 24/7 caregiving, not to
mention worry and heartache for the man she loved.
On the day Susan finally lost it, the day that precipitated her flight, I had phoned
to talk about something else, but I began with, “How are you doing?”
“Terrible.”
“Is Bill all right?” I asked.
“No, he’s not. He’s upstairs on the floor.”
“Do you want me to call someone? Or I could just come over,” I offered. Susan
had hurt her back and I knew she was in no condition to help Bill get up.
“No, that’s all right,” she said, strangely calm now. “I’m getting ready to go
across the street in a bit and see if Henry can help Bill get up.”
Something about her lack of urgency didn’t compute, so I asked, “How long has
Bill been on the floor?”
“I don’t know,” she said. “He’s . . . sort of . . . not . . . He can’t really tell me.”

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 Looking for Care in All the Wrong Places 䡲 39

Later I learned what had happened and why Susan was so leisurely about get-
ting help. When she found Bill on the floor, he told her he was all right and not to
call anyone. Just give him some time, and he’d get up himself—the same optimistic
can-do, I-don’t-need-help routine that kept him alive and at home years longer
than his doctors had thought possible. Besides, the last time she had called the
Visiting Nurse Association (VNA) for help, they had rebuffed her. Bill had spiked
a fever and was incapable of getting out of bed. Bill’s doctor told Susan he would
call the VNA and order a nurse to come out and draw blood for a test to see what
was going on. Susan was supposed to follow up with her own call to the VNA.
When she did, the person on the other end of the phone told her, “The normal
procedure is you bring the patient over for lab work.” Susan thought the visiting
nurses ought to understand why she couldn’t follow normal procedure because
they had taken care of Bill after a couple of his hospital episodes, but when she
stammered out an explanation, the VNA person chastised, “Okay, but if we come
out there, it’ll be private pay.” So this time, Susan sought help from Henry instead
of the VNA. Henry is a spry 85-year-old, but he couldn’t lift Bill and persuaded
Susan to call 911 for an ambulance.
It is an article of faith in policy circles that home healthcare is “overutilized.”
Costs have skyrocketed because too many people are too quick to run for help.
“There is a real problem with long-term care,” explains economist Mark Pauly in
Health Aff airs. “Most of the services are not the medical services that healthy people
would want to avoid but, rather, are the ‘low-tech’ or ‘servant’ services that anyone
would find helpful, whether well or ill.” Mr. Pauly has never met Bill.
According to the first principle of economics—the Law of Demand—people
will consume more of a good if they can buy it for less, or better yet, get it for
nothing. Because people on Medicare don’t pay anything for home care, economic
theory holds, they consume it with abandon. Co-payments would force patients
and families to bear at least some of the costs of their care and that, in turn, would
make them evaluate their needs with a more realistic eye. Economists speak of
setting the proper incentives, but what they really mean is discouraging people
like Bill and Susan from availing themselves of help.
Economic theory is right only if home care is a good in the economic sense—
something that enhances people’s welfare. Outside economics textbooks, care is
not an unalloyed good. Like Bill, most people don’t want to consume care because
they desperately don’t want to need it. To seek care is to ask for help and to ask
for help is to admit that you need help doing things most people can do for
themselves. Our culture reveres independence, and in this culture, dependence
is humiliating. To accept help is to cast yourself as dependent, less than whole, and
less virtuous than the independent citizen of our political rhetoric. Never mind that
other people gladly make excuses for you. Shame and the loss of one’s own powers
are the real deterrents to using home healthcare. Money is not the half of it.
Instead of empathizing with those who need care but are too proud to ask for
it, policymakers fear them as predators on the commonweal. Instead of making it

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 40 䡲 Handbook of Long-Term Care Administration and Policy

easier and more dignified for them to accept help, policy erects fences to keep them
away from our common care. Our public policy aims to domesticate the sick, the
frail, and the elderly by turning them into judicious consumers. That is why my
mother, still in her anesthesia-and-painkiller stupor, was signing all those forms on
the day of her first home care visit. She had to be transmogrified into an informed
consumer as well as a price. And if the economic wizards have their way, she and
people like her will soon have to pay for needing care, just so that they don’t forget
how much they cost the rest of us.

A visiting nurse I’ll call Caroline was so troubled by one case that she brought
it to the agency’s Ethics Committee. The client was an elderly farmer who had
been paralyzed in a tractor rollover accident some years before. He needed home
nursing mainly to tend his recalcitrant skin wounds. His wife had her own health
problems and the nurses sometimes got pulled into helping her too, although
visiting nurses are forbidden to treat anyone for whom they do not have orders.
Nevertheless, what really bothered Caroline was something else. The couple’s
children lived nearby, the family owned a handicapped van, and often, they
trundled the man out to family gatherings, church social activities, and the local
Wal-Mart—a favorite spot for the mobility-impaired because it provides electric
carts. And there’s the rub: to be eligible for Medicare’s home health benefit, a
person has to be “homebound.” The regulations say a person need not be literally
unable to leave home to qualify as homebound, but they allow only a few limited
excuses for going out. Home health nurses are supposed to police this confine-
ment to home. Every time they visit, they are supposed to ask whether the patient
has been out, and if so, for what purpose. Attending worship services or a medical
appointment is okay. Most anything else is not. So the nurses told the farmer’s
wife that her husband was not allowed to go out and still get care.
They told her repeatedly, and she repeatedly gave them a piece of her mind:
“If you make me take a choice between losing services and taking him out, I will
take him out.” They tried to up the ante by telling her they were sorry, but the
government has these rules. She countered: “If Mr. Clinton wants to come in here
and tell me I can’t have services, let him come.” In frustration, the nurses gave the
woman to understand that if she took her husband out, they didn’t want to know
about it.
As the Ethics Committee deliberated (I was a fly on the wall), one point of
consensus was clear: it’s good for the man to get out of the house and socialize.
Would that every disabled person had such loving, willing, close-by relatives, and
could afford a handicapped van! So the nurses did what visiting nurses have been
doing ever since the homebound requirement was introduced. They looked the
other way. But they knew they were breaking the law, and they didn’t feel good
about it. That is why they brought the case to the Ethics Committee. They won-
dered whether they were unethical in caring for the couple. I wondered whether the
law caused them to doubt their own compassion.

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 Looking for Care in All the Wrong Places 䡲 41

Medicare’s homebound requirement comes straight out of eighteenth-century

English Poor Law, whose magistrates distinguished between indoor and outdoor
relief. Indoor relief meant housing people in a poor house or an orphanage, where
they could be supervised and made to work before they could receive a bowl of
porridge. Outdoor relief meant just giving somebody help wherever they lived—the
kind of help we give when we send somebody a Social Security check or a welfare
check.
In 1834, England did welfare reform in much the same way we did it in the
United States in 1996. After exhaustive debate and study, reformers concluded that
outdoor relief discourages industry and thrift, encourages pauperism, and incites
the poor to fraud. Alexis De Tocqueville grasped the problem in his Memoir on
Pauperism: “Nothing is so difficult to distinguish as the nuances which separate
unmerited misfortune from an adversity produced by vice.” How, in other words,
do we tell who really deserves our help? His Majesty’s Commission on the Poor Laws
came up with a way: eliminate outdoor relief. Henceforth, anyone who wanted help
would have to live in a workhouse—a deliberately abhorrent place—where hus-
bands, wives, and children were separated from one another and all were forced to
labor for their meager gruel. The “workhouse test” would force supplicants to show
their hand. Or as His Majesty’s commissioners so delicately put it, “Into such a
house none will enter voluntarily; work, confinement and discipline will deter the
indolent and vicious; and nothing but extreme necessity will induce any to accept
the sacrifice of their accustomed habits and gratifications.”
The nursing home is said by some to have the same kind of salutary deterrent
effect on sick elderly people and to keep them from living off the public dole. Here
is health economist Mark Pauly writing in Health Affairs in 2001: “If I have to live
in a nursing home to collect benefits, and if (like most people), I would prefer not
to do so unless I was so frail that I really could not do well otherwise, I am less
likely to claim that my ADL score is worse than it really is.” Never mind what an
ADL score is. All you need to know is that the prospect of having to enter a nursing
home—Pauly believes—keeps people from cheating on the admissions test. The
problem with home healthcare services, Pauly explains, is that they lack such an
effective deterrent. “Insurers are terrified by the thought that if people can make
money from insurance and do not have to do anything that healthy people would
not do, there will be very substantial (and very clever) excess claims.”
This is as lucid an explanation as I have ever seen for why Medicare requires
home care patients to be homebound: to be imprisoned in your own home is the
next worst thing to being captive in a nursing home.
Few of us can abide the harsh wisdom of economists and royal ministers, so
home care for the elderly is rife with civil disobedience. I am sure my mother was
told that she had to be homebound to receive the help of the visiting nurses. I am
sure that was one of the rules and policies of which she was apprised on the day she
got home from the hospital and struggled to stay awake during two hours of talk-
ing head that passed for nursing. I am also sure that her surgeon encouraged her

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 42 䡲 Handbook of Long-Term Care Administration and Policy

to move about as soon and as much as possible. The day after she got home from
the hospital and everyday thereafter, for the ten days or so that Medicare paid for
her home care, my father took her out for walks, and up to the village for lunch.
They didn’t think twice about it, and they told me the nurse never asked about it
either.
When Bill was still well enough to drive, drive he did. He also took long walks
on his braces and canes, and much impressed Henry, his walking companion, with
his grit. But every time Bill went out, Susan shuddered. She wanted to cheer and
wish him Godspeed, yet it crossed her mind that if the VNA found out, they would
withdraw from his case, which was her case as well, for she needed their help as
much as Bill did.
Joanne, the physical therapist, was helping an elderly woman learn to walk safely.
The woman’s husband was in a nursing home a bus ride away, and Joanne hoped to
get her to the point where she could mount a bus and walk far enough to be able
to visit him on her own. But Joanne also knew that Medicare’s homebound rule
would not countenance such frivolity. Once Joanne documented that the woman
could get in and out of her home safely and walk about 25 yards—presumably to
escape a fire—the case was closed as far as Medicare was concerned. I do not know
whether Joanne cheated to do the humane thing. I do know that she faced a lot
of these dilemmas. And I do know that many rules intended to control home care
costs force otherwise law-abiding citizens to break the law or look the other way just
to get the care they need or give the care someone else deserves.

A few years ago, I met with the chair of my university’s politics department to dis-
cuss my future research plans. The man does meat-and-potatoes political science—
presidents, political parties, elections, that kind of thing. I expected that when
I told him I was studying home healthcare, he would ask what it has to do with
political science. Instead, he told me a story. His mother had a home health aide
for a long time before she died, he said; and at his mother’s funeral, he insisted that
the aide ride in the limousine with the family. “She was my mother’s best friend,
the most important person to her, and I wanted her to have a place of honor.”
Outside the family, nobody is asking aides to ride in the limo. Home health
aides typically earn seven to nine dollars an hour if they work for an agency, half
again more if they work privately. A quarter to a third of them don’t have health
insurance. They often have a hard time keeping 40 hours of work, and their hours
fluctuate with the health of their patients and the fiscal health of their employers.
Welfare offices (now dubbed employment offices) steer women into home health-
care by the busload, yet many aides make so little, even working full time, that
they still qualify for food stamps and Medicaid.
Among the specialized occupations that produce and deliver home care these
days, aides are usually the most skilled and valuable to the patient and the patient’s
family, but we pay them as if they were the least important. Planners, analysts, and
managers—the people Robert Reich calls symbolic analysts—never wipe a tear,

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 Looking for Care in All the Wrong Places 䡲 43

change a sheet, or lift a body or a spirit, but we pay them handsomely to fondle
abstractions.
In the industrial world, this hierarchy makes a certain sense. Without the
Brains, the Brawn might accomplish little (or at least that’s the demeaning theory
of industrial relations). Symbolic analysts see right through particulars and individ-
uality and uniqueness to the generalizable essence of things. Unfortunately, when
it comes to caregiving, symbolic analysts see right through the people who need to
be taken care of, and you cannot take good care of somebody if you no longer see
them.
A case manager may think she knows how long it takes to dress a client or give a
bath; a computer model may even think it knows how long it takes an aide to dress
and feed five patients. But neither the case manager nor the computer knows, or is
capable of learning, what the aide knows; exactly how Mr. So-and-So’s body moves
and hurts, and just how to nudge his stroke-benumbed shoulder and prop his arm
so that he can slide it into his shirtsleeve. Researchers invent care plans to satisfy
statistical tests and cost-effectiveness standards; policymakers and care managers
adopt them. But aides know the subtle arts of coaxing, joking, and soothing people
into complying with the pieces of the plan. The best care plans in the world come
to naught if aides are not brilliant psychologists.

By definition, home healthcare takes place in homes, out of sight of managers.

Because the various nurses, therapists, aides, and case managers are rarely in
somebody’s home at the same time, if there is any such thing as integration of care,
it happens at case conferences. They are a sort of planned substitute for chance
meetings in the coffee room. One such conference took place in a spare, nonde-
script room, the kind with linoleum floor, fluorescent lights, a large window look-
ing out on a parking lot, a couple of fake wood tables ringed by molded plastic
chairs, and nothing but a blackboard and me, the fly, on the white walls. A physical
therapist presented the case of a 49-year-old woman who had been in a car accident
that had left her quadriplegic. The woman and her husband were overwhelmed
by the mundane details of their new life, everything from coping with her bowels
to getting her in and out of a wheelchair. They had requested more help from the
agency, the physical therapist reported, but the woman had used up the three
home care visits she had been allotted. When the therapist had called the insurer
to get more visits authorized, the insurer denied her request, saying the woman
couldn’t benefit from more medical care, and anyway, “all their remaining prob-
lems are emotional, not medical.” At that, the nurse on the team blurted out, “Well,
I’m screwed. I’ll just go see her as a friend. And if I happen to have a few things in
my pocket.” Another therapist cut her off. “Yeah, that’s what I told ’em. I go to the
market all the time. You need something? Just give me your list.”
These women had been with the agency for years. Their livelihoods depended
on it and on the insurers who pay its bills. They had not seen the quadriple-
gic woman but three times, yet they were ready to help her on their own time.

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 44 䡲 Handbook of Long-Term Care Administration and Policy

Public caregiving, the kind given by strangers trained in technique and beholden to
accountants, can start out cold and distant, but it often ripens into loving, family-
like relationships.
Love is not a word that rolls easily off the tongue in policy circles. Love is
unprofessional. A professional does not have favorites, does not get “too attached-”
and certainly does not fall in love with the clients. Most of the home care workers
I have interviewed say that during their training, they were warned against getting
too close and against becoming emotionally involved. They were told not to share
personal information, give out their phone numbers, or get too friendly. And then
they all say things like, “But you just do—if you’re human, you do,” and “You can’t
help it.” Most of them, when they get going talking about the people they care for,
let slip the L-word.
And notice this: at the moment when the assembled team learned that a
desperately needy woman had been abandoned by her insurance plan and would
now have to be abandoned by the home care agency as well, the nurse did not say,
“She’s screwed.” She said, “I’m screwed.” She felt screwed, I imagine, because she
would have to violate her faith with someone she had come to care about, not
just for.
The industrial system of caring forces its caregivers to break these covenants.
But defiance ricochets around the system just as it erupted in the conference room.
In bedrooms and living rooms all over the country, nurses and aides are mak-
ing common cause with their patients. They routinely go beyond the jobs they
are assigned, and the ones they are paid for. Aides who struggle to put food on
their own tables buy food for their clients and slip it into their refrigerators with-
out making a fuss. They visit their clients after hours, give out their home phone
numbers, and continue providing care after the reimbursement runs out. They cook
and care for clients’ spouses, even though it is strictly forbidden to do anything for
someone who is not a bonafide client. (“I’m not going to fi x her dinner and just
ignore him,” one aide explained to me.) Like Joanne, they do a little creative billing
to provide the care they know is right. They risk their jobs to take care of people the
way their hearts tell them instead of the way the rules require.
In New York City, I asked a group of aides to talk about their work, and at the
end of our meeting, I asked them to tell me about something they were especially
proud of. A Guyanan woman had described a couple she cares for, ages 92 and 88.
He needs a wheelchair and she uses a walker. One of the aide’s jobs was getting
them ready for the night and into bed. When it was her turn to tell her proud
moment story, she leaned forward and whispered, as if to keep her supervisor from
hearing: “Sometimes she asks me to put her in his bed, so they can . . .”—she hesi-
tated, searching for the right words—“you know, be comfortable. I’m not supposed
to. She has a hospital bed and she’s supposed to sleep raised up. But I do it. I tell her
I’m not supposed to, and that it’s very dangerous. But then I do it.”

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 Looking for Care in All the Wrong Places 䡲 45

Love is all we hope for when we are old and sick. We hope for love even more
when we need others’ help caring for our parents, our spouses, and our children.
Yet, somehow, when we act as citizens, writing laws for Everyman and creating
the constitution of our collective life, we are terrified of love. We fear that the
unbounded needs of the Ailing will unleash the unbounded compassion of the
Caring, and the two in cahoots will rob us blind. So we corral love into our private
yards and exterminate compassion from the public lands, like so many howling
coyotes.

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CRC_AU5327_CH003.indd 46 12/21/2007 12:52:22 PM
 Chapter 4

The Medicalization
of Long-Term Care:
Weighing the Risks

Colleen M. Grogan

Contents
The Myth of Intergenerational Family Living ............................................50
Chronic Illness and Aging: The Evolution of a Concept ............................53
Public Policy Response and the Rise of Nursing Homes ............................55
Medical Vendor Payments in 1950 ........................................................57
Medicare and Medicaid........................................................................ 60
Public Policy and Questions of Family Care ..............................................61
Conclusion: Irreconcilable Conflict? ..........................................................65
References ................................................................................................. 66

Most Americans say they want to die at home, but very few do so. Although the
percentage of Americans dying in hospitals has decreased since 1980, from 52 to 41
percent in 1998, the majority still die in hospitals (Pritchard et al., 1998; Blank and
Merrick, 2003; Flory et al., 2004). Among Americans aged 65 and above, 50 per-
cent die in hospitals (SUPPORT Principal Investigators, 1995; Last Acts, 2002).

47

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 48 䡲 Handbook of Long-Term Care Administration and Policy

Death in the hospital is usually characterized as a high-technology death, often

after stays in intensive care units where the person has been hooked up to many
tubes and devices in a last-ditch effort to save the individual (ibid.). Especially for
older, frail elderly (those above 85 years of age), and those with terminal illnesses,
such heroic efforts seem unnecessary to many and even cruel to some. Whether
cruel or unnecessary, most agree that such a death is far from the ideal vision of
dying in the comfort of one’s own home surrounded by loved ones. Although only
25 percent of Americans die at home, more than 70 percent say that is their wish
(Last Acts, 2002, p. 13).*
Apart from the place of death, it is often the case that the whole last year or two
(or longer) of life is a much more medicalized experience than either the elderly or
their caregivers would have wanted (ibid.). Several studies suggest that unfortu-
nately patient preferences for death rarely dictate what actually happens. Multiple
health system supply factors, such as the number of hospital beds and the availabil-
ity of hospice services and nursing homes, play an important role in determining
where people die (Emanuel et al., 2000; Christakis and Iwashyna, 2000; Pritchard
et al., 1998). Many published memoirs of caregivers reveal their usually troubled
and difficult journey with helping their elderly relative or friend in their last years
of life (Callahan, 2006).† A common theme in these memoirs is the sense of loss of
control—not only because the elderly care recipient’s decline often goes in unan-
ticipated directions, but because the healthcare system often takes over in ways that
feel overpowering (ibid.; Gerber, 2005). The most startling memoirs come from
professionals with a great deal of medical knowledge and experience with the long-
term care (LTC) system, who, despite all of their know-how, often feel powerless to
change the way care is provided to their elders.
A recent book by renowned gerontologist Robert Kane and his sister Joan
West, for example, describe their caretaking experiences for their mother during
her three-year struggle with a stroke and its aftermath. In their book, aptly titled
It Shouldn’t Be This Way: The Failure of Long-Term Care, they describe their moth-
er’s life from independent living, to a stroke, to rehabilitation, to assisted living, to
a dementia unit, and finally to a nursing home, where she died (Kane and West,
2005). Another book, My Mother’s Hip, written by a medical sociologist Margolies
(2004), also describes an overmedicalized approach to caring for her mother, which
often fell out of her control, again, despite her expertise. Of course, the reason
such professional memoirs are troubling and surprising is that, as the professionals
themselves suggest, “if the system is so difficult for them to maneuver, think of how
much worse it must be for the uneducated consumer” (Callahan, 2006, p. 146).
Not only do we have the knowledge, but we also have public policies in place—
advanced directives and funding for hospice and home care services—intended to

* Cited in 1999 Harvard opinion poll.

†
In Chapter 3 of this handbook, Deborah Stone relates her parents’ personal experience with
long-term care.

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 The Medicalization of Long-Term Care: Weighing the Risks 䡲 49

help enable caregivers to obtain a more “ideal” death and a less medicalized dying
process for their loved ones. And yet, for many this ideal remains elusive. Why?
The literature offers many answers to this multifaceted question. Research tends to
break down the complexity by analyzing components of the decision-making pro-
cess, including whether to hire home care services or admit the individual to a nurs-
ing home for short-term rehabilitation or for LTC, or write an advanced directive.
Most answers to these particular choices focus on the influence of current policy
and programs, and the current healthcare infrastructure, that promote incentives
or disincentives for each one (Pritchard et al., 1998; Emanuel et al., 2000).
For example, many argue that the lack of good, affordable, community-based
care options contributes to the relatively high use of nursing homes that continues to
persist in many areas (Gabrel, 2000). Others focusing on low utilization of hospice
care services highlight both the lack of services available, and the difficulty in know-
ing when an elder has started on the “death trajectory” (Christakis and Iwashyna,
2000). Hospice services are often employed for those who want them, but usually
very late in the dying process because providers were not absolutely sure that the
patient was, in fact, on this trajectory. To explain the troubling fact that many
patients with advanced directives receive aggressive medical treatment often at odds
with their wishes, research points to the lack of communication between medical
staff and departments about such patient wishes (SUPPORT Principal Investigators,
1995). As a case in point, emergency departments often implement very aggressive,
curative medical treatments on all patients without asking whether an elder has an
advanced directive. If ER-911 is called, the assumption is that aggressive curative
care should be administered (Bradley et al., 2000; Cassel et al., 2000).
Although research in this vein gives us greater insights into LTC decision-making
processes and is certainly helpful for guiding policy and program changes, there is an
imbedded assumption that elders and their caregivers are willing to age and die in
the less traveled, potentially more risky, less protective, and more uncertain world of
independent living and home care. Yet what these memoirs reveal is that although
caregivers and care recipients say they want a homelike environment,* they also
want a low-risk, safe environment for their elders. It is exactly at those times when
risk is heightened and safety threatened that caregivers are prompted to call on the
healthcare system. When the care recipient is in the medical morass, caregivers
often feel remorse, are conflicted, and wonder whether they “did the right thing”
or not. The problem is that there is no right answer, and the conflict between risk
and safety and protection versus “letting go” run deep. Indeed, the purpose of this
chapter is to explicate the historical roots of this conflict.
I focus on the history of how professionals defined chronic illness and aging
in the middle of the twentieth century, and show how our policy responses to that
dominant definition helped to shape how Americans think about LTC today. I rely

* Public opinion data supports this contention (see Last Acts, 2002).

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 50 䡲 Handbook of Long-Term Care Administration and Policy

on secondary historical analyses to show how elder care has evolved over time.*
I argue that this history helps to explain why Americans today are deeply conflicted
between two ideals for their elders—a free, independent, and homelike environ-
ment versus a more protective, safe, and medicalized one. LTC advocates often
tell us this is a false dichotomy, that we can have it both ways: an independent,
healthy, safe environment in which to grow old and die. But the memoirs and
research cited earlier suggest otherwise. In this chapter, I hope to shed light on
this contradiction by highlighting how our approach to increasing frailty—as an
agonizing choice between independence and safety—is deeply rooted in our social
and political history.

The Myth of Intergenerational Family Living

There is a myth in the American psyche that evokes a past
perfection. . . .
Every house is home to a large multi-generational family. . . . Grand-
mother lives comfortably in a sun-splashed bedroom on the first floor
that is filled with her memorabilia of a productive life. She is a vision
of sweetness and gentility, and her sage wisdom and placid personality
are the keystones of family solidarity. At an advanced age Grandmother
becomes ill with a painless but weakening disease of vague origin.
The loyal family doctor . . . spends countless hours at her bedside
before announcing solemnly to the family that, “She is leaving us now.”
The family’s solicitude is boundless as they surround the deathbed.
They are rewarded with a few parting gestures of love and advice as
Grandmother passes from this vale surrounded by her adoring and
grieving family.
Forrest et al., 1990, p. 2

Of course, there are many problems with this picture. Set aside how very rare it is
for people to die a painless death, much less to have the presence of mind to give
us a few parting words or gestures of love (Nuland, 1994). Most problematic, as
Forrest et al. remind us, is that “our 1900 grandmother simply wasn’t there.” The
multigenerational caretaking family was rare for two reasons. First, simple demo-
graphic data reminds us that very little caretaking (of grandma anyway) actually
needed to be done. In 1900, only 4 percent of the population reached the age of 65,

* Because this is only one chapter of an edited volume, and I am attempting to show broad
trends over time, much of the historical detail is missing. Readers who would like more histori-
cal detail should refer to the secondary sources in the reference list, especially Haber (1983)
and Haber and Gratton (1994).

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 The Medicalization of Long-Term Care: Weighing the Risks 䡲 51

and life expectancy was 47 years. Since that time, however, life expectancy has
increased by 30 years and is now over 75 years of age. Since 1950, the population
of Americans above the age of 65 has more than doubled, now reaching 12 percent
of the U.S. population (2000 census data: www.census.gov). Even more striking
are the increases of the “older-old” age brackets: “the 75–84 age group is 11 times
larger than it was in 1900, while the 85+ group is 22 times larger” (Forrest et al.,
1990, p. 3).
Not only were there very few family members above the age of 65 needing
care, but the central characteristics that we associate with old age today—loss of
control over children, household, and employment—never occurred for the major-
ity of older people until relatively recently. For example, in preindustrial America,
the old rarely experienced the empty-nest syndrome. Most older people “spent the
majority of their lives with at least one child in the home” (Haber and Gratton,
1993, p. 11). Very few people approaching old age lived beyond the maturity of
all their children. Moreover, most older men remained employed and heads of the
household (Haber and Gratton, 1993; Chudacoff and Hareven, 1978). Even in
the industrial era, when more individuals began to outlive the maturity of their
offspring, the family structure of the old became increasingly complex. It did not
reflect a monolithic structure where all older individuals simply moved in with one
of their offspring. Rather, Haber and Gratton (1993) explain how a variety of family
structures emerged during this period.

The elderly’s family varied according to locale. On the farm, in the city,
and in the small villages of the United States, the elderly established
distinctive types of households. In the village of the industrial era, in
fact, large numbers followed a strikingly “modern” family structure.
Living alone or simply with their spouse, they created the empty nest
household. . . . As today, however, this arrangement did not necessarily
reflect desertion by kin. Instead, during the industrial era, many older
people finally had the financial capability to establish a long-preferred
model of separate rather than extended or complex households. While
popular beliefs consistently emphasized the importance of assisting
needy family members, U.S. cultural admonitions have also stressed
the primacy of the distinct nuclear family. (pp. 21–22)

Haber and Gratton’s (1993) historical work helps us understand the second reason
why multigenerational living was rare: contrary to popular belief, many elderly
did not want to live with their children and many children did not want to live
with their elders. In the cases where they cohabitated, Haber and Gratton provide
numerous examples of tension in three-generational households. Diaries written
by adult children from this time period express a very difficult experience shar-
ing authority over the household with aging parents. For example, after taking
her elderly mother into her home, one woman complained: “Harmony is gone.

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 52 䡲 Handbook of Long-Term Care Administration and Policy

Rest has vanished. . . . The intrusion is probably a common cause of divorce, and
most certainly of marital unhappiness and problems in children” (Haber and
Gratton, 1993, pp. 39–40). Haber and Gratton (1993, pp. 38–42) explain how
these tensions led even “experts”—psychologists and social planners—to argue
for separate living arrangements to create more family harmony. That advice,
coupled with the rise in such intergenerational tensions, led to separate living
arrangements increasingly becoming a part of the “American Dream.” Indeed,
Haber and Gratton argue that as long as family economic means were sufficient,
American families strived for separate living arrangements.

Between 1900 and 1940, the proportion of men aged sixty-five and
over who lived as dependents in their children’s home declined from
16 percent to 11 percent; for women the percentage fell from 34 to
23. . . . The decrease in residential dependency [was] based on rising
opportunities that allowed a significant number of Americans to real-
ize a longstanding ideal of autonomous living. Rather than exposing
neglect on the part of the young or a sudden dislike of their elders,
such living arrangements were largely the result of economic prosperity.
Increased wages and additional wealth allowed some families to achieve
an ideal of separate dwellings. . . . By 1915, in fact, a new pattern began
to emerge: fewer middle-class families formed complex households
while in the working-class, [extended family dwellings] became more
common. (Haber and Gratton, 1993, p. 37)

This strong preference for independent living has persisted. In an advice book titled
When Our Parents Get Old, by Metropolitan Life Insurance Company in 1959, the
following was written, clearly to a middle-class audience, under the subheading
Where to Live:

Most people who have studied the problems of advancing age believe
that “moving in with the children” is not necessarily the best solution.
They suggest that several other possibilities be considered before setting
up a three-generation family. An elderly brother or sister living alone
may make an excellent partner to a parent’s later years. Occasionally,
elderly people who want privacy but don’t want to be entirely alone rent
part of their living space to another older person, or fi nd space to share
in their quarters. (pp. 4–5)

The rest of the chapter is devoted to providing advice to overcome the often difficult
situation when a parent “must” move in with the child. It is important to under-
stand this myth about the multigenerational family living together in harmony for
two reasons. First, it forms the foundation of the LTC ideal. For reasons I hope to
unravel, family care of our elders has been a strongly held social norm of what LTC

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 The Medicalization of Long-Term Care: Weighing the Risks 䡲 53

should entail. Second, significant care of elders with chronic illness did not occur
until the latter half of the twentieth century. Therefore, it was primarily percep-
tion about how to treat the elderly with chronic illness and public policy responses
to these images—rather than actual caretaking experiences—that shaped how we
think about eldercare today.

Chronic Illness and Aging: The Evolution of a Concept

Institutionalization of the poor began with fervor in the 1820s under the view that
the causes of poverty can be located squarely within the individual (Katz, 1986;
Holstein and Cole, 1996). With this outlook in hand, the philosophy of almshouse
administrators was to change individual behavior through work and punishment
(ibid.). Although these institutions, which housed the poor of all ages (including
the sick and mentally ill), grew quite rapidly during the nineteenth century, social
reformers at the turn of the century began designing institutions for certain groups
in an effort to reform, rehabilitate, and educate. For example, children were sent
to orphanages, the “insane” to mental institutions, and the physically disabled to
special schools. Not surprisingly, the chronic, noncurable condition of most elderly
individuals in almshouses did not fit well with the reform and rehabilitation rheto-
ric of that time (ibid.). Thus, because there was no “reform movement” for the
elderly, they were simply left in the almshouses. As a result, the vast majority of
“inmates” in the almshouses in the early part of the twentieth century were frail
elderly persons with chronic conditions (Stewart, 1925; Haber, 1983).
This shift happened unintentionally. However, many physicians and social
reformers began touting the transformation of almshouses into “old folks” homes,
primarily for deserving (nonpoor) elderly needing custodial care. At the same time,
most providers favored separate institutions as a solution to “caring” for elderly
with chronic care needs for two reasons. First, hospitals were growing, with a new
improved image as places where sicknesses could be cured. Because the elderly with
chronic conditions could not be easily restored to health, there was no place for
them in these new acute care institutions (Vladeck, 1980). Hospital administrators
developed strong views about appropriate hospital utilization, which was generally
defined as relatively short stays to treat acute care episodes of illness. Chief among
their concerns was hospital overutilization, which occurred when patients would
remain in hospital beds long after hospital services were necessary (Dieckmann,
1999; Sheatsley, 1962). Although medical professionals disagreed about appropriate
alternative solutions to hospital overutilization (or “bed-blockers” as they were also
called*), there was general agreement starting in the 1930s that a setting separate
from the hospital was most appropriate.

* And still called today (see Mur-Veeman et al. (2005), Hospital Intermediate Care: A Solution for
the Bed-Blockers Problem?).

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 54 䡲 Handbook of Long-Term Care Administration and Policy

The second reason why medical professionals tended to support separate elder
institutional care has to do with how they defined chronic illness and aging. Actually,
in the middle of the twentieth century, a debate about the concept of chronic illness
emerged, but both concepts led to an institutional response. The first view, which
emerged in the nineteenth century and continued to dominate in the twentieth,
was that chronic illness in old age represented a deterioration of health. Therefore, it
demanded a separate medical institutional model with some type of skilled nursing
care to manage this decline and other associated problems of old age (ibid.; Stevens,
1971; Vladeck, 1980; Haber, 1983; Rosenberg, 1987; Haber and Gratton, 1993).
The irony of this view of care for the chronically ill is that it contributed to the
hospital “overutilization problem” described in the foregoing section. Results from
a survey of 50 hospital administrators across the United States, over a 12-month
period from 1960 to 1961, showed that the vast majority of them attributed “inap-
propriate” long stays in the hospital to a lack of available skilled nursing care among
family members in the community (Sheatsley, 1962). The following is an example
of administrators’ responses:

In many cases, there are people who live alone or who cannot get proper
care if left in their homes; the mother has too many other children to
care for, or the husband cannot be trusted to provide nursing care to his
wife. It is perhaps not necessary that they be hospitalized, but there are
darned good reasons for doing so. (ibid., p. 34)

This statement illustrates how the idea of custodial care for the aged (as was provided in
almshouse conversions to old folks homes) changed to strongly held notions that a cer-
tain level of skilled care is necessary for taking care of elders with chronic conditions.
The second view held that chronic illness and aging should be seen as simi-
lar to any other acute care condition. In other words, the chronic condition can
be maintained rather than left to deteriorate, and, most importantly, can perhaps
improve over time or even be cured. The strongest advocate for this view was E. M.
Bluestone, who was the director of Montefiore Chronic Disease Hospital during
the 1950s. He argued that caring for patients with chronic illness in institutions
separate from acute care hospitals was harmful to the patient because it did not
allow for restorative or curative measures. Accordingly, this view did not support
the use of separate chronic disease hospitals or nursing homes. Rather, it advocated
the use of hospitals, which could appropriately offer aggressive treatment to the
chronically ill (Field, 1967; Fox, 1957; Dieckmann, 1999).
Note how there were no voices for viewing aging as a natural declining process
that would occur over time. On the contrary, everyone supported some type of
medical intervention by the middle of the twentieth century and the questions were
how much, what kind, and when? Although the aging process became medically
defined, treatment was not discussed extensively in the early part of the twentieth
century because there were relatively few aged persons with chronic illness. In the

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 The Medicalization of Long-Term Care: Weighing the Risks 䡲 55

mid-1900s, when advances in the economy, public health, and medicine created old
age, it was natural to adopt the accepted medicalized view of aging to the treatment
regimen; public policy responded in turn.

Public Policy Response and the Rise of Nursing Homes

In the early twentieth century, a grassroots movement and public activism con-
verged around the idea of publicly funded old-age pensions. The explanations for
passage of the Old-Age Survivors Insurance (OASI) legislation in 1935 (or Social
Security, as it is more commonly referred to today) are numerous and much too
complex to address in this short chapter.* Here, we focus on two reasons related to
the appropriate treatment of the aged. First, when the Great Depression hit in the
1930s, there was a natural shift in public opinion regarding the causes of poverty.
The predominant view emerging during this time period was that unpredictable
events such as unemployment, sickness, old age, and death of a spouse had nothing
to do with questionable individual behavior. Thus, the American public looked to
the federal government to help solve problems of basic economic needs.
Second, the horrendous conditions of the almshouses—the institutional
response to poverty—became more widely recognized, and New Deal activists
argued that old-age pensions would allow elderly people to live with dignity in the
community (Vladeck, 1980; Stevens and Stevens, 1974; Haber and Gratton, 1993).
When Congress passed the federal-state, means-tested income program, Old-Age
Assistance (OAA) for poor elderly persons, as part of OASI, it clearly stated that
no assistance would be given to almshouse inmates (Vladeck, 1980; Holstein and
Cole, 1996). This clause was inserted in the legislation with the intention of foster-
ing the closure of poorhouses.
Although poorhouses did die out, institutional care for the elderly did not.
From 1940 to 1950, the number of people above the age of 65 living in institu-
tions increased at twice the rate as the elderly overall—74 percent compared to
36 percent (Fisher, 1953). This dramatic growth happened, in part, because many
of the aged had disabling conditions that could not simply be addressed with the
cash income derived from OASDI or OAA. It was soon obvious that significant
medical care needs remained unmet for many elderly individuals. For example,
a study by the Interdepartmental Committee to Coordinate Health and Welfare
Activities of about 1 million people receiving OAA payments in 50 states, during
1936–1937, found that although only 2.5 percent of the elderly were bedridden,
an additional 14 percent required considerable care (Social Security Bulletin, 1939).
Most important, however, was that 22 percent of the former and 52 percent of the
latter reported receiving no medical care or supervision (ibid.).

* See Gratton and Haber (1993) for a review of the many explanations and an extended
reference list.

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 56 䡲 Handbook of Long-Term Care Administration and Policy

An interesting aspect of the study is that it does not include people living in
convalescent or nursing homes because the federal government refused to provide
OAA funds to people in public institutions, and a number of states did not permit
any grants to residents of private institutions. But the denial of payments to elderly
living in the thousands of private boarding homes—and the emerging nursing
homes—would have been very difficult for states to administer. Indeed, by 1946,
several states reported significant amounts of OAA funds for recipients living in
such places (White, 1952a).
Actually, the amount of nursing home care covered through OAA money var-
ied substantially across the states. For example, in a 1946 study on medical care
provided to OAA recipients in 20 states, the Bureau of Public Assistance found that
Connecticut and New Hampshire provided nursing home coverage for over 10
and 8 percent, respectively, of the beneficiaries whereas North and South Carolina
financed only one recipient per thousand; Pennsylvania and West Virginia did not
allow any OAA funded nursing home care (ibid.).
Although the cost of nursing home care also varied across the states, it is note-
worthy that it was considered quite expensive even at this early period. In 1946,
the average monthly cost per recipient across the 17 states that provided nursing
home care was $65, an amount well over the $50 maximum the federal government
allowed in OAA monthly payments (ibid.). Because the states had to pay the differ-
ence, such costs were quite burdensome for them. Among the states that provided
nursing home care, institutional facilities consumed a high proportion of their total
OAA medical costs. For example, although Connecticut provided nursing home
care to only 10 percent of its OAA recipients, these expenditures consumed 80 per-
cent of the state’s total OAA medical outlays. This “disproportion” existed in all of
the states that provided healthcare. Even in New Mexico, where less than 1 percent
of OAA recipients received nursing home care, it consumed 10 percent of the state’s
total medical costs (White, 1952b).
Indeed, for anyone who was looking closely (and unfortunately not many were),
this 1946 study made two facts—that are still with us today—crystal clear: first,
quality of care varied tremendously across nursing homes and many suffered from
low quality; and second, the cost of such LTC was expensive. In White’s summary
of the findings from the 1946 study, she wrote:

Nursing-home care, which includes maintenance costs as well as nurs-

ing and other medical services, is expensive even in homes that do not
meet high standards. Unquestionably the homes in which recipients of
old-age assistance were living ranged from those of acceptable quality
as nursing-care institutions to homes that were poorly equipped and
operated. (White, 1952a, p. 10)

It is important to note that the increase in the number of elderly living in nursing
homes from 1935 to 1950 was accompanied by the establishment and growth of

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 The Medicalization of Long-Term Care: Weighing the Risks 䡲 57

proprietary facilities (Fisher, 1953). As mentioned earlier, because of provisions in the

1935 Social Security Act restricting the use of federal funds for payments to public
institutions, states could only use their OAA funds to support elderly living in private
places. As they started to liberalize the use of their OAA money to cover nursing home
costs during the 1940s, their preference was clearly toward the private sector. Indeed,
the proportion of public to private institutions in 1900 completely reversed itself: by
1950, 72 percent of institutions for the aged were composed of private for-profit estab-
lishments, up from 28 percent. Interestingly, the dominance of proprietary institu-
tions in the nursing home industry (67 percent) is still with us today (Jones, 1999).
Historians Holstein and Cole (1996, p. 29) sum up this irony nicely: “Hatred for the
almshouse created a resistance to any public provision of nursing home care; thus, the
almshouse . . . led to the now-dominant proprietary nursing home industry.”

Medical Vendor Payments in 1950

When states realized that the elderly poor were using a large share of their OAA
funds to pay for private institutional care, as well as other medical care expenses,
they lobbied Congress for a separate provision to reimburse multiple providers (e.g.,
nursing homes, hospitals, and physicians) for medical services rendered to eligible
recipients. Although the states were supposed to include the cost of medical care in
their determination of OAA pension amounts, they argued that the federal maxi-
mums were too low and did not reflect the true costs of medical care. In what
would become a worn argument, the states argued further that sickness and medi-
cal care expenditures often caused poverty and dependence on OAA in the first
place (Altmeyer, 1950; Vladeck, 1980; Stevens and Stevens, 1974).
In an effort to address this problem, in 1950, the federal government revised the
Social Security Amendments in two important ways. First, it allowed states, under
the federal financial match, to pay medical providers directly for services rendered
to public assistance recipients. This revision created the term “medical vendor pay-
ments” (White, 1950; Norman, 1952; Stevens and Stevens, 1974). Second, the bill
lifted the prohibition against federally financed cash payments to elderly people
living in public institutions. There was a growing sentiment that it was too restric-
tive (and perhaps unfair) to exclude them from the program. However, there was a
lingering fear that these dollars would be used, yet again, to finance poorhouses. As
a result, a regulatory clause was included requiring states to establish and maintain
standards so that nursing homes “met the definition of a medical institution, not
just the old-fashioned poorhouse” (Altmeyer, 1950, p. 60).
Thus, federally funded skilled nursing home care for the aged was born. Because
of medical vendor payments, and efforts to deny any funding for poorhouses, the
medicalization of institutions for the elderly became codified into public law.
Medical vendor payments also created huge incentives to increase institutionaliza-
tion of the aged. The medical vendor program created a new matching fund, which
now reimbursed a plethora of providers for services rendered to poor, mostly the

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 58 䡲 Handbook of Long-Term Care Administration and Policy

chronically ill, elderly. Because states were given the authority to set the level and
terms of payments to these providers, including physicians, hospitals, and nursing
homes, incentives for expanded expenditures were embedded in the legislation.
Although healthcare providers were relatively silent about medical vendor pay-
ments in the 1950 Social Security hearings, they clearly understood their signifi-
cance. The Inter-Association of Health (IAH), composed of top ranking officials
from six major provider groups,* submitted a statement in support of the need
for earmarked funds (through medical vendor payments) to finance healthcare for
public assistance recipients. The organization understood that various financing
schemes would have a significant impact on its membership. Therefore, IAH’s state-
ment included “the further view that any provision to finance medical care for assis-
tance recipients . . . should have the support of those six organizations” (statement
submitted to U.S. Congress, January 23, 1950, p. 171). In a separate statement,
the American Hospital Association recommended that “medical assistance include
long-term care services rendered for the chronically disabled, aging population”
(Hayes, 1950, p. 1073). Clearly, the group was concerned about “bed-blockers.”†
As fiscal conservatives feared, public assistance programs continued to increase
in large part due to the growth of medical vendor payments. Once this legislation
was passed, there was a push to expand financing almost immediately. In 1953, a
separate matching rate for such payments (apart from cash payments) was estab-
lished; the individual medical maximums and federal matching rate subsequently
rose in 1956, 1958, and 1960, culminating in the passage of Medicaid and Medi-
care in 1965 (Poen, 1982; Stevens and Stevens, 1974).
The Hill–Burton Act also provided funds for nursing home construction.‡ With
construction funds available, and a reimbursement stream for the elderly poor needing
LTC services, the number of proprietary nursing homes grew enormously. In 1957,
the American Nursing Home Association conducted a survey and reported almost
400,000 beds in 17,455 nursing and convalescent homes, of which 67 percent were
under proprietary auspices (Brown, 1958). Most of the latter were relatively small—
an average of 23 beds per home compared with 51 beds and 83 beds per nonprofit and
public nursing home, respectively (ibid.). The frail elderly quickly filled them: in just
four years the percentage of persons aged 65 and above in for-profit facilities increased
from only three-fourths of 1 percent (0.0075) to more than 1 percent. Not surprisingly,

* The six organizations are American Medicaid Association, American Hospital Association,
American Nurses Association, American Dental Association, American Public Health Asso-
ciation, and the American Public Welfare Association.
†
There are hints of a broader concern held by others in the medical and public health profession.
For example, in 1952, an article published in the New York State Journal of Medicine argued
that care for the chronically ill and aged sick persons is the number one public health problem
facing the country (Merrill, 1952).
‡
See Holstein and Cole (1996) for a discussion on how Small Business Administration (SBA)
and Federal Housing Authority (FHA) construction loans encouraged the building of private
for-profit nursing homes.

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expenditures increased commensurately: skilled nursing home costs in 1956–1957

amounted to $320 million. Approximately $125 million were paid on behalf of public
assistance recipients, which amounted to almost half of all patients in skilled nursing
homes receiving some public assistance support for their care (Brown, 1958).
The passage of the Kerr–Mills Act in 1960 also profoundly influenced LTC cov-
erage and subsequent policy by including two crucial provisions in the legislation:
the concept of medical indigence and comprehensive benefits. Kerr–Mills* had
originally been drafted in 1959 as an alternative to the Forand bill, which proposed
universal coverage for the elderly but with a restricted benefit package (Marmor,
1973). Proponents of Kerr–Mills argued that a means-tested program would be
more efficient than a universal one because it offered help to the most needy.
They also noted that this approach offered them more security than the Forand
bill because it provided comprehensive benefits, covering not only hospital care
but institutional services as well. Moreover, although Kerr–Mills was a targeted
program, it was designed to be distinct from welfare; eligibility for benefits was
restricted to the “medically indigent” (older people who needed assistance because
they had large medical expenses relative to their income). Proponents emphasized
that the “medically indigent should not be equated with the totally indigent,” those
who receive cash assistance (Fein, 1998, p. 311). The moral argument behind this
expansion reasoned that the sick elderly—those with chronic conditions—do not
have to become impoverished to have their health services expenses paid.
Despite comprehensive coverage, Kerr–Mills was largely viewed as a residual
program. Although most proponents of social insurance (Medicare for the popula-
tion aged 65 and above) were not in favor of Kerr–Mills, they did not spend much
time fighting against it.† Forand sums up the view: “It will not do any harm, but it
will not do any good. Personally I think it is a shame, I think it is a mirage that we
are holding up to the old folks to look at and think they are going to get something”
(Stevens and Stevens, 1974, p. 29).
Although it is unclear how much the elderly were helped under Kerr–Mills, it is
certain that the program had a huge impact on the growth of nursing homes. From
1960 to 1965, vendor payments for institutional care increased almost ten-fold,
consuming about one-third of total program expenditures (Vladeck, 1980). Given
the rise in the construction of nursing homes and payments to them under medical
vendor payments and Kerr–Mills, it is difficult to view these programs as residual
ones that eventually would wither away after the enactment of Medicare. The latter
did very little to alleviate the chronic LTC needs that these programs addressed
(albeit by most accounts not very well) (see Mendelson, 1974; Vladeck, 1980).

* Named after its Democratic congressional sponsors, Representative Wilbur Mills and Senator
Robert Kerr.
†
Edward D. Berkowitz in his book, Mr. Social Security, describes how Wilbur Cohen very
much wanted to please Wilbur Mills and in this sense was supportive of Kerr–Mills legislation
despite his ultimate push for universal coverage for the aged under Medicare.

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 60 䡲 Handbook of Long-Term Care Administration and Policy

Medicare and Medicaid

The Social Security Amendments of 1965 (the Medicare and Medicaid legislation)
combined three approaches to financing medical care into a single package. By all
accounts, the creation of this massive “three-layer” cake took nearly everyone by sur-
prise (Stevens and Stevens, 1974; Marmor, 1973; Gordon, 2003; Oberlander, 2003).
The first layer was Medicare Part A, a hospital insurance program based on the Social
Security contributory model. The second was Medicare Part B, a voluntary supplemen-
tary medical insurance program funded through beneficiary premiums and federal
general revenues. The third and final layer was the Medical Assistance program (com-
monly known as the Medicaid program), which broadened the protections offered to
the poor and medically indigent under Kerr–Mills and medical vendor payments. The
Kerr–Mills means test was liberalized to cover additional elderly citizens, and eligibil-
ity among the indigent was broadened to include the blind, permanently disabled, and
adults in (largely) single-headed families and their dependent children.
The enactment of Medicaid, in combination with Medicare, was in keeping with
a pattern of adopting a limited social insurance program and “supplementing” it with
public assistance. Despite Medicaid’s comprehensive benefit package and the growth
in the number of elderly and their chronic care needs, legislators perceived Medicaid
to be a relatively minor piece of the 1965 Social Security legislation, and of much less
significance than Medicare. Indeed, some thought Medicare would decrease expendi-
tures for medical care provided to public assistance recipients because services would
now be covered under Medicare (Grogan and Patashnik, 2003). Government esti-
mates of Medicaid’s future budgetary costs assumed that the program would not lead
to a dramatic expansion of healthcare coverage (Stevens and Stevens, 1974). Federal
officials projected that Medicaid outlays would amount to no more than $238 mil-
lion per year above what was currently being spent on welfare medicine. However, it
soon became clear that Medicaid was hardly “supplemental.” The $238 million mark
was reached only after six states had implemented their Medicaid programs. By 1967,
37 states were establishing Medicaid programs, and spending was rising by 57 percent
annually (Congressional Research Service [CRS], 1993, p. 30).
The dramatic increase in Medicaid expenditures should not have come as a
surprise to anyone looking closely at the earlier medical vendor payments and
Kerr–Mills program. As discussed earlier, the fastest growing and most expensive
component of these two public assistance programs was the cost of nursing homes
for chronically ill elderly persons. By 1965, every state had medical vendor pay-
ments for public assistance recipients, and 40 states had implemented a Kerr–Mills
Medical Assistance Act (MAA) program for the medically indigent that provided
at least some nursing home coverage (Stevens and Stevens, 1974). Because long-
term services were excluded under Medicare, the growing costs of nursing homes
were simply shifted to Medicaid.
Although Medicare did not reduce Medicaid expenditures as some legislators
had naively hoped, it did help to change the way the healthcare system provided

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 The Medicalization of Long-Term Care: Weighing the Risks 䡲 61

services to chronically ill elderly. In 1950, the dominant view about care for the
chronically ill elderly had been that they should receive skilled nursing services in
an institution separate from that of a hospital. By 1965, the alternative view—that
the elderly with chronic conditions should be served in the acute care hospital—
became more acceptable. As Field (1967) writes:

Neither is prolonged illness a universally hopeless, static condition. Its

very nature implies a continuity of the disease, calling for continuity
in treatment. Changes in the patient’s condition often occur. These
changes are related to the four phases of the disease: the acute phase,
in which active medical care within a hospital is imperative; the con-
valescent stage in which the patient prepares for a return to normal or
near normal health; the chronic stage in which the patient can function
in his normal environment, provided he recognizes his limitations and
receives continued medical and nursing supervision; and the custodial
stage, in which the patient requires care with a minimum of medical
attention. These steps do not necessarily follow one another in this order
in the course of any one illness. The patient in the chronic stage of his
illness may experience an acute exacerbation of symptoms, necessitat-
ing rehospitalization and active medical intervention. . . . Institutional
care is only part of the answer during urgent phases of illness. An overall
institution for patients with prolonged illness is out of keeping with our
present-day understanding of it. (pp. 9–10; emphasis added)

Medicare’s coverage of acute illnesses and rehabilitation (often called postacute care)
fits in with this new emerging view. Although it did not pay for many of the associ-
ated costs of chronic illness (those described in the foregoing extract in stages three
and four), such as medications and home care, Medicare’s coverage of hospital and
postacute care affirmed the view that institutional care is essential at times, including
rehabilitation services. Yet Medicare’s universal coverage of acute and postacute care,
and Medicaid’s separate means-tested payments for nursing homes (and subsequent
community-based care options), created a fragmented LTC system; it is quite common
now for the elderly to move in and out of multiple institutions during their last years
of life. Although the description of the four stages of chronic illness appears logical,
caring, and humane, for the elderly and their caregivers, the movement in and out of
institutions can feel like a roller-coaster ride filled with confusion and displacement.

Public Policy and Questions of Family Care

By the 1970s, the foundations of our modern LTC conflict were laid: first, through-
out the twentieth century, multigenerational household care of our elders, as will
be documented in more detail in this section, has been a strongly held social norm

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 62 䡲 Handbook of Long-Term Care Administration and Policy

of what LTC should entail, despite strong personal preferences for independent
living. Second, policy responses to medicalized ideas about how to treat the elderly
with chronic illness created a large supply of publicly funded institutional beds
within the LTC sector. Concerns about the quality of care provided in these set-
tings, ironically, fostered even more policies advancing medicalization. There has
been a continuing evolution of these forces and ongoing attempts to reconcile the
desires for independent living with those of medicalized versions of safety.
In most discussions about the provision of welfare benefits, especially in the United
States, questions relating to family responsibility inevitably arise. A central concern
in the Social Security debates during the early 1930s was whether benefits should
be universally distributed, regardless of income, or whether they should be means-
tested according to family income. Of course, the OAA program was means-tested
and states were given responsibility to determine eligibility levels and other criteria
for receiving benefits. Many states—some even before Social Security was passed—
mandated that families should have a role in the care of their elders. For example, in
1921, Indiana enacted legislation requiring the legal responsibility of adult children
for support of their parents. By 1952, 33 states had passed legislation establishing the
responsibility of adult children to support OAA recipients (Schorr, 1960).
The widespread existence of these statutes attests to a strongly held norm that
adult children have a moral obligation to assist their parents in times of need.
Even those who advocated universal Social Security pensions and OAA believed
that adult children should be required to support their parents whenever feasible
(Dowdell, 1939).* Because medical vendor payments to nursing homes grew out
of OAA benefits, it was perhaps a natural extension to ask about the role of family
responsibility in providing care to the chronically ill elderly. As shown in the fol-
lowing, this issue was raised early on in hearings about medical vendor payments.

Senator Millikin: Do relatives in North Carolina show much interest in taking care
of relatives?
Dr. Winston: Many relatives do. I suspect they are very much like relatives every-
where. Some do, and some do not.
U.S. Congress, January 23, 1950, p. 187

Similarly, policymakers wondered whether the increasing use of nursing homes was
an indication that families were not caring for their elders. Yet, while politicians
and others were questioning the appropriateness of kin sending their frail elders
off to institutions, providers were encouraging them to do so. At the same time,
surveys suggest that the most common reason for entering a nursing home is due to
worsening health (Branch, 1982; Colerick and George, 1986; Buhr et al., 2006).

* Strong notions of child obligations to take care of their parents have been around for a long
time (see Doty, 1986).

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 The Medicalization of Long-Term Care: Weighing the Risks 䡲 63

In the 1960s, many respondents mentioned that their physician or provider recom-
mended such placement (Sheatsley, 1962; Townsend, 1971). When chronic illness
set in, physicians clearly believed that lay family members were often ill-equipped
to provide the level of skilled nursing care required (Haber, 1983).
Despite strong provider support, by the early 1970s, not long after Medicare
and Medicaid were enacted, several studies of nursing home care revealed serious
quality of care issues. A few exposes gave significant press to the topic. For example,
a 1971 Ralph Nader report, Old Age: The Last Segregation, revealed a stark, inhu-
mane portrait of nursing home care. Three years later, Mary Adelaide Mendelsohn
published Tender Loving Greed: How the Incredibly Lucrative Nursing Home Industry
Is Exploiting America’s Old People and Defrauding Us All. Both books documented
how nursing homes were making substantial profits although providing substan-
dard care to their residents. They blamed the government’s financial support of
these poorly run institutions and, most importantly, implicated the providers’ role
in legitimating nursing homes for their patients.
These manuscripts, and several newspaper articles, eventually prompted the fed-
eral government to hold congressional hearings from 1976 to 1977 on the topic and
eventually the legislature passed major new regulations, including certification guide-
lines, staffing requirements, and rules about dispensing medications and the use of
restraints (Fox, 1986). Although very few nursing homes met these standards of care
in the late 1970s, they added up to significant changes over time. In particular, by the
1990s, although not devoid of quality problems, nursing homes represented a medi-
calized and regulatory environment considered appropriate for the frailest elderly.
Nonetheless, as Congress was attempting to improve the quality of care provided
by nursing homes, legislators also wondered yet again why American families were
seemingly rescinding their obligations to take care of their elders (U.S. Congress,
1977; Doty, 1986).* A search of Congressional documents using subject heading
“Medicaid” for 1976 revealed 13 hearings, 6 prints, and 4 reports all devoted to
quality concerns specifically around fraud and abuse within the Medicaid program.
In contrast to such views about the irresponsible American family, several research-
ers were documenting the high level of care actually provided. Two national surveys
conducted by the Department of Health and Human Services† indicated that spouses
and adult children spent numerous hours each week assisting nearly three-quarters of
the disabled elderly living at home (Doty, 1986). Even among those who used paid
help, the vast majority relied on their family to supplement their needs. The 1982
LTC survey revealed that only 5 percent of the elderly received all of their care from
paid providers, and only 26 percent of it was financed by the government. By the
mid-1980s, it was clear that (mostly female) family members were spending count-
less hours of unrecognized labor caring for their loved ones (Brody, 1981; Horowitz,
1985; Noelker and Wallace, 1985; Soldo and Myllyluoma, 1983; Abel, 1987).

* For a summary of the early findings on this question, see Doty (1986).
†
The 1979 Health Interview Survey and the 1982 Long-Term Care Survey.

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 64 䡲 Handbook of Long-Term Care Administration and Policy

Although this helped allay concerns that families were not stepping up to the
plate, it also showed how even the best intentioned family care is often overwhelm-
ing and incomplete. Terms such as “caregiver stress” and “caregiver burden” became
part of the LTC lexicon; it was now openly discussed that although family care is
preferred, the caregivers may simply feel too exhausted, or too frail themselves, to
provide adequate skilled care for their elderly relatives (Brody, 1990; Cantor, 1983;
Clipp and George, 1990; Doty, 1986; George, 1990; Montgomery et al., 1985;
Zarit et al., 1980; Zarit, 1989).
Primarily in response to the high cost of nursing homes, and also in part a
response to growing concerns about their poor quality of care, advocates and policy-
makers have been promoting alternatives to institutionalization since the early 1970s
(Abdellah, 1978; Greene et al., 1993). Through existing policies and funding new
programs, home care and community-based care (HCBC) options are encouraged
for elderly with chronic illnesses (ibid.). Community-based care has grown enor-
mously and, where it is offered, utilization among the elderly who need it is high.
The problem with HCBC, however, is twofold. First, for people with substantial
disabilities, it can actually be more expensive than that provided by nursing homes
(Weissert et al., 1988). Second, studies have also found that such care does not neces-
sarily prevent a nursing home placement as many thought it would (Kemper et al.,
1987; Kemper, 1988).* At-home care seems to be used chronologically as a care method
for earlier stages of illness, whereas nursing home placement is still predominant in
the last stage (ibid.). Rarely is community-based care used as a sole source of care to
help the elderly die in their home (Last Acts, 2002). In our fragmented care system,
community-based care tends to be a patchwork approach that assists the elderly who
are moved in and out of various institutional settings: from hospital to rehabilitation
to a nursing home, and—if lucky—back to the community (ibid.).
The social norms for independent living, combined with a highly medicalized
LTC environment, contribute to Americans feeling deeply conflicted today between
two ideals for their elders—a free, independent, homelike environment versus a pro-
tective, safe, institutionalized one. LTC advocates often tell us this is a false dichot-
omy, that we can have it both ways: an independent, healthy, safe environment in
which to grow old (Last Acts, 2002). But the advice (or “how to”) books suggest
otherwise. Fox’s (1982) book, The Chronically Ill, highlighted the conflict well:

To go or not to go to a home? From all sides, conflicting influences tug

at you. You are wise—or you are cruel—to think of such a thing; she
will love, or she will hate it there. From four sides you are bombarded:
䡲 “Send her to a nursing home,” says a doctor.
䡲 “You’re just trying to duck your obligations,” says the gossip.

* Contrary to this finding, Greene et al. (1993) found that specific community-based services
targeted to specific needs can prevent nursing home entry.

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 The Medicalization of Long-Term Care: Weighing the Risks 䡲 65

䡲 “We have the bed for her—she’ll love our homelike atmosphere,”
says the nursing-home industry.
䡲 “Consider alternatives to institutionalization,” say citizen-action
groups. (p. 14)

Recent books highlight how there are good nursing homes and that sometimes
placement is necessary. Nursing homes are considered appropriate in this new vein
of advice books if the at-home environment is not considered “safe.” In their advice
book, Forrest et al. (1990) list five classic danger signs for the frail elderly living
independently: marked change in personal appearance; decrease in nutritional sta-
tus; financial confusion; paranoia, hallucinations, and delusions; and falls.
The authors note that falls are the leading cause of accidental death for people
above the age of 75. Indeed, falls are one of the most common triggers for nursing
home placement (Doty, 1986). Even the simple fear of a fall occurring, based on an
assessment that it is high risk, can often prompt a nursing home placement. Indeed,
the book warns in bold that “safety must be the prime consideration. When
the integrity of the elderly person’s safety cannot be maintained, alternative living
arrangements must be made immediately!” (Forrest et al., 1990, p. xx).

Conclusion: Irreconcilable Conflict?

In this chapter, I argue that the reason Americans have a much more medicalized
end-of-life experience than their wishes suggest they want, may not simply be due
to poorly designed public policy, but rather something that runs deeper in the
American psyche. I do not mean to imply, as many others have, that American
families do not care, or do not care enough. Rather, I argue that the medicalized
experience may reflect a conflict deeply rooted in American social and political his-
tory, including its social conscience about successful aging: first, that independent
living is preferred; and, second, that aging should be viewed as a unique form of
chronic illness for which skilled and specialized health services are needed. These
two paradigms suggest that we constantly trade off independence for medical safety
as older people become more frail.
Three main factors have developed over time to help bolster this conflict: first, the
creation of a highly medicalized environment in all the facets of LTC provision—
the hospital, rehabilitation center, nursing home, and home healthcare services; sec-
ond, a more fluid way to think about chronic illness—from segregated care to more
integrated care, allowing movement through multiple institutions; and finally, the
persistence of widespread societal expectations regarding family care obligations
alongside strongly held preferences for independent living arrangements. Unfortu-
nately, the convergence of these issues encourages families and their elders, each step
along the way of increasing frailty, to confront an agonizing choice between a more
free, but risky environment and a protective, institutionalized medical one.

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 66 䡲 Handbook of Long-Term Care Administration and Policy

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CRC_AU5327_CH004.indd 70 1/3/2008 11:42:18 AM
 PROVIDING AND II
RECEIVING CARE

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CRC_AU5327_S002.indd 72 1/2/2008 10:11:12 PM
 Chapter 5

Older Long-Term
Care Recipients

Megan E. McCutcheon and William J. McAuley

Contents
Characteristics of the Older Population .....................................................74
Growth of the Older Population ............................................................... 77
Basic and Instrumental Activities of Daily Living
and Other Measures of Long-Term Care Need ..........................................78
Sources of Payment for Long-Term Care................................................... 80
Recent Trends in Disability and Future Prospects..................................... 80
References ..................................................................................................82

Planning for, funding, providing, and coordinating long-term care are major
concerns in the United States. Long-term care can be required at any age, and there
are nearly as many people below the age of 65 who require it as there are people
aged 65 and above with such needs (Feder et al., 2000). However, it is appropriate to
focus specifically on long-term care for the older population because the probability
of having a disability (Cohen et al., 2005) and of needing long-term care services
increases substantially with age (Feder et al., 2000). This chapter describes the older
population, including trends in aging, and the major factors that lead to or are

73

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 74 䡲 Handbook of Long-Term Care Administration and Policy

associated with their use of long-term care. The chapter ends with a discussion of
recent trends in impairment and in technologies aimed at managing it, as well as
future prospects for long-term care.

Characteristics of the Older Population

In 2003, there were 35.9 million residents aged 65 and above in the United States,
representing 12.4 percent of the total population (Federal Interagency Forum on
Aging-Related Statistics, 2004). Although it has been aging rapidly, the United States
is not by any means the “oldest” nation, with regard to the percentage of the total
population that is aged 65 and above. For example, in Italy, Japan, and Greece those
aged 65 and above represent more than 18 percent of the total population. The
“old-old” subgroup, those aged 85 and above—and the age group that is more likely
to require assistance with long-term care—has experienced especially rapid relative
growth over time. In 2000, approximately 4.2 million old-old people resided in the
United States (Federal Interagency Forum on Aging-Related Statistics, 2004).
Although the figures for the United States mentioned earlier are useful for under-
standing aging as an important national phenomenon, it is essential to recognize
that the older population is not evenly distributed across the nation’s landscape. Less
than 9 percent of the residents in Utah and Alaska are aged 65 or above, whereas
17.2 percent of Florida’s population, and more than 15 percent of the populations of
Pennsylvania and West Virginia, consist of older people. The most rural areas in the
United States tend to have higher percentages of elderly people than metropolitan
areas (Hawes et al., 2003). The vast majority (82.5 percent) of older persons in the
United States is white, but the increase of elders in most minority populations is
outpacing that of the whites. Elders who are African American, Hispanic, and
Asian constitute 8.4, 5.7, and 2.7 percent, respectively, of the total older population
(Federal Interagency Forum on Aging-Related Statistics, 2004).
The marital status and household composition of elders are important
considerations in the assessment of long-term care because spouses and other
household members tend to assist one another with long-term care. Informal care-
givers generally do not relinquish their responsibility for care, even when formal
services are made available to impaired older people (Li, 2005). The availability
of informal care acts to limit the use of formal community-based care, and it can
also delay nursing home admissions among older people (Charles and Sevak, 2005;
Houtven and Norton, 2004). Because spouses often provide long-term care, it
makes sense that being unmarried is a significant independent predictor of nurs-
ing home placement (Borrayo et al., 2002). Similarly, elderly long-term care users
who reside in the community are far more likely than nursing home residents to
be married (Spector and Fleishman, 2001). The percentage of older people who are
married declines with increasing age, primarily due to widowhood, so that less than
one-third of persons aged 85 and above are married. However, men who survive

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 Older Long-Term Care Recipients 䡲 75

into old-old age are more likely to have a spouse; about 59.4 percent of men and
14 percent of women aged 85 and above are married. Only 19 percent of older men
live alone as compared to 40 percent of older women (Federal Interagency Forum
on Aging-Related Statistics, 2004). Half of all older women aged 75 and above live
by themselves (Administration on Aging, 2004), suggesting that female elders are
far less likely to have someone within the household who can provide long-term
care, should they need it.
Because income can be used directly to purchase long-term care or pay for
long-term care insurance, it is an important consideration in developing an over-
all perspective on long-term care among seniors. Income can determine the types
of services that are available and accessible to elders. The older population in the
United States has experienced a dramatic increase in the percentage of people hav-
ing incomes above the poverty level, primarily due to Social Security. The percent-
age of elders living in poverty reached a low of 9.7 percent by 1999 but since then
has increased slightly, reaching 10.4 percent in 2002. The rise in poverty among
seniors is a serious concern, especially given the burgeoning cost of healthcare and
the direct association between low income and health status (Huynh et al., 2006).
Critically, poverty levels vary dramatically by sex, race or ethnicity, and liv-
ing arrangement. Elders with the highest percentages living in poverty include
Hispanic (47.1 percent) and African-American women living alone (40.6 percent).
In contrast, less than 4 percent of older married white men and women living with
their spouses have incomes below the poverty level (Federal Interagency Forum on
Aging-Related Statistics, 2004). The median income of older men exceeds that of
older women by a substantial amount, $20,363 versus $11,845 in 2003 (Adminis-
tration on Aging, 2004).
Among the most important contributors to the need for long-term care are
chronic health problems, such as those listed in Table 5.1 (Fisher and McCabe,
2005). As shown in Table 5.1, some of the most common chronic conditions include
hypertension, arthritic symptoms, heart disease, and cancer. Older men are consid-
erably more likely than older women to report heart disease, diabetes, and cancer,
although older women are much more likely to report hypertension and arthritic
symptoms. Many older people have more than one chronic condition, a factor that
can increase the possibility that long-term care will be required.
Cognitive and sensory limitations can also establish the need for long-term care
(Gibson et al., 2004). Low cognitive capacity, especially memory impairment, is a
significant risk factor for nursing home admission (Metha et al., 2002). Approxi-
mately 15 percent of older men and 11 percent of older women experience mod-
erate to severe memory impairment. Among persons aged 85 and above, about
34 percent of men and 31 percent of women have moderate to significant memory
impairment (Federal Interagency Forum on Aging-Related Statistics, 2004). Vision
and hearing problems also increase with age. Approximately 47 percent of all older
men and 30 percent of older women have trouble hearing without a hearing aid.
However, among the old-old, 67 percent of men and 56 percent of women report

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 76 䡲

CRC_AU5327_CH005.indd 76
Table 5.1 Percentage of People Aged 65 and above Reporting Selected Chronic Conditions (2001–2002)
Arthritic Heart Any Chronic
Sex Hypertension Symptoms Disease Cancer Diabetes Stroke Asthma Bronchitis Emphysema

Total 50.1 35.0 31.2 20.7 15.6 8.8 8.4 6.1 5.0
Men 47.3 31.3 36.6 24.5 18.0 9.5 7.3 5.1 6.5
Women 52.2 39.3 27.1 17.9 13.9 8.2 9.2 6.8 3.8

Source: Federal Interagency Forum on Aging-Related Statistics, Older Americans 2004: Key Indicators of Well-Being, U.S. Govern-
ment Printing Office, Washington, 2004.
Handbook of Long-Term Care Administration and Policy

2/18/2008 10:43:47 AM
 Older Long-Term Care Recipients 䡲 77

problems with hearing. Similarly, there are age-related increases in the percent-
age of people who experience at least some problem with their vision, even when
they use glasses or contact lenses. Such difficulties are reported by approximately
16 percent of older men and 19 percent of older women, and increase to 29 and
35 percent, respectively, among the old-old population (Federal Interagency
Forum on Aging-Related Statistics, 2004).
When a nationally representative sample of noninstitutionalized older people
was asked to report on their own health status during 2000–2002, approximately
27 percent rated it as fair or poor (Federal Interagency Forum on Aging-Related
Statistics, 2004). With increasing age, people are more likely to report that their
health is less than optimal. For example, among persons aged 65–74, 22.6 percent
rate their health as fair or poor, but this figure increases to 34.9 percent among the
old-old population. Self-ratings of health also differ significantly by the ethnicity of
seniors. Among older African Americans aged 65–74, 37.6 percent rate their health
as fair or poor. This percentage increases to 47.6 percent among those aged 85 and
above (Federal Interagency Forum on Aging-Related Statistics, 2004).
Although there are significant differences in self-ratings of health by ethnicity,
past research has suggested that older African Americans, Hispanics, and Asians
are less likely than white non-Hispanics to use formal long-term care (Wallace
et al., 1998). However, recent data identifies a turnaround in this trend among
African Americans. Recent nursing home utilization rates have declined for whites,
whereas they have increased for African Americans, so that they are now higher
for the latter. Older African Americans are also more likely to use home healthcare
than older whites (Pandya, 2005). Nursing home utilization, however, continues
to be low for Hispanics, Asians, and Native Americans. As the United States con-
tinues to age and become more diverse, long-term care planners and policy makers
must give greater attention to the mix of needs, preferences, and utilization patterns
among the many segments of the older population.

Growth of the Older Population

A number of factors influence the age structure of a population, including shifts in
the birth rate, life expectancy, and the numbers and age of immigrants. Life expec-
tancy at birth has grown from approximately 49 in 1900 to 77 in 2001 (Federal
Interagency Forum on Aging-Related Statistics, 2004). Both men and women have
experienced improvements over this period, although the increases have been some-
what greater for women than for men. The life expectancy at older ages has also
increased. In 2001, persons aged 65 years could expect to survive an average of
18 more years, and those aged 85 could anticipate living 6.5 more years. Although
the life expectancy of women at age 65 continues to remain higher than that for
men, there is evidence that the gap has been narrowing in recent decades (Federal
Interagency Forum on Aging-Related Statistics, 2004).

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 78 䡲 Handbook of Long-Term Care Administration and Policy

Basic and Instrumental Activities of Daily Living

and Other Measures of Long-Term Care Need
Long-term care is designed primarily to assist individuals in the performance of
activities of daily living (ADLs) (Feder et al., 2000). ADLs are generally divided
into two broad types. The basic or physical ADLs are the tasks required for self-
maintenance. The usual measures include the ability to perform bathing, dressing,
eating, transferring (getting in and out of bed or chairs), walking, and grooming
(combing hair and shaving) (Lawton and Brody, 1969).
Instrumental ADLs (IADLs) are more complex behaviors that require substan-
tial memory, decision making, or physical capacity. These activities make it possible
to communicate with others, traverse the community, manage household and
financial tasks, and self-medicate. In measuring IADLs, researchers and clinicians
normally include getting to places beyond walking distance (e.g., driving, using
a bus or cab), shopping (assuming that transportation is available), meal prepara-
tion, light housework, taking medications, and handling basic personal finances
(Lawton and Brody, 1969).
Lower-body mobility limitations, including having difficulty lifting 10 pounds,
walking up ten steps, walking a quarter of a mile, standing for 20 minutes, or bend-
ing down to pick up an object, are highly associated with the use of long-term care
because they form the physical building blocks for the performance of ADLs and
IADLs. Upper-body mobility limitations, such as those associated with reaching
over one’s head, picking up a glass, and holding a pencil, are also correlated with
the use of long-term care services, although not to the same degree (Spector and
Fleishman, 2001). As demonstrated in Table 5.2, there are substantial differences
by sex in the ability to perform these lower- and upper-body activities among
older people, with relatively more women reporting difficulty with each activity
(He et al., 2005).
When people are completely unable to perform one of the ADLs or IADLs, or
require supervision or direct assistance to carry them out, they are said to have a
functional limitation or deficit. Because these daily living tasks are important to
the health, safety, independence, and well-being of older people, some type of inter-
vention is required when they cannot be regularly achieved without assistance. The
interventions provided to address these functional limitations form the foundation
of long-term care. In 2002, approximately 8.7 million people aged 65 and above
residing in the community reported having one or more ADL or IADL limitations,
representing 26.5 percent of all such older people. Approximately 2 million of them
have three or more ADL limitations—a larger number than the 1.4–1.6 million
residents of nursing homes (Johnson and Weiner, 2006; Spillman and Black, 2005).
It is both surprising and distressing that a higher percentage of older people with
at least one ADL or IADL limitation live alone (37.7 percent) than those without
any limitation (29.7 percent). Even more alarming is the fact that 35 percent of
older community residents with three or more ADL limitations, a group that has

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 Older Long-Term Care Recipients 䡲 79

Table 5.2 Activity Limitations among People Aged 65 and above

by Sex (1998)
Activity Limitation (Very Difficult Percentage Percentage
or Unable to) of Men of Women

Walk a quarter of a mile (about three 16.8 28.3

city blocks)
Stand or be on one’s feet for two hours 16.0 27.4
Climb ten steps without resting 11.9 21.8
Sit for two hours 3.8 5.8
Reach over one’s head 5.5 8.3
Use one’s fingers to grasp or handle 3.2 4.9
small objects
Lift or carry something as heavy as 10 pounds 7.4 19.1
(such as a full bag of groceries)
Push or pull large objects (such as a living 13.1 27.9
room chair)
One or more of the preceding limitations 57.7 70.5

Source: He, W., Sengupta, M., Velkoff, V. A., and DeBarros, K. A., U.S. Census Bureau
Current Population Reports P23–209, U.S. Government Printing Office,
Washington.

considerable need for long-term care, live alone (Johnson and Weiner, 2006). Only
61.3 percent of older community residents who have an IADL or ADL limitation
receive paid or unpaid help, and the vast majority (76.7 percent) of those receiving
such care receive it solely from unpaid sources, especially family members (Johnson
and Weiner, 2006).
In general, older people who reside in nursing homes have more ADL and IADL
needs, in comparison to those who reside in the community. However, there is con-
siderable overlap in levels of ADL and IADL deficits across the two environments,
suggesting that some institutionalized individuals could appropriately reside in the
community if the required resources were available (Grando et al., 2005).
When asked about their preferences, most adults indicate that they wish to
receive long-term care in their homes, provided by family members or by nonkin,
while relatively few prefer to receive care in nursing homes (Eckert et al., 2004;
McAuley and Blieszner, 1985). As described previously, there are reasonably good
estimates of the number of nursing home residents, and national surveys provide
satisfactory data on the number of older community-residing residents who require
long-term care. However, we have less accurate knowledge about older individuals
living in alternative residential care settings, such as assisted living, group homes,
and board-and-care facilities (Spillman and Black, 2005). There is good reason to
believe that the number of residents in these alternative settings has grown appre-
ciably in the past 15 years.

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 80 䡲 Handbook of Long-Term Care Administration and Policy

Recent studies suggest that there were approximately 36,000 alternative resi-
dential settings in 2002, accommodating about 800,000 residents (Spillman and
Black, 2005). According to Harrington et al. (2005), residential care and assisted
living increased by 97 percent from 1990 to 2002, whereas nursing home beds
increased by only 7 percent over the same period. Therefore, the United States is
experiencing changes in the location and type of long-term care, with increasing
numbers of disabled older adults living in the community and in alternative resi-
dential settings relative to nursing homes. Although the range of disability among
residents of assisted living facilities is great, those who live in these settings are
generally less frail and impaired than the nursing home residents. The differences
in impairment across these settings are the result of the admission and discharge
criteria used by assisted living facilities. It should be noted that many of the latter
are relatively new (Golant, 2004), which has limited the opportunity for residents
to experience aging in place, a factor that may result in frailer, more impaired
people in the future.

Sources of Payment for Long-Term Care

The costs of long-term care are paid through a variety of sources. In 1998, home care
and nursing home expenditures totaled $150 billion. Of this amount, Medicaid paid
approximately 40 percent, Medicare 20 percent, and private insurance 8 percent.
Nearly 26 percent was paid out of pocket by recipients or their family, while the rest,
7 percent, came from all other funding sources (Feder et al., 2000). Medicaid was
the primary source of nursing home care in 1998, accounting for 44 percent of all
nursing home expenditures. The second largest source of payment was care recipi-
ents or their families (31 percent). The remaining payers include private insurance
(7 percent) and other sources (5 percent) (Feder et al., 2000). These figures do not
take into account the substantial amount of unpaid long-term care provided by
family members and other informal sources of support, which has been estimated
to total more than $250 billion a year (U.S. Department of Health and Human
Services, 2005).

Recent Trends in Disability and Future Prospects

Data on disability among all elders in community and nursing home settings
suggests that from 1984 to 1999 there was a decline in the percentage of persons
who are chronically disabled with regard to ADLs or IADLs (Office of Dis-
ability, Aging and Long-Term Care, 2003). The overall decrease in this 15-year
period was substantial, moving from 22.1 percent in 1984 to 19.7 percent in
1999. Because the percentage of elders in nursing homes changed little, most

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 Older Long-Term Care Recipients 䡲 81

of the reduction in chronic disability was experienced by older people resid-

ing in the community (Office of Disability, Aging and Long-Term Care, 2003).
Although fewer people require ADL or IADL assistance, some of this change
can be attributed to the use of assistive devices that enable older people to man-
age their disability themselves and continue to function independently in the
community.
The steadily increasing use of assistive equipment may be a harbinger of even
larger future shifts toward the personal management of impairment without the
need for human support. There is evidence that technologies such as canes, walk-
ers, wheelchairs, bath seats, bath rails, raised toilet seats, toilet rails, portable
toilets, hearing aids, and back braces are associated with reductions in require-
ments for informal care and can also serve to supplement formal care. Assistive
technologies can be especially beneficial for those disabled elders who have suffi-
cient cognitive abilities to effectively use them. These devices can also particularly
benefit unmarried elders because they can, in some cases, provide the regular,
ongoing assistance that might otherwise be available only from a spouse (Agree
et al., 2005). As might be expected, current forms of assistive technology are less
useful in reducing or supplementing informal and formal care among older per-
sons with cognitive impairments (Agree et al., 2005). The development of a wide
range of new assistive, housing, and medical technologies could make it possible
for many of those who begin experiencing difficulty with daily living activities to
maintain their independence for a longer period than is currently feasible (Wolf
et al., 2005).
Because of increasing life expectancy and the fact that the first members of
the baby boom generation will turn 65 in 2011, the United States will soon be
experiencing a new boom in aging. Census estimates suggest that the number of
Americans aged 65 and above will more than double from 35 million in 2000 to
72 million in 2030, at which point nearly 20 percent of the total population will
consist of older people (He et al., 2005). Looking even further ahead, it is estimated
that the older population will reach 86.7 million in 2050 (He et al., 2005).
Data also suggest very rapid growth of the old-old. Those who are aged 85 and
above will more than double from 4.7 million in 2003 to 9.6 million in 2030.
Furthermore, this segment of the population will increase very rapidly after 2030,
when the baby boom generation joins their ranks, so that the old-old group will
double again to 20.9 million in 2050 (He et al., 2005). These figures indicate that
although there may be reductions in impairment among older people well into the
future, they may be counterbalanced or surmounted by the substantial increases
in the old-old population, who are most likely to require long-term care services.
Therefore, there is little doubt that long-term care will persist as a substantial
national concern. Consequently, it is important for planners, policy makers, pro-
gram administrators, and researchers to improve their understanding of the issues
and plan accordingly.

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 82 䡲 Handbook of Long-Term Care Administration and Policy

References
Administration on Aging (2004). A Profile of Older Americans: 2004. Washington:
Administration on Aging, U.S. Department of Health and Human Services.
Agree, E. M., Freedman, V. A., Cornman, J. C., Wolf, D. A., and Marcotte, J. E. (2005).
Reconsidering substitution in long-term care: When does assistive technology take
the place of personal care? Journal of Gerontology: Social Sciences, 60B, S273–S280.
Borrayo, E. A., Salmon, J. R., Polivka, L., and Dunlop, B. D. (2002). Utilization across the
continuum of long-term care services. The Gerontologist, 42, 603–612.
Charles, K. K. and Sevak, P. (2005). Can family caregiving substitute for nursing home
care? Journal of Health Economics, 24, 1174–1190.
Cohen, M. A., Weinrobe, M., Miller, J., and Ingoldsby, A. (2005). Becoming Disabled after
Age 65: The Expected Lifetime Costs of Independent Living. Washington: AARP Public
Policy Institute.
Eckert, J. K., Morgan, L. A., and Swami, N. (2004). Preferences for receipt of care among
community-dwelling adults. Journal of Aging and Social Policy, 16(2), 49–65.
Feder, J., Komisar, H. L., and Niefeld, M. (2000). Long-term care in the United States:
An overview. Health Aff airs, 19, 40–56.
Federal Interagency Forum on Aging-Related Statistics. (2004). Older Americans 2004:
Key Indicators of Well-Being. Washington: U.S. Government Printing Office.
Fisher, M. F. and McCabe, S. (2005). Managing chronic conditions for elderly adults: The
VNS CHOICE model. Health Care Financing Review, 27, 33–45.
Gibson, M. J., Gregory, S. R., Houser, A. N., and Fox-Grage, W. (2004). Across the States:
Profiles of Long-Term Care. Washington: AARP Public Policy Institute.
Golant, S. M. (2004). Do impaired older persons with health care needs occupy U.S.
assisted living facilities? An analysis of six national studies. Journal of Gerontology:
Social Sciences, 59B, S68–S79.
Grando, V. T., Rantz, M. J., Petroski, G. F., Maas, M., Popejoy, L., Conn, V., and
Wipke-Teves, D. (2005). Prevalence and characteristics of nursing home residents
requiring light-care. Research in Nursing and Health, 28, 210–219.
Harrington, C., Chapman, S., Miller, E. M. N., and Newcomer, R. (2005). Trends in the
supply of long-term-care facilities and beds in the United States. Journal of Applied
Gerontology, 24, 265–282.
Hawes, C., Phillips, C. D., Holan, S., and Sherman, M. (2003). Assisted Living in Rural
America: Results from a National Survey. College Station, TX: Southwest Rural Health
Research Center, Texas A&M University System Health Science Center.
He, W., Sengupta, M., Velkoff, V. A., and DeBarros, K. A. (2005). 65+ in the United States:
2005. U.S. Census Bureau Current Population Reports P23-209. Washington: U.S.
Government Printing Office.
Houtven, C. H. V. and Norton, E. C. (2004). Informal care and health care use of older
adults. Journal of Health Economics, 23, 1159–1180.
Huynh, P. T., Schoen, C., Osborn, R., and Holmgren, A. L. (2006). The U.S. Health Care
Divide: Disparities in Primary Care Experiences by Income. New York: The Common-
wealth Fund.
Johnson, R. W. and Weiner, J. M. (2006). A Profile of Frail Older Americans and Their
Caregivers (Occasional Paper Number 8). Washington: Urban Institute.

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Lawton, M. P. and Brody, E. M. (1969). Assessment of older people: Self-maintaining and

instrumental activities of daily living. The Gerontologist, 9, 179–186.
Li, L. W. (2005). Longitudinal changes in the amount of informal care among publicly
paid home care recipients. The Gerontologist, 45, 465–473.
McAuley, W. J. and Blieszner, R. (1985). Selection of long-term care arrangements by older
community residents. The Gerontologist, 25, 188–193.
Metha, K. M., Yaffe, K., and Covinsky, K. E. (2002). Cognitive impairment, depressive
symptoms, and functional decline in older people. Journal of the American Geriatrics
Society, 50, 1045–1050.
Office of Disability, Aging and Long-Term Care. (2003). Changes in Elderly Disability Rates
and the Implications for Health Care Utilization and Cost. Washington: U.S. Depart-
ment of Health and Human Services, Assistant Secretary for Planning and Evalua-
tion, Office of Disability, Aging and Long-term Care.
Pandya, S. M. (2005). Racial and Ethnic Diff erences among Older Adults in Long-Term Care
Service Use (Fact Sheet No. 119). Washington: AARP Public Policy Institute.
Spector, W. D. and Fleishman, J. A. (2001). The Characteristics of Long-Term Care Users
(AHRQ publication No. 00-0049). Rockville, MD: Agency for Healthcare Research
and Quality.
Spillman, B. C. and Black, K. J. (2005). The Size of the Long-Term Care Population in
Residential Care: A Review of Estimates and Methodology. Washington: Office of
Disability, Aging, and Long-term Care Policy, U.S. Department of Health and
Human Services.
U.S. Department of Health and Human Services. (2005). Reauthorization of the Older
Americans Act: Testimony. Retrieved May 11 from http://www.hhs.gov/asl/testify/
t970709a.html.
Wallace, S. P., Levy-Storms, L., Kingston, R. S., and Anderson, R. A. (1998). The persistence
of race and ethnicity in the use of long-term care. Journal of Gerontology: Social Sci-
ences, 53B, S28–S42.
Wolf, D. A., Hunt, K., and Knickman, J. (2005). Perspectives on the recent decline in
disability at older ages. The Milbank Quarterly, 83, 365–395.

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 Chapter 6

Younger Individuals with

Disabilities: Compatibility
of Long-Term Care and
Independent Living

Arthur W. Blaser

Contents
A “Puzzle Population”: Younger People with Disabilities
and Long-Term Care..............................................................................87
People with Disabilities: Patients and Long-Term Care Users ................87
Younger People ......................................................................................88
Long-Term Care ....................................................................................89
Resources ..............................................................................................89
Information Sources ............................................................................. 90
Characteristics of Younger People with Disabilities....................................92
Demographics .......................................................................................93
Younger Long-Term Users: Subgroups ..............................................94
Attitudes and Behavior ..........................................................................95
Changes over Time: Milestones .................................................................96
Deinstitutionalization, Self-Determination, and Independent Living....97

85

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 86 䡲 Handbook of Long-Term Care Administration and Policy

The Americans with Disabilities Act......................................................98

Olmstead v. L.C. and E.W. .....................................................................98
Long-Term Care: Crisis and Responses ......................................................99
Conclusions: Integration and Long-Term Care ........................................101
Age and Integration.............................................................................101
Cross-Disability...................................................................................101
Quantity of Expenditures ....................................................................101
Political, Social, and Economic Power .................................................102
References ................................................................................................102

Independent living is not doing things by yourself, it is being in control

of how things are done.
Judy Heumann
World Institute on Disability, p. 8

Most attention to “long-term care” (LTC) is concerned with aging. As people age
the likelihood of using LTC increases, a relationship that is growing stronger. There
have always been, however, and will always be, younger individuals in the LTC sys-
tem. Many of the issues confronted by younger and older individuals are the same,
whereas some others vary.
Since the 1970s, there has been an ongoing debate over whether medical profes-
sionals or users should direct LTC. The consumer-control debate is now accompa-
nied by a new issue: which supports can best aid LTC users. This chapter focuses on
one group of LTC users—younger people with disabilities (PWDs).
Emphasis on consumer-directed LTC began with many younger users and activ-
ists, and has spread throughout the age span. Supports, necessary for complete inte-
gration in society, are also important across the age span. For those users defined as
“working age,” this includes various services beyond the confines of medical care, such
as those related to employment, housing, and transportation. Ultimately, integration
requires reconceptualizing our fundamental notions about age, disability, and LTC.
Since the 1990s, LTC policy has been in crisis. As the 2005 Deficit Reduction
Act exemplifies, escalating costs are only one of the elements; limited choice and
abridgement of disability rights are critical problems as well. To address these issues
completely, we must look at the often-overlooked younger LTC users.
The “institutional bias” in LTC policy has meant that people were placed in
restrictive environments. Especially among younger residents of nursing homes and
care facilities, residents sought a role in directing their fates. Along with advocates
and surrogates (often family members making decisions to give “voice” to their kin),
younger PWDs sought to be shapers of as well as being shaped by LTC policy.
In a study that included many California LTC users, Benjamin and Matthias
(2001, p. 633) wrote that “service planners tend to equate physical limitations

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 Younger Individuals with Disabilities 䡲 87

with psychological and spiritual dependency among elderly people, and to focus
on dependency based on functional limits in the absence of assistance, rather than
on the potential for independence that may result from providing assistance.” The
“service planners” often ignore younger individuals altogether. The disability rights
movement’s major focus since the end of the twentieth century has been with creat-
ing LTC options that are consistent with, and not opposed to, independent living.
Benjamin (1996, p. 75), in his essay “Trends among Younger Persons with Dis-
ability or Chronic Disease,” depicting “recent changes,” indicated that “For much
of the 1970s and 1980s, long-term care was considered synonymous with services
for older persons, and specifically with nursing home care for older adults.” He and
other researchers have identified a major problem in LTC planning. Institutional
facilities have been overemphasized, and the search for LTC alternatives has been
underemphasized. Although he wrote in the 1990s, the issues Benjamin identified
are still with us.
In the sections that follow, I will discuss key terms such as “disability,”
“younger,” and “LTC”; identify the most common types of LTC providers and
sources of information; describe younger PWDs and some historical milestones;
present responses to the current LTC crisis; and assess the place of younger PWDs
in the overall LTC “picture.”

A “Puzzle Population”: Younger People

with Disabilities and Long-Term Care
This chapter concerns a population that defies precise definition. Moreover, the
“disabled”/“nondisabled” borderline tends to be somewhat fuzzy (Sheets, 2005).
It has become a cliché to say that “disability” is an attribute that people acquire or
lose on a regular basis. However, contracting a disability is much more common
than having it disappear or be cured. Increasingly, a PWD will acquire multiple
disabilities over time. Similarly, application of the label “younger population” is
always changing. At the same time, what qualifies as LTC may be very brief, and
merely reflects an absence of support. As one can argue, there is one piece of the
LTC “puzzle” that is clear: the LTC system has always had problems in satisfying
users, and without significant changes such problems are likely to grow.

People with Disabilities: Patients and Long-Term Care Users

PWDs are classified as “disabled” by medical professionals, government officials,
and often even themselves. Identification of a PWD as “disabled” stems from a
specific approach or “model of disability.” Some other common classifications are
the treatment, compensation and rehabilitation, and civil rights models (Switzer,
2003, pp. 7–10); the medical or clinical model, emphasizing functional limitations,

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superseded by a sociopolitical or minority group model (Schriner and Scotch,

pp. 164–165); and the medical, civil rights (also “social”), and cultural models
(Longmore, 2003, pp. 215–224). In each case, the later approaches emphasize lib-
erating people from their medical diagnoses. As such, LTC is addressed differently,
as a means of organizing society with a wide range of supports rather than just nar-
rowly focusing on medical treatments.
Some social scientists distinguish “impairments” usually identified in medical
diagnoses (i.e., muscular dystrophy, dementia, or hemiplegia from a stroke) from
“disabilities” that may be imposed by an environment that makes it difficult for the
individual to function (Oliver, 1990). While bearing in mind the “disabling envi-
ronments” in which LTC is often carried out, this chapter distinguishes younger
PWDs by impairments that limit “major life activities” (such as walking or talking)
as used in the Americans with Disabilities Act (ADA) and by the U.S. Bureau of the
Census. PWDs using LTC require assistance with activities of daily living (ADLs),
such as dressing or toileting, or instrumental activities of daily living (IADLs), such
as using transportation or personal finance.
Policymakers and analysts label PWDs using LTC as consumers, users, clients,
customers, patients, aid recipients, or rights holders. As with “care” (discussed in
the following paragraphs), each of the labels may have a different implication. One
may imply a hierarchy, with the PWD following the instructions of nondisabled
“helpers.” The term “client,” for instance, is allied to a social work model, and “cli-
ents” are at the bottom of a presumed hierarchy. As Batavia (2003) argues, “patient”
relegates the person who uses LTC to the “sick role”; it is closely tied to the medical
model. Similarly to Batavia and others, I generally prefer “user” or “consumer” to
describe the recipient of LTC services.
Similarly, policymakers and analysts may label LTC services as assistance,
attendance, or caregiving. Designations may be consequential: “home health
assistance” is a mandatory service under Medicaid, available to recipients in every
state, whereas personal assistance is optional. Batavia and others have expressed a
preference for the term “assistant” rather than “attendant” because the latter term
implies the disabled person’s passivity (Batavia et al., 1991). In this chapter, “per-
sonal assistance services” refer to supports that are directed by the PWD (often but
not always for LTC).

Younger People
Fluidity in terms and their application are characteristic of the “younger” puzzle
population of PWDs in LTC. Just as one can be a PWD (or not) in different times
and places, one can be “younger” (or not) in different times and places. “Younger”
is an ambiguous label: it may mean below 65, 60, 55, or even 50 years of age, the
minimum age level for eligibility in the American Association of Retired Persons
(AARP). The federal Older Americans Act uses eligibility thresholds of 60, whereas

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other laws use 62 or 65. Specific ages determine eligibility for Medicare, Social
Security benefits, and age discrimination complaints.
A common age range for “younger people” is 18–64, although other breakdowns
may be used. “Nonelderly” is a frequently used substitute for “younger.” Batavia
(2003), who wrote extensively about “independent living” and LTC, distinguishes
children and “working-age adults.” Similarly, some Bureau of the Census classifica-
tions categorize people below 5 or 18 years of age as “the younger” population.

Long-Term Care
LTC is a label applied or misapplied to places, policies, supports, and service users.
Although PWDs often are spoken of as “in” LTC, they should be more accurately
viewed as using LTC services. The former implies that a person is in an institu-
tionalized setting, such as a nursing home. In reality, most PWDs receive LTC
at home.
LTC services fall along a continuum, with degrees of hierarchy. In addition,
terms such as government-run institutions, nursing homes, home healthcare, resi-
dential care, group homes, home and community-based services—sometimes sup-
ported by public authority, as in California’s In-Home Supportive Services (IHSS)
system—personal assistance, and independent living may overlap with each other.
Some of them also serve individuals who are not LTC users.
LTC is often contrasted with acute care. The goal of acute medical services, in
contrast to LTC, is to cure the person’s condition. PWDs, in contrast, require long-
term services. The duration of assistance is specified by some sources, such as in the
National Long-Term Care Survey (NLTCS), as three months or more.
Many people attach a negative connotation to the word “care,” implying that
it means the provision of assistance. “Care” may suggest a hierarchy between the
“caregiver” and the care user. Eustis and Fischer (1992) noted that differing atti-
tudes toward the word “care” were one area of difference among older and younger
recipients of assistance; the latter tend to be less receptive to the term. Younger users
often prefer “help” or “assistance,” terms that are less likely to imply dependence.
Johnson (2000) argues that one could reject some uses of “care,” as in “caregiver,”
whereas accepting others, such as “personal care attendant.” She is concerned that
PWDs commonly are left out of the “care equation.” Although LTC transcends age
classification, that fact is not always recognized.

Resources
Observers portray incomplete and inconsistent pictures of LTC resources and
information sources. This is partly because of the differences in their conceptualiza-
tions of disability, age categories, and LTC itself. Regardless, as argued in this chap-
ter, the overall availability of consumer-directed LTC and supports are inadequate.

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As discussed earlier, the overwhelming majority of LTC is provided by relatives.

However, PWDs may not have any family, or the latter could be unable or unwill-
ing to provide sufficient care. As parents of younger PWDs age, they can become
frail or disabled themselves. In addition, many LTC recipients view care by family
members as violating their sense of independence.
For low-income older and younger LTC users, Medicaid is a common source
for LTC funding. PWDs and the frail elderly may qualify for “medically necessary”
LTC as long as they have income or resources at or below their state’s qualifying
level, which would preclude qualification for Medicaid. Individuals who are not
eligible for Medicaid must purchase LTC with their own resources. Given the low
employment rates for PWDs, this is only a small minority of the younger LTC
population.
Although institutional care represents the largest amount of Medicaid LTC
funding across age groups, the proportion going to community-based alternatives
is increasing. Using Medstat data, Gold (2006) notes that by the fiscal year 2005
“63% of . . . national LTC expenditures ($59.34 [billion]) went to institutions, but
37% went to community-based services ($35.16 [billion])” (para. 8). In contrast,
12 years earlier, “84% of the . . . Medicaid national Long Term Care (LTC) expen-
ditures ($35.4 [billion]) went to institutions (i.e., nursing facilities and ICF-MRs)
and only 16% went to community-based services (i.e., Medicaid waivers, home
health care, and personal care options) ($6.7 [billion])” (Gold, 2006). As discussed
on pp. 97 and 98, waivers are now a major part of the Medicaid policy. Many
advocates of independence and choice argue that community-based services need
to become the rule, rather than the exception for LTC.
Policymakers increasingly base future LTC strategies on LTC insurance, usu-
ally marketed as protection for old age. People may be motivated to purchase it
because of the fear of disability. For many younger PWDs (especially for those
significantly disabled from birth), LTC insurance obviously is not an option. One
company, which offers “The Maximum Lifetime Benefit Acceleration Rider (the
Value Rider),” notes that it “helps Baby Boomers by increasing their long term
care pool of money for use during early claims” (Business Update, 2006, para. 2).
However, the rider presumes the PWD’s unemployment because the policy “would
allow the spouse” (not the younger disabled person) “to continue working” (para. 6).
More importantly, it probably does not even attempt to provide sufficient supports
so that the LTC user could participate in the workforce, if he or she so desired.

Information Sources
Information about younger PWDs using LTC can be gleaned from many places,
but with each one there are caveats. Information about PWDs often will not include
age breakdowns or individuals in LTC. The data usually reflects places from where
it can be drawn most easily, such as the restricted environments of nursing homes.
At the same time, younger persons using LTC tend to be overlooked because

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researchers are more interested in the elderly. Therefore, informal support recipi-
ents, especially younger PWDs, are the users least likely to be counted. As Batavia
(2003) points out, no records are required under the “informal support” model.
Based on estimates by the commerce department, he places the number of recipi-
ents of informal LTC at 7.2 million people. Additionally, unless personal assistance
is obtained through an agency, even information on paid help is limited.
Extensive data on PWDs (most not users of LTC) is available through the Bureau
of the Census, and particularly the 2003 American Community Survey (ACS) (http://
www.census.gov/hhes/www/disability/2003acs.html). The latter includes extensive
breakdowns by factors such as age, state of residence, and ethnicity. A major problem
with the use of census data is that people in nursing homes are not included (Waldrop
and Stern, 2003).
The National Organization on Disability (NOD) commissions and dissemi-
nates periodic surveys conducted by Louis Harris & Associates, an organization
that uses large interview samples. It measures access to healthcare as well as politi-
cal, religious, and social participation. NOD reports on a subgroup of the Harris
respondents who self-identify as disabled. The first NOD survey was conducted in
1986; the fifth survey and recent data are from 2004. The latest one was based on
telephone interviews “with 1,038 non-institutionalized Americans with disabilities
and 988 Americans without disabilities ages 18 and over” (p. 117). Focusing only on
noninstitutionalized people, it found that “19% of people with disabilities use some
form of personal assistance services for help with basic needs such as getting dressed,
preparing meals, or bathing” (National Organization on Disability, 2004, p. 11).
The most thorough study, and the one most germane to our inquiry, was con-
ducted by Spector and Fleishman’s (2000). Based on the 1994 Disability Supplement
to the National Health Interview Survey (NHIS) (community-based users), and the
1996 Medical Expenditure Panel Survey Nursing Home Component (nursing home
residents), they compare LTC consumers by age and setting.
The NHIS (http://www.cdc.gov/nchs/about/major/nhis/about200606.htm) is
conducted annually by the Bureau of the Census for the National Center for Health
Statistics of the Centers for Disease Control and Prevention. Sample sizes are very
large (50,000–100,000 people). The 2000 NHIS was a primary basis for an analy-
sis by the Georgetown University Long-Term Care Financing Project (2003), titled
“Who Needs Long-Term Care?” The 1994 Disability Supplement to the NHIS,
used by Spector and Fleishman, is also known as the NHIS-D. As with the annual
NHIS, it serves as an excellent source of information on the health of noninstitu-
tionalized Americans, but does not include many people receiving LTC services.
Nor do any of its questions focus on LTC.
Extensive nursing home data is available through the National Nursing Home
Survey (NNHS) (http://www.cdc.gov/nchs/nnhs.htm), although the most recent
one was in 1999 (earlier surveys were taken in 1973–1974, 1977, 1985, 1995,
and 1997). The NNHS, conducted by the National Center for Health Statistics,
includes residents and staff from up to 1500 facilities with Medicare or Medicaid

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certification. The surveys offer extensive information about nursing home residents,
but not about other users of LTC.
An NLTCS (http://www.nlcs.aas.duke.edu/) gathered a plethora of data on
six occasions between 1992 and 2004 about Americans aged above 65 in LTC.
The U.S. Bureau of the Census administers the NLTCS; funding comes from the
National Institute on Aging and Duke University. The younger individuals using
LTC, however, are outside the scope of NLTCS.
Medicare and Medicaid offer extensive information about certified facilities,
and about the increasing number of recipients of personal care services. Prominent
disability rights advocate and lawyer Steve Gold (www.stevegoldada.com) analyzes
statistics related to nursing home stays of Medicaid recipients, especially through
Medicaid’s Minimum Data Set (MDS) (http://www.cms.hhs.gov/Minimum
DataSets20/). In some cases, this data can be compared with expenditures and
the use of home and community-based services. Although it offers in-depth detail
about LTC expenditures, the information does not include comprehensive demo-
graphic breakdowns or include users of LTC who are not supported by Medicaid.
Completed MDS forms include data on age for every Medicaid-supported
nursing home resident. But in most reports, the age data is not used. Moreover, the
MDS does not provide any information on attitudes toward LTC.
Private research firms such as Medstat (http://www.medstat.com/; a promi-
nent source in Gold’s analyses) and Mathematica Policy Research (http://www.
mathematica-mpr.com/health/longtermcare.asp) are increasingly generating new
types of data germane to LTC, including categorization by age. Mathematica
recently evaluated Arkansas (Independent Choices), Florida, and New Jersey
(Money Follows the Person) programs, all designed to enhance the consumer role
in LTC.
Finally, two centers evaluating LTC data are at the University of California,
San Francisco: the Disability Statistics Center (http://dsc.ucsf.edu/main.php) and
the Center for Personal Assistance Service (http://www.pascenter.org/home/index.
php). These centers, and other similar ones, report on data gathered by many of the
organizations mentioned in the “Demographics” section.

Characteristics of Younger People with Disabilities

Policymakers, scholars, and activists continuously debate similarities and differ-
ences across LTC consumer age groups, partly because circumstances are ever
changing. For instance, a large generation gap in one time and location may not
be present in the future ones. Many authors refer to the importance of “bridging
the gap” between the aging (including LTC users, policy makers, administra-
tors, and people who study aging) and the younger disability community (includ-
ing users of LTC, policy makers, and people who study disability) (Ansello and
Eustis, 1992).

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Demographics
Younger individuals with disabilities are a population in flux, as is the population
of PWD users of LTC, and subgroups of the PWD-LTC consumer population.
The overall LTC population is a large minority of a much larger minority of the
U.S. population, PWDs. In the 2000 Census, 19.4 percent of the U.S. population
was disabled, or 49.7 million people aged 5 or above (Waldrop and Stern, 2003).
For the 16–64 age group, the PWD percentage of the population was 18.6 percent,
compared to 41.9 percent for people aged 65 and above (Waldrop and Stern, 2003).
Clearly, in both age categories, there is a high percentage of disability, although the
likelihood tends to rise with age.
Notwithstanding that numerically there are many younger users of LTC, they are
vastly outnumbered by older users proportionally. The Georgetown University Long-
Term Care Financing Project (2003) estimates that 1.4 percent of people below the
age of 65 years “need” LTC, in contrast to 14 and 50 percent, of those aged above 65
and 85, respectively. Adams (2004) estimates that 4 percent of the U.S. population,
about 13 million people, will need LTC at some point in their lives. About 44 percent
of the LTC population, or 5,700,000 individuals will be below the age of 65 years.
Most causes of disability cross age groups, but some are more characteristic
of younger PWDs. Urban gangs and international warfare are two common rea-
sons for the young onset of disability. Obesity is another (Lakdawalla et al., 2004).
Dementia, from traumatic brain injury rather than from Alzheimer’s, is more likely
to characterize younger than older LTC users (Beattie et al., 2002). These examples,
of course, stem from social variables. In addition, better technology has meant the
survival of many premature, mostly low-birth-weight babies, contributing to higher
numbers of PWDs and a younger LTC population. According to a report from the
National Academy of Sciences’ Institute of Medicine, “In 2004, 12.5% of U.S. births
were premature, a 30% increase over the rate in 1981” (Maugh, 2006, p. A18).
Just how many younger people are LTC users? Batavia (2003) has estimated
that 4–5 million adults aged 65 and above were LTC users and 4 million LTC users
were aged below 65. Of these, most received care in the community (3.9 million
people aged 65 and above and 3.7 million were aged below 65). The 2004 Louis
Harris/NOD survey confirmed that informal support is used more frequently than
agency help: 77 percent of its respondents relied on family members or friends for
assistance, versus 29 percent who relied on home health aides or other paid help.
There has been a major shift away from nursing homes, toward community-
based services. This shift involves members of all age groups, and results from both
social changes and deliberate government policy. Bernstein et al. (2003) report
that the proportion of nursing home residents below 65 years of age declined from
11.6 percent in 1985 to 9.7 percent in 1999. During this time, there was a decrease
in the number of people residing in nursing homes, from 6.3 to 5.9 per 1000 indi-
viduals. Surprisingly, there was also a slight increase in the number of nursing homes.
These newer facilities tend to have fewer occupants than the ones they replace.

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Especially for younger users, LTC is mostly received in the community.

Using data from 1994 and 1996, Spector and Fleishman (2000) reported that
46.7 percent of those receiving LTC in the community (3,363,000 people) were
aged 18–64, whereas 53.3 percent (3,823,000 people) were aged 65 and above. In
nursing homes, 8.8 percent (138,000 people) were aged 18–64, and 91.2 percent
(1,425,000 people) were aged 65 and above.
Other sources echo the results in Spector and Fleishman (2000). Pandya (2005),
for instance, used 1999 NNHS data, which revealed that 18.5 percent of the black and
16.6 percent of the “other nonwhite” nursing home population was below 65 years of
age. The comparable figure for white nursing home residents was 8.3 percent.

Younger Long-Term Users: Subgroups

Spector and Fleishman (2000) described certain characteristics of younger LTC
users: although more are female than male, the imbalance is much less for those
below than those above 65 years of age; the black proportion of the younger
PWD population is much greater; younger LTC recipients are more likely to have
never been married; and although all groups have very high unemployment rates,
18.7 percent of the LTC recipients of community services are employed.
Another characteristic of younger LTC users is poverty. For LTC users in the com-
munity, 26.5 percent of those aged 18–64 are in poverty, compared to 14.7 percent
of those aged 65 and above. There is no comparable figure for the 18–64 years of
age nursing home population. Because that group almost always relies on Medicaid
funding, it is probably even poorer than those people receiving LTC in the commu-
nity, regardless of age (Spector and Fleishman, 2000).
Age differences or similarities vary greatly among facilities and regions. This
often reflects the widely varying LTC policies of state and local governments. Some
facilities experienced great increases in younger populations. In New York City’s
Holly Patterson Geriatric Center, for example, by 2003, about 43 percent of the 655
residents were aged below 65 (Healy, 2003).
In California’s IHSS program, there are also noticeable age differences: “Among
all recipients in the IHSS program, those assessed as severely cognitively impaired
represent 11.8% of those under age 65, 2.4% of those aged 65–74, and 5.4% of
those aged 75 and older” (Benjamin and Matthias, 2001, p. 639). As Benjamin and
Matthias (2001) recognize, age differences probably reflect the pattern of available
support services.
Given a choice, however, nonelderly individuals are especially likely to choose
home or community-based alternatives over institutional facilities. But choices
have been greatly constrained by policymakers, by society, and sometimes by
family members or the lack thereof. Demographic figures indicate only where
people receive LTC; they would change with availability of new choices and
supports.

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 Younger Individuals with Disabilities 䡲 95

Attitudes and Behavior

One of the many gaps (between disabled and nondisabled respondents) identified
in the National Organization/Louis Harris survey was in a question about whether
respondents worried about going to a nursing home. Thirty-six percent of respondents
with disabilities were worried (somewhat worried to extremely worried) versus 23 per-
cent of nondisabled respondents (National Organization on Disability, 2004, p. 139).
Younger PWDs in LTC are particularly concerned about and critical of the
constraints that accompany institutionalization, and their complaints tend to be
those that are heard. When society undergoes major changes, as it did in the United
States during the 1960s and 1970s, the PWD and PWD-LTC populations were not
immune. Since then, with continued change in LTC policy, their efforts to promote
greater independence and control over their lives have continued.
Chroniclers of the disability rights movement have noted that initially primar-
ily younger activists were involved; they were joined by older individuals later on.
As Shapiro (1993, p. 6) wrote, “Older people have avoided affiliation with the dis-
ability rights movement. They have grown up with prejudices about a disabled life
being a sad and worthless one. Many fear the same stigma will be used to take
away their independence.” Younger people were less inclined to accept a “sick role”
that would leave them incapable of participating completely in society. The age
gap has diminished over time, partly due to cooperative efforts of groups such as
the National Council on Aging (www.ncoa.org) (representing many older users)
and the World Institute on Disability (www.wid.org) (representing many younger
users). In addition, many younger activists have grown older.
Higher education levels also lead to greater resolve to control one’s medical
situation. Batchelder (1999, p. 59) has observed that “Younger and more educated
patients are more likely to expect to be involved in decisions about their care and
to question their physician’s advice.” Indeed, in the Spector and Fleishman (2000)
data, for both the LTC community and nursing home users, individuals aged
18–64 had received more formal education than users aged 65 and above.
LTC policy has been determined by perceptions about the wants of the elderly
who are only partly grounded in reality. “The perception is that older people . . .
have accommodated to nursing home placement and are ‘soft’ on service alternatives
that support and maintain independence” (Benjamin, 1996, p. 89). Such a percep-
tion may reinforce the stance of those opposed to more home and community-
based options. However, the perception may be accurate for some users regardless
of age, but not for most people in need of LTC.
Age-based claims of varying validity have influenced policy in almost every
subgroup of the LTC population in almost every community around the world.
They sometimes foster age-based conflict. Differing perceptions are reflected in the
ongoing battle over the fate of San Francisco, California’s, Laguna Honda Hospital.
One view, reflected in a letter to the editor of the San Francisco Chronicle, stated
“the ‘alternatives’ cited by younger disabled advocates do not always work for frail

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 96 䡲 Handbook of Long-Term Care Administration and Policy

85-year-olds with multiple medical illnesses” (Palmer, 2005, p. B4). Age-based dif-
ferences were also a basis of a June 2006 ballot proposition, which lost by an almost
3–1 margin. As reported in the San Francisco Chronicle, “Supporters of Proposition
D had argued that too many beds in the skilled nursing and long-term care facility
are filled by younger, violent patients who put at risk the elderly people who have
traditionally been housed there” (Vega, 2006, p. B2). Similarly, three years earlier
The New York Times had made similar charges, arguing that drug use in nursing
homes is emblematic of their changing populations (Healy, 2003).
A Denver facility’s experience also reveals age differences: “There are additional
costs, such as higher food costs for younger adults with bigger appetites and anger-
management issues that arise from having a degenerative disability” (Padilla and
Gong, 2003, p. 50). As with many differences, however, the latter may not be based
on age alone.
The institutional bias, inherent in LTC policy over the decades, has diminished.
There is now a larger role for individual choices. This has been welcomed by mem-
bers of all age groups, but particularly by younger PWDs. Despite the fatalism of
many LTC users, more and more PWDs value and seek alternatives to institutional
facilities. In fact, most age-based difference in attitude toward LTC is one of degree
rather than of kind. Regardless, younger people tend to be given more options
than older people. According to the Kane and Kane (2001, p. 115), “in decelerat-
ing order, cash, vouchers, and individually employed workers rather than packages
from agencies are used to enhance control and flexibility for younger consumers.”
They continue, “Younger persons with disabilities reject the concept of standard
home health care, which is considered a major step toward autonomy for older
consumers, compared with entering a nursing home” (p. 116).
Such observations are consistent with what Walsh and LeRoy (2004, p. 134)
observed in their cross-national survey of women with disabilities “aging well”: “the
wishes of the service recipients are too often lost in the squeeze. The rush to address half
of the normalization equation (least restrictive living arrangement) runs over the other
half of the equation (personal choice and self-determination).” Many LTC users, regard-
less of age, have commented on a lack of choice and arbitrarily restrictive settings.
In California, Benjamin and Matthias (2001) found that age made a difference
in users’ preferences. However, they ascribe this to more familiarity with consumer
direction among younger recipients. As older recipients gain more experience with
consumer direction, as community supports are developed, and as younger recipi-
ents become older, the preference gap presumably will narrow.

Changes over Time: Milestones

Younger PWDs’ LTC use has adapted to changing political, economic, and social
factors. Four of the more important ones have been deinstitutionalization and
self-determination; the independent living movement; the ADA of 1990; and the

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 Younger Individuals with Disabilities 䡲 97

Olmstead Supreme Court decision in 1999. All of these drew from other, related
movements in the United States, such as the fights for civil, consumer, and
women’s rights.

Deinstitutionalization, Self-Determination,
and Independent Living
For many younger users of LTC, “top-down” and “bottom-up” approaches have
been influential sources of change. The “top-down” approaches resulted in the clos-
ing and changing of large state hospitals. To proponents, the changes reflected
major reform; to critics it signified the “dumping” of people into different (often
privately owned) institutions.
Scala and Nerney (2000, p. 57) underscored the historical (and continued)
importance of a “bottom-up” approach to LTC. They wrote that “the notion of
self-direction or self-determination grew out of a recognition that, no matter the
disability, having control over major aspects of one’s life was just as important to
those with intellectual disabilities as it was for any other person with a disability.”
Particularly for younger users with intellectual/developmental disabilities (ID/
DD), groups such as The Arc (www.thearc.org) and People First encouraged active
participation in LTC. Organizations such as the Bazelon Center (www.bazelon.
org) and the Center for Self-Determination (http://www.self-determination.com/)
emphasize consumer options and autonomy.
The independent living movement (http://www.ncil.org/ and http://www.
independentliving.org/) is associated with Ed Roberts’ activities at the University
of California–Berkeley in the 1960s (Shapiro, 1993). Because “living” would be
independent (while also interdependent), the centers spawned by the movement
were nonresidential. From their beginning, the right of PWDs (many of whom
were LTC users) to LTC choice was essential for these Centers of Independent
Living (CILs). Many of them provide support services, including housing refer-
ral and vocational services, to enable LTC users to live outside of institutions.
Consumer direction of LTC is a central independent living principle. Accord-
ing to one source, “The idea of consumer-directed services originated over two
decades ago among younger persons with disabilities in the disability rights and
independent living movements” (Mahoney et al., 2002, p. 75). Batavia (2002,
p. 64) argues that “Perhaps the most powerful assertion of positive autonomy in
health care today is the demand by many people with disabilities to control the
circumstances in which they receive their long-term care.” Independent living
advocates demand for “positive autonomy” in LTC has been labeled “consumer
direction” (Batavia, 2002).
Batavia (1991, p. 531) has pointed out that “The need for personal assistance
is not limited to any age group or any other demographic category.” Yet, “Per-
haps the main reason that the independent living model is largely overlooked by

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policymakers in this country is that long-term care policy has focused primarily on
the frail elderly population.” Although “independent living” is not inherently the
province of younger people, the perception that it is has constrained its growth.

The Americans with Disabilities Act

The ADA, signed into law on July 26, 1990, was the result of an active social move-
ment. The movement’s goals went beyond traditional civil rights, such as rights
to nondiscrimination and to participation. They included access to medical care,
and to a full range of rights affected by LTC. The ADA’s promise was that PWDs
should no longer be segregated and subject to unequal opportunities because of a
restrictive environment. The ADA involved a broader application of rights than
those guaranteed through the earlier Rehabilitation Act of 1973.

Olmstead v. L.C. and E.W.

The U.S. disability rights movement has had mixed success in meeting its goals
through the courts. In several court decisions, such as Garrett v. Alabama, Toyota
v. Williams, and Chevron v. Echazabal, the U.S. Supreme Court interpreted the
ADA narrowly, limiting the scope of disability rights. In contrast, the decision in
Olmstead v. L.C. and E.W. (1999) was welcomed by disability rights advocates. It
resulted in an integration mandate, exemplified by the specific plaintiffs and by the
spate of action that followed. Implementation of Olmstead has become the central
concern of many disability rights advocates and policy makers.
Lois Curtis and Elaine Wilson, aged 31 and 47, respectively, sought the right
to live in a community setting rather than in the Georgia Regional Hospital in
Atlanta. By a 6–3 margin, the Supreme Court agreed that their ability to live inde-
pendently suggested that continued hospitalization was a form of discrimination
prohibited by the ADA. As Justice Ruth Bader Ginsburg wrote in the majority
opinion, “The ADA both requires all public entities to refrain from discrimina-
tion, . . . and specifically identifies unjustified ‘segregation’ of persons with dis-
abilities as a ‘form of discrimination.’” Curtis and Wilson’s institutionalization,
despite their wish to live in a community setting, was impermissible segregation.
The “integration mandate” would soon be broadly applied to all age and disability
groups.
The emphasis on positive rights was significant in the Olmstead decision. Georgia
not only was prohibited from keeping Curtis and Wilson in a segregated setting,
it was also obligated by the ADA to provide community-based alternatives. More-
over, the state could not even argue that alternatives were not available. Every state
must now provide support services to enable community living.
Many disability rights groups, including NCIL, American Association of People
with Disabilities (ADAPT), and The Arc, sought wide application of the Olmstead

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 Younger Individuals with Disabilities 䡲 99

decision. In analyzing the positive rights guarantees within the ADA, legal scholar
Weber (2004, p. 290) wrote that “Individually, the costs of service at home or in
community housing is much cheaper than it is in institutions. The real difficulty
is what is sometimes referred to as the woodwork problem: Making services in
community settings available will bring people who need the services ‘out of the
woodwork.’” Enlightened LTC policy meets people’s needs, and would give many
younger PWDs opportunities to participate in society. Bringing people out of the
“woodwork” is consistent with the Olmstead rationale.

Long-Term Care: Crisis and Responses

Although there is a wide agreement that there is an LTC crisis, there are disagree-
ments about the nature of the crisis. There are more people using LTC primarily
because of rising life expectancy and improved medical care. Shapiro (1993, p. 5)
noted “Medicine once promised to wipe out disability by finding cures. Instead,
doctors only spurred a disability population explosion by keeping people alive
longer.” Unfortunately, the growth in LTC has not been accompanied by supports
for employment, transportation, housing alternatives, and so on. For governments,
greater LTC demands may (infrequently) bring higher costs. Recipients, in con-
trast, are concerned with their quality of life. However, “quality of life” may be
interpreted differently by different people.
Some nursing home administrators argue that quality care is possible in institu-
tions. However, one must consider the needs of all LTC users, particularly younger
people, often specifically their alienation. One way to do this is to provide separate
accommodations for them. However, for many others, segregation—especially in
institutions—is not the answer.
Most analysts, advocates, and policymakers worldwide extol community-based
LTC alternatives, especially the ones that are consumer directed. Indeed, agency
and consumer-directed services constitute a steadily growing proportion of Medic-
aid LTC expenditures.
Home and Community-Based Services (HCBS) grew with use of Section
1915(b) and 1915(c) waivers and Section 1115 waivers of the Social Security Act.
They allow the Secretary of Health and Human Services to “waive” conditions that
would otherwise limit states in their use of Medicaid funds.
Batavia (2001) describes the slow initial use of the waivers, followed by more
rapid growth. By 1999, Medicaid’s HCBS program was a part of every state’s
programs. Now it is a centerpiece of LTC strategy under U.S. President George
W. Bush through his New Freedom Initiative grants. HCBS programs have been
emphasized throughout the Bush presidency, and this intensified with the 2005
Deficit Reduction Act.
The Deficit Reduction Act includes a program partially implementing prin-
ciples long urged by disability rights activists, “Money Follows the Person.”

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Th is suggests that the person using LTC, or a surrogate, should be able to “shop”
for their LTC rather than give the initiative to providers. The “Money Follows
the Person” program enables the secretary of HHS to provide grants to states
to promote the availability of community-based services. Some states, such
as New Mexico, have also adopted “Money Follows the Person” programs on
their own.
Unlike 1915(b) (Freedom of Choice) and 1915(c) (HCBS waivers), the 1115
(Research and Demonstration) waivers are limited in time, generally up to five
years. One use of the 1115 waiver was for the Cash and Counseling program,
funded and promoted by the Robert Wood Johnson Foundation. It began in 1998,
and extended from the initial three states (Arkansas, New Jersey, and Florida) to
twelve others (as of July 12, 2006). Certain people requiring LTC are given money
to purchase their own services, allowing them to live at home. They, rather than
agencies, are completely responsible for their own LTC choices.
Cash and Counseling assessments indicate successes within every age group,
and for every type of disability (Bunn, 2006; Cash allowance program better suits
Medicaid, 2003; Dale et al., 2003). According to a study by Simon-Rusinowitz
and Mahoney (2001, p. 10), “Interest peaked in the 30’s–50’s (about 60% of con-
sumers), about 50% of consumers in their 60’s, and about 30–40% of consumers
in their 70’s–90’s were interested in the cash option.” Interestingly, there was less
(although still considerable) interest among the youngest adults, compared with
those who were middle-aged.
Qualitative advantages of the “Cash and Counseling” approach may be less
important to policy makers than the economic ones. Bagentsos (2004, p. 80) warns,
“disability rights activists should regard the conservative agenda behind the cash-
and-counseling program as a threatening one. Such a program would probably
reduce the wages paid to personal assistants, as they would move from working
for (frequently unionized) home health agencies to working for hard-to-unionize
individual household employers.” Indeed, some of the cost advantages of consumer-
directed options are made possible by the low wages of personal assistants. Bagentsos’
answer to the LTC crisis is not reinstitutionalization, rather it is to acknowledge a
complete range of economic and human costs.
The Medicaid Community Attendant Services and Supports Act (MiCASSA)
(S. 401 and H.R. 910 in the 109th Congress [2006, slightly modified as the Com-
munity Choice Act in the 110th Congress]) is a proposal to amend Title 19 of the
Social Security Act. With its adoption, waivers under Medicaid would no longer
have to be granted to states to make HCBS available. The latter would become the
rule, rather than the exception to institutional care. Similar proposals have been in
Congress since 1997.
Clearly, progress has been made. However, although younger PWDs have ben-
efited disproportionately from all of these changes, most government resources still
focus on nursing home care.

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 Younger Individuals with Disabilities 䡲 101

Conclusions: Integration and Long-Term Care

Attention to younger individuals using LTC enables a focus on four common
assumptions, each one directing ones attention to a factor that has some influence
on LTC policy. They are (1) age, (2) the nature of a PWD’s disability, (3) the quan-
tity of LTC expenditures, and (4) the power of economic and political interests.
These, however, should not be a basis for unwarranted reductionism.

Age and Integration

Many examinations of age and LTC proceed from opposite assumptions: “age
makes a big difference”; and “age does not make a difference.” Along with the
former assumption is a related claim that the aging process should be considered
separately from that of disability, per se; what is true for younger individuals with
disabilities often will not be true for older LTC users. In reality, there are often
overlaps between younger and older users’ needs and interests, although they are
not identical. Indeed, the National Council on Disability (2004, p. 56) concluded
“The studies suggest that sometimes age matters and sometimes it does not.”
The most promising LTC approaches address aging issues, but do not ignore
younger PWDs. Supporters of MiCASSA, for instance, include not only disability
activist organizations, such as ADAPT and the World Institute on Disability, but
also the Gray Panthers, the National Association of Area Agencies on Aging, and
the National Council on the Aging.

Cross-Disability
Many claims that younger people with particular disabilities are poorly suited for
some forms of LTC are based on unfounded stereotypes. Yet the National Council
on Disability (2004, p. 10) found “The type and severity of disability do not seem
to determine individuals’ preferences regarding care: interest in consumer direction
extends across a range of disabilities and ages.” The kinds of services available tend
to be more related to political and economic clout than to preferences. Although
community supports will differ across a range of disabilities, the importance of
consumer choice does and should not.

Quantity of Expenditures
Many accounts of the “LTC crisis” are limited to increased demand on a costly
LTC system. Such financial pressures result not only from an aging population,
but also from medical technology that makes it likely that younger PWDs will
survive longer. However, these issues address only a part of the LTC crisis. We need
to ensure that the disabled population will generally remain or become productive
community members. And although enabling initiatives, such as access to assistive

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 102 䡲 Handbook of Long-Term Care Administration and Policy

technology, employment, and transportation can save money over time, there could
be substantial start-up costs. Moreover, the objective of containing LTC expendi-
tures must not obscure the rights of LTC users.

Political, Social, and Economic Power

LTC policy making, which too often minimizes the consumer role, is overly influ-
enced by the nursing home industry. We need to involve other stakeholders to a
greater extent, including users and disability rights organizations. Importantly, we
must empower LTC users so that they can have greater control over LTC policy
and their own lives.

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 Chapter 7

Informal Caregivers and

Caregiving: Living at
Home with Personal Care

Sharon M. Keigher

Contents
Introduction: Informal Caregiving for Family and Friends Across
the Life Course ........................................................................................106
Profiles of Informal Care in the United States .........................................108
A Profile of All Informal Caregivers ....................................................108
A Profile of Informal Caregivers of Disabled Elderly Americans.......... 110
The Challenges, Burdens, and Rewards of Informal Caregivers
in Aging Families.....................................................................................112
Contemporary Challenges to Informal Care .......................................112
Longevity, Filial Bonds, and Multigenerational Families ....................112
Housing Arrangements .......................................................................113
The Heterogeneity of American Families............................................. 115
Caregiver Stress and Burden................................................................ 115
Alzheimer’s Disease and Dementias ................................................ 116
Physical Work ................................................................................. 116
Economic Imperatives and Employment Dilemmas ....................... 117

105

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Caregiver Isolation .......................................................................... 118

Spousal or Partner Care .................................................................. 118
Parent Care by Adult Children ....................................................... 118
Aging Adults Caring for Disabled Adult Children.......................... 119
Caregiver Assessments and Instruments.......................................... 119
The Satisfactions and Rewards of Giving Informal Care .....................120
Trends and Policy Innovations in Support of Family Caregivers .........121
Policy Recognition of Caregivers ....................................................121
Supportive Interventions for Informal Caregivers ...........................122
New Programs of Support for Family Caregiving ...........................123
The Future: Strengthened Alliances among Family Caregivers, Older
Adults, Paid Care Workers, and Our Future Selves ..................................125
References ................................................................................................127

Introduction: Informal Caregiving for Family

and Friends Across the Life Course
“Ordinary people living out their lives and doing what needs to be done to assist
family members with disabilities are hardly likely to see themselves as long-term
care providers,” but family, friends, and loved ones are exactly those who provide
the bulk of long-term care in the United States (Kane et al., 1998, p. 14). It is
estimated that 44.2 million adults in the United States—21 percent of all adults—
voluntarily provide informal,* unpaid personal care and support to other adults who
are ill or disabled, living at home, and who need assistance to perform the most basic
activities of daily living (ADL). These caregivers represent 22.9 million, or 21 percent,
of all households (National Alliance for Caregiving and American Association of
Retired Persons [AARP], 2005).
These family* caregivers—spouses,† adult children, other relatives, friends, and
neighbors of all ages—are the lifeline for disabled partners,† frail and aging parents,
and other loved ones who cannot look after themselves. They care for the chroni-
cally ill, physically disabled, and cognitively impaired parents, as well as adult chil-
dren who continue, or return home, to live with them. Some caregivers raise other
people’s children, or their own grandchildren, with or without the support of any-
one else. Many provide such care at considerable sacrifice to themselves, continuing

* “Informal care” and “family care” are used interchangeably here to acknowledge the signifi-
cance of both blood kinship and “families of choice.” The 23 percent increase in the number
of “nonfamily households” between 1990 and 2000 (from 27.4 million to 33.7 million) is
suggestive of the extent to which new patterns of adult lifestyles may take on importance in an
aging society.
†
“Spouse” and “partner” are also used interchangeably here to acknowledge the importance of
both designations in reference to caregiving situations.

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to care well into their own old ages. Unfortunately, in our society, informal caregiv-
ers often go unnoticed except by those whose very lives depend upon them (ASPE
and AOA, 1999, p. 2).
Informal caregivers are easily “taken for granted” by the formal health and long-
term care systems, because many of the services are exactly what people provide for
themselves when they can. Families “naturally” provide care without compensa-
tion, special credentials, or supervision. Often, they provide home maintenance
and social and psychological support along with assistance in ADL (eating, dress-
ing, bathing, toileting) and transportation to doctor appointments, church services,
and community events. Caregivers are often the only link to social and emotional
support, and the “normalcy” that most disabled and frail people of all ages experi-
ence only in their own homes and familiar communities. For persons whose medi-
cal conditions or injuries have resulted in chronic illness or disability, family and
friends literally can be the foundation of healthcare, the critical safety valve in our
nation’s “very leaky” systems of health and long-term care. The economic value
of this “free,” informal care, previously estimated to be between 168 billion and
197 billion dollars annually, was reestimated in 2000 to be worth 270 billion dollars
annually (Arno, 2002). This massive sum is well over twice the combined costs of
nursing homes ($92 billion) and home healthcare ($32 billion).
Informal care is provided and received by people of all ages, at all stages of their
life course. Among frail and disabled adults receiving long-term care, persons aged
65 years and above comprise about half, whereas those aged 18 through 64 years
comprise the other half. Given the extreme heterogeneity of these care receivers, it is
not surprising that their caregivers are an equally diverse group. Among all disabled
adults aged 18 and above receiving care at home, 78 percent receive all of that care
exclusively from informal caregivers, mostly wives and adult daughters. Another
14 percent receive a combination of informal and formal care, and only 8 percent of
disabled adults living at home rely entirely on formal, paid care providers. Spillman
and Black (2005) recently found that in 1999, two-thirds of older people with dis-
abilities relied entirely on family and friends. Another 26 percent supplement their
informal care with formal care, and 9 percent rely solely on formal care services.
Omitted from these caregiver estimates are children and teens below the age
of 20 who, even when very young, are sometimes significant caregivers for disabled
siblings, parents, or other relatives (Becker et al., 1998; Becker and Dearden, 1999;
Keigher et al., 2005). Also, largely overlooked are older adults, even those in their
ninth and tenth decades, who, despite their own infirmities, are primary caregiv-
ers for others. The United States has yet to recognize the significance of informal
caregiving as a normative experience, which, like marriage and family policy, may
be unable to sustain by itself without structural policy and financial supports.
This chapter presents a general profile of the basic sine qua non of family care in
the United States—the unpaid, unsung individuals who provide personal assistance
for disabled loved ones who depend on them to live at home. “Informal caregivers”—
autonomous volunteer helpers, neither paid nor supervised, and therefore beyond

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the control of formal social and healthcare agencies—are the very foundation
of the human capital in both the healthcare and long-term care systems in the
United States. The long-term care system delivers care through organizations pro-
viding managers and direct care workers to assist individuals in their own homes
and communities, in residential care, and in institutional settings, all attempting to
complement the needs of disabled persons who depend on them, and hopefully in
concert with their informal or family caregivers. Funded through market purchases
by individuals, as well as through government programs, the amount of care deliv-
ered depends greatly on market demand and government assistance, as well as on
the availability of the “no-cost” informal caregivers. Regardless of the health of the
economy, government contributions, and social changes in family structures, loved
ones remain the safety net, the essential foundation of modern long-term care.
After profiling America’s informal caregivers, the social forces impinging on
them in families and households, increasingly straining their individual capacities
to provide sufficient, appropriate care will be highlighted. These societal forces raise
policy concerns regarding projected declines in the availability of informal caregiv-
ers, as well as evidence of the elasticity of caregiver supply and future potential
capacity. An extensive research literature has validated the stress and burden expe-
rienced by caregivers with various characteristics and in various situations, as well
as their profound satisfactions and rewards.
Next, we consider some trends and public policy initiatives of the past three
decades that have sought to increase both commitment of, and support for family
or informal caregivers. Emerging challenges are expected to complicate informal
caregiving in the next decade; thus, we conclude by calling for more meaning-
ful partnerships between formal long-term care services, paid direct care work-
ers, informal caregivers, and future consumers—all agents with a vital stake in
strengthening our nation’s capacity to care.

Profiles of Informal Care in the United States

A Profile of All Informal Caregivers
Most long-term care consists of informal assistance provided by close, unpaid
family members and friends to disabled persons, enabling them to remain living
at home in their own communities. They are sometimes referred to as “front-
line caregivers” because of their personal or affectional relationship to the per-
son needing assistance. Paraprofessionals or direct care workers are usually paid,
trained, and supervised individuals, employed by formal agencies to provide in-
home personal care and assistance. Because family caregiving work can be very
isolating and difficult, formal paid caregivers are often asked to schedule their
work around the needs of family caregivers, providing either respite for them or
serving as extra help.

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It has been estimated that as many as one in three Americans voluntarily pro-
vide unpaid informal care each year to one or more ill or disabled family members
or friends above the age of 18 (ASPE and AOA, 1999). Nearly three-quarters of
these caregivers assist family members and nearly one-quarter assist friends. Eight
percent of the total report helping more than one care recipient over the past year.
The most common informal caregiving relationship is that of an adult assist-
ing aging parent(s) (38 percent), whereas spouses provide 11 percent of informal
care to their elderly husbands or wives. Seven percent of informal care is provided
by parents to their significantly disabled children who are above the age of 18.
Twenty percent is provided to other relatives—grandparents, siblings, aunts, and
uncles—and about 24 percent to friends and neighbors.
At any point in time, one in five Americans is providing informal care to an ill
or disabled family member, reflecting the long-term nature of such care (NAC and
AARP, 2006). Although caregiving is provided by adults of all ages, the average
caregiver is a 46-year-old female with some college education who is employed and
spends more than 20 hours a week providing care to her mother.
Spouse caregivers tend to be older (average age 55); only 13 percent of people
in their 20s and 14 percent of adults aged 70 years and above report providing any
care. Caregivers in their 20s are naturally more likely to care for older family mem-
bers such as grandparents, aunts, and uncles. Caregiving tends to decline as indi-
viduals take on family responsibilities, raising their own children and managing
their careers, but caregiving responsibilities rise again as people reach their late 50s
and 60s. Women caregivers above the age of 60 years are most frequently providing
care to a partner or sibling (ASPE and AOA, 1999).
Although both women (61 percent) and men (39 percent) provide informal
care, women are much more likely to be giving care throughout the entire year than
men. Moreover, women provide 50 percent more hours of care than men do per
week, are twice as likely to be caring for ill or disabled children, and provide care
over longer periods of time, and more frequently, to two or more persons. Indeed,
across the life course, male caregivers provide relatively few hours of informal care;
those below the age of 64 provide 5–11 hours of care per week, whereas men in
their late 60s provide about 15 hours of care per week, both typically to disabled
spouses or partners. Male caregivers are more likely to be employed full- or part-time
(66 percent) than female caregivers (55 percent) (National Alliance for Caregiving
and AARP, 2005), whereas, overall, female caregivers provide more hours of care
and a higher level of care.
These gender disparities generally persist among different ethnic and racial groups.
For example, black and white Americans are equally likely to be providing informal
care at any given time, but across the life course, black women do much more caregiv-
ing than white women, more frequently caring for disabled members of their extended
family, and more likely to be residing with a disabled child or adult. Six percent of
black women in their 50s reported caring for an ill or disabled child; and black women
are more likely to be caring for grandchildren well into their 60s and 70s.

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Informal caregivers report being as healthy as the general population; eight in

ten report having “good or excellent” health. The 17 percent reporting “fair or poor”
health are more likely to be caring for patients posing the greatest responsibility,
who have lower incomes, co-reside with the care recipient, are less educated, and
above the age of 50. Their caregivers are more likely to include spouses or partners.
Similarly, compromised health is experienced by older grandparents with custody
of minor children (Fuller-Thompson and Minkler, 2000) and older caregivers of
disabled adult children.
Finally, 59 percent of informal caregivers were employed either full- or part-time
during the previous year, as were 65 percent of persons caring for two or more dis-
abled or chronically ill persons. In fact, the percentage of women caregivers who are
employed closely resembles the proportion of women in the labor force generally.
Women caregivers are only slightly more likely than other women to be employed
part-time, and male caregivers were no more likely than other men to be working
part-time.
Becoming an informal caregiver is a commonplace life course experience in the
United States, particularly for women. Indeed, most females provide care to rela-
tives or friends at more than one point in their lives. Many provide care for several
care recipients, and over substantial periods of their lives.

A Profile of Informal Caregivers of Disabled Elderly Americans

Of special interest within the caregiver population described earlier are people caring
for older adults sufficiently disabled enough to be eligible for nursing home placement;
these caregivers are at particular risk for health, psychological, and financial stress.
They are one subject of interest in the National Long-Term Care Survey (NLTCS) and
the Informal Caregiver Supplement (added in 1989). Conducted in 1982, 1989, 1994,
1999, and 2004, this survey gathers data from a nationally representative sample of
Medicare beneficiaries aged 65 and above on their functional limitations and receipt
of formal and informal care, providing an in-depth examination of the most common
form of informal caregiving—assistance provided to elderly persons living at home
with significant functional impairments. Formal care is defined as “paid personal
assistance provided to persons with a chronic disability living in the community,”
whereas informal, or family care, is defined as “unpaid personal assistance . . . .”
Rather than search for caregivers, this survey interviews Medicare beneficiaries
who identify their “most” primary caregiver. It then gathers data from the primary
caregivers who are doing the hands-on or supervisory caregiving. It then extrapolates
from the care receiver’s inability to perform, without human or mechanical assistance,
one or more six basic ADLs and nine instrumental activities of daily living (IADLs),
because of chronic illness or disability. ADLs include bathing, dressing, moving around
indoors, transferring from bed to chair, using the toilet, and eating. The nine IADLs
include light housekeeping, meal preparation, grocery shopping, laundry, taking

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medications, managing money, telephoning, outdoor mobility, and transportation. By

focusing exclusively on elderly recipients receiving informal care, the NLTCS provides
reliable and specific information about the subset of family caregivers providing the
most extensive and critically important activities; it also allows identification of trends
in disability and in use of formal and informal care. Unfortunately, the most recent
data available, from the 1999 survey, are only partially analyzed as of this writing.
The 1999 survey identified approximately 3.7 million elders (10.7 percent)
who were receiving 120 million hours of informal care from 7 million Americans
each and every week (ASPE and AOA, 1999). The vast majority of these 7 million
caregivers were assisting older, disabled family members, each with an average of
1.7 caregivers, with each caregiver providing almost 20 hours of unpaid help weekly.
Such assistance was the primary reason why most of these older people with dis-
abilities were able to remain in their homes and communities.
The 1999 National Long-Term care survey also found that the overwhelming
majority of noninstitutionalized older adults who need long-term care—about
91.5 percent of them—were receiving some or all of it from relatives, friends, and
neighbors (Spillman and Black, 2005, p. vii), a decline from 95 percent in the
1994 survey, indicating that more elders are receiving some formal services. About
two-thirds use no formal care at all, relying solely on unpaid help, primarily from
female partners and adult daughters or daughters-in-law. As disability increases at
older ages, elders utilize increasing amounts of informal care, and become more
likely to live with relatives or have a caregiver stay with them. Of all older persons
with three or more ADL limitations, 86 percent reside with others and receive, on
average, 60 hours of informal care per week, supplemented by slightly more than
14 hours of paid assistance (Stone, 2006, p. 406).
Most of these elders have a primary caregiver who provides the bulk of their
care, and secures and coordinates help from “secondary” caregivers, paid or unpaid.
Almost 75 percent of primary caregivers are women, 36 percent adult children,
and 40 percent spouses; their average age is 60, and over two-thirds of them are
unemployed. Two-thirds of the employed caregivers work full time, with few, if
any, other income sources. The latter generally provide fewer weekly hours of assis-
tance to elders, but still average 18 hours of care per week. Two-thirds of them
had experienced conflicts between their employment and their caregiving respon-
sibilities, and had rearranged their work schedules, reduced their work hours, or
taken unpaid leaves of absence (Stone, 2006, p. 407). Many eventually will “retire
early” with reluctance, usually sacrificing potential retirement income and benefits,
including medical insurance, to do so.
Spillman and Black (2005) note that earlier waves of the NLTCS, between
1984 and 1994, had shown a significant decline in the number of informal caregiv-
ers and an increase in the use of formal care by paid workers for these Medicare
beneficiaries. However, in the 1999 survey, the use of any formal care declined from
43 percent in 1994 to 34 percent by 1999, whereas reliance on “informal care only”
had increased significantly, from 57 percent in 1994 to 66 percent by 1999.

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The number and proportion of beneficiaries receiving no formal or informal

help with personal care had also increased from 22 percent in 1994 to 28 percent
by 1999, reflecting lower disability levels among beneficiaries in 1999, as well as
greater use of assistive devices and home adaptations. Reductions in morbidity and
functional decline are positive trends and good news. However, a larger propor-
tion of informal caregivers were caring for elders with higher levels of disability in
1999 than in 1994. The population of caregivers and receivers had aged, with nearly
40 percent of caregiving children assisting parents aged 85 years and above in
1999 (increased from 34 percent in 1994). And 13 percent of caregiving children
were themselves aged 65 years or above (Spillman and Black, 2005).

The Challenges, Burdens, and Rewards

of Informal Caregivers in Aging Families
Contemporary Challenges to Informal Care
As the U.S. population above the age of 65 years grows from 36 million in 2007
(12 percent of the population) to 87 million (more than 20 percent) in 2050
(FIFARS, 2006), community leaders, policy makers, researchers, and especially
long-term care administrators will need to be vigilant regarding the health, psycho-
social, and economic well-being of not only older Americans, but their informal
caregivers and direct care workers as well. This projected growth in the number
and proportion of older adults reflects “societal aging”—a profound demographic
age shift that is occurring in developed countries throughout the world. In the
United States, the first of the postwar birth cohort, the “baby boom” generation
born between 1946 and 1964, began turning 60 years of age in 2006. By 2030, over
71 million boomers will turn 65, an unprecedented increase in the U.S. population
aged between 65 and 85 years. Healthier and less functionally disabled than earlier
generations, many are expected to remain actively engaged in their communities,
possibly providing valuable human resources to meet a vast range of human needs
(Achenbaum, 2005; Morrow-Howell et al., 2001). With the right encouragement,
incentives, and training, they may be the resource to provide a good deal of formal
and informal care.

Longevity, Filial Bonds, and Multigenerational Families

As Americans live longer, linkages within multigenerational families are growing.
Of the Americans above the age of 35 years in 2007, 80 percent are members of
three-generation families, and 16 percent are of four-generation families (Bengtson,
2001; Bengtson et al., 2004). Parents and children today are likely to share five
decades of life, siblings may share eight, and grandparents and grandchildren may
share three or more decades—all relationships characterized by emotional closeness

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(Bengtson et al., 2002). Multigenerational families today are also characterized by

greater geographic distances among members, but moderate face-to-face contact is
facilitated for most by increasing levels of air travel, telephone, and electronic com-
munication. Despite occasional media images to the contrary, strong norms of filial
obligation appear to be able to transcend great distances (Bengtson et al., 2002;
Bengtson, 2001; Navaie-Waliser et al., 2001). Long-distance caregiving issues are
of growing importance, particularly to large, multinational firms, and those that
employ large number of women.

Housing Arrangements
Among other family norms that have changed dramatically since World War II is a
trend at all ages toward living alone at adulthood. Multigenerational households that
were previously common are rare today, except among immigrant and low-income
minority populations. This “preference” for the nuclear family and privacy can be
a mixed blessing for older spousal caregivers who, over time, frequently become iso-
lated, exhausted, and depressed, needing more support, personal contact, and physical
strength to continue giving care. Although older women with increasing dementia or
frailty may prefer to live alone, or cannot afford to move, living alone without someone
“looking after them” can place them at risk of self-neglect, exploitation, or injury.
The percentage of older adults residing with a spouse declines with age, but
with a significant gender bias. Women, who comprise 58 percent of the population
aged 65 years and above (FIFARS, 2004, p. xiv), are much less likely to be married
at older ages than men (41.6 percent versus 72.4 percent). In 2004, of the adults
aged 65–74, 79 percent of men were married, as were only 57 percent of women. By
85 years of age and above, 58 percent of men were married, as were only 15 percent
of women (FIFARS, 2006, p. 8). Because men tend to marry younger women who
tend to outlive them, men are much more likely to live with a wife or partner well
into their ninth and tenth decades, whereas women are much more likely to become
caregivers of partners before they are widowed, and more than twice as likely as
men (39.7 percent versus 18.8 percent) to live alone (FIFARS, 2006, p. 8).
Minority women (Hispanic, Asian, and black) at older ages are more than
twice as likely as white women to be living with their children or other relative(s)
(FIFARS, 2006). For those who live independently, nearly 94 percent have living
relatives (FIFARS, 2004), and two-thirds share their household with at least one fam-
ily member, typically a spouse or partner or child or sibling. The 6 percent without
family ties—particularly unmarried women, elders of color, and those without living
children—receive support and assistance from friends, neighbors, and acquaintances
(Moen et al., 2000). Some simply prefer being alone (Rubinstein, 1986).
In contrast, 80 percent of all older individuals who live alone are women, includ-
ing 41 percent each of older white women and black women, and much smaller pro-
portions of Asian and Hispanic women. Most women living alone have at least one
adult child living sufficiently close to visit them regularly (AOA, 2002). Declining

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health, loss of a caregiver or spouse, desire for companionship, and declining income
most often precipitate a move to an adult child’s home (Wilmouth, 2000) or reloca-
tion to some form of congregate senior housing, assisted living, or nursing home.
For most older Americans, living longer means extended years of active healthy
life followed by, for many, continuing to live with chronic illness or disability at
home in the community, while receiving some assistance from family members with
the tasks of everyday living. Because family and friends provide 80 percent of that
assistance, having a spouse or adult daughter nearby is the factor most often cred-
ited with keeping an older adult safely at home until the end of life. The dilemma
is that gradual fertility declines during the past 35 years have left the younger
generations of families with fewer members available to provide older relatives with
necessary personal care (Hooyman, 2006, p. xxxv).
Families generally engage in reciprocal support and assistance between older
and younger members, with older adults providing support to children and grand-
children as long as they can (Silverstein et al., 2002), and children gradually pro-
viding more significant assistance to elders. Elders provide child care, advice, and
financial assistance to the young, although gradually, caregiving and support flow
from younger generations to elders needing care.
With increased life expectancy, these reciprocal patterns of cross-generational fam-
ily support continue to be preferred, but providing care to two and even three living
generations simultaneously is increasingly infeasible. As adult children with develop-
mental disabilities or mental illnesses live longer, they also need extended care and
“looking after.” Some continue to live with aging parents who eventually will experi-
ence their own declining health. Grandparents caring for grandchildren have been rec-
ognized in the past two decades as a vital resource for community child welfare services
that would be unable to provide sufficient foster care to children whose parents in the
middle generations have been decimated by epidemics of crack cocaine, methamphet-
amines, violence, and HIV/AIDS (Cox, 2000; Gleeson and Hairston, 1999; Minkler
and Roe, 1993; Fuller-Thompson and Minkler, 2000; Minkler et al., 2000). In 2005,
4.5 percent of all American children were living with neither parent, including 3.4
percent of white children, 5.1 percent of Hispanic children, and 9.8 percent of black
children (U.S. Census, 2006); the majority of these children reside with other relatives.
All these human needs converge on the complex terrain of family and informal care.
While it is estimated that by 2020 one-third of Americans will be at least aged
50 years, this “population aging” is occurring unevenly across the states, shaped by
local fertility and mortality levels as well as the number of older and younger people
who migrate to and from the state. In 2002, Florida had the highest proportion of
persons aged 65 and above (17 percent), with Pennsylvania and West Virginia close
behind, each with over 15 percent (FIFARS, 2004). Florida is expected to hold that
rank in 2030, with over 27 percent of their population aged 65 and above; Maine,
Wyoming and New Mexico are expected to reach 26 percent (U.S. Census Bureau,
2005). Population aging has implications for the quality of life to be enjoyed by all
generations in the future.

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The Heterogeneity of American Families

Powerful societal forces have precipitated these rapidly increasing variations among
American families and household configurations. Increasing pluralism, ethnic and
cultural diversity, growing economic uncertainties and disparities, the normaliza-
tion of divorce, reconstituted and blended families, multigenerational households,
and acceptance of alternative lifestyles have all challenged traditional assumptions
about the capacity of families to “care for their own.” Although greater numbers of
people of all ages are living alone, there are more single parents raising children on
their own, teen parents living with their parents, and unmarried individuals living
together in various nontraditional family configurations, such as grandparents rais-
ing children, gay and lesbian couples and families, and adults of all identities adopt-
ing children and providing adult foster care. Increasingly, a family must be defined
broadly to capture reality, by the strengths of its interpersonal commitments and
the quality of members’ relationships, rather than by blood ties, codependence, or
coresidence. Having proximate, familiar, and available assistance, even just one
dependable person, either sharing the household or residing nearby, is the criti-
cal ingredient of social support for most elders unable to navigate alone beyond
their homes. The challenge is to facilitate these nurturing and supportive caregivers
appropriately through the long-term care system.

Caregiver Stress and Burden

Caring for the frailest elders with multiple functional limitations, including demen-
tia, can be the most difficult work people do. It can take a devastating toll on family
caregivers, particularly aging partners. Faced with regularly managing a loved one’s
problem behaviors, caregivers frequently feel excessively burdened and develop sig-
nificant depression (Greenberg et al., 2006, p. 343). Women experience more dif-
ficulties in caregiving roles than do men, with effects typically changing gradually,
or “unfolding” throughout the course of a caregiving career. It is well documented
that family caregivers of elders with cognitive impairments and behavior problems
develop poorer mental and physical health than their age peers, and typically have
the poorest caregiver outcomes (Baumgarten et al., 1992; Schultz and Williamson,
1991). Seltzer (2006) notes that “with fully 12.1 million Americans presenting such
symptoms and needing such care long-term, caregiving is a major public health
issue” (p. 337).
Unrelieved caregiver burden—whether the result of exhaustion, financial, or
other related strains—contributes substantially to institutionalization (Feinberg
et al., 2005, p. 1–2). Even if that is avoided, the financial, physical, or emotional
difficulties precipitated by continuous caregiving can greatly exacerbate pressures
on local healthcare systems and social services, as caregivers seek medical and psy-
chological help for health conditions arising from isolation, poor nutrition, or inju-
ries. If financial mismanagement, poverty, self-neglect, or elder abuse is suspected,

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institutionalization may become inevitable anyway, ultimately forcing public outlays

for nursing home costs (U.S. Department of Health and Human Services, 2002).
Empirical research demonstrates that stress caused by the caregiving experi-
ence can have fundamentally adverse effects on the psychological, social, and physi-
cal well-being of family caregivers (Bookwala et al., 2000; McKinlay et al., 1995;
Toseland et al., 1990). The sources of this stress have been identified as: the elder’s
challenging behavior and the caregiver’s inability to manage it, the physical strain
of caregiving work, its financial burden, difficult shared housing arrangements,
caregiver isolation, conflicts among family members, and the specific support needs
of older parents and grandparents caring for young and adult children. These are
each briefly discussed in the following sections.

Alzheimer’s Disease and Dementias

Caregivers of older adults suffering from significant dementia have specific support
needs at different points in their “caring careers.” At the time of the first diagnosis,
families especially need help in planning for future care needs, locating services
and public benefits, and preparing for care. Caregivers as well as elders with early
dementia can benefit from education and assistance in updating a will, power of
attorney documents, healthcare proxy, and advance directives. Most caregivers will
also benefit from a comprehensive biopsychosocial and environmental assessment,
and from individualized assistance in developing a plan of care (Adams, 2006).
Family tensions may rekindle long-standing conflicts. Frequently, the whole
family system needs assistance in preparing to make decisions about the future,
to solve problems, to resolve conflicts, and settle differences of opinion about care
options and roles (Toseland et al., 1995). It is common for individual family mem-
bers and the entire family system to struggle with emotional adjustment as dementia
symptoms progress; health professionals must recognize that, for family members,
understanding, accepting, and coming to terms with the situation is a long and
slow process. Spousal caregivers of people with early-stage Alzheimer’s disease, and
often the patients themselves, can benefit greatly from psychoeducational support
groups at this point (Cummings, 1999; LoboPrabhu et al., 2005).

Physical Work
Providing personal care for disabled persons requires physical strength and fitness,
knowledge, and skill to avoid injuring oneself. Recently, concern has risen in the
media and among healthcare professionals about the decline in physical activity
and manual labor among Americans, and the resultant increase in overweight and
obesity in the population. This problem has special relevance for competent perfor-
mance of the basic personal care tasks required of informal, as well as formal, care-
givers who are routinely lifting, transferring, and toileting disabled adults. Because
of the high risk of disabling back strains and injuries, especially in the course of

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caring for heavy patients (Eaton, 2003), nursing and nursing assistant are among
the most dangerous occupations (comparable to trucking, mining, and agriculture).
Labor organizations have lobbied to restrict nurses’ obligations to perform exces-
sively strenuous, dangerous work and to require that mechanical assistance equip-
ment be provided when appropriate.
Ironically, many family caregivers simply do such work, all the time, without
insurance against occupational injury, or health insurance, and often without a
salary. Indeed, government-funded programs regularly off-load certain duties onto
family caregivers simply because it is too difficult and costly for formal agencies to
schedule them or do them daily or at inconvenient times (e.g., administration of
medications and toileting).
Although female spouses and partners provide the bulk of personal, heavy care,
they are usually older themselves, lacking the physical strength to lift, pivot, and
transfer “dead” weight. Male caregivers—husbands, partners, and sons—often face
social mores discouraging them from what are seen as female gender roles; men
often lack the personal experience, know-how, and comfort in performing certain
types of personal care as well (Kramer, 2000; Kramer and Thompson, 2002). Often
capable of lifting a loved one into and out of bed and dressing or bathing them,
most men are not prepared to do these tasks on a daily basis. Adult sons and daugh-
ters, also unaccustomed to providing such care, often feel insecure about assisting
a parent of the opposite gender. Adult children may also feel stressed and overex-
tended trying to meet their own personal, family, or employment obligations and
simultaneously caring for their parents.

Economic Imperatives and Employment Dilemmas

Persons who resign from employment to assume domestic caregiving duties usually
lose more than their incomes. They often sacrifice health insurance, Social Security,
other deferred retirement benefits, social contacts, and satisfying work that affirm
one’s identity and worth. For many, especially older workers, a temporary withdrawal
from employment becomes permanent as they lose touch with professional skills and
their knowledge becomes obsolete. People who “only” reduce their work hours (which
rarely happens) begin making smaller pension and Social Security contributions, and
typically lose their health insurance and other benefits. Now they lack insurance
against an injury that could result in their own disability or unemployability.
Reluctance to work full time is often seen by managers as a lack of commit-
ment, leading to low—or no—annual wage increases or promotions. Later in life,
these partially employed caregivers suffer from reduced Social Security benefit levels.
Without sufficient contributions (40 quarters of coverage in “covered employment”),
some family caregivers are ineligible for any Social Security protection, except
perhaps the smaller, means-tested Supplemental Security Income (SSI) benefit.
In 2006, the means-tested SSI benefit amounted to only $603 per month for a
person living alone and $402 if residing with others.

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Labor force participation rates for older women have increased significantly since
the mid-1980s, and for older men since the mid-1990s. Currently, 34 percent of men
and 24 percent of women aged 65–69 years are employed. Similar growth in labor
force participation occurred among women aged 62–64 years, reaching 40 percent
in 2005. Even people above the age of 70 years are employed more; their employment
rate has risen markedly for well over a decade to 14 percent of men and 7 percent of
women (FIFARS, 2006). This steady increase in older women’s workforce participa-
tion rate over the last four decades, and the more recent rise for that of older men, have
resulted in fewer people available for domestic duties (FIFARS, 2006, pp. 18–19).

Caregiver Isolation
Continuous obligation in the home can quickly isolate and trap caregivers, partic-
ularly elderly spouses, leading to relinquishment of their own interests, rights, and
health. Striking inequalities of resources and health status already exist between the
genders, socio-income levels, and racial and ethnic groups, all of which may be exacer-
bated by particular types of informal caregiver situations (FIFARS, 2004). These may
include caregivers without transportation resources or social supports, and who face
the unique challenges of loved ones with severe mental and dementing illnesses.

Spousal or Partner Care

Aged spouses in long-term caregiving situations certainly experience particular
strains. As Zarit and Zarit (1992) noted, “There is no uni-dimensional answer to
the question of what helps caregivers sustain the marital bond, but clearly attention
to caregiver frustration by a team of health care professionals offering consistent
support facilitates ongoing commitment to caregiving.” The resources available to a
spousal caregiver appear to be extremely important and stronger than any particular
caregiver characteristic in maintaining optimal mental health (Moritz et al., 1992).
Common predictors of spouse caregivers’ emotional strain were recently iden-
tified by Kang (2006) through examination of the 1999 NLTC national survey
data. A key source is the type and extent of a care receiver’s disruptive behaviors.
Caregivers’ perceptions of feeling overloaded, experiencing limitations on his or her
life, and awareness of family disagreements can also contribute to emotional strain.
Other widely identified sources of emotional strain are inadequate personal coping
strategies (Kang, 2006), depression (George et al., 1989; George and Gwyther,
1986), and risk of elder abuse (Paveza et al., 1992).

Parent Care by Adult Children

Among adult children providing care to parents, stress can arise from conflicts
likely to represent old, unresolved sibling issues. The immediate conflicts can be

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 Informal Caregivers and Caregiving 䡲 119

about the equitable distribution of caregiving tasks or differing perceptions of the

needs of a frail parent (Semple, 1992). Such family conflicts are associated with
increased risk of caregiver depression. Caregivers may also experience other second-
ary strains such as role captivity and role overload. The full impact of caregiving
cannot be understood without taking into account the proliferation of other life
stressors.

Aging Adults Caring for Disabled Adult Children

Aging family members provide a significant service to society by sustaining vul-
nerable members, but these contributions do not come without cost. Aging par-
ents caring for adult children with cognitive and developmental disabilities are
at particular risk of mental health problems, physical illness, and social isolation
(Greenberg et al., 2006, pp. 339–354). Such parents have often lived quietly for
decades with the companionship of their child; making alternative care arrange-
ments for contingencies, including one’s own death, can be particularly stressful.
Comparing mothers of grown children with developmental disabilities with
those of mentally ill adult children reveals both similarities and differences. Accord-
ing to Greenberg et al. (1993) and Seltzer (1995), mothers of the latter group show a
distinct “wear and tear” pattern, being significantly more stressed, with higher lev-
els of caregiver burden, depression, and pessimism about the future. They typically
feel more distanced from the child than do similarly aged mothers of children with
developmental disabilities. The researchers also note that caring for someone with
Alzheimer’s disease is substantially similar to caring for persons with serious and
persistent mental illness. With both illnesses, there is a high degree of uncertainty
regarding the illness trajectory, and unpredictable, sometimes cyclical symptoms.
Needing to be constantly vigilant, most caregivers will eventually develop serious
depression and declining health. The provision of respite care, social support, and
assistance may alleviate some of these problems. Many research questions remain
about how to mobilize external supports in strategic ways that truly maintain the
perceived health of these critically important caregivers.

Caregiver Assessments and Instruments

Using appropriate, standardized assessments of caregiver burden is essential for
healthcare practitioners, at a minimum to initiate early interventions and to prevent
burnout. Assessment of caregiver burden is conceptualized as having three compo-
nents. The first deals with impairments of the recipient, including his or her ADL
deficits, sociability, disruptive behavior, and mental status. Although severity of
symptoms and impairment alone are inadequate predictors of caregiver stress, they
do yield useful information. Second, the tasks corresponding to the older adult’s
needs are rated by the caregiver as being “difficult, tiring, or upsetting.” Dealing

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with bowel or bladder incontinence, for example, would probably be more upset-
ting, difficult, or tiring than assisting with meals. Third, the impact of the behav-
iors and the associated caregiver tasks are assessed relative to the caregiver’s overall
life (Gallo et al., 2000).
Administration of short screening instruments, such as the Zarit Burden Inter-
view, can open the topic of caregiver stress for discussion. Brief depression screening
instruments are useful because the prevalence of depression in caregivers is likely
to be very high, and the perceived burden of care may be greater when it is present.
Because perceived burden is also linked with the caregiver’s sense of his or her own
coping capabilities, it is useful to explore the mechanisms he or she depends on for
handling stress and help him or her identify his or her own coping style. Pearlin
and Scaff (1995) describe a variety of useful techniques and instruments for gather-
ing information about coping capabilities.

The Satisfactions and Rewards of Giving Informal Care

The research literature today is rapidly expanding with “discoveries” of the rewards
and satisfactions inherent in providing care for an older loved one. When asked how
they felt about caregiving, even when greatly stressed, many caregivers expressed
deep feelings of satisfaction, pride, and accomplishment. Some have observed that
giving care is one of the few ways family members have today to demonstrate love
and affection for one another in a significant way.
Adhering to ideals such as “filial piety” and “satisfying obligations,” most
healthy caregivers of older adults consider their work to be a privilege, a “giving
back” of care that was previously given to them—genuine reciprocity. Rewards
include satisfaction or pleasure in fulfilling the caregiving role, feelings of personal
growth, a renewed sense of purpose in life, closer relationships with family and
friends, political advocacy, and greater insight into the struggles of persons with
disabilities (Harris, 2002; Kramer, 1997; Lawton et al., 1991).
In the course of providing care at home, loved ones may find room for inti-
macy and openness that rarely occurs in medical settings. Facilitated by focused
attention to only one person, discussion of long past incidents may be reopened
honestly, in the supportive context of gentle touch, quiet, and peace (Lustbader,
1991). Greenberg et al. (2006, p. 340) note that estimates of the percentage of care-
givers who experience rewards from caregiving have varied widely, but range from
approximately 50 to 90 percent of the caregivers sampled.
There are practical rewards to giving care as well. Many women who leave full-
time employment (either temporarily or permanently) gain freedom to do mean-
ingful things that they enjoy, may have postponed for years, or discover for the
first time. A slower pace of daily life, having personal control over one’s schedule,
and time for intimate conversation, all are real, meaningful satisfactions for many
caregivers.

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Lustbader (1991) observes that caregiving experiences—feeling the wrenching

helplessness of a loved one’s dependence—are essential requisites that can prepare
us for our own lives later. We need them to understand our own true humanness.
“Prior to getting sick or reaching advanced age, we can choose to grant ourselves
a close acquaintance with physical suffering and its alleviation. We can draw near
to the sickbeds of friends and relatives and involve ourselves in the experience of
helplessness, hoping that this foreknowledge will help us to age well” (p. 170).
An important support for many caregivers is spirituality and believing in a
higher power as a means of “letting go” of feelings of frustration. Spirituality is a
resource a number of caregivers credit with helping them handle multiple physi-
cal, emotional, and social demands without feeling burdened. Researchers have
begun to explore the role of spirituality in helping caregivers, as well as frail older
adults, cope on a daily basis. Nelson-Becker et al. (2007) identify four preliminary
questions that clinicians can raise with caregivers to open discussion on spiritual-
ity that may be important to them. They also provide comprehensive guidelines
for dealing with spiritual issues in professional practice, or deciding to refer the
caregiver to pastoral care resources. Some caregivers use religion or spirituality to
help them resolve ethical dilemmas. Spiritual assessment is another new tool under
development that may be helpful to clinicians and caregivers in identifying their
unresolved concerns and providing them with the language for discussing them
(Nelson-Becker et al., 2007).

Trends and Policy Innovations in Support of Family Caregivers

Policy Recognition of Caregivers
Research on informal caregivers grew dramatically in the 1980s and 1990s, as did
societal awareness of the importance and value of family caregivers and their needs.
Bits of this recognition occasionally penetrated political arenas in Congress and
state capitols. For example, the Family and Medical Leave Act, considered ground-
breaking when it was introduced in Congress in the 1980s, languished there for
years, although all it granted was a legal right for employees in very large corpora-
tions to take up to 12 weeks of unpaid leave from work to care for a disabled fam-
ily member or a new baby. Finally, in 1992, a new Congress passed the bill again,
making it the first legislation President Bill Clinton signed in 1992, immediately
after taking office.
Eight years later, Clinton signed the Family Caregiver Support Act of 2000,
enacted as an Amendment to the Older Americans Act. This law, which some
view as the “most significant legislative amendment to the Older Americans Act in
30 years” (Hudson, 2006, p. 493), established funding within the federal Admin-
istration on Aging (AOA) for a system of caregiver resource centers throughout the
aging network in each state. These centers can provide educational and program
materials, referral services, and comprehensive assessments for caregivers to identify

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burden, stress, and unmet needs of assistance at home. They can also mobilize
direct services, including limited amounts of respite care. Although this is a modest
initiative overall, it is a start.

Supportive Interventions for Informal Caregivers

Finding a singular purpose for many social programs is often difficult to discern.
Are services provided to help family caregivers increase and sustain their efforts,
improve the quality of their care, or ensure that they are not unduly burdened by
their caring work? In the United States, program goals, even when well defined, are
frequently undermined because they are strictly means-tested. Services of the Older
Americans Act, however, are supposedly universal, but they are especially limited
by AOA’s very small budget. Increasingly, income-based user copayments are being
requested of participants to keep some programs viable.
Kane et al. (1998, p. 151) describe three main types of in-home services, both
government and privately funded, that are aimed at supporting family caregivers.
The first consists of direct services for caregivers, such as counseling, psychother-
apy, training programs, and support groups, aimed at helping them adapt and cope
with the demands on them. The second consists of respite programs offering care-
givers some relief by providing small amounts of in-home care, day care, or periodic
institutional care for the disabled person. A third type consists of payments directly
to caregivers to provide partial monetary compensation for their work. Kane et al.
(1998, p. 151) note that the purpose of these caregiver programs is often vague, even
to the policymakers who adopt them (they result from compromise, after all), and
such programs have not been well evaluated.
Programs for caregivers vary greatly and may address a variety of issues. Support
and educational groups are a particularly common intervention highly valued by
those who attend regularly. They tend to be most helpful when composed of care-
givers assisting people with similar conditions. Some caregivers find support groups
impractical, however, preferring to use their precious “free time” to do errands or
to get away from their situation.
Among persons above the age of 65 years, caregivers have higher levels of
depression and other health problems than noncaregivers. Consequently, some
programs provide health checkups and treatment for physical and mental health
problems. Others provide periodic screening and case management to support
caregivers.
Training programs for caregivers tend to be the most effective when they are
available “on-demand,” offering the right training exactly when a caregiver needs
it. For some, the right time is at the beginning stages of a condition, as part of
the diagnosis; for others, it is at critical junctures in the progression of an illness
(Kane et al., 1998). For caregivers, training provided by speech, occupational, and
physical therapists and nurses is particularly appreciated because such professionals
can offer reassurance in the course of providing very specific instruction. In all

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cases, training effectiveness can only be measured when its goals are clear and care-
givers perceive that it meets their individual needs.

New Programs of Support for Family Caregiving

The U.S. Senate Special Commission on Long-Term Care (the “Pepper Commis-
sion”) in the late 1980s is credited with originating the idea of “consumer-directed
care” or “self-direction” in personal care or “personal assistance services.” Th is con-
cept articulated, for the first time, the commonalities among different populations
of persons with disabilities needing personal assistance or community-based living
arrangements to prevent institutionalization. Various terminologies emerged rap-
idly in the 1990s after consumer-directed care was detailed in President Clinton’s
massive Health Security Act of 1993 to “signify a genuine desire to put consumers
in charge of their long-term care services” (Kane et al., 1998, p. 131).
Indeed, consumer control of care, or partnership between healthcare providers
and patients, has been embraced actively over the last decade by different enti-
ties, including parents, advocates for persons with developmental disabilities, the
Independent Living Movement of persons with physical disabilities, persons with
HIV/AIDS, and the mental health club house and recovery movements.
In the mid-1990s, the federal agencies within the Department of Health
and Human Services (DHHS), in collaboration with the Robert Wood Johnson
Foundation, funded various demonstration projects (Independent Choices),
which tested various innovations in different states. In 1997, they launched a
three-state demonstration, the National Demonstration of Cash and Counsel-
ing. With nearly 100 waivers from various federal agencies, Arkansas, Florida,
and New Jersey conducted randomized trials, allowing consumers the option
of using traditional agency-provided personal care, or receiving a “care budget”
(based on equivalent service costs) from which they could hire and manage their
own personal care workers. Clients willing to try Cash and Counseling were
randomly assigned to the experimental consumer choice group or the traditional
service control group. By 2004, the data analysis indicated significantly better
results in the consumer choice model. Cash and Counseling became a regular
option in all the three demonstration states, and DHHS expanded the trial to
other states.
Momentum toward consumer-directed care was already building in 1999 when
the U.S. Supreme Court decided the groundbreaking case of Olmstead v. LC, 527
U.S. 581 (1999). To assure that people with disabilities have choices about where
they will be served, and that they may live “in the least restrictive setting” pos-
sible, this ruling directed the states to develop more community-based programs
for disabled persons more aggressively. To implement the Olmstead decision, the
Centers for Medicare and Medicaid Services (CMS) have continued to encourage
innovations in the states.

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Conceptual development and systems thinking about long-term care have been
steadily chipping away at a putative oversupply of institutional long-term care beds
in the states since 1981, when the Reagan administration initiated the first in-home
and community-based services (HCBS) waivers, allowing Medicaid beneficiaries who
qualified for nursing home placement to be served at home with personal care and other
services. However, the total package had to cost the state less than its average nursing
home placement. The assumption was—and still is—that expensive nursing home
beds could be replaced in most states by less costly and possibly more effective HCBS.
The key to a state systems’ management has been identified as finding a “proper bal-
ance” between in-home care and service-enhanced housing, specialty-built residences
and nursing facilities within the states’ long-term care systems. At the national level,
policy research has focused on the importance of the states’ allocation of resources
across different care sectors and their performance (and outcomes). Greater use of fed-
eral waivers has allowed states to gradually fund more Medicaid in-home services and
community-based care for disabled and frail elderly, and persons with developmental,
physical, and cognitive disabilities (Stone, 2006, p. 402; Kane et al., 1998).
In the 1990s, several states (e.g., Oregon, Washington, Arkansas, and Maine)
took aggressive steps toward rebalancing their long-term care systems. Oregon,
using a new model of small “service-enhanced relative foster care homes,” located
in large, existing homes in neighborhoods, quickly and dramatically changed the
balance of its LTC resources. By 1995, Oregon was serving 47 percent of its pub-
licly funded long-term care clients with in-home services, 25 percent in new relative
foster homes, and only 28 percent of the total in nursing homes. By 2005, Oregon
and New Mexico were spending over two-thirds of their Medicaid LTC dollars
on HCBS, whereas Washington, DC, and Mississippi were spending less than
20 percent of their Medical LTC dollars on HCBS (AARP, 2006).
Movement toward HCBS, and later consumer-directed care, was stimulated
primarily by advocates of the disability rights movement, beginning in 1981 with
the Reagan administration’s initiatives to consolidate various health programs
into block grants to the states, including the first Title XIX waivers to states under
Section 2176. States had incentives to use these Medicaid waiver opportunities
to consolidate programs for various constituencies. Later, the Olmstead decision
pushed some states into deinstitutionalizing even more people with disabilities.
CMS has made the Medicaid waiver process increasingly flexible, investing millions
of dollars in Systems Change Grants since 2000 to assist states in these rebalancing
efforts. Many states have used their own general revenues as well to strengthen their
HCBS infrastructure (Stone, 2006; Kane et al., 1998).
Since the election of George W. Bush in 2000, CMS has continued granting
waivers to states, as long as they control demand through the use of waiting lists,
enrollment caps, service limits, and spending caps. Periodically, the White House
proposes to convert Medicaid into “block grants” to the states. The Deficit Reduc-
tion Act of 2005 (discussed in Chapter 19) included additional spending for HCBS
for the elderly and disabled, allowing states for the first time to offer these services

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as an optional benefit instead of requiring a waiver. However, unlike other optional

services (e.g., rehabilitation or personal care), states are now allowed to cap the
number of people eligible for the services. The Congressional Budget Office (CBO)
estimated that this provision would extend additional services to about 120,000
enrollees (KCMU, 2006, p. 6).
Monitoring projects, many sponsored by advocacy organizations with the sup-
port of private foundations, have emerged to help “take the pulse” of such devel-
opments in the 50 states. The American Association of Retired Persons (AARP),
for example, has published biennial reports since 1992, providing comprehensive,
comparable state and national level data on 85 reliable performance indicators. The
goal is to weigh each of the 50 states’ (plus the District of Columbia) long-term care
system “performance” relative to maintaining a “healthy balance between insti-
tutional and community care programs.” These monitoring studies are a valuable
resource for policymakers, researchers, consumer advocates, and others making
policy decisions about the financing and delivery of long-term care, and the extant
support for precious family caregivers (AARP, 2004).

The Future: Strengthened Alliances among

Family Caregivers, Older Adults, Paid Care
Workers, and Our Future Selves
The state of family care in the United States today seems healthy enough, until we real-
ize how very fragile is the health of individual caregivers providing care for the most
disabled and behaviorally difficult older adults. And prospects for increases in the
availability of family and friends to fill these roles in the future seem remote indeed.
What can we expect to change in the coming decades? Older Americans will
be healthier and living slightly longer than they do today, experience fewer func-
tional disabilities, and require somewhat less assistance. An ever-larger proportion
of younger seniors probably will be employed, continuing the trend among males,
reversed in the mid-1990s, toward later retirement. In contrast, elders will still have
a significant number of years in retirement, allowing at least some time for engag-
ing in community activities, offering advice, and helping their neighbors and loved
ones when needed.
Americans may also discover ways to provide for their individual selves even more
effectively than they do now, by expanding the range of tools and equipment to
assist older people as well as caregivers. These might include personal communica-
tions technologies, remote television monitoring of vital signs, assistive devices, and
automatic bathing machines. Can long-distance virtual caregiving be far behind?
Not exactly. Although technology can be helpful, it is not what most of us actu-
ally seek when sick, confused, or anxious, nor what solitary caregivers reach for if
assaulted by a confused partner or parent. Caregiving is a human resource, people
behaving humanely toward one another. If we can agree that family care is essentially

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about relationships, emotional connections, and social support, as well as meeting

daily needs, we will simply need to generate more of it. Human caring is not so much
a financial problem as it is one requiring creative ideas, partnerships, and social allies.
Can we really stretch the supply of caregivers, considering what it takes?
Most likely we can, as the National Cash and Counseling project has demon-
strated. Certainly, caregivers who do not have to maintain full-time employment
elsewhere can provide more and better care for their loved ones. One approach is
to extend that option to elders on Medicaid—dropping the “unpaid” prefi x from
informal—and family caregivers by simply compensating them. This is already pos-
sible in the 26 states covering personal care under Medicaid, in states with HCBS
waivers, and potentially through the 2005 Deficit Reduction Act that expands
community care if states can control enrollment of beneficiaries and spending.
Such financial assistance may also allow families to purchase equipment, and hire
extra human hands or skilled assistance as needed (AARP, 2006).
Being a long-term care “giver” means commitment and a sense of obligation to
another person who needs personal care. These feelings mainly derive from long-
standing relationships and generally have developed over time out of convenience or
affection. They reflect an investment, or a sense of “giving back” for services previ-
ously received. The provision of care by family, friends, and neighbors will remain,
like it or not, the most basic long-term care services we have. People do not want
to relinquish the care of a loved one, but many need, desire—and deserve—more
supports than they have at present. As a group, caregivers already endure too many
burdens for their own health and well-being.
One way of acknowledging the caregivers’ vital role in the LTC system could
be to grant them legally stated rights and protections. Indeed, there are many ver-
sions of this concept posted on dozens of caregiver support group Web sites. Most
of these Caregiver Bills of Rights include statements aimed directly at the isolated,
burdened female caregiver, advising her to “believe in yourself,” “ask for help,” and
“speak up,” and asserting that “you have a right to take a break,” all cast in terms of
her “obligation to take care of herself.”
But is the problem really with caregivers themselves? Another way to frame
their dilemma is to address the larger issues of American society itself, the routines
and policies we live by that are creating our “shortage” of caregivers. These routines
and policies must change if we are to generate additional caregiving resources. In
turn, this requires an honest acknowledgment that care of frail and disabled people
occurs in private homes, among fragile people—the care receiver, the informal fam-
ily caregiver, and an outside caregiver who is trained and paid—who must all care
about and respect each other (Keigher, 1999). There will be an increasing demand
for, and willingness by families, insurance companies, and government to pay for
more informal and formal home care workers. As such, we must ensure that dis-
abled persons have choices and that caregivers, both paid and unpaid, have rights of
their own, including access to livable wages and affordable medical care.

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 Informal Caregivers and Caregiving 䡲 127

The most obvious step in this direction is to assure that all three of these frag-
ile, dedicated partners—the care receiver, informal family caregiver, and care
worker—are rightfully entitled to injury protection, healthcare, and long-term care
services for themselves (Keigher, 2000). Efforts to make professional nursing safer
should extend to personal care work in both homes and communities. State-of-the-
art, individualized training is needed so that workers and family members can both
learn to properly lift, transfer, and position patients. Home assessments can help
families realistically measure their needs for space adaptation, lift equipment, and
alternatives to assist elders themselves, as well as those caring for them. Communi-
ties need to be retrofitted for sustainability, making it easier for citizens to stay fit,
exercise, walk, and access nutritious food, promoting “mixed neighborhoods” of
all ages and incomes, sustaining the availability of potential caregiving friends for
older residents, who may remain valued neighborhood assets.
The second need is a “no-brainer”: Everyone must be entitled to healthcare as a
right. Today, an appallingly high proportion of nursing assistants, home care work-
ers, and family caregivers are without health insurance—the very people likely to
be injured, and when ill, likely to jeopardize a fragile older patient and, in turn, the
family caregiver. We need to implore all of these fragile stakeholders to be as consci-
entious as possible about maintaining their health and assure that care is available
to them, because others depend on them so much.
The third need is long-term care now for today’s disabled Americans of all ages,
and in future for all of us. This is the provision we all will be fortunate to have at
some later date. Perhaps family and home care workers should be allowed to “earn”
home care credits toward their own care in the future, by providing care today. Like
Social Security itself, only an intergenerational compact secured by the government
could assure this.
Our country could greatly strengthen the fragile caregiving arrangements in
the homes of millions of Americans by making a commitment to healthcare for all.
That is the first step, and it is high time that we took it.

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 Chapter 8

Trends and Challenges in

Building a Twenty-First
Century Long-Term
Care Workforce

Edward Alan Miller and Vincent Mor

Contents
Who Provides Formal Long-Term Care? ..................................................134
Are Staffing Levels Sufficient to Ensure Quality? .....................................136
What Does the Future Hold for Long-Term Care Staffing? .....................139
Why Is There Difficulty in Recruiting and Retaining Staff ? ....................140
What Strategies Might Promote Greater Recruitment
and Retention? .........................................................................................142
Work-Oriented Redesign.....................................................................142
Wages and Benefits..............................................................................143
Training, Career Ladders, Loan Forgiveness, and Scholarships ...........144
Training..........................................................................................144
Career Ladders................................................................................146
Online Training .............................................................................148
Loan Forgiveness and Scholarships .................................................149

133

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 134 䡲 Handbook of Long-Term Care Administration and Policy

What Are the Roles of Unions in Long-Term Care? .................................150

Conclusion............................................................................................... 151
References ................................................................................................ 151

I began my career in long-term care as a dishwasher, later becoming a

nursing assistant for seven years, followed by nearly seven more years as
a licensed nursing home administrator. I grew up in the poultry capi-
tal of America—southwest Missouri—where most of my friends ended
up working on a production line. I found myself at a local nursing
home washing dishes and being made fun of by my chicken processing
friends for working at the “old folk’s home.” At first, I have to admit
that I agreed with them. I thought it was more prestigious to work at
the chicken plant and was very upset that my mother forced me to work
at the nursing home.

All of us here know it takes a special person to be a good CNA and I

knew that there was nothing special about me. I reluctantly became a
nurse assistant and learned a valuable lesson—I am special. . . .
Lori Porter
National Association of Geriatric Nursing Assistants, 2005

A well-trained, stable workforce—with well-trained professionals and paraprofession-

als such as certified nurse assistants, home health aides, personal assistants, licensed
practical nurses, registered nurses, nurse supervisors, physicians, social workers, phar-
macists, administrators, and therapists specializing in care for the chronically ill and
disabled—is a necessary prerequisite for quality long-term care. But for every Lori
Porter, who enthusiastically embraces a rewarding career in long-term care, there
are countless others who lack the necessary incentives and opportunities to do so.
Although this is especially true of lesser-skilled workers, as the combination of low
wages, insufficient benefits, inadequate training, heavy workloads, and associated
stigma conspires to make recruitment and retention a challenge; it is also true of
nurses, physicians, and others who prescribe services and supervise direct-care staff.
Promoting better compensation, career advancement, and improved work environ-
ments for caregivers at all levels is the major challenge facing development of an
adequate twenty-first century long-term care workforce in the United States.

Who Provides Formal Long-Term Care?

According to the U.S. Bureau of Labor Statistics (USBLS), there were 3.85 million
individuals employed in long-term care in 2003, 57 percent of whom delivered direct
care, including 545,690 registered nurses (RNs) and licensed practical nurses (LPNs),

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 Building a Twenty-First Century Long-Term Care Workforce 䡲 135

and 1.65 million nurse aides, home health aides, and personal care workers (American
Health Care Association, 2004). Compared to the workforce in general, nurse aides
working in long-term care (nursing homes, home health) are more likely to be female
(90.9 percent, 89.2 percent), nonwhite (43.3, 51.4), unmarried (60.6, 56.4), have a
high school education or less (72.6, 62.1), and have children at home (56.3, 51.1).
Nearly 50 percent have incomes below 200 percent of the federal poverty level.
Approximately half are between the ages of 25 and 44 years (United States General
Accounting Office, 2001). On average, home care aides tend to be older than nursing
homes aides (46.2 versus 38.0). Compared to nursing home aides, home care aides are
also more likely to be Hispanic or Latino (15.9 versus 7.8 percent) and to be foreign-
born or non-U.S. citizens (23.7 versus 13.8 percent).
The USBLS estimates that in 2003 there were 170,880 RNs and LPNs and
567,150 paraprofessional staff, including 255,370 home health aides and 269,860
personal and home care aides, employed in home-based service (American Health
Care Association, 2004). Because a significant proportion of home-based aides
are hired privately, however, USBLS estimates likely underestimate the number
of home care workers (Stone, 2004). This explains, in part, why one recently pub-
lished study using data from the 2000 Census and including workers employed
by both private households and home care agencies, resulted in a value, 788,149,
significantly higher than those previously published (Montgomery et al., 2005).
Regardless of the exact number, however, the demand for home care workers has
grown in light of consumer preferences for increased public funding for home-
and-community based services (HCBS) and socioeconomic and demographic
trends that favor a more consumer-driven market (Wright, 2005). At an estimated
growth rate of 56 percent, the USBLS (2005) projects that, between 2004 and
2014, home health aides will be the fastest growing U.S. occupation, with personal
and home care aides, at 41 percent, being the fourth fastest. This is in contrast to
registered nurses and nursing aides, orderlies, or attendants, who are expected to
grow by 29.4 and 22.3 percent, respectively, during the same time period.
In contrast to home care, more comprehensive data exists on staffing in nursing
homes, where 80–90 percent of hands-on care is provided by nurse aides. Although
analysis of data from the Online Survey, Certification, and Reporting (OSCAR)
system indicates that the number of RNs and LPNs working in nursing homes
remained steady at about 100,000 and 200,000 full-time equivalent employees
(FTEs), respectively, between 1992 and 2004, the number of certified nurse
assistants (CNAs) declined from 700,000 to 600,000 FTEs. This is in contrast to
the number of residents, which increased from 1.28 to 1.63 million between 1977
and 1999, and the number of beds per facility, which increased from 79 to 105
during the same time period (Decker, 2005). This growth in utilization has been
accompanied by greater acuity among residents, with the proportion of residents
aged 85 and above increasing from 34.8 to 46.5 percent between 1977 and 1999,
and the proportion able to independently perform basic life activities (eating, walk-
ing, dressing, and bathing) declining during these years (from 66.8 to 52.8, 32.9

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 136 䡲 Handbook of Long-Term Care Administration and Policy

to 21.1, 29.6 to 12.9, and 13.0 to 5.6 percent, respectively) (Decker, 2005). Thus, as
the number of CNAs has declined, workloads and the social and medical complex-
ity of residents cared for have grown significantly.

Are Staffing Levels Sufficient to Ensure Quality?

Clearly, long-term care providers must have enough well-trained staff to perform
the tasks necessary to respond to every client’s needs. Analysis of OSCAR indi-
cates that total staff hours per resident per day in 2004 averaged 3.6, ranging from
approximately 0.5 for RNs to 0.8 for LPNs and 2.3 for CNAs. Federal law requires
a minimum of eight hours per day of RN services and twenty-four hours per day of
licensed nursing service. Although 36 states have adopted their own nursing facility
staffing levels, no staff-to-resident ratios or hours per resident per day have been
established by the federal government (Tilly et al., 2003).
Total staff hours in many nursing homes are below recommended levels
(see Figure 8.1). Nearly 30 percent average fewer than 2.75 nursing hours per patient
per day, the minimum recommended by the Centers for Medicare and Medicaid
Services (CMS) (2002). Less than 10 percent average more than 4.55 hours per
patient per day, the level favored by many experts in the field (Harrington et al.,
2000). There is also dramatic interstate variation in staffing levels. According to
OSCAR, more than half the nursing homes in seven states—Missouri, Oklahoma,
Kansas, Iowa, Illinois, Texas, and New Mexico—do not meet minimum federally

100
Desired (4.55 +
HPRD)
80
Optimal (3.9 +
Percentage

60 HPRD)

40 Minimum (2.75 +
HPRD)

20
Below minimum
(< 2.75 HPRD)
0
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004

Year

Figure 8.1 Percentage of nursing homes meeting various recommended mini-

mum total staff levels, hours per resident per day (HPRD), 1992–2004. (Brown
University analysis of Online Survey, Certification, and Reporting [OSCAR],
1992–2004.)

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 Building a Twenty-First Century Long-Term Care Workforce 䡲 137

recommended standards. Whereas 40 percent of nursing homes would need to

increase total staffing levels to meet CMS’ preferred minimum standards, 95 percent
would need to increase total staffing levels to meet the levels preferred by advocates.
Currently, the federal government lacks a process for collecting and monitoring
accurate staffing data in nursing homes, let alone among home care providers.
Furthermore, because there is considerable heterogeneity in residents’ social and
clinical needs for care from facility to facility, uniform staffing ratios might not be
appropriate without taking this into consideration.
Research has consistently demonstrated a relationship between staffing and
the quality of care in nursing homes. Higher staffing has been associated with
resident survival, functional status, fewer pressure sores and infections, less physical
restraint use, catheterization, weight loss, dehydration, and lower hospitalization
rates. Better staffing also leads to lower worker injury and litigation rates, as well as
less stressful conditions, so that physical and psychological abuse may also be less
likely (Centers for Medicare and Medicaid Services, 2002; Institute of Medicine,
2001, 2003). One recent study of California nursing homes found that facilities
with higher staffing (>4.1 hours per resident per day) performed better on 12 of
the 16 process of care measures, including getting residents out of bed, engaging
in activities, and providing feeding assistance and incontinence care. It also found
that staffing proved to be a better predictor of quality than eight separate clinical
indicators currently used by the federal government (Schnelle et al., 2004). This is
also true of another recent study, which examined the relationship between staffing
and quality in four states and found reductions in quality associated with increases
in both RN and NA/LPN turnover (Castle and Engberg, 2005).
Although there is little empirical evidence on the relationship between staffing
and quality of care in home care, Stone (2004, p. 525) observes that “anecdotes
and qualitative studies suggest that problems with attracting and retaining direct
care workers translate into poorer quality and/or unsafe care, major disruptions
in continuity of care, and reduced access to care.” Without sufficient staff, home
care agencies may not have enough aides to send out, let alone be able to provide
clients with the same good worker day in and day out. This increases pressure on
family caregivers, who already provide most care to frail and disabled individuals
living in the community (Stone, 2004). It may also lead individuals and families
to choose residential care options even though these options may not be among
their preferred choices.
Not only does available evidence indicate that staffing levels affect quality, but
it also suggests that the mix of staff available may affect quality as well. Elderly
patients treated by advanced practice geriatric nurse specialists experience fewer
hospital readmissions and nursing home-to-hospital transfers (Intrator et al., 2004).
However, these staff resources are relatively rare. Indeed, the nursing shortage has
translated to increased use of contract nurses, which undermines continuity of
patient care. Analysis of OSCAR indicates that the percentage of nursing homes
using 5 percent or more contract nurses doubled between 1997 and 2004, from

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 138 䡲 Handbook of Long-Term Care Administration and Policy

16.7 − 36.9 percent

9.2 − 16.6 percent
5.8 − 9.1 percent
0 − 5.7 percent

Figure 8.2 Percentage of freestanding nursing homes employing 5% or more

contact nurses, 2004. (Brown University analysis of Online Survey, Certification,
and Reporting [OSCAR] data, 2004.)

5 to 10 percent for RNs and 7 to 14 percent for LPNs, respectively (see Figure 8.2).
There is evidence to suggest that this level of use of contract nurses is associated
with poorer care. There is also limited evidence to suggest that a relationship may
exist between the quality of home care workers and clinical, functional, and lifestyle
outcomes of consumers (Stone, 2004). Leadership with special training and certifi-
cation might make a difference as well. Although there are currently only 500 active
certified nursing home administrators, facilities administered by them perform bet-
ter in terms of the number and severity of deficiencies than facilities without a certi-
fied administrator (American College of Health Care Administrators, 2005).
Staff turnover in long-term care is particularly problematic. Annual turnover rates
in home care range from 40 to 60 percent (Paraprofessional Healthcare Institute,
2005). Annual turnover rates in nursing homes approach 50 percent for most staff
categories and, depending on the tightness of the labor market, may exceed 100 per-
cent in certain areas as positions must often be filled multiple times during the course
of a year. At 71.1 percent in 2002, turnover is especially high among CNAs (Decker
et al., 2003). Turnover in nursing home leadership is equally problematic; nearly half
of Directors of Nursing (DONs), staff RNs, and LPNs were replaced in 2002 and
35.5 percent of administrative RNs. Recent estimates also place turnover among nurs-
ing home administrators at somewhere between 40 and 43 percent (Castle, 2005).
Turnover is quite varied across regions. In New Jersey, New York, and Pennsylvania,
CNA turnover was estimated to be 45.7 percent in 2002, whereas in Arkansas,
Louisiana, Oklahoma, and Texas this rate exceeded 100 percent (Decker et al.,
2003). The volume of vacancies in nursing homes is also high, with an estimated
96,000 FTEs in vacant positions in 2002 (Decker et al., 2003). Approximately
52,000 of these vacancies were for CNA positions, with an additional 13,900 and

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 Building a Twenty-First Century Long-Term Care Workforce 䡲 139

25,100 for RN and LPN positions, respectively. Vacancy rates were especially high
among staff RNs (15.0 percent) and LPNs (13.2 percent) and somewhat lower
for CNAs (8.5 percent) and other positions. Bowers et al. (2000) suggest that
turnover affects quality, in part, by causing disruptions in care continuity and
resident–caregiver relationships, which, in turn, reduce the chances that care will
be provided in ways that satisfy residents’ needs and preferences. By promoting
instability and turnover among direct care staff, turnover among administrators
has been shown to compromise quality as well (Castle, 2001, 2005).

What Does the Future Hold for Long-Term

Care Staffing?
Staff shortages in long-term care will become even more significant in the future.
The number of Americans needing long-term care is projected to increase from
13 to 27 million between 2000 and 2050, with the number of elderly individuals
needing such care increasing from 8 to 19 million (United States Department of
Health and Human Services, 2003). Consequently, the USBLS projects that an
additional 1.9 million direct care workers will be needed in long-term care set-
tings between 2000 and 2010 alone (United States Department of Health and
Human Services, 2003). But although the need for long-term care services is
expected to increase greatly over the coming decades, the supply of workers is not
expected to keep up with the resulting demand due to reductions in the number
of people who have traditionally fi lled these jobs. The Health Resources and Ser-
vices Administration (HRSA, 2002), for example, has projected that the current
RN deficit is likely to increase from 6 to 29 percent between 2000 and 2020.
Thus, medical advances and the graying of the population will result in a marked
increase in the demand for nursing services, whereas the number of nurses leaving
the profession due to attrition and retirement will exceed the number entering the
field. This growing gap in “caring capacity” will be apparent at all levels of staffing
in every long-term care organization. This is because the nation is training fewer
and fewer geriatric specialists, including doctors, nurses, CNAs, home health
aides, and advance practice nurses—at a time—given the demographics—when
we should be training more.
Thirty percent of the nation’s 670 baccalaureate nursing programs satisfy criteria
for exemplary geriatrics education. However, less than 23 percent of these require
a stand-alone geriatrics course. Only three of the nation’s 145 medical schools have
geriatric departments, and less than 10 percent of these require a course in geriat-
rics. Given limited capacity to produce geriatric specialists, it should not be sur-
prising that only 21,500 of the nation’s 2.2 million practicing RNs are certified
in geriatrics, while only 6,600 of the nation’s 650,000 physicians are certified in
this area, although projections suggest that 36,000 geriatricians will be needed by
2030 (Kovner et al., 2002). Although 91 percent of nursing home residents have

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 140 䡲 Handbook of Long-Term Care Administration and Policy

a significant mental disorder, only 1.7 percent of general psychiatrists provide ser-
vices in nursing homes, with only 2600 having received subspecialty certification
in geriatric psychiatry since 1991. Training in geriatric mental health is similarly
lacking among psychologists and social workers (American Geriatrics Society and
American Association of Geriatric Psychiatry, 2003). Most direct care staff have
little or no training specific to geriatric care as well.

Why Is There Difficulty in Recruiting

and Retaining Staff?
There are several reasons why many find long-term care unattractive, or choose
not to stay after entering the field. Part of the explanation has to do with the
“second-rate” status associated with working in this area, whether as a physician
or hourly employee making minimum wage. This stems, in part, from the wide-
spread public perception that caring for the elderly is unpleasant and unappealing,
along with media portrayals of some long-term care providers as profiteers more
interested in making money than ensuring high-quality patient care. Based on a
recent Kaiser Family Foundation (2005) national survey of the public, nursing
homes, at 35 percent, rank below pharmaceutical manufacturers (43 percent) and
just above health insurers (34 percent) and managed care plans (30 percent) in the
share of adults who believe that they are doing a “good job” meeting the country’s
need. This is in contrast to nurses (94 percent), doctors (69 percent), and hospitals
(64 percent). Although 69 percent of respondents agree that nursing homes provide
frail and disabled people a safe environment they could not have at home, twice as
many believe that nursing homes make people worse rather than better off (see Fig-
ure 8.3). Furthermore, 74 percent believe that nursing homes do not have enough

Strongly agree Somewhat agree Somewhat disagree Strongly disagree

They have staff who are concerned about the well- 24 44 13 11

being of their patients (percent)
Managers of nursing homes are not concerned 19 21 29 18
about the well-being of their patients (percent)
Nursing homes do not have enough staff (percent) 50 24 8 3

The families of those who use nursing homes are 37 27 17 9

not involved enough in what is going on (percent)
The staff at nursing homes are often poorly trained 34 26 17 9
(percent)
There is too much waste, fraud, and abuse by 31 27 16 7
managers of nursing homes (percent)

Figure 8.3 Views of nursing home management, percent who agree. (From Kaiser
Family Foundation [2005] Health Poll Report Survey [conducted June 2–5, 2005].)

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 Building a Twenty-First Century Long-Term Care Workforce 䡲 141

staff. Sixty percent believe that staff at nursing homes are often poorly trained, and
58 percent believe that there is too much waste, fraud, and abuse by managers.
Despite public perceptions, providing direct care is physically and emotion-
ally demanding, with injury rates exceeding those for almost any other profes-
sion. In 2003, workplace injuries in nursing homes and residential care facilities
averaged 10.1 per 100 full-time workers, compared to 6.8 per 100 construction
workers and 5.0 per 100 workers in all private workplaces (Wright, 2005). There
are also a high number of assaults on direct care staff, with 59 percent of nursing
assistants in one study reporting being assaulted by residents at least once a week
and 16 percent daily (Gates et al., 2002). Injury rates and assaults may be especially
high in less well-staffed facilities, with heavy caseloads being cited as one of the
major reasons why CNAs leave long-term care and why retention is higher in facili-
ties with more staff (Centers for Medicare and Medicaid Services, 2002; Mickus et
al., 2004; Trinkoff et al., 2005). Ensuring safety is also a concern among home care
workers, who may, in fact, be at greater risk as they venture out into the community
(Sylvester and Reisener, 2002).
Other frequently cited factors contributing to turnover include inadequate initial
training and continuing education, rotating assignments and limited involvement
in decision making, perceived lack of value and respect on the part of supervi-
sors, and little or no opportunities for professional growth and career advancement
(Eaton, 2002; Mickus et al., 2004). Rotating assignments make CNAs feel unap-
preciated because it demonstrates a lack of value for their skills and knowledge, and
prevents the development of ongoing caregiving relationships with residents, which
compromises their ability to provide quality care (Bowers, 2003).
Another frequently cited reason for turnover is low wages (Eaton, 2002; Mickus
et al., 2004). The long-term care workforce is among the lowest paid in the nation.
This is especially true of paraprofessional direct care workers, who, with a median
hourly wage of $9.20 in 2003, earned nearly 33 percent less than all U.S. workers
(American Health Care Association, 2004). Furthermore, only 48.3 percent of
nursing home aides engage in year-round, full-time employment. Even fewer home
care aides—34.3 percent—do so (Montgomery et al., 2005). In part because a
significant portion work only part-time, at $13,287 and $12,265, respectively, in
2002, the median annual incomes for nursing home and home care aides were
barely above the federal poverty line of $11,060 for a family of two and well below
that of $16,700 for a family of four (Paraprofessional Healthcare Institute, 2003a).
Direct care workers are also less likely to receive benefits, including health insur-
ance, vacation time, tuition assistance, pension coverage, and child care (Fishman
et al., 2004). This is especially true in home care where agencies often “fill their
rosters with as many part-time aides as they can hire, train them to minimum
required standards, and assign work with little regard for the aides’ need for full-
time hours or other professional treatment. As a result, turnover in the industry
is high, care provided is erratic, and both home care aides and home care clients
suffer” (University of Wisconsin Center for Cooperatives, 2006, p. 1).

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What Strategies Might Promote Greater Recruitment

and Retention?
Recruitment and retention represent significant costs, both for long-term care pro-
viders and the quality of care that they provide. Direct costs, including administra-
tive costs, overtime pay, temporary staffing and advertising, screening, interviewing,
and training (Seavey, 2004), range from $2500 for aides to $7000 for RNs (Castle
and Engberg, 2005; National Commission on Nursing Workforce for Long-Term
Care, 2005). The indirect costs are also substantial and include lost productivity,
reduced admissions, deterioration in employee morale, and reductions in service
quality (Seavey, 2004). The presence of significant costs, both direct and indirect,
implies that successful efforts to reduce turnover will have a significant return on
investment. Consequently, several strategies have been adopted to improve work-
force recruitment and retention in long-term care. The most prominent have been
attempts to change the workplace environment, increase wages and benefits, and
create opportunities for career advancement and training.

Work-Oriented Redesign
A number of initiatives promote systematic work-oriented redesign that eschews
hierarchical management structures in favor of strategies that enhance worker
autonomy and involvement in decision making (National Commission on Nursing
Workforce for Long-Term Care, 2005). These include several management prac-
tices shown to distinguish the culture of nursing homes with lower turnover and
higher-quality care from those with higher turnover and lower-quality care. This
is reflected in several studies which found that in comparison to the latter, the
former had more effective leadership and management offering caregivers recogni-
tion, meaning, feedback, and opportunity; an organizational culture valuing and
respecting both caregivers and residents; positive human resource policies in the
areas of compensation, training, career ladders, and scheduling; thoughtful and
motivational organization and care practices such as consistent assignment, indi-
vidualized care planning, and the use of team and group processes; implementa-
tion of active quality improvement programs; and adequate staff ratios and support
(Barry et al., 2005; Eaton, 2002; Grant, 2004; Mor, 1995; Rantz et al., 2004).
There is also evidence that smaller facilities have better outcomes than larger facili-
ties (Grant, 2004; Rantz et al., 2004).
Frequently highlighted are the benefits of primary assignment in which the staff
work consistently with the same residents. Ninety percent of nursing homes rotate
staff from one group of residents to another after a period of time (Farrell, 2005). This
promotes instability in caregiver–resident relationships, thereby making it difficult
for staff to honor and anticipate residents’ needs and personal preferences. In con-
trast, primary assignment promotes greater resident–caregiver bonding, and as such,

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 Building a Twenty-First Century Long-Term Care Workforce 䡲 143

increases caregiver satisfaction while providing the foundations for resident-centered

care, with positive implications for quality of life and resident outcomes, such as
personal appearance and hygiene; pressure ulcers and ambulation; and greater sense
of security, comfort, control, choice, and well-being (Burgio et al., 2004; Campbell,
1985; Caudill, 1991–1992; Cox et al., 1991; Goldman, 1998). There is also con-
siderable interest in self-managed work teams, which have been shown to lower
absenteeism and turnover and improve decision making, job satisfaction, and per-
formance in manufacturer settings (Yeats et al., 2004).

Wages and Benefits

Given lower wages and benefits and fewer advancement opportunities than in
other industries, long-term care providers have difficulty competing with employers
offering less physically and emotionally demanding low-pay jobs (Paraprofessional
Healthcare Institute, 2003a). This is reflected in one study, which found that inac-
tive nurse aide registrants in North Carolina who left long-term care earned more
income, experienced less unemployment, and cycled through fewer positions each
year than active registrants still employed in long-term care (Konrad et al., 2003).
In addition to other low-wage industries, long-term care providers have a difficult
time competing with hospitals, where wages and benefits for RNs and paraprofes-
sionals workers are considerably higher (United States Department of Health and
Human Services, 2003). For example, the average annual salary for RNs and nurse
aides are 17.0 and 9.4 percent lower, respectively, in nursing homes than in hospi-
tals. Additionally, nurse aides are nearly twice as likely to receive health insurance
and pension coverage in hospitals as under nursing home employment. In 2001,
$2.7 billion would have been needed to increase wages and benefits to achieve par-
ity in compensation among hospital and nursing home staff (Decker et al., 2001), a
value that would be considerably higher if accounting for even the lower wages and
fewer benefits in home care. This competition for staff is likely to increase as acute
care hospitals’ demands for workers specially trained in geriatrics rise along with
those of nursing homes and home care providers.
As of 2003, 26 states have sought to increase compensation through wage pass-
through policies in which a reimbursement increase from a public source—usually
Medicaid—is directed toward increased wages and benefits for direct care work-
ers (Harmuth and Dyson, 2004). Between 1999 and 2002, average CPI-adjusted
Medicaid per diem rates increased by a modest 3.8 percent, from $105.80 to $117.73
(Grabowski et al., 2004). Most state Medicaid programs reimburse nursing homes
on the basis of cost centers where a certain amount of payment is directed toward
nursing, capital, administration, housekeeping, and other areas. Those who wish to
direct more money into staffing set higher limits on how much they pay for nursing
than for other areas. According to one survey, nine states extended pass-throughs to
nursing home workers only, whereas four extended them exclusively to home care

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workers and eight to both nursing home and home care workers (Paraprofessional
Healthcare Institute, 2003a).
The purpose of wage pass-through programs is to ensure that increases in pay-
ments show up as higher wages and more generous benefits for direct care workers.
However, there has been little systematic evaluation of wage pass-through programs.
Of the twelve wage pass-through states responding to a 1999 survey, four reported
that they had a positive impact on recruitment and retention, three reported that they
had no impact, and three said the impact was unknown (North Carolina Division
of Facility Services, 2000). Results from four unsophisticated evaluations performed
have been mixed; Michigan experienced a 61 percent increase in CNA wages and
21 percent decline in turnover over the 13 years of its wage pass-through program,
whereas wages for nurse aides in Massachusetts increased by 8.7 percent during the
first year of that program and vacancy rates stabilized. After one year of implementa-
tion, turnover in Kansas nursing homes declined from 111 to 101 percent following
implementation, whereas total compensation for direct care workers in Wyoming
increased from $9.08 to $13.74 per hour and turnover declined from 52 to 37 per-
cent over the first three months for that state’s wage pass-through (Harris-Kojetin
et al., 2004; Paraprofessional Healthcare Institute, 2003a). Although the efficacy
of wage pass-through programs has yet to be fully examined, most agree that low
wages contribute to high turnover, especially among direct care workers.
Because wage pass-throughs provide a mechanism to attract and retain a higher-
quality workforce, they have garnered support from both industry and resident
advocates. Given widespread support for programs such as these, there is a greater
need to rigorously evaluate the staff and wage pass-through policies that are in
place. There is also a need for more effective auditing and enforcement procedures
to ensure that additional funding is going where it is supposed to go. This process of
ensuring provider accountability is critical, although it can be potentially burden-
some for states.

Training, Career Ladders, Loan Forgiveness, and Scholarships

Training
The federal government requires that CNAs and home health aides work under
the supervision of an RN and receive at least 75 hours of minimum training.
This includes 16 hours of clinical training in addition to 59 hours in the class-
room learning basic caregiving skills. Within four months of employment, these
workers must pass a state-sanctioned competency test to work for a Medicare- or
Medicaid-certified nursing home or certified home health agency, and must receive
an additional 12 hours of training annually to maintain certification (Paraprofes-
sional Healthcare Institute, 2005). This is in contrast to home care aides or personal
care workers hired by state, local, or nonprofit agencies and independent provid-
ers hired directly by consumers. These individuals may or may not be subject to

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 Building a Twenty-First Century Long-Term Care Workforce 䡲 145

training requirements and may or may not work under the supervision of an RN
(Stone, 2004).
Because of rising acuity and frailty, especially in nursing homes, there is a grow-
ing concern that current training requirements do not adequately prepare direct
care workers for their positions (Salsberg, 2003). This has spurred 26 states to
extend mandatory CNA training beyond the 75 hours required by the federal law,
including 15 states that require 100 or more hours (Office of Inspector General,
2002). CNAs working in Missouri must receive at least 175 hours of training.
Virginia recently expanded its minimum number of training hours from 80 to 120.
Ohio, New Mexico, and Florida have developed new rules standardizing training
CNAs and other direct care workers throughout their states (Harmuth and Dyson,
2005; Office of Inspector General, 2002).
A number of states have also extended training requirements for home health
aides. Wyoming requires 91 hours of training and Washington 105 hours. Several
require home health aides to be certified as CNAs with, perhaps, additional train-
ing on topics related specifically to home care. Although Maryland has no training
requirements for personal care aides, home health aides must receive CNA certifi-
cation in addition to 12 hours of in-service training. However, many states require
training for personal assistance workers. Maine requires 40 hours of training for
all personal care assistants. Other states require personal care assistants to complete
the same training as home health aides, whereas some require only a few hours of
in-service training (Harmuth and Dyson, 2005; Paraprofessional Healthcare Insti-
tute, 2005). There is also a growing awareness of the need to support self-directed
consumers who hire and train their own workers (Paraprofessional Healthcare
Institute, 2004).
Recently, there has been interest in providing new workers with more inten-
sive and structured orientation, with some state and provider initiatives adopting
peer-mentoring systems for new employees (Paraprofessional Healthcare Institute,
2003b). An example is New York’s “Growing Strong Roots” peer-mentoring pro-
gram, which pairs new employees with exemplary and experienced CNAs who
acquaint them with the customs, resources, and values of their facilities. Both men-
tors and mentees receive additional training. Mentors also receive formal recog-
nition and a bonus or increase in salary. Retention among new CNAs and their
mentors increased by an average of 17 and 21 percent, respectively, in six nursing
homes participating in the program’s initial evaluation. No significant increases
were identified in comparison homes. The program has therefore added an addi-
tional 22 facilities to its roster (Harris-Kojetin et al., 2004).
Another initiative that promotes a more nurturing approach is the Learn,
Empower, Achieve, and Produce (LEAP) program developed by Mather Lifeways, a
long-term care provider in Illinois. The goal is to develop leadership, mentoring, team-
work, and communication skills among all staff. Nurse managers, RNs, and LPNs
participate in a six-week workshop to develop leadership, role model, clinical geron-
tological, and team-building skills. CNAs participate in a fourteen-hour, seven-week

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 146 䡲 Handbook of Long-Term Care Administration and Policy

workshop that focuses on career and skill development in a variety of areas, including
person-centered care, communication, care team building, and mentoring. CNAs
that complete this training become level 2 CNAs and receive salary increases ranging
from $0.50 to $1 per hour. LEAP was piloted in 1999 and replicated at three other
sites between 2000 and 2002. Both nurse and CNA turnover declined among partic-
ipating facilities. Both nurses’ and CNAs’ perceptions regarding their work empow-
erment, job satisfaction, and organization communication improved significantly,
with improvement on these variables being associated with fewer health deficiencies
cited on state inspections. More than 400 “specialists” from 26 states have been
trained to replicate LEAP in their own facilities (Hollinger-Smith, 2002; National
Clearinghouse on the Direct Care Workforce, 2005).

Career Ladders
Both Growing Strong Roots and LEAP incorporate career ladders, which allow
workers to acquire skills that enable them to grow professionally and advance
through a progression of better paying jobs. There are several basic types of career
ladders: those that provide workers with opportunities for higher pay and greater
professionalization within the context of their current positions, and those that pro-
vide staff with financial incentives to participate in supplemental “job-enhancement”
training programs. The latter includes programs that create formal tiers within the
same occupation. It also includes programs that enable workers to move progres-
sively from one occupation to another, for example, from being CNAs or home
health aides to LPNs or RNs.
Several states have encouraged career enhancement within the context of cur-
rent positions. One example is “Growing Strong Roots” in New York. Another
example is North Carolina’s “WIN A STEP UP” program, which provides nurse
aides with financial incentives in the way of bonuses and higher wages to complete
11 training sessions over 16 weeks focusing on clinical proficiency, interpersonal
skills, and communication. Before the start of the program, supervisors in par-
ticipating facilities receive training in the “coaching style” of mentoring, whereas
nurse aides commit to continuing employment for at least three months. Com-
pared to nonparticipants, participating nurse aides demonstrate better retention
and job satisfaction (WIN A STEP UP, 2005). Other states have developed more
targeted programs that enable CNAs to acquire skills for performing specific addi-
tional tasks. Examples include Maine, which has developed a 24-hour medication
administration course and South Dakota, which allows CNAs who have completed
basic training to specialize in a particular clinical area such as dementia or wound
care (Harmuth and Dyson, 2005; National Commission on Nursing Workforce for
Long-Term Care, 2005).
A second type of career ladder program creates formal tiers within the same
occupation, the gradual assumption of which provides workers with increases in

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 Building a Twenty-First Century Long-Term Care Workforce 䡲 147

pay and responsibility (Fitzgerald and Carlson, 2000). Although programs such
as LEAP have only two tiers, several similar initiatives have three or more. Johns
Hopkins Geriatric Center, a 218-bed facility in Baltimore, Maryland, has estab-
lished a three-level career ladder in which entry-level staff begin as geriatric nurse
aides (GNAs), but with subsequent classroom and clinical education and training,
gradually move to geriatric patient aide (GPA) and patient care technician (PCT)
positions. GNAs provide basic care mandated by federal and state law; GPAs per-
form several additional procedures such as ostomy care, pulse oximetry, and blood
sugar monitoring; and PCTs acquire more advanced acute care skills necessary
to care for certain patient populations (Harris-Kojetin et al., 2004). Through its
Performance Improvement and Quality Improvement program, Ararat Nursing
Home, a 200-bed facility in Mission Hill, California, has established a five-tier
career ladder, with increases in responsibility and pay of 25–50 cents per hour as
CNAs move from level to level (National Commission on Nursing Workforce for
Long-Term Care, 2005). States such as Delaware and North Carolina have also
created new job levels for CNAs referred to as “senior CNAs” and “GNAs,” respec-
tively (Harmuth and Venkatraman, 2001).
A third type of career ladder provides direct care workers with the education
and training opportunities necessary for them to move progressively to better pay-
ing occupations; for example, from CNAs to LPNs and RNs. Under its PRIDE
program, New Courtland Elder Services, a subsidiary of the Presbyterian Founda-
tion of Philadelphia, adopted a career ladder program consisting of three CNA lev-
els as well as in-house preparation courses and scholarships encouraging nurse aides
to earn their General Educational Development (GED) diplomas or to become
LPNs and RNs (National Commission on Nursing Workforce for Long-Term
Care, 2005). Cooperative Home Care Associates (CHCA), a worker-owned home
health agency in New York’s South Bronx, provides its workers with opportuni-
ties for career advancement, leadership development, and working participation
in agency decisions. CHCA has established three levels of home health aides, with
each successive level associated with additional training and higher wages. There
are also opportunities to advance to positions within administration and training,
and several programs have been established to help aides advance beyond home
health to other occupations (e.g., nursing). Approximately 80 percent of CHCA’s
employees share ownership, with the majority of board members being elected from
among direct care staff (Inserra, 2002; Powell, 2006; Stone, 2004).
Effective career ladder programs do their best to seamlessly integrate training
with the work and personal lives of employees by offering courses at convenient
times and providing students with access to the financial assistance necessary to pay
for tuition, books, and other expenses. Furthermore, several successful programs
have formed partnerships with local workforce investment agencies, community-
based organizations, unions, community colleges, and other educational institutions
to design and implement appropriate training programs and career advancement
opportunities (Fishman et al., 2004). In fact, community colleges throughout the

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 148 䡲 Handbook of Long-Term Care Administration and Policy

country report collaborative efforts with healthcare providers to address nursing

shortages in their areas (National Commission on Nursing Workforce for Long-Term
Care, 2005). Joining forces with a local community college, for example, five Genesis
ElderCare facilities located on the same campus in rural Massachusetts provide entry-
level employees with formal career ladder classes and college courses, including an
on-site evening LPN program. This program has been funded, in part, by the State
of Massachusetts Extended Care Career Ladder Initiative, which supports several
organizations’ efforts to develop opportunities for direct care workers to increase their
skills to reduce turnover and vacancies in long-term care. Although originally targeted
at CNAs, Massachusetts Extended Care program has since been expanded to home
care (National Commission on Nursing Workforce for Long-Term Care, 2005).
On a larger scale, the provider–educational institution approach has been
used by both private foundations and public agencies as they seek to encourage
more health workers to enter geriatrics. For example, states match HSRA grants to
fund regionally based Geriatric Education Centers (GECs), which are accredited
health profession schools that foster collaborative relationships among educators to
improve health professional training in geriatrics and to provide clinical experiences
in geriatrics in nursing homes and other long-term care settings (United States
Department of Health and Human Services, 2003). Similarly, the American Asso-
ciation of Colleges of Nursing has joined forces with the John A. Hartford Foun-
dation to establish the Geriatric Nursing Education Project to support curriculum
development and new clinical experiences in geriatric settings by forging partner-
ships between schools of nursing and long-term care organizations.

Online Training
Online training and the Internet are playing a major role in seamlessly integrating
health professional training to people’s work and personal lives, and encouraging
low-income individuals who have families and other full-time obligations to pursue
more advanced careers in long-term care. There are several examples that illustrate
how computer-assisted learning can be used to promote career mobility in this area.
Indeed, were it not for online resources, many facilities might not be able to com-
ply with regulatory requirements for continuing education. This has helped spur the
creation of Web sites such as www.myziva.com, which provides nursing home opera-
tors with a comprehensive array of management tools and resources, including 100
continuously updated online courses, education materials, and other resources. There
has also been a growing proliferation of Web-based continuing medical education
sites more generally, including those sponsored by the American Medical Associa-
tion, which has produced its own resources on pain management and osteoporosis
while endorsing online systems created by others. Furthermore, online training now
constitutes 10 percent of all higher education, among the most prominent areas of
which is healthcare. These include bachelor’s, master’s, and doctorate programs in

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 Building a Twenty-First Century Long-Term Care Workforce 䡲 149

health administration and nursing, in addition to certification programs for medical

and nurse assistants (eLearners, 2005; OnlineCareers.com, 2005). It has been sug-
gested that funding for expanded online programs be provided through state and
federal grants (National Commission on Nursing Workforce for Long-Term Care,
2005; Salsberg, 2003). For example, North Carolina and Minnesota have designated
funding to support on-site online training for CNAs in nursing homes.

Loan Forgiveness and Scholarships

Financial incentives may prove to be an especially attractive means of spurring
people to pursue educational opportunities in long-term care. Th is is not only true
for CNAs, home health aides, and LPNs looking to advance their careers, but also
for physicians, nurses, and others who may not otherwise choose careers in this
area. Indeed, there has been growing interest among state and federal officials in
directing scholarships and loan forgiveness programs toward both the professional
and paraprofessional segments of the long-term care workforce. Scholarships pro-
vide support for tuition and other expenses incurred by students as they pursue
their education, whereas loan forgiveness pays off educational debt after students
complete their programs. Although both approaches may be effective in encour-
aging financially better-off individuals to pursue careers in targeted specialties,
scholarships may be more effective than loan forgiveness in stimulating finan-
cially disadvantaged students to do so, as they may not have the money for tuition
even though it may be reimbursed after graduation. This is especially true when
tuition is high, education takes several years, and loan repayment is competitive
or uncertain. Loan forgiveness, however, may be more easily connected to service
obligation in a particular geographic area, facility, or field (Salsberg, 2003). For
example, medical students will sometimes receive scholarships, fulfill their obliga-
tion, and then immediately move on. This is in contrast to loan forgiveness pro-
grams, which, because they do not require individuals to sign up for service years
in advance, but instead after their education has been completed, allows them to
choose the areas within which to work, thereby increasing the likelihood that they
will stay for longer periods of time.
There are several state and federal programs that provide loan forgiveness and
tuition assistance. Among a multitude of federal programs, the Health Resources
and Services Administration provided $15 million in loan repayment under its
Nursing Education Loan Repayment programs to nurses who agree to serve at
least two years in designated facilities (United States Department of Health and
Human Services, 2003). At the state level, the Michigan Nursing Scholarship pro-
gram offered $4 million in scholarships to RN and LPN students in exchange for a
commitment to work in a Michigan healthcare facility after graduation (National
Commission on Nursing Workforce for Long-Term Care, 2005). Minnesota estab-
lished a program to fund scholarships to nonadministrative workers looking to

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 150 䡲 Handbook of Long-Term Care Administration and Policy

advance their careers in long-term care, whereas Virginia implemented a scholar-

ship and loan repayment program for students who agree to work in this area for a
specified period of time. Not only does New York’s Workforce Retraining Initia-
tive provide support to workers in meeting the requirements of existing positions,
but it also assists eligible workers as they transition to new jobs within healthcare
(Harmuth and Dyson, 2005). Several government programs also provide low-
income or unemployed individuals opportunities to pursue employment in the
health field. The federal Work Investment Act (WIA) has funds that can be used to
give low-income or unemployed individuals paid work experience and on-the-job
training to help them become more employable, and the Welfare-to-Work pro-
gram helps welfare recipients and low-income noncustodial parents in high-poverty
areas obtain jobs in the public- or private-sector (Salsberg, 2003; Stone and Wiener,
2001). A number of states such as Arkansas, Montana, New Jersey, and South
Carolina have explicitly sought to recruit Welfare-to-Work recipients to nursing
homes (Harmuth and Dyson, 2005).

What Are the Roles of Unions in Long-Term Care?

Strategies to improve recruitment and retention in the long-term care workforce
derive from several sources. These include key stakeholders such as individual pro-
viders and provider networks, federal and state officials, and organizations such as
the Association of Homes and Services for the Aging and the National Association
of Geriatric Nursing Assistants. Another key and increasingly important player in
promoting higher wages, career advancement, and workplace redesign has been
the remarkable growth in unionized long-term care workers. Today, the largest
long-term care union, Service Employees International Union (SEIU), includes
440,000 home care workers and 160,000 nursing home employees. With 110,000
nurses and 40,000 doctors, SEIU is also the largest union of healthcare workers.
Furthermore, the ranks of SEIU continue to swell. In 2005, for example, 41,000
home care workers in Michigan voted to join the union. Overall, SEIU member-
ship increased from 625,000 to 1.8 million between 1980 and 2005. Currently,
there are more than 300 SEIU local union affiliates and 25 state councils in North
America (Service Employees International Union, 2006).
SEIU has proven highly successful in garnering higher wages and benefits for its
members. In California, SEIU-affiliated home care workers received wage increases
of $2 per hour over two years in addition to comprehensive health coverage. Home
care workers in New York have also secured comprehensive coverage in addition
to paid vacation and sick days, a pension, and training and education opportuni-
ties. SEIU has also worked with public authorities, advocates, and clients to pass
legislation, creating quality home care councils in several states. The purposes of
these councils are to promote consumer direction, create registries of carefully
screened attendants to make it easier for clients to find reliable workers, provide

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 Building a Twenty-First Century Long-Term Care Workforce 䡲 151

emergency backup services when regular caregivers become unavailable, recruit

new workers to the field, and allow attendants to collectively bargain for better
wages and benefits (Service Employees International Union, 2006).
The healthcare industry is one of the few sectors of the economy in which unions
have won more than 50 percent of their certification elections. In nursing facili-
ties, unions prevailed in 60 percent of elections conducted by the National Labor
Relations Board between 1999 and 2001. The two most active unions were SEIU
and the Teamsters, which were involved in 42 and 13 percent of elections, respec-
tively. However, significantly fewer elections were held in the south and west,
regions that have traditionally proven to be less union friendly than the north-
east and midwest (Palthe and Deshpande, 2003). Some providers have sought to
develop collaborative relationships with unions, whereas others have proved to
be much more resistant (Stone and Wiener, 2001). In a qualitative study of 20
California and Pennsylvania nursing homes, Eaton (2000) found that in contrast
to lower-quality facilities, which were mostly nonunion and actively discouraged
worker input, higher-quality homes were mostly unionized and welcomed and
solicited systematic worker input.

Conclusion
Although there are federal and state programs and other efforts targeted at stim-
ulating the supply of nurses and other healthcare workers, shortages are more
acute and the work is generally considered less desirable in the long-term care
sector. Consequently, there is widespread agreement that key stakeholders could
do much more in targeting loan forgiveness, scholarship, wage enhancement,
training, career ladder, and other programs to recruit individuals at all levels to
long-term care specifically. The long-term care workforce, including CNAs, home
health aides, personal care assistants, LPNs, RNs, advanced practice nurses,
administrators, and geriatricians, must be expanded, supported, and trained for
the multiplicity of tasks and responsibilities necessary to deliver high-quality care
to frail and chronically disabled individuals in both residential and home- and
community-based settings. Th is is true both in the context of current workforce
deficits and in the context of even greater deficits to come if administrators do
not join with workers in engaging public policy makers in solving the workforce
crisis in long-term care.

References
American College of Health Care Administrators. 2005. Long-Term Care Administrator
Certification and Its Impact on Quality of Long-Term Care Services. Alexandria, VA:
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 Chapter 9

The Role and

Responsibilities of the
Medical Director and the
Attending Physician in
Long-Term Care Facilities

Daniel Swagerty

Contents
Introduction ............................................................................................158
Regulatory Oversight ...............................................................................158
The Attending Physician’s Role ................................................................ 161
Medical Direction.................................................................................... 161
Implementation of Resident Care Policies and Procedures ..................165
Coordination of Medical Care ............................................................166
Critical Investments to the Medical Directorship ....................................167
Conclusion...............................................................................................168
References ................................................................................................169

157

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Introduction
In 1974, in response to perceived quality of care problems, Medicare regulations,
for the first time, required a physician to serve as the medical director in skilled
nursing facilities and be responsible for the medical care provided in those facilities
[1–4]. Since 1991, the long-term care field has undergone fundamental changes in
medical knowledge, clinical complexity, societal and legal attitudes, demographics
and patient mix, and reimbursement and care settings [5–7]. Increasingly, medical
directors are held accountable by state legislators, regulators, and the judicial
system for their clinical and administrative roles in facilities of all kinds [7–9]. At
least one state, Maryland, has enacted legislation outlining the specific regulatory
responsibilities and educational prerequisites for medical directors, and other states
may follow its lead [9–10].
The 2001 Institute of Medicine report Improving the Quality of Long-Term
Care urged facilities to give medical directors greater authority and hold them
more accountable for medical services. The report further states, “Nursing homes
should develop structures and processes that enable and require a more focused
and dedicated medical staff responsible for patient care. These organizational struc-
tures should include credentialing, peer review, and accountability to the medical
director” [11].
In April 2002, the American Medical Directors Association (AMDA) convened
an expert panel to review its position statement in the context of the evolution that
is occurring within long-term care [12]. Their work product outlined the medical
director’s major roles in the facility and was geared toward ensuring that appropri-
ate care is provided to an increasingly complex, frail, and medically challenging
population (Table 9.1) [12]. These concepts were considered when the Center for
Medicare and Medicaid Services revised the Surveyor Guidance related to F Tag
501 for medical direction in 2005 [13].

Regulatory Oversight
Although the federal regulation F Tag 501 for medical direction remained the same,
the Guidance to Surveyors was entirely replaced [13]. The regulation requires each
facility to have a medical director who is responsible for the implementation of resident
care policies and the coordination of medical care. These two roles provide the basis for
the functions and tasks required of medical directors in long-term care facilities.
The regulation is as follows:
§483.75(i) Medical Director
1. The facility must designate a physician to serve as medical director
2. The medical director is responsible for
i. Implementation of resident care policies
ii. The coordination of medical care in the facility

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 Role and Responsibilities of Medical Director 䡲 159

Table 9.1 Roles and Responsibilities of the Medical Director

in the Nursing Home

Role and responsibilities

It is the AMDA’s view that the roles and responsibilities of the medical director in
the nursing home can be divided into four areas: physician leadership, patient
care—clinical leadership, quality of care, and education
Physician leadership
Help the facility ensure that patients have appropriate physician coverage and
ensure the provision of physician and healthcare practitioner services
Help the facility develop a process for reviewing physician and healthcare
practitioner credentials
Provide specific guidance for physician performance expectations
Help the facility ensure that a system is in place for monitoring the performance
of healthcare practitioners
Facilitate feedback to physicians and other healthcare practitioners on
performance and practices
Patient care—clinical leadership
Participate in administrative decision-making and the development of policies
and procedures related to patient care
Help develop, approve, and implement specific clinical practices for the facility to
incorporate into its care-related policies and procedures, including areas
required by laws and regulations
Develop procedures and guidance for facility staff regarding contacting
practitioners, including information gathering and presentation, change in
condition assessment, and when to contact the medical director
Review, consider, and/or act upon consultant recommendations, as appropriate,
that affect the facility’s resident care policies and procedures or the care of an
individual resident
Review, respond to and participate in federal, state, local, and other external
surveys and inspections
Help review policies and procedures regarding the adequate protection of
patients’ rights, advance care planning, and other ethical issues
Quality of care
Help the facility establish systems and methods for reviewing the quality and
appropriateness of clinical care and other health-related services and provide
appropriate feedback
Participate in the facility’s quality improvement process
Advise on infection control issues and approve specific infection control policies
to be incorporated into facility policies and procedures
Help the facility provide a safe and caring environment
Help promote employee health and safety
Assist in the development and implementation of employee health policies and
programs
(continued)

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 160 䡲 Handbook of Long-Term Care Administration and Policy

Table 9.1 Continued

Education, information, and communication

Promote a learning culture within the facility by educating, informing, and
communicating
Provide information to help the facility provide care consistent with current
standards of practice (defined as “approaches to care, procedures, techniques,
and treatments that are based on research and/or expert consensus and that are
contained in current manuals textbooks and or publications, or that are accepted,
adopted or promulgated by recognized organizations or national bodies.”)
Help the facility develop medical information and communication systems with
staff, patients, and families and others
Represent the facility to the professional and lay community on medical and
patient care issues
Maintain knowledge of the changing social, regulatory, political, and economic
factors that affect medical and health services of long-term care patients
Help establish appropriate relationships with other healthcare organizations

Source: Adopted from American Medical Directors Association, Roles and Respon-
sibilities of the Medical Director in the Nursing Home, Position Statement
A06, March 2006.

The intent of this requirement is that

䡲 The facility has a licensed physician who serves as the medical director to
coordinate medical care in the facility and provides clinical guidance and
oversight regarding the implementation of resident care policies.
䡲 The medical director collaborates with the facility leadership, staff, and other
practitioners and consultants to help develop, implement, and evaluate resi-
dent care policies and procedures that reflect current standards of practice.
䡲 The medical director helps the facility identify, evaluate, and address and
resolve medical and clinical concerns and issues that
− Affect resident care, medical care, or quality of life.
− Are related to the provision of services by physicians and other licensed
healthcare practitioners.

Although many medical directors also serve as attending physicians, the roles and
functions of a medical director are separate from those of an attending physician.
The medical director’s role involves the coordination of facility-wide medical care,
whereas the attending physician’s role involves primary responsibility for the medi-
cal care of individual residents [14–15].
The medical director’s roles and functions require the physician serving in that
capacity to be knowledgeable about current standards of practice in caring for
long-term care residents, and about how to coordinate and oversee related practitioners

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 Role and Responsibilities of Medical Director 䡲 161

[16–18]. As a clinician, the medical director plays a pivotal role in providing clinical
leadership regarding application of current standards of practice for resident care and
new or proposed treatments, practices, and approaches to care. The medical director’s
input promotes the attainment of optimal resident outcomes, which may also be influ-
enced by many other factors, such as resident characteristics and preferences, individ-
ual attending physician actions, and facility support. The 2001 Institute of Medicine
report states, “nursing homes should develop structures and processes that enable and
require a more focused and dedicated medical staff responsible for patient care” [11].
The medical director is in a position, because of his or her role and function, to impact
the overall quality of care provided in a nursing facility, address individual resident’s
clinical issues, and supervise the quality of medical provided. The text Medical Direc-
tion in Long-Term Care [15] asserts that “The Medical Director has an important role
in helping the facility deal with regulatory and survey issues . . . the medical director
can help ensure that appropriate systems exist to facilitate good medical care, establish
and apply good monitoring systems and effective documentation and follow up of
findings, and help improve physician compliance with regulations, including required
visits. During and after the survey process, the medical director can clarify for the
surveyor’s clinical questions or information about the care of specific residents, request
surveyor clarification of citations on clinical care, attend the exit conference to demon-
strate physician interest and help in understanding the nature and scope of the facility’s
deficiencies, and help the facility draft corrective actions.”

The Attending Physician’s Role

Attending physician involvement in long-term care is essential to the delivery of
quality long-term care [19–23]. Attending physicians should lead the clinical deci-
sion making for patients under their care. They can provide a high level of knowl-
edge, skill, and experience needed in caring for a medically complex population in a
climate of high public expectations and stringent regulatory requirements. In 2001,
AMDA developed a policy statement outlining the role and responsibilities of the
attending physician in long-term care [24]. Physicians need clearly stated expecta-
tions to fulfill their attending responsibilities. They need a set of essential functions
and tasks that should be performed by them and cannot be delegated to others
(Table 9.2) [24]. Although various factors make physician adherence challenging,
attending physicians should work with medical directors to address the obstacles, not
cite them as a reason to avoid responsibility.

Medical Direction
Nationally accepted statements concerning the roles, responsibilities, and func-
tions of a medical director can be found at the AMDS web site [24]. The facility
is responsible for designating a medical director, who is currently licensed as

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 162 䡲 Handbook of Long-Term Care Administration and Policy

Table 9.2 Role of the Attending Physician in the Nursing Home

Responsibility for Initial Patient Care. The attending physician should

Assess a new admission in a timely fashion (based on a joint
physician–facilitydeveloped protocol, and depending on the individual’s medical
stability, recent and previous medical history, presence of significant or
previously unidentified medical conditions, or problems that cannot be handled
readily by phone)
Seek, provide, and analyze needed information regarding a patient’s current
status, recent history, and medications and treatments, to enable safe, effective
continuing care, and appropriate regulatory compliance
Provide appropriate information and documentation to support the facility in
determining the level of care for a new admission
Authorize admission orders in a timely manner, based on a joint physician–
facility-developed protocol, to enable the nursing facility to provide safe,
appropriate, and timely care
For a patient who is to be transferred to the care of another healthcare
practitioner, continue to provide all necessary medical care and services
pending transfer until another physician has accepted responsibility for the
patient
Support patient discharges and transfers. The attending physician should
Follow up with a physician or another healthcare practitioner at a receiving
hospital as needed after the transfer of an acutely ill or unstable patient
Provide whatever documentation or other information may be needed at the
time of transfer to enable care continuity at a receiving facility and to allow the
nursing facility to meet its legal, regulatory, and clinical responsibilities for a
discharged individual
Provide pertinent medical discharge information within 30 days of discharge or
transfer of the patient
Make periodic, pertinent on-site visits to patients. The attending physician should
Visit patients in a timely fashion, based on a joint physician– facility-developed
protocol, consistent with applicable state and federal regulations, depending on
the patient’s medical stability, recent and previous medical history, presence of
significant or previously unidentified medical conditions, or problems that
cannot be handled readily by phone
Maintain progress notes that cover pertinent aspects of the patient’s condition
and current status and goals. Periodically, the physician’s documentation should
review and approve a patient’s program of care
Determine progress of each patient’s condition at the time of a visit by evaluating
the patient, talking with staff as needed, talking with responsible parties/family
as indicated, and reviewing relevant information, as needed
Respond to issues requiring a physician’s expertise, including the patient’s
current condition, the status of any acute episodes of illness since the last visit,
test results, other actual or high-risk potential medical problems that are
affecting the individual’s functional, physical, or cognitive status, and staff,
patient, or family questions regarding the individual’s care and treatments

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 Role and Responsibilities of Medical Director 䡲 163

Table 9.2 Continued

At each visit, provide a legible progress note in a timely manner for placement on
the chart (timely to be defined by a joint physician– facility protocol). Over time,
these progress notes should address relevant information about significant
ongoing, active, or potential problems, including reasons for changing or
maintaining current treatments or medications, and a plan to address relevant
medical issues
Ensure adequate ongoing coverage. The attending physician should
Designate an alternate physician or appropriately supervised midlevel
practitioner who will respond in an appropriate, timely manner in case the
attending physician is unavailable
Update the facility about his or her current office address, phone, fax, and pager
numbers to enable appropriate, timely communications, as well as the current
office address, phone, fax, and pager numbers of designated alternate
physicians or an appropriately supervised midlevel practitioner
Help ensure that alternate covering practitioners provide adequate, timely
support while covering and intervene with them when informed of problems
regarding such coverage
Adequately notify the facility of extended periods of being unavailable and of
coverage arranged during such periods
Adequately inform alternate covering practitioners about patients with active
acute conditions or potential problems that may need medical follow-up during
their on-call time
Provide appropriate care to patients. The attending physician should
Perform accurate, timely, relevant medical assessments
Properly define and describe patient symptoms and problems, clarify and verify
diagnoses, relate diagnoses to patient problems, and help establish a realistic
prognosis and care goals
In consultation with the facility’s staff, determine appropriate services and
programs for a patient, consistent with diagnoses, condition, prognosis, and
patient wishes, focusing on helping patients attain their highest practicable level
of functioning in the least restrictive environment
In consultation with facility staff, ensure that treatments, including rehabilitative
efforts, are medically necessary and appropriate in accordance with relevant
medical principles and regulatory requirements
Respond in an appropriate timeframe (based on a joint physician– facility-
developed protocol) to emergency and routine notification, to enable the facility
to meet its clinical and regulatory obligations
Respond to notification of laboratory and other diagnostic test results in a timely
manner, based on a protocol developed jointly by the physicians and the facility,
considering the patient’s condition and the clinical significance of the results
Analyze the significance of abnormal test results that may reflect important
changes in the patient’s status and explain the medical rationale for subsequent
interventions or decisions not to intervene based on those results when the
basis for such decisions is not otherwise readily apparent
Respond promptly to notification of, and assess and manage adequately, reported
acute and other significant clinical condition changes in patients

(continued)

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 164 䡲 Handbook of Long-Term Care Administration and Policy

Table 9.2 Continued

In consultation with the facility staff, manage and document ethics issues
consistent with relevant laws and regulations and with patients’ wishes,
including advising patients and families about formulating advance directives or
other care instructions and helping identify individuals for whom aggressive
medical interventions may not be indicated
Provide orders that ensure individuals have appropriate comfort and supportive
care measures as needed, for example, when experiencing significant pain or in
palliative or end-of-life situations
Periodically review all medications and monitor both for continued need based
on validated diagnosis or problems and for possible adverse drug reactions. The
medication review should consider observations and concerns offered by
nurses, consultant pharmacists, and others regarding beneficial and possible
adverse impacts of medications on the patient
Provide appropriate, timely medical orders and documentation. The attending
physician should
Provide timely medical orders based on an appropriate patient assessment,
review of relevant pre- and postadmission information, and age-related and
other pertinent risks of various medications and treatments
Provide sufficiently clear, legibly written medication orders to avoid
misinterpretation and potential medication errors, such orders to include
pertinent information such as the medication strength and formulation (if
alternate forms available), route of administration, frequency and, if applicable,
timing of administration, and the reason for which the medication is being given
Verify the accuracy of verbal orders at the time they are given and authenticate,
sign, and date them in a timely fashion, no later than the next visit to the patient
Provide documentation required to explain medical decisions, that promotes
effective care, and allows a nursing facility to comply with relevant legal and
regulatory requirements
Complete death certificates in a timely fashion, including all information required
of a physician
Follow other principles of appropriate conduct. The attending physician should
Abide by pertinent facility and medical policies and procedures
Maintain a courteous and professional level of interaction with facility staff,
patients, family/significant others, facility employees, and management
Work with the medical director to help the facility provide high-quality care
Keep the well-being of patients or residents as the principal consideration in all
activities and interactions
Be alert to, and report to the medical director—and other appropriate individuals
as named through facility protocol—any observed or suspected violations of
patient or resident rights, including abuse or neglect, in accordance with facility
policies and procedures

Source: Adopted from American Medical Directors Association, Role of the Attend-
ing Physician in the Nursing Home, Position Statement E03, American
Medical Directors Association, March 2003.

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 Role and Responsibilities of Medical Director 䡲 165

a physician in the state in which the facility he or she serves is located. The
facility may provide for this service through any of several methods, such as
direct employment, contractual arrangements, or another type of agreement.
Whatever the arrangement or method employed, the facility and the medical
director should identify the expectations for how the medical director will work
with the facility to effectively implement resident care policies and coordinate
medical care.

Implementation of Resident Care Policies and Procedures

The facility is responsible for obtaining the medical director’s ongoing guid-
ance in the development and implementation of resident care policies, includ-
ing review and revision of existing policies. The medical director’s role involves
collaborating with the facility regarding the policies and protocols that guide
clinical decision making (e.g., interpretation of clinical information, treatment
selection, and monitoring of risks and benefits of interventions) by any of the
following: facility staff ; licensed physicians; nurse practitioners; physician assis-
tants; clinical nurse specialists; and licensed, certified, or registered healthcare
professionals such as nurses, therapists, dieticians, pharmacists, social workers,
and other healthcare workers.
The medical director has a key role in helping the facility to incorporate current
standards of practice into resident care policies and procedures or guidelines to help
assure that they address the needs of the residents. Although regulations do not
require the medical director to sign the policies or procedures, the facility should
be able to show that its development, review, and approval of resident care policies
include the medical director’s input.
This requirement does not imply that the medical director must carry out the
policies and procedures or supervise staff performance directly, but rather must
guide, approve, and help oversee the implementation of the policies and procedures.
Examples of resident care policies include, but are not limited to

䡲 Admission policies and care practices that address the types of residents that
may be admitted and retained based on the ability of the facility to provide
the services and care to meet their needs
䡲 The integrated delivery of care and services, such as medical, nursing,
pharmacy, social, rehabilitative, and dietary services, which includes clini-
cal assessments, analysis of assessment findings, care planning including
preventive care, care plan monitoring and modification, infection control
(including isolation or special care), transfers to other settings, and discharge
planning
䡲 The use and availability of ancillary services such as x-ray and laboratory

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䡲 The availability, qualifications, and clinical functions of staff necessary to

meet resident care needs
䡲 Resident formulation and facility implementation of advance directives
(in accordance with the state law) and end-of-life care
䡲 Provisions that enhance resident decision making, including choice regarding
medical care options
䡲 Mechanisms for communicating and resolving issues related to medical care.
䡲 Conduct of research, if allowed, within the facility
䡲 Provision of physician services, including (but not limited to)
– Availability of physician services 24 hours a day in case of emergency
– Review of the residents’ overall condition and program of care at each
visit, including medications and treatments
– Documentation of progress notes with signatures
– Frequency of visits, as required
– Signing and dating all orders, such as medications, admission orders, and
readmission orders
– Review of and response to consultant recommendations
䡲 Systems to ensure that other licensed practitioners (e.g., nurse practitioners)
who may perform physician-delegated tasks act within the regulatory require-
ments and within the scope of practice as defined by the state law
䡲 Procedures and general clinical guidance for facility staff regarding when to
contact a practitioner, including information that should be gathered before
contacting the practitioner regarding a clinical issue or question or change in
condition

Coordination of Medical Care

The medical director is responsible for the coordination of medical care in the
facility. The coordination of medical care means that the medical director helps
the facility obtain and maintain timely and appropriate medical care that supports
the healthcare needs of the residents, is consistent with current standards of prac-
tice, and helps the facility meet its regulatory requirements. In light of the extensive
medical needs of the long-term care population, physicians have an important role
both in providing direct care and in influencing care quality. The medical direc-
tor helps coordinate and evaluate the medical care within the facility by reviewing
and evaluating aspects of physician care and practitioner services, and helping the
facility identify, evaluate, and address healthcare issues related to the quality of care
and quality of life of residents. “A medical director should establish a framework for
physician participation, and physicians should believe that they are accountable for
their actions and their care” [16].
The medical director addresses issues related to the coordination of medical
care identified through the facility’s quality assessment and assurance committee

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 Role and Responsibilities of Medical Director 䡲 167

and quality assurance program, and other activities related to the coordination of
care [25–28]. This includes, but is not limited to, helping the facility

䡲 Ensure that residents have primary attending and backup physician coverage
䡲 Ensure that physician and healthcare practitioner services are available to help
residents attain and maintain their highest practicable level of functioning,
consistent with regulatory requirements
䡲 Develop a process to review basic physician and healthcare practitioner
credentials (e.g., licensure and pertinent background)
䡲 Address and resolve concerns and issues among the physicians, healthcare
practitioners, and facility staff
䡲 Resolve issues related to continuity of care and transfer of medical information
between the facility and other care settings

A response from a physician implies appropriate communication, review, and resi-

dent management, but does not imply that the physician must necessarily order
tests or treatments recommended or requested by the staff, unless the physician
agrees that those are medically valid and indicated.
In addition, other areas for medical director input to the facility may include

䡲 Facilitating feedback to physicians and other healthcare practitioners about

their performance and practices
䡲 Reviewing individual resident cases as requested or as indicated
䡲 Reviewing consultant recommendations
䡲 Discussing and intervening (as appropriate) with a healthcare practitioner about
medical care that is inconsistent with applicable current standards of care
䡲 Assuring that a system exists to monitor the performance of the healthcare
practitioners
䡲 Guiding physicians regarding specific performance expectations
䡲 Identifying facility or practitioner educational and informational needs
䡲 Providing information to the facility practitioners from sources such as nation-
ally recognized medical care societies and organizations where current clini-
cal information can be obtained
䡲 Helping educate and provide information to staff, practitioners, residents,
families, and others

Critical Investments to the Medical Directorship

The most important investment to the medical director position is dedicated time
devoted by the physician. Performing administrative duties should be kept separate
from clinical time spent caring for residents as their attending physician. Although
contractual duties of the medical director may require only several hours per month,
it is vitally important for the medical director to invest the time to become involved

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 168 䡲 Handbook of Long-Term Care Administration and Policy

in the fabric of the facility, to identify problems, and to participate in solutions.

This type of involvement usually requires at least eight hours per week for a 100-
bed facility. The time requirement for these administrative tasks would vary only
slightly in smaller or larger facilities. Each task requires a certain amount of time to
develop and implement, which is fairly fi xed regardless of the number of the beds.
A second critical investment is adequate staff support. Many nursing facili-
ties have been highly successful in dedicating a physician assistant or advanced
practice nurse to a part- or full-time position in assisting the medical director. This
individual would investigate clinical situations, organize and conduct quality man-
agement monitors, review charts for compliance with resident care policies, and
represent the medical director when absent. This position can be vitally important
in assisting the medical director to provide 24-hour coverage of resident care and
administrative problems. Although all attending physicians should have 24-hour
coverage for the residents in their practice, if the system fails, emergency coverage
for those residents falls to the medical director or his or her surrogate.
Adequate financial resources must be allocated by the nursing facility as a third
critical investment. The medical director should receive adequate support for their
administrative time. Physicians have often been willing to assume the medical direc-
torship to supplement their income with nursing facility resident care visits and by
the revenues generated by hospital admissions from the facility. Basing the medical
director position on a salary and not on resident care revenue should enable the medi-
cal director to devote the time required to effectively perform their administrative
duties. The long-term care facility and medical director should delineate the financial
arrangement and responsibilities of each party in a written contract. Adequate finan-
cial resources would also be required if a physician assistant or advanced practice nurse
is employed. Medical staff liaison activities, staff assistants, the quality management
program, and education activities all require financial support by the facility.
Education is the fourth critical investment that must be made by both the nursing
facility and the medical director. Education for all nursing facility employees enhances
quality of care and employee satisfaction, and may increase employee retention. In-
service sessions and teaching rounds help motivate the staff to do a good job and
increase their morale. Integrating the nursing facility into geriatric medical and nurs-
ing education is imperative for providing quality care now and in the future. The
teaching nursing home develops great pride in the staff and residents of the facility.

Conclusion
The medical director of a long-term care facility is of vital importance in the
management and provision of quality care. Excellence in nursing facility care will
never be achieved until the medical director plays a truly meaningful role in the
operations of the facility through an integral involvement, appropriate organizational
position, and adequate financial support. The position of medical director should be

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 Role and Responsibilities of Medical Director 䡲 169

nurtured and enhanced by the medical community and long-term care industry.
Only then will society be assured of the highest quality in nursing facility care.

References
1. Gruber, H. W. The medical director in the nursing home—a catalyst for quality care.
Journal of the American Geriatrics Society. 1977; (November)11: 497–499.
2. Pattee, J. J. Role of medical director in a nursing home. Minnesota Medicine. 1977;
(February): 107–108.
3. Lawson, I. R., et al. Medical director in long-term care. Journal of the American
Geriatrics Society. 1978; (April): 157–166.
4. Fanale, J. E. The nursing home medical director. Journal of the American Geriatrics
Society. 1989; (April): 369–375.
5. Elon, R. The nursing home medical director role in transition. Journal of the American
Geriatrics Society. 1993; (February)2: 131–135.
6. Levenson, S. A. The new OBRA enforcement rule: Implications for medical directors
and attending physicians (7 parts). Nursing Home Medicine 1995; 3: 32–34, 45–48,
83–85, 122–126, 150–154, 195–199, 214–216.
7. Levenson, S. A. Bridge building, not rain dancing: A medical director’s core man-
agement responsibilities. Journal of the American Medical Directors Association. 2001;
(May/June)3: 125–133. http://www.jamda.com/article/PIIS1525861004701814/fulltext.
8. Levenson, S. A. The impact of laws and regulations in improving physician performance
and care processes in long-term care. Journal of the American Medical Directors Asso-
ciation. 2004; 5(4): 268–277. http://www.jamda.com/article/PIIS1525861004701358/
fulltext.
9. Levenson, S. A. The Maryland regulations: Rethinking physician and medical
director accountability in nursing homes. Journal of the American Medical Directors
Association. 2002; (March/April)2: 79–94.
10. Boyce, B. F., Bob, H., Levenson, S. A. The preliminary impact of Maryland’s medi-
cal director and attending physician regulations. Journal of the American Medical
Directors Association. 2003; 4: 157–163.
11. Institute of Medicine. Improving the Quality of Long-Term Care. Washington: National
Academy Press; 2001, p. 201.
12. American Medical Directors Association. Roles and Responsibilities of the Medical
Director in the Nursing Home, Position Statement A06, March 2006.
13. CMS Manual System Pub. 100–07. State Operations Provider Certification, Transmit-
tal 15. Tag F501, Medical Director—Guidance to Surveyors. November 28, 2005.
14. Levenson, S. A. The nursing home medical director: A new era. Journal of Long-Term
Care Administration. 1989; 17(1): 6–9.
15. Pattee, J. J., Otteson, O. J. Medical Direction in the Nursing Home—Principles and
Concepts for Physician Administrators. Minneapolis, MN: Northridge Press; 1991, p. 5.
16. Levenson, S. A. Medical direction in long-term care. A Guidebook for the Future, 2nd
ed. Durham, NC: Carolina Academic Press; 1993, p. 135.
17. Zimmer, J. G., Watson, N. M., Levenson, S. A. Nursing home medical directors:
Ideals and realities. Journal of the American Geriatrics Society. 1993; 2: 127–130.

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18. Pattee, J. J. History and evolution of the role of the medical director. Clinical Geriatric
Medicine. 1995; (August): 331–341.
19. Dimant, J. Roles and responsibilities of attending physicians in skilled nursing
facilities. Journal of the American Medical Directors Association. 2003; (July/August)4:
231–243. http://www.jamda.com/article/PIIS1525861004703552/fulltext.
20. Levenson, S. A. Medical Director and Attending Physicians Policy and Procedure
Manual for Long-term Care. Dayton, OH: MedPass; 2005.
21. Swagerty, D. L., Rigler, S. The physician’s role in directing long-term care: Under-
standing the rules is important for protecting your patients and your practice.
Postgraduate Medicine. 2000; (February)2: 217–227.
22. Winn, P., et al. Improving communication among attending physicians, long-
term care facilities, residents and residents’ families. Journal of the American Med-
ical Directors Association. 2004; 5(2): 114–122. http://www.jamda.com/article/
PIIS1525861004700663/fulltext.
23. American Medical Directors Association. Role of the Attending Physician in the
Nursing Home, Position Statement E03. March 2003.
24. www.amda.com.
25. Levenson, S. A. A medical quality assurance and improvement program: The essentials
for a medical director. Journal of Medical Direction. 1993; 3: 20–27.
26. Levenson, S. A. The knowledge base of long-term care medical direction: Guidelines
for contributors and continuing education planners. Journal of Medical Direction.
1992; 2: 12–15.
27. Levenson, S. A. The medical director and continuous quality improvement. Journal
of Medical Direction. 1992; 2: 67–75.
28. Wilson, K., et al. Facility investigations: Medical directors should know the rules.
Journal of the American Medical Directors Association. 2002; 2(4 Supplement):
H38–H39. http://www.jamda.com/article/PIIS1525861004705162/fulltext.

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 FOCUSING ON III
SERVICES

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CRC_AU5327_S003.indd 172 1/1/2008 3:49:33 PM
 Chapter 10

Long-Term Care Services,

Care Coordination, and
the Continuum of Care

Megan E. McCutcheon and William J. McAuley

Contents
The Care Continuum............................................................................... 174
Ideal Continuum of Long-Term Care Compared
with Current Reality ................................................................................176
Long-Term Care Services .........................................................................177
Informal Care: The Backbone of Long-Term Care ..............................177
Home- and Community-Based Care ...................................................178
Nursing Home Care ............................................................................179
Assisted Living Facilities......................................................................180
Personal Care Settings .........................................................................181
Continuing Care Retirement Communities ........................................181
Care Coordination Models ......................................................................182
Long-Term Care Case Management ....................................................182
Healthcare Coordination ....................................................................183
Transitional Care and Care Coordination ...........................................184
Chronic Care Model ...........................................................................186

173

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 174 䡲 Handbook of Long-Term Care Administration and Policy

Disease Management Model ...............................................................186

Care Coordination Programs ...................................................................187
Program of All-Inclusive Care for the Elderly ......................................187
Rural Program of All-Inclusive Care for the Elderly .......................188
Web-Based Care Coordination ...........................................................189
Health Maintenance Organizations ....................................................190
Social Health Maintenance Organization ...........................................190
Coordination and Advocacy for Rural Elders ...................................... 191
Future Directions..................................................................................... 191
Conclusion...............................................................................................192
References ................................................................................................192

The Care Continuum

The 35-year-old concept of a continuum of care continues to play an important
role in the conceptualization, design, and implementation of programs and services
that address the growing needs of the aging population. Liebowitz and Brody intro-
duced the term “continuum of care” in 1970, developed through the collaboration
of research and practice, to describe a concept of care for older individuals within
acute, intermediate, and independent living environments (Liebowitz and Brody,
1970). Ideally, a continuum of care consists of a wide variety of services and appro-
priate providers that deliver assistance and support, which address the diverse and
changing needs of older people (Liebowitz and Brody, 1970). A true continuum
of care would involve episodic healthcare visits that occur, along with required
continuing care, as the client progresses through various care environments as he
or she becomes less capable of living independently (McBryde-Foster and Allen,
2005). The care continuum should range from services for active seniors (such as
those provided through senior centers and area agencies on aging) and assistive
community services (home health, personal care, and nutrition services) to facil-
ity admissions due to unstable or declining health conditions. Palliative care and
hospice, interspersed with occasional, unpredictable outpatient and hospital visits,
should be available for end-of-life needs (Dyeson, 2004).
Clearly, certain groups of younger people experience chronic disabilities and
would also benefit from care coordination. For example, children with develop-
mental disabilities or complex medical needs may experience frequent transitions
of care from hospitalizations to specialists’ community offices. Not only can coor-
dinated care positively affect the status of children and young adults by improving
access to services, decreasing hospitalizations, and assuring comprehensive care,
but it can also limit the negative effects of illnesses and disabilities on their par-
ents (i.e., parents’ work schedules) (Palfrey et al., 2004). Pediatric cancer patients
are another population that may require shared management of care so that ser-
vices and treatments are provided effectively and efficiently (Kisker et al., 1997).

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 Long-Term Care Services, Coordination, and Continuum 䡲 175

The medical home model designed for youth highlights communication, collabora-
tion, and integration as integral parts for the continuity of coordinated care (Kelly
et al., 2002). The American Academy of Pediatrics and the U.S. Department of
Health and Human Services identified several important steps for successful transi-
tions of child care to adult-oriented care. These steps strongly emphasize care coor-
dination and the various elements involved with the delivery of comprehensive care,
which will be discussed throughout this chapter (Rosen et al., 2003). It is clear that
coordinated care is applicable to many different populations in need of continuing
medical attention; however, this chapter focuses on the older population, which is
more likely to require such supportive services.
Three important points should be made about the continuum of care at the
outset. First, the use of the term “continuum” may suggest that older people move
along a steady progression from independence to greater dependence and death
in a consistent, predictable manner. This is not at all the case for most elderly
people. Instead, there may be many declines and improvements in health status
and functional capacity as people experience short-term shifts in chronic diseases,
contract acute illnesses, and are treated and cured or receive rehabilitation and
restorative services. Given these continually shifting circumstances, programs and
services must be nimble and responsive to change. Those responsible for organiz-
ing and providing long-term and acute care to the aged must keep in mind that
such clients have the capacity to rebound if they receive appropriate treatments
and services. Therefore, when assessing the requirements of older individuals, care
coordinators should consider whether rehabilitation and restorative services would
be beneficial.
Second, it is too easy to reify the continuum of care—to think of it as the
prevalent state of affairs, rather than as an ideal concept against which current con-
ditions should be measured. In only rare cases are there medical and long-term care
services and programs, funding sources, and coordination personnel in place to
constitute a true continuum of care for older people. In most cases, what currently
exists is, at best, cobbled together, incomplete, and inadequate for the vast majority
of individuals in need. Therefore, priority should be placed on policies that facilitate
the actualization of a continuum of care model—with the full range of programs
and services—to more elders (Gross et al., 2004; Palley, 2003).
Third, the term “continuum” suggests a beginning and endpoint, with move-
ment in one direction. In reality, older people experience dramatic change in
functional capacity and acuity over time, with periods of improvement as well as
decline. Therefore, we should be careful when referring to a continuum of care not
to suggest one-way movement toward more impairment and more intensive service
needs. Kane (1993) has suggested that we use the term “repertoire” of services to
emphasize that there should be a variety of available services that elders can utilize
as they need them, where they need them. Although we agree with her goal, and
terminology can definitely make a difference in our perceptions, we will use the
term continuum because it is generally accepted.

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 176 䡲 Handbook of Long-Term Care Administration and Policy

Depending on the needs and conditions of the older adult, multiple professionals
may be involved with the provision of care at any point. Therefore, it is important for
care coordinators to understand the extensive variety of services that may be available
in any area. Their responsibilities include assessing the needs of their clients as well
as helping them negotiate the service system miasma caused by the complexities of
applications, eligibility determinations, multiple service agencies, scheduling issues,
and other factors that are required to assure that the elders receive the care when and
where they need it. As the central communicator among the client, healthcare and
long-term care providers, payers, and other family and community resources, the
care coordinator is the individual who can best optimize the older person’s health
and functional outcomes (McBryde-Foster and Allen, 2005).

Ideal Continuum of Long-Term Care

Compared with Current Reality
Ideally, a continuum of long-term healthcare and social services would consist of the
early recognition and management of each health event, change in condition, medi-
cal procedure, or other issues affecting an individual’s health or function. It would
entail a seamless coordination of complete healthcare and social services across set-
tings and across changes in health status (The Care Coordination Coalition, 2005).
It would take into account available informal supports and client choice (Stone,
2000). It would also be setting-independent, as much as possible, so that older
people are not forced to change residence to receive the types of services they
need. The care would be provided by a multidisciplinary team of professionals
who know the client’s health history and are aware of current ailments, medica-
tion regimens, recent procedures, test results, and ongoing social and medical
services. Such knowledge could only be achieved through complete and accurate
record keeping and a commitment to information sharing across all providers. To
establish an ideal continuum of care within a community, there should be a skill-
ful collaboration among the various providers in the locale, so that information
is readily exchanged and services can be effectively and efficiently coordinated
(Stefanacci and Podrazik, 2005).
Unfortunately, this ideal is not met in most cases. One problem in establishing
a proficient continuum of care for elders is the diverse funding streams that have
some responsibility for long-term care and healthcare and that utilize very differ-
ent eligibility criteria. The current financing of healthcare, which is varied and
disjointed, does not meet the needs of this aging population (Gross et al., 2004;
Miller and Weissert, 2004).
Medicaid is a welfare program that merges federal and state funds for people
with very limited financial resources (Palley, 2003). States have considerable leeway
in determining who is eligible and what services are available, fostering large differ-
ences among the states in the types of assistance provided and who can receive them.

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 Long-Term Care Services, Coordination, and Continuum 䡲 177

Medicaid is the primary funding source for nursing home care, primarily because
a large number of residents “spend down” to Medicaid eligibility levels while in the
facilities (Stefanacci and Podrazik, 2005).
Medicare, however, is a completely federal program that subsidizes a variety
of healthcare services for the elderly and disabled, including physician, hospital,
rehabilitation, hospice, and home healthcare; recently Congress added a prescrip-
tion drug benefit. Although Medicare reimburses for some nursing home days
following acute episodes, it does not pay for long-term nursing home care (Centers
for Medicare & Medicaid Services, 2002).
Some older individuals have private health insurance or private long-term care
insurance. In 2003, approximately 61 percent of noninstitutionalized persons aged
65 years and above had some form of private health insurance, with 35 percent
obtained through an employer or employment-based retirement plan and 29 percent
purchased directly by the recipient; a small minority obviously received health
insurance through both sources (Administration on Aging, 2004b). In contrast,
the growth of private long-term care insurance has been relatively slow, and it is not
currently a major payment source for such care. Currently, only about 7 percent of
long-term care spending is financed by private insurance (Feder et al., 2000). Many
of these privately paid policies cover health services not supported by Medicare.
There are many gaps and redundancies in the services available through these fund-
ing streams and, with the exception of some special circumstances described in the fol-
lowing section, they do not “work together” very well. The limited opportunity to craft
a reasonable set of services for an individual across these and other health financing
sources is a substantial impediment to a continuum of care for older people.
Access to a continuum of care is especially a concern for rural elders who need
medical and social assistance but have limited access to the necessary services and
programs. One-fifth of the country’s older population resides in rural areas; such
residents are more likely to be older and in poorer health and have more functional
impairments than urban older adults (National PACE Association, 2002a). Rural
and small town elders also tend to have lower incomes by nearly 20 percent than
their urban counterparts (Ritchie et al., 2002). The limited housing, health, and
social support options available for both low-income and rural seniors suggest that
those who are in the greatest need of services may also be the most likely to experi-
ence an inadequate continuum of care (Stefanacci and Podrazik, 2005).

Long-Term Care Services

Informal Care: The Backbone of Long-Term Care
It has been estimated that up to 85 percent of elder care in the United States is “infor-
mal” care provided by family, or in some cases, friends or neighbors (Lubben and
Damron-Rodriguez, 2003). Because most “formal” services (those provided for pay)

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 178 䡲 Handbook of Long-Term Care Administration and Policy

are available only intermittently, on a limited schedule, or for short periods; the
help provided by informal caregivers is crucial. It has been estimated that the dollar
value of informal care provided to older people is approximately $257 billion per
year (Pandya, 2005; United States Department of Health and Human Services,
2005). Because the assistance provided through informal sources is so important
to continuity, any approach to care coordination should take the availability of
informal caregivers into account, including the types of care they can provide,
their expertise for providing it, their physical and psychosocial needs, the level of
burden they experience, and the potential for burnout (Dyeson, 2004). Further-
more, because these caregivers often take on the role of care coordinator as well,
they should be continually involved and consulted as decisions are made regarding
the types and scheduling of formal services (Coleman and Boult, 2003; Craig and
Jones, 2005; Stille et al., 2005).

Home- and Community-Based Care

Home- and community-based care consists of services provided to older community
residents in their homes or in community settings outside their homes. Such assis-
tance includes social and medical care services, case management, home-delivered
meals, transportation, senior center programs, adult day care centers, and respite
services. Several studies have suggested that the care provided through home- and
community-based services can delay or limit the need for institutional care (Palley,
2003). Continual management of follow-up visits and assessments in home- and
community-based programs can potentially decrease mortality, delay functional
deterioration, and prevent the need for high-cost institutional facilities (Ritchie
et al., 2002). Clients and relevant family members should be informed of the vari-
ous service options so they can be involved in decision making. They should be
closely linked with the care team that completes assessments so they can be directly
involved in care planning as well (American Geriatrics Society, 2000).
Home health services funded by Medicare provide nursing, rehabilitation, and
assistive care. Social workers maintain contact with recipients and providers and
coordinate this care (Dyeson, 2004). Recently, however, the program has sub-
stantially reduced home health services and has instituted policies that curtail
long-term care (Herd, 2001; McCall et al., 2003).
Aimed at limiting the utilization of institutional facilities, Medicaid-waiver
(Section 1115) programs establish home and community services for frail older
adults (Palley, 2003). These Medicaid-funded services are generally less medically
oriented than those offered through Medicare and tend to emphasize personal care
and homemaker assistance. As noted earlier, many older individuals are not eligible
for such services due to strict income and asset limitations.
Many community-based services are available through area agencies on aging, estab-
lished through the Older Americans Act, to address the well-being and independence

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 Long-Term Care Services, Coordination, and Continuum 䡲 179

of older adults. Some of the programs available include senior centers, adult day
services, nutrition services, and transportation. These various services address the
multiple needs of the growing older adult population and allow many older indi-
viduals the opportunity to remain in the community. However, although these ser-
vices are potentially available to all elders, because of limited dollars, area agencies
on aging are expected to target those with the greatest social and economic needs
(Administration on Aging, 2000, 2004a; United States Department of Health and
Human Services, 2005).
Senior centers offer social, physical, educational, and recreational activities to
community-dwelling older adults. For those who are less independent and have
additional care needs, adult day centers may be more appropriate. The latter address
the needs of older adults with functional or cognitive impairments while providing
respite care to their caregivers as well (National Association of Area Agencies on
Aging, 2006). The variety of care offered may include personal assistance, thera-
peutic services, meals, caregiver support groups, social services, and health-related
services (Pandya, 2004). The majority of adult day services are private pay because
only limited public funding has been available. Greater access to adult day care
would allow more older individuals to remain in the community and potentially
avoid costly institutionalization (Pandya, 2004).
Congregate meal sites can be found at senior centers as well as at other facili-
ties within the community. Through congregate meal programs, seniors receive a
nutritional lunch within a social setting (National Association of Area Agencies
on Aging, 2006). Older individuals who have mobility problems and are unable
to shop or prepare their own food can also receive nutritious meals without leav-
ing their home through home-delivered meal programs, such as meals-on-wheels
(National Association of Area Agencies on Aging, 2006).
There are also programs that provide transportation services to older adults who
have difficulty traveling to medical offices, meal sites, or other critical locations
(National Association of Area Agencies on Aging, 2006). Although often limited in
schedule and coverage area, transportation services can often facilitate service coor-
dination by providing clients crucial access to a wider variety of service locations.
Area agencies on aging not only offer programs that can help older individuals
remain in their homes, but they also seek to coordinate the comprehensive delivery
of care either directly or through the collaboration with other community provid-
ers (National Association of Area Agencies on Aging, 2006). Unfortunately, their
low level of funding and lack of direct control over agencies with which they do not
have service contracts limit their ability to coordinate services effectively.

Nursing Home Care

Individuals who require ongoing skilled nursing services, substantial assistance with
basic activities of daily living (ADL), or rehabilitation services may be admitted to

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 180 䡲 Handbook of Long-Term Care Administration and Policy

nursing homes. Approximately 1.6 million people reside in approximately 17,000

facilities in the United States (Katz and Karuza, 2005). It has been estimated that
by the year 2030, 5.3 million older adults will be receiving care in nursing homes
(Malench, 2004).
Because Medicare policies regarding the funding of hospital-based acute care
have led to reduced hospital stays of older people, they tend to be admitted to nurs-
ing homes “quicker and sicker” than they were in the past. This transition toward
providing care in facilities and settings traditionally used for long-term care has
obscured the unclear distinction between acute and long-term care (Stone, 2000).
Furthermore, nursing homes and acute care hospitals tend to have very different
goals and care standards (Katz and Karuza, 2005): Acute care hospitals emphasize a
disease-focused medical model; nursing homes stress a maintenance and quality-of-
life model. Recently, due to the reductions in length of hospital stays, more nursing
homes have also established a rehabilitation mission. These differing approaches to
care can result in substantial problems in transition and unique case management
issues (Katz and Karuza, 2005).
Th rough a special Medicare program, rural hospitals can defi ne a certain
number of their acute care beds as swing beds, which can switch from acute to
skilled nursing beds, as needed (Dalton et al., 2005). Th is program is especially
valuable in supporting older people in the transition from acute to rehabilitation
or recuperation care because they can make the switch without moving to a new
setting. In fact, they often can stay in place, receiving much or all of their care
from the same staff. Moreover, swing beds are helpful to rural hospitals, many of
which are experiencing fi nancial woes, because they can discharge patients from
acute care while retaining them as skilled care. In many very rural counties,
the only available skilled nursing beds are hospital swing beds. In general, the
stays of people in rural hospital swing beds are considerably shorter than those
in freestanding skilled nursing facilities or in hospital-based skilled care units
(Dalton et al., 2005).

Assisted Living Facilities

Assisted living facilities have been developed with a consumer focus and are typically
private-pay facilities. They offer homelike environments, and tend to operate on more
of a hospitality model than a healthcare or long-term care model (Mollica, 2003).
Although state and local regulations for assisted living facilities differ considerably,
thereby limiting standardization, requirements generally include the provision or
coordination of several services that include round-the-clock staff, health and social
services, housekeeping, laundry, activities, meals, and transportation (Stefanacci and
Podrazik, 2005).
Assisted living facilities appeal to older individuals interested in more options
for later life living, especially those elders with limited function or cognitive decline

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 Long-Term Care Services, Coordination, and Continuum 䡲 181

and complex medical conditions, because they can age in a homelike environment
while maintaining more of their independence (Stefanacci and Podrazik, 2005).
However, due to the diverse care needs of this population, and the generally limited
on-site services available, it can be difficult to maintain a balance of independence
with the need for assistance as elders become frailer. Therefore, it is important for
these facilities to acknowledge that they are often serving a vulnerable population,
and to be vigilant about exceeding the facility’s ability to address their special and
wide-ranging care needs (Stefanacci and Podrazik, 2005). Approximately 900,000
residents are living in more than 36,000 assisted living facilities in the United Sates.
More than half of the residents are aged 85 years or above, and a relatively large
percentage needs at least some assistance with ADL and medication management
(Stefanacci and Podrazik, 2005).

Personal Care Settings

Board and care homes are residential facilities that provide supervision and per-
sonal care assistance to a relatively small number of older people who can no
longer live alone and do not require skilled nursing care (Benedictis et al., 2005;
Medicare, 2005b; Perkins et al., 2004). They are also referred to as adult foster
or family care homes, residential care facilities, adult group homes, personal care
facilities, and sometimes even assisted living facilities. Board and care homes often
provide services to low-income residents who generally pay for their care with their
supplemental security income (SSI) benefits (Herd, 2001; Perkins et al., 2004).
Some of the services provided include a private or shared room, meals, assistance
with ADL, and staff oversight (Benedictis et al., 2005; Castle, 2004; Perkins et al.,
2004). Although board and care homes are an important component within the
aging network, there are significant issues related to the regulation of these facili-
ties. Licensing of these settings depends on state and local laws and, due to the lack
of consistent monitoring, the quality of care provided to residents is of some concern
(Benedictis et al., 2005; Castle, 2004; Medicare, 2006).

Continuing Care Retirement Communities

Continuing care retirement communities (CCRCs), also referred to as life care
communities, generally include independent, assisted, and nursing home settings
on a single campus. Usually, individuals enter the CCRC once and can transi-
tion from setting to setting as warranted by their needs and health status (AARP,
2004). CCRCs are chiefly private-pay environments, with entrance fees ranging
from $20,000 to $400,000 in addition to monthly payments. Residents may either
own their units or rent them (AARP, 2004). The three most commonly available
contracts for CCRCs include “extensive contracts” that permit unlimited long-term
nursing care for either a small increase in monthly payments or at no additional

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 182 䡲 Handbook of Long-Term Care Administration and Policy

cost; “modified contracts” that provide long-term nursing care for a specified time
and cost; and “fee-for-service contracts,” in which long-term nursing care is paid in
full by the resident at the daily rate (AARP, 2004). The flexibility of receiving care
outside of the community may be limited by the requirements in the CCRC con-
tract (Centers for Medicare & Medicaid Services, 2005). Although many of these
communities assure care for the remainder of an individual’s life, the high costs of
CCRCs often make them unaffordable options for those with lower incomes.

Care Coordination Models

Because of the many complications and disjunctions within long-term care and
between acute care and long-term care, and because the ideal continuum is
extremely rare in any community, coordination is a key component of long-term
care for the older population. The characteristics of effective care coordination
include diagnosis and assessment, eligibility determination, support with appli-
cations and enrollment, communication with formal organizations and informal
caregivers, development of all-inclusive plans, and maintenance and sharing of
accurate records (Aliotta, 2003; Burton et al., 2004; Coleman, 2003). Such coordi-
nation is essential for enhancing the delivery of quality care and quality outcomes,
especially for older people who are frail and have complex needs (Aliotta, 2003;
Chumbler et al., 2005; Gittell and Weiss, 2004; Mollica, 2003; Temkin-Greener
et al., 2004). In the following sections, we describe models of care coordination,
beginning with case management, the most common approach.

Long-Term Care Case Management

Case management, a professional approach to coordination, aims to facilitate the
appropriate delivery of informal, self, and agency care to older people (Lubben and
Damron-Rodriguez, 2003). It is an essential component of care coordination. Those
older people receiving home- and community-based care tend to benefit from this
approach by experiencing an increase in services, life satisfaction, and care confidence,
as well as a reduction in unmet needs (American Geriatrics Society, 2000).
Quality case management depends on a case manager who is experienced and
educated about the aged, especially their complex medical, functional, and social
problems, and the services that can address their special needs (American Geriatrics
Society, 2000). The case manager identifies a frail elder’s special requirements and
coordinates the services provided by multiple practitioners and across settings.
At the same time, he or she seeks to optimize client autonomy and function
(American Geriatrics Society, 2000; Tahan, 2005). In addition to coordinating ser-
vices, case managers must also manage the funding sources of these services, includ-
ing multiple public and private sources (Lubben and Damron-Rodriguez, 2003).

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 Long-Term Care Services, Coordination, and Continuum 䡲 183

In fact, because of differing client needs, funding streams, and eligibility require-
ments, advocacy is a crucial activity in assuring that clients and family members
can successfully negotiate the maze of items that comprise any local “system” of
care (Tahan, 2005). Case managers must advocate for the client’s best interest while
coordinating the range of required services, to assure that elders achieve their opti-
mum functioning or return to their previous health status (Tahan, 2005). Owing to
the multifaceted responsibilities involved with numerous providers and payers, case
managers face enormous challenges (Mollica, 2003). They must therefore under-
stand the complex reimbursement policies of various public and private agencies
and be knowledgeable of other available resources, including informal caregiver
support (American Geriatrics Society, 2000).
Monitoring services to assure that the quality and quantity of care is another
important responsibility of care coordinators. In addition to coordinating formal
services and informal supports, social workers or nurse case managers can also
provide direct services along with other team members such as home health profes-
sionals (Lubben and Damron-Rodriguez, 2003).
Although case managers are often paid by an organization that is respon-
sible for funding part or all of the community services, some families and older
individuals use private case managers for this purpose (Lubben and Damron-
Rodriguez, 2003). In addition, some case management models involve agencies
that are responsible for both the management and delivery of care (Lubben and
Damron-Rodriguez, 2003).

Healthcare Coordination
Any effort to coordinate long-term care successfully must also include acute health
services and transitions from acute to other forms of care. Older individuals may be
served by several physicians and from multiple providers who address their various
health conditions, functional impairments, and social needs. Because many elders
have comorbidities, they often receive care from multiple specialists (Gittell and
Weiss, 2004). In fact, about 15 percent of Medicare clients receive care only from
specialists (Koopman and May, 2004). The use of so many different doctors can
result in limited communication among them as well as a lack of complete knowl-
edge of their clients’ health history, health conditions, or treatments (Coleman and
Bout, 2003).
Such isolated healthcare can lead to adverse effects, including the replication
of services or medications, conflicting and confusing care instructions, avoidable
hospital and emergency room utilization, and higher overall costs (Aliotta, 2003;
Burton et al., 2004; Parry et al., 2003; Temkin-Greener et al., 2004). It can also
result in medication errors, overmedication, and adverse drug reactions (Burton
et al., 2004; Coleman and Bout, 2003; Koopman and May, 2004; Parry et al.,
2003). Interdisciplinary care teams that address communication and coordination

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 184 䡲 Handbook of Long-Term Care Administration and Policy

across providers and settings can help avoid these potentially serious problems
and improve the efficacy of acute and long-term care (Parry et al., 2003; Temkin-
Greener et al., 2004).
Collaborative efforts to provide continuous care coordination across acute and
chronic health conditions will most likely require organizational change. One
approach should include the involvement of clients and their families in care plan-
ning, which would lead to more informed, confident, and prepared recipients and
caregivers. The shared management of care can be enhanced through education
aimed at providing clients and their families with the skills necessary to assist with
the maintenance of medication schedules and the promotion of healthy behaviors
(Harrison and Verhoef, 2002).
Additionally, procedures must be established to facilitate the sharing of client
information among providers. Such efforts are complicated by unlinked record
systems, the transmission of noncoded clinical data, and complex administra-
tive information that includes various insurances and relevant social information
(Gittell and Weiss, 2004; Miller and Weissert, 2004). The sharing of comprehensive
care plans that can be understood across settings is one strategy for improving com-
munication and coordination (Schrag, 2005).
Rewards have generally been lacking for professionals who participate in shared
decision making for treatments as well as those involved in the development of
comprehensive healthcare plans (Schrag, 2005). However, financing strategies have
been used by some payers to motivate and promote healthcare coordination. One
example is the provision of fi xed monthly payments to the hospital and its physi-
cians that include the various forms of required follow-up care in addition to their
usual fees (Gittell and Weiss, 2004).

Transitional Care and Care Coordination

Many older adults experience numerous care transitions due to shifts in chronic
conditions and hasty hospital discharges promoted by financial requirements (Parry
et al., 2003). Transitional care consists of coordinated and continuous care pro-
vided to clients during these periods, sub- and postacute nursing settings, services
provided in the client’s home- or community-based services, assisted living settings,
or nursing homes (Coleman and Boult, 2003; Parry et al., 2003). It should include
a comprehensive plan that takes into account the current objectives, preferences,
and health status of the client (Coleman and Boult, 2003).
Older individuals moving to and from various health and long-term care set-
tings are at risk for disjointed care due to the independent operation of provider
organizations (Coleman et al., 2004; Parry et al., 2003). The resulting fragmen-
tation of services may lead to conflicting care recommendations and medication
regimens, deficient follow-up, care disruption, risks of care disparities and replica-
tion, and limited planning for the future (Coleman et al., 2004; McBryde-Foster

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 Long-Term Care Services, Coordination, and Continuum 䡲 185

and Allen, 2005). Inadequate transitional care can also increase the unnecessary
use of hospitals and emergency rooms, thus increasing costs (Coleman et al., 2004;
Moore et al., 2003).
Hospital discharge staff members often do not have adequate time to orga-
nize efficient or effective transfers due to fi nancial pressures (Parry et al., 2003).
Other barriers include the lack of fi nancial incentives, inadequate quality mea-
sures, limited formal relationships between and among sites, and untimely man-
agement of client data transmission, which is often complicated by the Health
Insurance Portability and Accountability Act (HIPAA) (Coleman, 2003). As a
result, service providers in the next setting may not receive complete informa-
tion about a client’s condition, prognosis, or type of care required (Parry et al.,
2003). Clearly, transitional care planning and coordination must be improved
so that providers across settings can minimize adverse outcomes, promote care
continuity, and plan and deliver quality care that is appropriate for meeting the
needs of older people (Coleman and Bout, 2003; McBryde-Foster and Allen,
2005; Moore et al., 2003).
It is particularly important for clients and their family caregivers to be part of
the development of transitional care plans (Coleman, 2003; Malench, 2004; Parry
et al., 2003). This involvement should include the education of the client and family
about the care to be delivered and the creation of clear and realistic expectations,
thus increasing client confidence and generating the empowerment needed for suc-
cessful progression through the health and long-term care systems (Harrison and
Verhoef, 2002). It is particularly important to discuss new care settings with care
recipients and their families. They should also receive guidance on managing the
client’s condition; addressing modified medication and activity regimens; identify-
ing adverse symptoms or regressions and appropriate contact persons for further
questions or concerns; and assuring the timely initiation of care (Coleman, 2003;
Craig and Jones, 2005).
About 30 percent of clients who experience care transitions within the final
30 days of their lives are transferred at least three times. Because of the lack of
information and limited attention given to the preferences of the client and family,
caregivers experience a high level of dissatisfaction with the care provided (Craig
and Jones, 2005). The evidence suggests, then, that providers are often not aware
of client or family care preferences or do not have access to a plan indicating the
preferences.
One example of an effort to coordinate care transitions is the Care Transi-
tions Intervention model, which focuses on client education and supports for active
involvement in the transition process. It addresses four critical areas of transitional
care, including self-directed medication safety, communication of health records,
follow-up care, and symptom management. These objectives correspond with
national efforts to support client-centered care, collaborative planning, coordinated
care, drug safety, and lower healthcare costs (Coleman et al., 2004; Parry et al.,
2003). The design of the intervention, although standardized, is sufficiently flexible

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 186 䡲 Handbook of Long-Term Care Administration and Policy

to mold around a client’s individual needs and chronic conditions. Importantly,

intervention recipients were less likely to have subsequent hospitalization (Coleman
et al., 2004).

Chronic Care Model

The chronic care model was designed to address and improve assistance for
individuals with ongoing conditions. Six important elements of the chronic
care model include (a) developing provider and community resource relation-
ships; (b) implementing complete organizational support of chronic care deliv-
ery; (c) empowering clients and families and promoting self-care management;
(d) defining team responsibilities and care structures; (e) incorporating chronic
care guidelines into daily practice; and (f ) utilizing electronic information sys-
tems for reminders, tracking client status, and accessing client registries. These
model components have been found to decrease costs and increase the quality of
such care (Bodenheimer et al., 2002).
The senior health center model is a primary care clinic for older clients that is
based on the former model. It provides care coordination and access to qualified
health workers from various disciplines. The senior health center supports self-care
management and the use of electronic health records (EHRs), which have been
found to improve client health communication across settings, including nursing
homes and home health agencies (Stock et al., 2004). The organization of compre-
hensive service sites for multiple conditions, each requiring specialized resources,
serves to promote holistic care while minimizing overhead costs. Although this
approach should enhance access to care, to date there is little research comparing
its outcomes with those of more traditional care (Stock et al., 2004).

Disease Management Model

The disease management model is a client-centered coordinated care model
designed to (a) assure the continuous quality improvement of care through a
primary care coordinator, regardless of client care setting and (b) identify both
effective and ineffective methods of care as determined through treatment out-
comes (Claiborne and Vandenburgh, 2001). Th is model has evolved from both
population-based care for chronic conditions and evidence-based medical out-
come models that promote interdisciplinary approaches to disease intervention.
In addition to the objectives of providing evidence-based health promotion and
quality-of-life improvements, prevention, comprehensive care assessments, and
early treatments, the disease management model also strives to reduce the length
of episodic care, provide disease-specific treatments, and encourage the self-
management of illness. The delivery of disease management care involves a shift
from professionals providing episode-specific care to an interdisciplinary team

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 Long-Term Care Services, Coordination, and Continuum 䡲 187

approach that facilitates access to services, client education, and assessment of

psychosocial issues (Claiborne and Vandenburgh, 2001).

Care Coordination Programs

Demonstration programs are being conducted in several states to improve the coor-
dination of care within and across long-term and acute care settings. Some of the
program goals include restructuring of the health delivery systems, minimizing
episodic and intermittent care, creating easier access to services, and establishing
interdisciplinary coordination teams. One of the first programs that embraced the
joint health and functional approach to aging care was the federal Program of All-
Inclusive Care for the Elderly (PACE) (Mollica, 2003).

Program of All-Inclusive Care for the Elderly

PACE, developed as an alternative to long-term care, addresses the functional
independence of low-income seniors who are nursing home certifiable but want to
remain in the community as long as possible (Friedman et al., 2005; Gross et al.,
2004; Lynch et al., 2005; Mollica, 2003; Palley, 2003). PACE enrollees must also
be at least 55 years old and live within the program service area.
The program provides individualized care by a team of professionals at day
health centers, where a primary care clinic is housed (Coleman, 2003; Friedman
et al., 2005; Lynch et al., 2005). The multidisciplinary team consists of a physi-
cian (often a geriatrician), nurse, social worker, and ancillary therapists, as well as
additional professional and nonprofessional staff (Lynch et al., 2005). PACE staff
members monitor their clients across primary, acute, and long-term care settings,
and are involved with the planning of the client’s discharge in each place (Coleman,
2003; Gross et al., 2004; Lynch et al., 2005; McBryde-Foster and Allen, 2005;
Temkin-Greener et al., 2004). This approach to care can address and limit the risks
associated with uncoordinated care as the client’s needs change. The programs usu-
ally contract with medical providers but retain responsibility for the management
of services and reimbursements (Lynch et al., 2005).
PACE advanced from a demonstration project in 1986 to a recognized managed
care provider through the Balanced Budget Act of 1997. The PACE program receives
capitated funds from Medicare and Medicaid, which helps overcome problems with
differing funding streams. It serves over 9000 participants at the 28 PACE location
sites in 17 states (Friedman et al., 2005; Lynch et al., 2005). The average participant
is 80 years of age, with 7.9 medical conditions and three ADL limitations (National
PACE Association, 2002b). Although program recipients tend to have serious ADL
limitations and medical problems, with slightly less than half having a diagnosis of
dementia, they experience reduced utilization of nursing homes (Friedman et al.,
2005; National PACE Association, 2002b), fewer hospitalizations, relatively limited

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 188 䡲 Handbook of Long-Term Care Administration and Policy

physical decline, greater use of ambulatory services, and better reported quality of
life and health status than similarly situated nonrecipients (Lynch et al., 2005).
Assessments of PACE programs have demonstrated that they are an efficacious and
cost-effective model of quality care for this vulnerable and potentially costly aging
population, and a valuable option for coordinating long-term and acute care (Gross
et al., 2004; Palley, 2003). In general, PACE tends to be less costly than traditional
fee-for-services care (Gross et al., 2004).
Because the programs depend on adult day health centers and require partici-
pants to be nursing home eligible, state agencies do not focus exclusively on this
care coordination program (Mollica, 2003). Some other barriers that might affect
the growth of PACE include the limited ability of enrollees to use outside care pro-
viders, high costs for non-Medicare eligible participants, state and local financial
restrictions, staffing shortages, and unsupportive state policies (Gross et al., 2004).
Additionally, considerable effort is required to establish a PACE site, including the
time and costs for the modifications of information systems for processing claims
or reports, establishing program criteria and rates, managing quality assurance
efforts, and processing PACE application approvals, as well as for the operation of
the program and its facilities (Gross et al., 2004).

Rural Program of All-Inclusive Care for the Elderly

The provision of PACE services to rural elders is needed to address the needs
of this isolated and aging population (National PACE Association, 2002a).
However, due to the limited number of healthcare sites and the access problems
that rural older adults experience, alternative approaches to service delivery are
needed. Some potential methods for expanding PACE-type programs for rural
elders include use of mobile sites or outreach centers housed with other units that
can deliver services to participants, application of technological approaches that
can support team coordination and delivery of care, identification and recruit-
ment of nontraditional transportation providers, implementation of contractual
community partnerships with diversified providers, and the expansion of services
to other populations requiring extensive care coordination (National PACE Asso-
ciation, 2002a).
Rural PACE programs can be created using a network model that includes
team members from various organizations and locations, shares network facilities
and equipment, and assists with enrollment (National PACE Association, 2002a).
Another model is the rural–urban linkage approach: It extends existing PACE
programs to neighboring or nearby rural areas or joins existing rural and urban
providers to create a new PACE program for rural older adults that can provide
specialized services, which would otherwise not be available; spreads administrative
costs and financial risks across a larger group of participants; and utilizes familiar
rural community resources (National PACE Association, 2002a).

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 Long-Term Care Services, Coordination, and Continuum 䡲 189

Web-Based Care Coordination

Because provider communication and client outcomes have been found to be posi-
tively associated, the application of information technology systems can be a useful
method for enhancing the current problematic communication and care coordina-
tion that too frequently exists between and among physicians and care settings
(Burton et al., 2004; Coleman, 2003). The secure transmission of electronic data
for clients with multiple chronic conditions can minimize the negative outcomes of
uncoordinated care (Burton et al., 2004). According to the Institute of Medicine,
EHRs can enable clinicians to update, exchange, and access complete and current
client data easily across a variety of settings (Burton et al., 2004). The Institute of
Medicine encourages the use of EHRs to minimize the uncoordinated care and
medical errors that may otherwise result from incomplete or broken information
sharing (Koopman and May, 2004). Another advantage of EHRs is that it elimi-
nates paper records that are difficult to update and standardize for cross-setting use
(Coleman, 2003).
There are several feasible options to achieving the benefits of EHRs, including
Web-based interfaces to access data, smart cards containing a computer microchip
with client health and demographic information, and personal data assistants man-
aged by clients or family members with information provided at all healthcare or
long-term care sites (Burton et al., 2004; Coleman, 2003).
Although EHRs can improve the communication of clients’ records and facili-
tate the coordination of care, different health systems may utilize separate, incom-
patible EHR systems, thereby limiting their effectiveness (Koopman and May,
2004). Other barriers include the lack of standardized records, high start-up and
maintenance costs, the lack of clinical or financial support, client privacy concerns,
and the legal liability of physicians. Also, some disadvantages of the smart card
system have been identified, such as lost cards, inconsistent updates by providers,
and the need for universal readers at all provider locations (Burton et al., 2004;
Coleman, 2003).
The San Francisco Department of Aging and Adult Services has developed a pro-
gram that uses an Internet-based care management tool that allows agencies to share
client information and manage their care. The online consumer assessment, refer-
ral, and enrollment standard instrument, used to access all services, creates referrals
to applicable services within the aging system, and allows cross-communication of
program participants (Coleman, 2003).
The Department of Veterans Affairs (VA) has implemented a client-centered
care coordination/home-telehealth program (CC/HT) to address the self-care
needs of chronically impaired older individuals living in the community (Chumbler
et al., 2005). CC/HT enhances self-monitoring of health status and allows direct
client/provider communication through the use of such data and communica-
tion technologies. Using four of the six elements (discussed in the section titled
Chronic Care Model) of the chronic care model, CC/HT sends data daily over

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 190 䡲 Handbook of Long-Term Care Administration and Policy

the Internet to the care coordinator to determine if a follow-up contact is necessary.

This thoroughness can assist in the early detection of additional problems (Chumbler
et al., 2005). An increase in primary care visits among diabetic veterans using CC/
HT suggests that the program and care coordinators were effective in monitoring
clients, ensuring that their needs were addressed before any decline in health sta-
tus (Chumbler et al., 2005). Research findings suggest that the program potentially
could limit future diabetic problems and improve symptom management, as well as
save costs, primarily due to a decrease in hospitalizations (Chumbler et al., 2005).
Furthermore, CC/HT was found to enhance the quality of care by educating the
client and strengthening client/provider communication through the use of telecom-
munication technologies (Chumbler et al., 2005).

Health Maintenance Organizations

There are several managed care plans available through Medicare, including health
maintenance organizations (HMOs), preferred provider organizations (PPOs), and
private fee-for-service plans. HMOs contract with the federal government to provide
health coverage to Medicare eligible individuals who choose to enroll in this type of
health plan. The percentage of participating providers has been decreasing steadily
due to capitation rates that they deem to be inadequate (Evashwick, 2001). Among
other measures, the Medicare Modernization Act of 2003 has attempted to increase
the number of network providers by raising these payments (MCOL, 2005).
In addition to the regular services covered by Medicare, individuals enrolled in a
Medicare HMO may also receive benefits such as vision, hearing, dental, prescription
drug coverage, and extended days in the hospital (Centers for Medicare & Medicaid
Services, 2006). Enrollees are assigned a care manager who assesses and monitors the
services delivered by network providers (Evashwick, 2001). Participants must also
choose a primary care physician within the HMO network. Although some might
view this as a negative requirement of the plan, it can also be potentially benefi-
cial as a means for effective care coordination. The roles of both the care manager
and primary care physician, for example, can potentially curtail the duplication
of services, conflicting care recommendation by multiple providers, and negative
polypharmacy effects (Evashwick, 2001).

Social Health Maintenance Organization

The Social Health Maintenance Organization (SHMO) is a demonstration project
aimed at providing care to individuals enrolled in Medicare (Gross et al., 2004).
Although it has been operating for 20 years, there are only four functioning pro-
grams to date (Gross et al., 2004; Medicare, 2005a). Supported by the federal gov-
ernment, SHMOs include coverage of home- and community-based services for
the chronically disabled (Lynch et al., 2005). SHMO I sites (currently three) utilize

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 Long-Term Care Services, Coordination, and Continuum 䡲 191

care coordination to manage and individualize home- and community-based care.

SHMO II (currently one) alters the payment methods to include risk adjustments,
thereby addressing concerns about selective enrollments as well as attempting to
incorporate geriatricians more directly into the development of care plans (Lynch
et al., 2005). Unfortunately, there are very limited findings supporting positive out-
comes for these demonstrations or suggesting the improvement of enrollee health
and quality of care as compared to other Medicare HMO or fee-for-service recipi-
ents (Lynch et al., 2005).

Coordination and Advocacy for Rural Elders

In 1997, the Coordination and Advocacy for Rural Elders (CARE) program was
initiated to extend and improve community services and chronic care for frail aging
rural veterans. Its goal was to support their health and function by increasing access
to community-based and VA facility-based health and social services, promoting
preventive and self-care education, and offering care coordination and advocacy.
This program, which began as a pilot, educates clients and caregivers, provides
client advocacy, arranges services, and follows client progress. CARE has been
found to be a useful model of rural care for vulnerable older veterans residing
at home. Over the years, many unaddressed client needs have been detected by
CARE staff and almost two-thirds of the clients have been referred to service
providers (Ritchie et al., 2002).

Future Directions
Home- and community-based services can play an important role in establishing
and maintaining a successful continuum of acute and long-term care for the frail
older population. As discussed throughout this chapter, they can promote inde-
pendent living, assist with transitions, and delay institutionalization. However, we
have also described how various healthcare systems and insurance plans can con-
tribute to the fragmentation of care delivered to the older adult population. One
approach for the future provision of comprehensive and coordinated care to the
chronically ill aging population includes the development of home-based managed
care organizations. Such programs can address the growing need for home care ser-
vices overall as well as meet the specific needs and preferences of older and other
chronically ill populations. Consumer choice within managed care has become a
real concern for disabled people because of the direct relationship between quality of
care and quality of life (Kodner and Kyriacou, 2003). The current lack of consumer-
directed care in many managed care programs means limited involvement by cli-
ents and family members in the decision-making process regarding health-related
services, treatments, or care sites. Because these decisions are controlled most often

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 192 䡲 Handbook of Long-Term Care Administration and Policy

by the managed care organizations, recipients, and caregivers alike are deprived
of the knowledge, confidence, and empowerment needed for the successful coor-
dination of services and smooth progression through the long-term care system
(Harrison and Verhoef, 2002; Kodner and Kyriacou, 2003).
Seven recommendations by the Care Coordination Coalition (2005) to the
White House Conference on Aging Policy Committee offer a view toward the future
directions that should be undertaken to improve the coordination of care for older
Americans. The Coalition’s recommendations include (a) reimbursement levels based
on the provision of coordinated and comprehensive care; (b) requirements for quality
coordinated care, such as multidisciplinary services and management across set-
tings, advance care planning, continuing education and training for client self-
management, and round-the-clock contacts; (c) standardized electronic client care
records accessible by multiple providers; (d) finance demonstration projects for opti-
mal care planning and delivery; (e) long-term care annual workforce reports that
include policy effects; (f ) annual reports on the status of coordinated care system
development; and (g) stimulation of aging care through a national agenda.

Conclusion
Clearly, the much ballyhooed continuum of care for older adults remains a hollow
concept for most older recipients of long-term care. It is also evident that care coor-
dination can dramatically and positively affect the health and well-being of older
adults. Service development, communication, collaboration, and care coordination
must be improved to properly address the complex care needs of the aging popula-
tion. Without these improvements, older adults will continue to experience medica-
tion errors, service duplication, fragmented and inadequate care, and unnecessary
hospitalizations and nursing home admissions. Such problems foster a sicker and
more disabled population who require even greater and more expensive care. Along
with the rapidly increasing older population, healthcare costs are also growing at a
fast pace. These expenses can be constrained and care can be improved through the
provision and maintenance of effective care coordination and communication.
This chapter has identified problems with care coordination and some potential
solutions for rectifying them. However, we must explore further ways of improving
current healthcare and long-term care and promoting successful coordination to
enhance the well-being of our frail older population.

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Malench, S.S. (2004). Family and social work roles in the long-term care facility. Journal of
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Ritchie, C., Wieland, D., Tully, C., Rowe, J., Sims, R., and Bodner, E. (2002). Coordination
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 Chapter 11

Legal Issues Related to

Long-Term Care: Elder
Law, Estate Planning,
and Asset Protection

Jan L. Brown

Contents
Introduction ............................................................................................198
Legal Documents .....................................................................................199
Estate Planning ...................................................................................199
Capacity Issues ....................................................................................199
Powers of Attorney ............................................................................. 200
Living Wills ........................................................................................202
Guardianship or Conservatorship ...................................................... 204
Last Will and Testament .....................................................................205
Inheritance Taxes ................................................................................205
Probate ............................................................................................... 206
Revocable Living Trusts or Intervivo’s Trust .......................................207
Asset Protection Planning: Protecting Assets from Nursing
Home Costs ............................................................................................ 208

197

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Nursing Home Care: Its Costs and Affordability ............................... 208

Asset Protection: Case Study .............................................................. 208
Asset Planning: Methods Used for Protecting Assets.......................... 209
Annuities .............................................................................................210
Personal Care Contract .......................................................................210
Spousal Refusal ...................................................................................210
Divorce................................................................................................ 211
Spend Down ....................................................................................... 211
Opposition to Asset Protection Planning ............................................ 211
Jurisdiction: Laws That Apply to Asset Protection Planning................212
The Look Back Period .........................................................................212
Transfers and Gifts: Fair Market Value ...............................................213
Estate Recovery ...................................................................................213
Legislative History Regarding Asset Protection Planning .................... 214
Scams: Exploitation of Seniors ................................................................. 215
Home Improvements or Household Repairs ........................................216
Telephone Scams .................................................................................216
Government Agency Misrepresentation...............................................216
Direct Mail Solicitation....................................................................... 217
Financial Scams .................................................................................. 217
Estate Planning and Living Trust Scams ............................................. 217
Sweepstakes .........................................................................................218
Laws and Enforcement Agencies to Protect against Scams,
Fraud, and Telemarketing Fraud .........................................................218
Conclusion.............................................................................................. 220
References ............................................................................................... 220

Introduction
Many of us think about legal issues, litigation, and using lawyers only when our
rights have been violated and we now need to correct the wrongdoing or defend
ourselves. However, when working with persons who are impaired, either physically,
mentally, or diagnosed with a debilitating illness or disease, it is important to under-
stand that there are laws in effect that serve to protect such persons, their choices,
and their desires. When someone is incompetent or mentally impaired, it is espe-
cially vital to understand the specific legal issues involved and the legal needs that
must be addressed to provide for the incompetent or impaired individual.
This chapter is divided into three sections: legal documents specific to persons
who require long-term care, the legal strategies concerning asset protection for
persons requiring long-term care, and scams and financial exploitation situations
which specifically target seniors or persons who are impaired in some way.

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 Legal Issues Related to Long-Term Care 䡲 199

This chapter is written to provide general information to the reader, not to

provide legal advice. Unlike many professions, law is vastly different from state to
state. Cases which result from litigation provide standards and interpretations of the
laws in each state. Therefore, it is vital that anyone seeking particular legal informa-
tion seek advice from a licensed attorney in the state involved in the action.

Legal Documents
Estate Planning
There are four legal documents recommended for adults, regardless of their
health situation or status. The word “adult” in this case is defined as an individual
above 18 years of age and of sound mind. These documents, which are extremely
important for persons requiring long-term care or with debilitating illnesses, are
Financial Power of Attorney, Healthcare Power of Attorney, Advanced Directive,
a.k.a. Living Will, and a Last Will and Testament or, if appropriate, a Revocable
Living Trust.

Capacity Issues
It is important to understand the capacity-level requirement for the person who
is signing the document. “Capacity,” the term used to determine if someone has
the ability to process information correctly and make decisions for themselves, is
defined by the law in the state where the person is residing or domiciled. The gen-
eral view is that an individual who is impaired may still have the capacity to sign
legal documents depending upon the level of impairment. For example, some-
one with Alzheimer’s disease normally has the capacity to sign legal documents
throughout the early stages and often into the mid-stages of the disease. In the
later stage of the disease, capacity is often in question or nonexistent because an
individual normally can no longer process the information he or she is receiving
or cannot evaluate it and, therefore, is unable to make decisions based on under-
standing of the issue(s). Legal capacity is not to be confused with a physician’s
determination of his or her patient’s medical abilities. Legal capacity is defined
by state laws and cases, although often a physician’s evaluation is helpful or even
required if court involvement is necessary. The capacity level required to sign
certain papers also varies from one document to another as well as from one state
to another. For example, the capacity required to sign a Last Will and Testament
is likely different from that of a real estate contract, deed, or a Power of Attorney
document.
The impaired or ill person’s attorney who is drafting the document is able to
determine if his or her client has the legal capacity to sign it or not. If an individual

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does not have the legal capacity necessary to sign a specific document, the docu-
ment should not be signed, and often court involvement is required (see the section
on Guardianship or Conservatorship).

Powers of Attorney
For anyone who is suffering from health issues, whether a physical ailment or a
mental impairment, an advocate is beneficial and often required to ensure that
proper care and treatment are available. Although this section is addressing the
legal documents for persons who require long-term care services or medical care, the
reader should remember that anyone 18 years of age or older, if impaired, will need
someone to act for them, and very possibly make many important decisions on their
behalf. These decisions include medical treatments, choice of physicians, second
opinions, placement in a rehabilitation or nursing home facility, financial decisions,
paying of bills, filing insurance claims, and obtaining available benefits.
It is this author’s view that the most important legal document people above
18 years of age can have is one that appoints someone or an organization (i.e., an
agency) to act for them in the event that they are unable to act for themselves. This
may mean that someone is unconscious, heavily medicated, or incapable of com-
municating his or her wishes and desires. The document that appoints someone to
act for another is called a “Power of Attorney.”
The purpose and function of a Power of Attorney document is to appoint
another person to act for the signer of the document and provide the “power” or
action that can be taken on behalf of the incapacitated individual. The person
making the appointment is generally called the “principal”; the person appointed is
called the “agent,” “surrogate,” “attorney-in-fact,” or “power of attorney,” depending
upon the state where the document is drafted.
The agent must act in the best interest of the impaired or incapacitated person.
“Best interests” may be defined broadly depending upon the action and again, the
state’s statutes governing the activities of the agent. Sometimes, the term is defined
as “substituted judgment,” meaning agents apply their best judgment to making
decisions on behalf of the principal or impaired person. In a number of states,
criminal as well as civil charges can be brought against agents who have not acted
in the best interest of their clients and such actions have harmed them or were
contrary to their wishes and goals.
What power or authority is given to the agent depends on the document itself
and the way in which the power or authority is interpreted by the courts in the state
where the incapacitated or incompetent person resides. Some states allow agents to
make any and all decisions for their clients, whereas others restrict the authority
to specific types of decisions that are listed in the document itself. For example, in
some states, the agent has the power to gift or transfer monies (normally used to
reduce death taxes or to qualify for benefits) without requiring specific language
authorizing it, whereas other states require very specific language in the Power of

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Attorney document detailing the amounts that can be transferred and to whom the
gifts can be made. In these states, the agent cannot engage in an action unless it is
specifically authorized in the document.
In some states a Power of Attorney document is able to address both financial
and healthcare issues, whereas in other states separate Power of Attorney documents
are required. The former is normally a great convenience for the agent. However,
sometimes clients want different agents for their financial and healthcare decisions;
in this case, two separate documents are required.
Financial Power of Attorney normally allows the agent to manage bank accounts,
stocks and bonds, savings bonds, investments, real estate, loans, mortgages,
notes, retirement accounts (including IRAs, SEPs, 401(k), 403(b), and pensions),
life insurance, personal property, business interests, execute contracts, register
property, and pay taxes. The purpose of the Financial Power of Attorney is to
allow the agent to continue the financial transactions that the incapacitated per-
son would normally handle or attend to new issues that need to be addressed.
Th is can include paying bills (including rent and mortgages), collecting rents
or account receivables, dealing with investments, paying taxes and, of course,
the normally pressing issue of fi ling insurance claims. Without Financial Power
of Attorney, the agent cannot take such actions and bills can go unpaid, notes
uncollected, insurance claims go unfi lled, etc. To act, the agent generally must
present an original or a certified copy of the Financial Power of Attorney to the
bank, investment company, life insurance company, and the like. Some financial
institutions will send the document to their internal legal counsel for review,
whereas others require only a bank clerk to register the document by noting the
agent’s name and the existence of the document in the incompetent or impaired
person’s bank records.
As stated earlier, each state has its own laws and cases which dictate the use of
the Financial Power of Attorney. It is interesting and sometimes frustrating to learn
that many financial institutions also have their own requirements, often which
directly conflict with state law (such as not recognizing Power of Attorney unless
it is the financial company’s Power of Attorney document). Lastly, locale can also
make a difference. Small banks or small towns normally are less strict with the
agents or with their review of the documents.
A Healthcare Power of Attorney document provides the agent with the authority
to act on such issues as choosing or refusing medical treatments, including surgeries;
hiring medical staff, including nursing home aides and other caregivers; selecting
doctors, hospitals, rehabilitation centers, nursing homes, and other housing options;
reviewing medical instructions; planning for ongoing care, burial (including reli-
gious services, if desired), filing medical insurance claims; enrolling in medical
plans and services; and generally communicating with all healthcare providers and
providing them with directions on behalf of their clients. Generally, a Healthcare
Power of Attorney does not provide the agent with the authority to make end-of-life
care decisions.

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The agent is often the advocate for the impaired principal. Normally a spouse,
child, or other relative is the appointed agent. When there is not a relative avail-
able, oftentimes a close friend or agency will act as healthcare power of attorney.
Additionally, there are more and more “geriatric case management” businesses and
many of them are willing to serve as the healthcare agent.

Living Wills
Also known as declarations or advanced healthcare directives or end-of-life
directives, Living Wills are legal documents that provide an individual’s wishes
regarding end-of-life care, including instructions to doctors, hospitals, and
family members. Generally, the Living Will states that an individual does not
want any treatment that prolongs the dying process. Definitions for end-of-life
care, which are state-specific, may include a medical condition which is “termi-
nal,” the individual is in a “state of permanent unconsciousness,” or he or she
enters into a vegetative state.
“Terminal” generally is defined as a condition that is incurable and is likely to
cause death within a relatively short period of time. Treatment to cure or reverse
the condition is not available. “Permanent unconsciousness” signifies a condition
where the upper portion of the brain is no longer functioning and the condition is
irreversible.
Terminal or state of permanent unconsciousness is determined by a physician
(a number of states require two physicians). If the dying individual is able to
communicate and has the capacity, his or her wishes will be followed, regardless of
any Living Will.
The Living Will document addresses life support, medical treatment, palliative
care, and pain care and appoints a surrogate or agent to enforce its instructions.
This person is the advocate for the individual and has the authority to enforce the
individual’s written wishes. Specifically, most states’ Living Will statutes address
the following treatments:

䡲 Cardiac resuscitation. A group of treatments used when someone’s heart and

breathing stops. CPR is used in an attempt to restart the heart and breath-
ing. It may consist of mouth-to-mouth breathing or it can include pressing
or pounding on the chest to mimic the heart’s function and cause blood
to circulate. Electric shock and drugs also are used frequently to stimulate
the heart.
䡲 Mechanical respiration. Used to support or replace the function of the lungs.
A machine called a ventilator (or respirator) forces air into the lungs. The
ventilator is attached to a tube inserted into the nose or mouth and down
into the windpipe (or trachea). Mechanical ventilation often is used to assist

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a person through a short-term problem or for prolonged periods in which

irreversible respiratory failure exists due to injuries to the upper spinal cord or
a progressive neurological disease.
䡲 Tube feeding. The provision of artificial nutrition and hydration or any other
artificial or invasive form of nutrition (food) or hydration (water) supplements
or replaces ordinary eating and drinking by giving a chemically balanced mix
of nutrients and fluids through a tube placed directly into the stomach, the
upper intestine, or a vein.
䡲 Blood transfusion. The transfer of blood or blood products from one person
(donor) into another person’s bloodstream (recipient).
䡲 Forms of surgery or invasive diagnostic tests. Surgery is the branch of medicine
concerned with diseases and conditions which require or are amenable to
operative procedures. Surgery is the work done by a surgeon. Invasive pro-
cedure is a medical procedure which penetrates or breaks the skin or a body
cavity, that is, it requires a perforation, an incision, a catheterization, etc. into
the body; a diagnostic test is a procedure which gives a rapid, convenient, and
inexpensive indication of whether a patient has a certain disease.
䡲 Kidney dialysis machine. A machine that filters a patient’s blood to remove
excess water and waste products when the kidneys are damaged, dysfunc-
tional, or missing. Blood is drawn through a specially created vein in the
forearm, which is called an arteriovenous (AV) fistula. From the AV fistula,
blood is taken to the dialysis machine through plastic tubing. The dialysis
machine itself can be thought of as an artificial kidney which acts to filter the
blood removal. Once the filtration process is complete, the cleansed blood is
returned to the patient. Most patients using dialysis due to kidney impair-
ment or failure use a dialysis machine at a special dialysis clinic. Most sessions
take about four hours, and typically patients visit the clinic one to three times
per week.
䡲 Hemodialysis. A procedure that cleans and filters blood. It rids the body of
harmful wastes and extra salt and fluids. It also controls blood pressure and
helps the body keep the proper balance of chemicals such as potassium,
sodium, and chloride.
䡲 Peritoneal dialysis. Another procedure that replaces the work of the kidneys.
It removes extra water, wastes, and chemicals from the body. This type of
dialysis uses the lining of the abdomen, the peritoneal membrane, to filter
the blood.
䡲 Antibiotics. A drug used to treat infections caused by bacteria and certain
other microorganisms (National Hospice and Palliative Care Organization,
2004; MedicineNet.com, 2004).

It is vital to take into account an individual’s religious affiliation when discussing a

Living Will and Advanced Directive. Even different segments in the same religious

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group often have different views on appropriate life support and treatments for
end-of-life situations.*
The need for a Living Will was emphasized by the 2005 Florida case of Schiavo
v. Schiavo. Terri Schiavo, residing in a nursing home and receiving life-support treat-
ments, was in a permanently unconscious state for 15 years (The New York Times,
2005). She did not have a written directive regarding her end-of-life choices. After
years of her having received life-support treatment, her husband sought to remove
her from life support. Terri Schiavo’s parents and sibling disagreed, generating a very
long, well-publicized, and difficult fight. Her situation touched off a national religious
and political battle that eventually reached and involved not just the state legislature,
but the governor, the White House, and numerous levels of the judicial system. After
years of legal and political maneuvering, and several court decisions, the feeding tubes
were removed and Mrs. Schiavo died 14 days later (The New York Times, 2005).
The Schiavo case reinforces the need to have written, legal, and effective docu-
ments concerning individual desires for end-of-life care. Because a Living Will is
a legal document, this author recommends that it be state-specific to ensure its
effectiveness and enforceability. Although a Living Will often is described as a
simple document, it is not simple to make choices regarding one’s end-of-life care
and to ensure that they will be honored. The best time to prepare and sign a Living
Will is prior to a life-threatening time or event, so these important desires can be
made with clear thinking and time given to the choices chosen.

Guardianship or Conservatorship
If an individual is impaired and has not signed a Financial Power of Attorney or
Healthcare Power of Attorney and no longer has the capacity to sign these docu-
ments, court involvement may become necessary. Again, each state’s laws determine
the action necessary to have an individual or agency appointed or to provide health-
care and financial agency assistance to the incapacitated person.
To appoint an individual or agency, a formal court proceeding is required
(called a guardianship or conservatorship, depending upon the state). In these hear-
ings, the alleged incapable or incompetent person must be adjudicated as such and
an individual or agency (a guardian or conservator depending upon the state laws)
must be approved and appointed by the court. Medical testimony is required to
allow the court to determine if the alleged incapacitated person is incapacitated, in
part or in whole.
If the person is found to be incapacitated in part, the court may allow the indi-
vidual to continue certain decision making on his or her own behalf. However, if

* For a comparison on religious affi liations and their impact on end-of-life decisions, see http://
www.dickinson.edu/endoflife/bio.htm, a Web site by James M. Hoefler, Ph.D., professor at
Dickinson College in Carlisle, Pennsylvania, titled Tube Feeding Options at the End of Life.

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he or she is deemed fully incapacitated, then the person can no longer be involved
in decision making, including choices about his or her end-of-life care. Decisions,
of course, should always be in the “best interest” of the incapacitated person. When
a guardianship or conservatorship exist, the court supervises the appointed person’s
actions to ensure that the “best interests” rule is followed. Depending upon the
state, either a simple form or a very detailed report is required to indicate the steps
that have been taken.
The appointment of a guardianship or conservatorship by the court can take
anywhere from a few days to six months or longer, depending upon the urgency of
the situation and the state laws. This author encourages persons to sign Power of
Attorney and Living Will documents so as to choose their own agents and elimi-
nate the need for court involvement.

Last Will and Testament

A Last Will and Testament is a legal document that defines how and what happens
to an individual’s estate after he or she dies. It includes issues such as who will
receive assets, how they will be distributed, and the name of the executor (the
person in charge of handling the estate).
If a person dies without a Will (dying intestate), the laws of the decedent’s state
are the determining factor regarding the decedent’s property. State intestate laws
vary greatly. In some states, the surviving spouse receives the majority of his or her
spouse’s assets, whereas in others states the surviving spouse may receive a very
small share of the estate.
Depending upon state law, a Will may be valid and operational if it is written
and signed (holographic) by the individual. However, most individuals choose to
have an attorney draft it to ensure the Will’s effectiveness. If there are specific
issues (i.e., large estates with federal estate tax issues or “special needs” spouse or
children), they should be included and addressed appropriately in the Will’s draft-
ing and design.

Inheritance Taxes
Entire volumes can be written on the taxes associated with estates and, in fact, the
IRS has detailed its opinions extensively. For this chapter, I will present only a brief
overview of state inheritance taxes and federal estate taxes. The former vary greatly
among the 50 states. Many states, including Pennsylvania, impose an inheritance
tax which is a tax on the right to inherit property. Other states, for example, Florida,
do not have an inheritance tax at all. For those states with an inheritance tax, the
rate varies. The rate also can depend on the relationship of the beneficiary to the
decedent. Tax rates are susceptible to frequent changes, often based upon federal
tax law changes.

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Under the current federal law (2006), estates valued at $2,000,000 or less do not
incur a federal estate tax. For estates with $2,000,000 or more, federal estate tax is
an issue. The federal tax rate incrementally increases to a maximum 46 percent tax
rate. These tax rates are subject to frequent changes which occur with nearly every
rewrite or amendment of the tax laws.
For individuals with larger estates or estates that will incur federal taxes, special
tax planning language can be included in their Will which will minimize and
may eliminate any federal estate tax. Federal tax law is complicated; any estate
that is subject to federal estate tax should be reviewed carefully with an attorney
to plan any necessary steps to minimize the tax due upon the estate. Proper estate
planning for sizeable estates can save hundreds of thousands of dollars and some-
times millions of dollars.

Probate
Probate is generally the legal process required to administer an estate when some-
one dies and has assets titled and owned in his or her name alone. To probate an
estate, an individual’s assets are collected, final debts settled, necessary taxes paid,
then property is transferred from the decedent to his or her heirs. State-specific
requirements also must be fulfilled throughout the process, which can take any-
where from three months to one year, or beyond, depending upon the complexity
of the estate and the state’s probate system.
The first step in the probate process is to determine whether or not the decedent
left a Will. If there is one, the executor and his or her legal counsel take the Will to
the courthouse in the locale where the decedent lived and present it to the Register
of Wills (or court) with a Petition for Probate, or similar document. Normally,
the executor named in the Will is the spouse or adult child. If the executor named
in the Will is not available, or is unwilling to act and there is no other available
successor, an interested party will need to step forward and petition the court to be
appointed administrator of the estate.
If there is no Will or if the original copy of the Will cannot be found, again
someone, normally the spouse or a child, will need to step forward. If there is no
disagreement as to who will serve, the Register of Wills or court will make the
appointment. If, however, there is disagreement among family members, a hearing
may be required.
Once the estate is opened, and an executor is appointed by the court, the actual
administration of the estate can begin. Creditors are normally put on notice to
submit claims against the estate. Beneficiaries or individuals with an interest in
the estate should be notified as well. All of the assets of the decedent are collected
by the executor or administrator and an inventory is taken listing them. A prepay-
ment of inheritance taxes may be appropriate, depending on the state’s law. If an
inheritance tax return is due and the inheritance tax is not paid, penalties and
interest will begin to accrue.

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Other issues which must be handled by the executor may include the selling of
real and personal property, liquidating stocks and other assets, resolving disputes
with creditors, paying debts, establishing an account, applying for an employer
identification number, and preparing and fi ling of the required tax returns. When
all outstanding matters have been resolved, the estate is finalized in a manner
determined by state law. This may require preparing an accounting of the estate
administration and receiving court approval before making final distribution
of the remaining assets in accordance with the Will, or if there is no Will, in
accordance with the laws of the state where the decedent lived. Final settlement
of the estate is done (either informally or formally) depending upon the state’s
requirements. Probate can be involved and time-consuming or less involved, with
minimal time requirements, depending upon the estate itself and the state’s laws
which apply.

Revocable Living Trusts or Intervivo’s Trust

In some states, the process by which an estate is administered (probate) is fairly
simple and can be completed within three to nine months. However, there are other
states where the probate process is tedious, lengthy, and requires court involvement
and high fees. For those states, a Revocable Living Trust (hereinafter referred to as
a Living Trust) may be a better document than a Will to deal with one’s estate.
A Living Trust is a legal document created during a person’s lifetime that
establishes a new entity, a trust, to handle one’s estate. The trust document itself is
created and designed according to specific situations and needs of the individual.
Once the trust is created, certain assets are transferred or retitled into the trust,
which now becomes the legal owner of the assets.
The trust document itself specifies how these assets are managed during one’s
lifetime and distributed upon one’s death. Because a Living Trust is a revocable
instrument, it can be changed or modified during the trustee’s lifetime just like a
Will. The creator of the trust (the trustor) normally has the power to make changes
to the trust such as adding and deleting beneficiaries, changing the terms of their
estate or distribution of assets, and even terminating the trust itself.
A properly drafted, executed, and funded Living Trust will avoid probate and,
instead, a process called trust administration is required. In states which have
a simple probate process, trust administration can be very similar to probate. It
typically takes the same period of time to administer a trust as to probate a Will, and
the costs are generally the same. However, in states that have a burdensome, lengthy
probate process, trust administration may be easier and faster than probate.
If the trust is not funded or drafted properly, then trust administration can
actually take longer and cost more than normal probate costs as both probate and
trust administration can be required. A Living Trust may be advisable if an indi-
vidual desires professional management of his or her funds or if real property is
located outside of the individual’s state of residence.

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Asset Protection Planning: Protecting

Assets from Nursing Home Costs
Nursing Home Care: Its Costs and Affordability
The costs of nursing home care, which vary state by state, depend upon geographic
location. In some states (Alabama, Arkansas, Kansas, Indiana, Kentucky, and
Oklahoma), the charges are below $4,000 per month (or $48,000 per year), whereas
in other states (Connecticut, Hawaii, and New York) they average $7,000 a month
(or $84,000 per year) but can be as high as $9,000 a month (or $108,000 a year).
Costs can also vary within the state, depending upon such factors as small town
versus metropolitan area. For example, in New York, the average monthly cost in
the center of the state, Long Island, Rochester, and New York City is $6232, $9842,
$7375, and $9132, respectively (New York State Department of Health, 2006).
Nursing homes are expensive and most people cannot pay the costs, beyond
a very limited time, on their own. For instance, a 2005 study by Kaiser on the
percentage of elderly living in the community with assets equal to or greater than
three years of nursing homes costs found that only 8 percent of widows and divorced
or never married persons had sufficient assets to pay for their nursing home care for
a period of three years or more. The percentage declined as the population aged, to
the point that only 12 percent of persons aged 85 years and older had assets equal
to or greater than three years of nursing homes costs. Not surprising, a higher per-
centage of males (23 percent) than females (16 percent) had assets sufficient to cover
such nursing home costs (Kaiser Commission on Medicaid and the Uninsured,
2005).
The majority of persons entering nursing homes have no long-term care
insurance. It was not an option for many seniors, often due to such factors as the
high costs of the premiums or the inability of the individual to meet the medical
underwriting restrictions. Thus, the majority of seniors most often pay privately
for their nursing home care until they are impoverished, at which time Medicaid
provides coverage.
Because so many people exhaust their assets quickly, a number of elders began
to seek out ways to shelter or protect their resources. This is especially important
for the noninstitutionalized spouse, families with disabled children, and those who
wish to leave an inheritance to their children.

Asset Protection: Case Study

The following case, which is typical of those that elder law attorneys deal with
on a daily basis, shows why individuals may desire or need to protect their assets.
Situation: a woman (aged 78), whose husband (aged 81) has progressive Alzheimer’s
or a dementia-type disease, has taken care of him at home but finds herself less
capable of providing for him as the disease progresses. He begins to wander,

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becomes very agitated, sometimes physically aggressive, is incontinent, and no

longer sleeps through the night. Their total assets include a home, a vehicle, and
$250,000 in investments and savings. During the marriage, she had stayed at home
raising the children, and he worked to support them until he retired at age 65.
Her income from Social Security is $430 a month; he receives $1097 from Social
Security and $640 monthly from a pension each month. When he passes away, her
Social Security income will increase to $1,097, but she will not receive any of his
pension. If nursing home placement is required, two-thirds of their investments
will be spent on his care; with no planning, she will be allowed to keep only about
$101,000 to provide for her needs during the rest of her life. Her life expectancy
is approximately ten years (according to Social Security actuarial tables for 2006),
although her family has a history of much longer longevity, with many of them
living into their 90s.
If she is frail and requires in-home care assistance she will likely not have
sufficient assets to remain at home for the duration of her life. Nor will she have
sufficient income or assets to cover her costs for an assisted living facility. It may also
become very difficult and possibly impossible for her to pay her health insurance
premiums (Medicare Part B, medical supplements and Medicare Part D, prescrip-
tion cost premiums), prescriptions, taxes, utilities, and other bills that would allow
her to maintain her house.
In this case, if the woman was able to shelter an additional one-third of the
family’s investments, she would be able to avoid impoverishment, have sufficient
means to pay for her healthcare needs as they arise, and likely be able to remain
in her home or afford an assisted living facility. Indeed, the development of legal
strategies and applications to protect assets from nursing home costs was based on
the need to assist persons who otherwise would have insufficient means to care for
themselves as they age and as their healthcare needs increase. The goal is to allow the
institutionalized spouse to qualify for Medicaid, which pays the nursing home costs
while protecting or sheltering assets for the spouse at home (hereinafter called the
community spouse). Protecting assets allows the institutionalized spouse to qualify
for Medicaid earlier than if no asset protection planning had been done.

Asset Planning: Methods Used for Protecting Assets

Gifting funds to children or a relative to remove funds from the institutionalized
spouse and community spouse’s name is one method of protecting assets. Such gifts
must be very carefully calculated and thought out, and issues such as trustworthi-
ness of children, marital status, and ability to manage money and liability issues
must all be completely and thoroughly addressed.
Gifting or transferring funds to an irrevocable trust is another method of
protecting assets. The funds in the trust, which can be made unavailable for nursing
home costs, may be used by the community spouse. Because the trust is extremely
restricted and irrevocable, the assets transferred and the legal document itself must

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be carefully scrutinized. Transferring assets into such a trust results in a penalty

period which, in the past, has been extended beyond the penalty period timeframe
for outright gifts to children or relatives.
The amount of money transferred to a family member or trust must be care-
fully analyzed and calculated. Important factors for consideration are income, cost
of care, asset values and growth expectancy, state and federal taxes, health needs of
the parties, family dynamics, federal and state laws, and the period of ineligibility
of benefits which results from such transfers.
Each state has created exceptions that allow specific instances or transfers to
be acceptable without resulting in a period of ineligibility or penalty period. Some
of the exceptions are included in the regulations themselves, whereas others are
the results of appeals or fair hearings. The latter are not published, so few people
beyond those who were involved in the actions are aware of them.

Annuities
In some states, an immediate annuity can be purchased with the institutionalized
spouse’s money to reduce the funds available for nursing home costs. In the states
that allow it, the purchase of an annuity is not considered a transfer, thereby avoid-
ing any period of ineligibility. In this situation, the income generated will go to the
purchaser of the annuity (either the institutionalized person or community spouse).
The total amount allowed for the purchase of an annuity is state-specific. In some
states, the beneficiary of the annuity, after the institutionalized spouse or commu-
nity spouse, must be the state, allowing the state to recover any remaining assets.

Personal Care Contract

In a few states, personal care contracts are an acceptable way to protect assets from
nursing home costs. In it, a child or other relative receives a sum of money or
property in exchange for lifetime care. They do not need to provide the daily care
themselves but can oversee or supervise it.
In some states, the department administering medical assistance has repeatedly
rejected the personal care contract if the provider or supervisor of care is a family
member. These states have yet to be swayed by the argument that a child who
gives up his or her job and income to care for a parent should be allowed to be
reimbursed in this manner for those years of care or supervision.

Spousal Refusal
In some states, a spouse may assign his or her support rights to the state; the
community spouse can then refuse to pay for the institutionalized spouse’s care.

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Spousal refusals allow the community spouse to keep all of the marital assets and
his or her own income. Only the institutionalized spouse’s income will be available
for the nursing home care. Although federal law permits this process, only one
state, New York, has adopted the federal law regarding spousal refusal.

Divorce
If a person divorces his or her institutionalized spouse, the state often reviews
the situation to ensure that the distribution of assets is fair or that any prenuptial
agreement is accurately followed. However, until recently, divorce has not been
a method generally utilized to protect assets from nursing home costs. With the
passage of the Deficit Reduction Act of 2005 (DRA of 2005), it may be used
more often.

Spend Down
The laws governing Medicaid do not penalize the spending of the institutionalized
or community spouse’s funds as long as fair market value is received for what is
purchased. Spending assets to pay off debt (also known as spend down) can be used
when qualifying for Medicaid benefits. Some of the ways in which spend down
funds can be used are mortgage payments; prepay health insurance premiums; pay
off credit card debt; purchase a vehicle; make “acceptable” improvements to their
residence, such as updating or remodeling the bathroom with safety features; home
improvements; and prepay taxes. The idea of using the spend down strategy is to
provide greater value to the community spouse’s property, something he or she may
not be able to afford otherwise.

Opposition to Asset Protection Planning

The Medicaid program is funded by tax dollars and many persons and organizations,
such as the insurance industry, strongly oppose asset protection planning. The
insurance industry has lobbied successfully to limit asset protection methods.
Insurance representatives prefer that people purchase long-term care insurance
policies to cover some of their nursing home costs. Unfortunately, the vast majority
of seniors cannot afford or do not qualify for long-term care insurance, due to the
very strict medical underwriting requirements.
Some people who oppose asset protection planning argue that millionaires give
away their assets to qualify for Medicaid. However, this is not the case: under the
law, there are penalties and restrictions if large amounts of money are given away.
Such arguments, however false, have been persuasive to Congress and asset protec-
tion planning has been restricted legislatively.

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Jurisdiction: Laws That Apply to Asset Protection Planning

Medicaid (also known as medical assistance) is a federally funded program which
is administered by the states. Although federal law regulates Medicaid, state laws
are a very important component to understanding the eligibility requirements for
Medicaid benefits. Both state-specific regulations and federal law must be utilized
and adhered to when qualifying an individual for Medicaid. This chapter is not
meant to discuss the specifics of the Medicare or Medicaid programs, but to present
some of the laws, rules, and regulations applicable to both the programs.
To qualify for Medicaid benefits, the applicant must meet two major require-
ments: medical necessity and financial eligibility levels (asset limits of $2000–$2400
or less for a one-person household). The latter clearly illustrates that people must
impoverish themselves before they can receive Medicaid benefits. Some assets are
considered “exempt” or not counted when qualifying for medical assistance benefits.
Examples of resources not counted in determining eligibility include the following:

䡲 Your personal home

䡲 $1000–$1500 in life insurance
䡲 Revocable and irrevocable burial reserves subject to specified limits, which is
based on the average amount of a funeral in a county
䡲 Burial space and marker
䡲 One motor vehicle (Pennsylvania Department of Public Welfare, 2007)

The Look Back Period

The look back period is part of the medical assistance application procedure that is
conducted by the state agency administering the medical assistance program. Th is
administrative procedure will review, or look back, for any transfers of property for
less than fair market value. Any transfer of property during the look back period
of time, transferred for less than fair market value, could affect the applicant’s
eligibility for medical assistance. During the look back period of time, the review-
ing organization notes any gifts or distribution of funds that have been made by the
applicant or the applicant’s spouse to determine if any penalty is to be imposed on
these transfers before receiving medical assistance benefits.
The current look back period is 36 months for gifts and 60 months for trusts
from the date of the medical assistance application. Therefore, if someone enters a
nursing home and had made a gift of $32,000 to her children 37 months prior to the
institutionalization, this money would be beyond the look back period and no pen-
alty would be imposed. However, if the person had made the gift 16 months before
going into the facility, there would be a period of ineligibility during which time the
resident would have to pay the bill on her own. Moreover, under recent law changes,
the look back period has been changed dramatically: the DRA of 2005 extends it
to 60 months, from the date of application for Medicaid long-term care benefits.

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Thus, if a person who gave away his assets within the five-year period and applies
for medical assistance benefits, he or she will either have to return the gift or use his
or her spouse’s protected share throughout the penalty period. At the time of this
publication, the DRA of 2005 has yet to be fully implemented by the states and
federal government.
It is important to remember that to qualify for medical assistance, the commu-
nity spouse can have only a small amount of assets (the statutory protected share)
and the institutionalized spouse must be impoverished. Generally, the latter can
only have $2000–$2400 or less.

Transfers and Gifts: Fair Market Value

When the state agency reviews the applicant and his or her spouse’s assets during
the look back period, the agent determines if any of the gifts or transfers made were
at fair market value or not. Fair market value is defined as the true and appropri-
ate value assigned to the object or property transferred. For instance, if a house is
appraised and valued at $140,000, that is considered the fair market value. Therefore,
if the parties sell the house to a child for $140,000, it does not result in a period of
ineligibility. If it is sold for anything less, a period of ineligibility will be imposed.

Estate Recovery
Estate recovery programs, required by federal law, are administered by the states
(Omnibus Budget Reconciliation Act, 1993). Their purpose is to recover any medical
expenses from a Medicaid recipient’s estate. Estate recovery was a monumental
change in the law. Until 1993, Medicaid was an entitlement program, like Medicare
and Social Security, and required no repayment. However, the Omnibus Budget
Reconciliation Act of 1993 (OBRA 1993) changed medical assistance, requiring
the state to recoup the costs of the applicant’s care after he or she dies, using liens
or collection of debt methods.
Each state has defined its own estate recovery program’s parameters and they
vary considerably. Some states restrict their recovery to “probatable” assets (assets
titled in the recipients name alone). However, others have become increasingly
expansive in recent years in their definition of estate recovery property to collect
more funds.
The estate recovery program includes the following parameters: only persons
aged 55 years or older are subject to its provisions; the executors of the estate are
legally responsible for the repayment of medical assistance benefits; states are able
to place liens on estate property so as to receive repayment prior to other claimants;
states do not need to seek repayment until the community spouse has passed
away; and states are prohibited from recovery against the estate if disabled or blind
children reside in the deceased institutionalized person’s home.

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Legislative History Regarding Asset Protection Planning

Prior to 1988, if a married person needed nursing home care, the couple’s assets
had to be depleted before he or she could receive any Medicaid benefits. The
community spouse was thus impoverished, and had a difficult time providing for
his or her basic needs. The Medicare Catastrophic Coverage Act of 1988 (MCCA
1988) allows the community spouse to keep a portion of the married couple’s assets
to meet a minimum monthly maintenance amount. This was the only part of the
MCCA that was not repealed.
Additionally, the MCCA also created a look back period of 30 months, preced-
ing the application for Medicaid, for any transfer of assets. The period of ineligibility
for benefits was computed using a formula based on the value of the transfer (gift)
and the average monthly costs of nursing home care in the state. The maximum
period of ineligibility was 30 months.
Additional restrictions related to qualifying for medical assistance were included
in OBRA 1993. The bill altered asset protection planning by extending the look
back period to 36 months from the transfer of the gift. For certain trust assets, the
look back period was extended to 60 months. Moreover, a new exception for the
transfer rules was created to provide for special needs or disabled individuals under
the age of 65 years.
As stated earlier, OBRA 1993 also established the estate recovery program,
mandating the states to create and implement them. If the state did not do so
within the timeframe of the law, federal funding was to be withheld.
In 1996, another restriction regarding asset protection planning and transfer-
ring assets was written into law with the passage of the Kassebaum–Kennedy bill,
which was renamed as the Health Insurance Portability and Accountability Act
(1996). In this bill, a section was inserted to prohibit the transferring of assets to
qualify for medical assistance benefits and such transfers were defined as a criminal
act. The law was dubbed “Granny Goes to Jail” because nearly all individuals mak-
ing transfers to qualify for medical assistance benefits were senior citizens. This
criminalization of asset protection planning was highly criticized by senior groups.
In 1997, the “Granny Goes to Jail” law was repealed. However, it was replaced with
a new restriction on the “advisor” who provides advice on how to transfer assets to
qualify for medical assistance benefits: that person was now guilty of committing
a criminal act. This law was dubbed “Granny’s Attorney Goes to Jail.” In 1998, the
attorney general of the United States held the “Granny’s Attorney Goes to Jail” law
to be unconstitutional as it violated the First Amendment right of free speech.
In 2005, the most restrictive law to date, the DRA of 2005, was passed by
the Senate with a one-vote margin. At the time of this writing, it has neither been
fully implemented, nor have federal rules and state regulations been published.
Additionally, there are at least six lawsuits pending, all challenging the constitu-
tionality of the law. Therefore, it is uncertain if DRA of 2005 will ever be fully
implemented.

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The DRA of 2005 extends the look back period for all transfers or gifts (except to
disabled children below 65 years of age) from 36 to 60 months. The period of ineli-
gibility is calculated with similar formulas to earlier laws, but the start of the look
back period now begins at the time of the medical assistance application rather than
the date of transfer. It is possible that this requirement will require individuals to
transfer assets five years prior to nursing home placement to protect their resources.
DRA of 2005 also addresses the use of annuities which, in some states, have
been utilized to protect assets. Under the legislation, if an immediate annuity is
purchased to shelter assets from nursing home costs, the state must be named the
remainderment beneficiary. This allows the state to recover some or all of its costs
for the owner’s medical assistance benefits.
The DRA of 2005 also requires, in an effort to stop undocumented immigrants
from receiving Medicaid, proof of citizenship (i.e., birth certificate and passport)
to qualify for the program. This has become an enormous concern as many persons
in nursing homes have Alzheimer’s disease and may not be able to locate a birth
certificate. Additionally, many African Americans in the south during segrega-
tion were not issued birth certificates as they were denied access to hospital mater-
nity wards. It is estimated that 3–5 million low-income citizens may lose medical
assistance benefits because they will not be able to provide proof of citizenship. The
intent of the laws previously discussed in this section has been to restrict or elimi-
nate sheltering of assets from nursing home costs.

Scams: Exploitation of Seniors

Seniors are specifically targeted by individuals and companies that run fraudulent
schemes. A senior may receive 15–20 telephone calls per day by persons solicit-
ing money, selling low-value products for high prices, promising a lottery prize,
or playing on sympathies in hopes of obtaining credit card information or sell-
ing a product. Every day, unscrupulous sales people knock on the doors of older
people, often using high-pressure sales techniques, even threats, to convince them
to buy products, make house repairs, or to purchase unwarranted and nonbeneficial
insurance or financial products. Many seniors make such purchases based upon
the sales agent’s friendliness, honest looking face, or sad stories. Many people have
fallen victim to scam artists who present themselves as sincere and reputable indi-
viduals, sometimes with fake identification and employment history. There are
countless examples of seniors being scammed by sales people who remind them of
their grandchild, who indicate that they would like to be their friend, or threaten
to harm them if a purchase is not made. Persons who fraudulently misrepresent
themselves, a product, or a benefit are often very good at what they do, and scam
operations make billions of dollars every year.
Many seniors are embarrassed and will not report an abuse or fraudulent
occurrence, oftentimes not even telling their families. It is hoped by including the

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following in this chapter, that persons who work with older persons will be aware of
some of the issues surrounding such scams and, if suspected, can assist seniors and
possibly recover some of their money.

Home Improvements or Household Repairs

The typical scenario is a “knock on the door” approach. The scam artist “contractor”
will knock on the senior’s door with a story about the person’s roof, siding, gutter,
driveway, or windows needing repair. He or she will convincingly point out the areas
of repair, appear very knowledgeable, and present the situation to the homeowner
as dire. Payment of 50 percent down, usually in cash, will be requested and then a
future date will be made to replace the item(s). Oftentimes the senior does not have
a receipt or cancelled check to track down or trace the “contractor” who generally
does not ever return.

Telephone Scams
Telephone scams are widespread, ranging from winning lotteries and helping chari-
ties to winning a free vacation and Medicare financial abuse. Telescams are a $40
billion per year business. Recently, there are the “Australian” and “New Zealand”
lottery scams where the caller excitedly announces to the senior that he or she has
a winning ticket for millions of dollars. They are told that they need to pay only
a small fee to receive the million dollar prize. The convincing telephone scammer
provides a telephone number for the senior to call to verify the company, along
with his name and title. Victims are asked to provide their Social Security number
to verify their identification, and credit card number to cover the small fee that is
required before any lottery winnings can be distributed. The big “win,” of course,
is never received. Many of these telephone lottery scam businesses are based outside
the United States and therefore it is nearly impossible to stop them, recover lost
funds, or indict the individuals involved.

Government Agency Misrepresentation

Scam organizations representing themselves as federal, state, and government
employees call seniors to obtain their Social Security and credit card information.
There are countless scams targeting Social Security and Medicare beneficiaries in
this manner. Numerous scams include persons who identify themselves as agents of
the federal government, or from the Medicare office, to discuss benefits. The caller
attempts to obtain Social Security numbers, credit card information, or bank account
numbers on the pretext that such information is required to process a Medicare
claim or enroll the senior in a Medicare benefit (such as free medical equipment).

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Direct Mail Solicitation

Thousands of pieces of mail are delivered to seniors daily which misrepresent
products, issues, laws, and benefits. They range from “estate planning” and “tax
savings” methods to a chance of purchasing “limited time only” trinkets at a high,
inflated cost.

Financial Scams
There are numerous scams which target seniors with the goal of selling financial
and insurance products which offer no benefit to the senior. Disreputable individuals
often sell long-term annuities guaranteeing high interest returns, tax-free interest, and
other false benefits. The sales agents present themselves as people who have special
information that is not easily obtained or known and which can greatly benefit the
senior. Once these agents have the older person’s confidence, they will then convince
the victim to purchase expensive investment products, which can result in restricting
the victim’s access to his or her money and may offer no real benefit to the victim in
her lifetime. Unfortunately, it is not unusual to find that an 85-year-old who cashed
out her stocks, certificates of deposit, or sometimes her entire investment portfolio to
purchase a long-term annuity with a ten- or fifteen-year term without understand-
ing the purchase or restrictions. These purchases often leave seniors without ample
income or assets, placing them in a precarious financial situation for the rest of
their lives.
Many states, most notably New York, have taken action to halt the fraudulent
sales of annuities. Because the commissions on annuities are some of the highest
paid to insurance agents, some states have requested that the sales commission
paid by the insurance company to the sales agent be reduced in an effort to halt
aggressive, inappropriate practices.

Estate Planning and Living Trust Scams

Sometimes the benefits of certain legal documents are misrepresented by unscru-
pulous insurance agents who wish to handle a senior’s investments. Recently,
“Living Trust Mills” have gained attention in many states as one such estate plan-
ning scheme. In some states, Living Trusts offer little or no benefit to a senior.
An insurance agent or company normally partners with unethical attorneys to
misrepresent the benefits of Living Trusts and annuities. The sales agents normally
act as “front” men and will contact the senior either via telephone, direct mail, or
seminar, to discuss “new laws,” “ways to save taxes,” or “probate avoidance schemes,”
often representing themselves as employees of the attorney. The insurance agent
attempts to convince the senior that a Living Trust is cheaper and better than a Last
Will and Testament, that it saves taxes or shelters assets from nursing home costs,

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none of which is true in certain states. Oftentimes, the attorney never meets with
the senior, and will draft the legal documents based on the sales agent’s representa-
tion of the person’s circumstances and needs.
As previously stated, in many states, Living Trusts offer minimal or no benefit
yet may cost ten times more than a Will. The sale is made on the personality and
supposed expertise of the agent. The discovery of the lack of benefits and other
misrepresentations are often discovered by family members only after the victim
passes away.

Sweepstakes
As has been discussed, legitimate services, products, and methods of marketing
can be converted or altered to create a scam or fraudulent scheme. Sweepstakes are
another example. There are numerous legitimate sweepstakes, but there are also now
a number of fraudulent schemes. The typical scenario is where seniors are contacted
and told they have won a prize. They may even receive confirmation of the prize in
the mail, and are then told to wire funds to pay the taxes due, or a “release fee” that
can range from $100 to $10,000. The prize either is never received or is of a much
lower value than the money paid. Because of the way the companies are created, it
is difficult to locate, sue, or recover any of the fraudulently sent cash.

Laws and Enforcement Agencies to Protect against

Scams, Fraud, and Telemarketing Fraud
There are laws specifically created to reduce or eliminate such scams against per-
sons, particularly seniors. Theft, larceny, theft by deception, and fraud are all crimes
that can be prosecuted by filing criminal complaints. Working with the police or
the local district attorney, the senior can report the crime and aid in prosecuting the
person who stole their money or made misrepresentations to them. Cases where an
individual has been a victim of fraud can also be addressed by filing civil lawsuits
against the perpetrators. Such civil action may become a class action lawsuit to try
to recover the money or provide some restitution for many of the persons who were
victimized.
There are also legal agencies and authorities who can act and may possibly recover
the fees. Each state’s Area Agency on Aging (AAA) (under the state’s Department
of Aging) has enforcement powers as defined under the Older American’s Act. The
protective services department of the AAA can institute an investigation based on
anonymous callers and bring criminal charges against perpetrators of fraud. Local
District Attorney Offices often work together with the AAA to pursue and file
criminal charges.
States’ Attorney General Offices have the authority to pursue civil or criminal
actions against perpetrators of fraud, including levying large fines and injunctions,

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 Legal Issues Related to Long-Term Care 䡲 219

which can prevent a company from “doing business” in the state. The consumer
fraud or consumer protection division in the Attorney General’s Office will accept
complaints and investigate them. Oftentimes, companies are more responsive to a
complaint investigation by the Attorney General’s Office than an individual.
In addition, each state’s Department of Insurance has regulating authority over
insurance companies and their agents doing business in their states. The department
can levy a fine, cancel an agent’s license, or restrict the agent(s) and companies involved
in fraudulent sales practices. Similar to the Attorney General’s Office, the Insurance
Departments have consumer protection departments where complaints can be filed
and investigated. A complaint investigated by the Department of Insurance Office
oftentimes also carries more weight and influence than an individual action.
The United States Post Office, specifically the United States Postal Inspector’s
Office, will investigate and prosecute mail fraud. It has the authority to prosecute,
as a criminal action, individuals and companies who use the United States postal
mail service in conjunction with committing a crime such as fraud.
The Federal Bureau of Investigation has the authority to investigate interstate
fraud. Ponzi or pyramid schemes often involve numerous locales and persons work-
ing and selling in many states. In a scam involving large investments, it is not
uncommon to find a number of local and federal agencies investigating and work-
ing together to stop the illegal scheme, prosecute the wrongdoers and recover funds
for the victims.
The Securities and Exchange Commission, another federal agency which works
to bring justice to securities fraud situations, has investigative and prosecution
powers against securities misrepresentation. Aside from the federal agency, each
state has a banking or securities exchange department which also has investigation
and prosecution powers.
In an attempt to regulate and reduce misrepresentation, the federal government
in 1996 enacted a law specifically addressing telemarketing. It restricts the hours
of telemarketing calling and prohibits telemarketers from providing misleading
information about the services or products being offered. It requires firms to main-
tain a “Do Not Call” list, which includes persons who have either registered with
the federal “Do Not Call Registry” or have told the company to add their name to
the list themselves. Violations result in the telemarketing firm being subject to a
$10,000 fine for each offense. Many states have their own “Do Not Call” registry
as well as additional fines levied against offenders.
Finally, the Direct Marketing Association maintains a list of persons who do
not want to receive direct mailings from any organization. To remove their name
from company mailing lists, individuals can send the request to

Mail Preference Service

Direct Marketing Association
PO Box 643
Carmel, NY 10512

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Conclusion
There are numerous legal issues that pertain to all seniors. Creating legal documents
such as a Will, Power of Attorney, Living Will, or Healthcare Power of Attorney are
essential for the senior, especially one who is facing long-term care needs. The laws
surrounding estate planning change and it is important to have legal documents
drafted and reviewed by an attorney to ensure estate planning needs will be met.
In some cases, the senior and family may benefit from nursing home planning
and asset protection plans, especially if nursing home placement is anticipated and
there is a special needs child or community spouse involved. The laws pertaining
to Medicaid benefits also change frequently and often dramatically. It is vital to
obtain expert legal advice for this type of situation to ensure rights are protected
and impoverishment is avoided.

References
Deficit Reduction Act. (2005). Senate Bill 1932, 42 USC §1396p and §1396r-5.
Health Insurance Portability and Accountability Act. (1996).
Kaiser Commission on Medicaid and the Uninsured. (2005). The Distribution of Assets in
the Elderly Population Living in the Community, June 2005. Washington, DC: The
Henry J. Kaiser Family Foundation.
MedicineNet.com. (2004). Definition of terms, retrieved on September 8, 2004, http://
www.medterms.com.
National Hospice and Palliative Care Organization. (2004). Definition of terms, retrieved
on September 8, 2004, http://www.nhpco.org.
New York State Department of Health. (2006). Office of Medicaid Management, January,
Albany, New York.
Omnibus Budget Reconciliation Act. (1993).
Pennsylvania Department of Public Welfare. (2007). Medicaid—General Eligibility Require-
ments, retrieved on April 26, 2007, http://www.dpw.state.pa.us/servicesprograms/
medicalassistance/003670296.htm.
The Medicare Catastrophic Coverage Act. (1988). 42 USC §1396r.
The New York Times. (2005). Week in review, retrieved July 2006, http://www.nytimes.
com/2005/06/19/weekinreview.

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 Chapter 12

Long-Term Care Housing

Trends: Past and Present

Shannon M. Chance

Contents
Almshouse Tradition in the United States .............................................. 222
Differentiation of Specialized Groups ......................................................223
Medical Model Formalizes ......................................................................223
Architectural Developments and Changing Public Perceptions ...........223
Acute Care Takes Center Stage ...........................................................224
Residential Model Differentiates Long-Term Care ...................................225
Cost Concerns Dominate ................................................................... 226
Construction Technologies Evolve ..................................................... 226
National Policy....................................................................................227
The Rise and Decline of Nursing Homes ........................................... 228
Consumer Market Drives Change ...................................................... 230
Trends for the Future ...............................................................................231
Features and Qualities to Include ........................................................232
Special Care Facilities......................................................................... 234
Conclusion...............................................................................................235
References ................................................................................................236

221

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The United States faces a pressing need for more and better housing to sustain its
aging population. As waves of baby boomers reach retirement age, our deficit of
supportive housing begs society to focus its attention on filling the gap. A variety
of disciplines—including healthcare, design, and policy—must lend their talents
toward crafting solutions to meet America’s imminent housing needs. The impend-
ing wave of housing construction for long-term care prompts us to evaluate the
history of housing for the aging as well as the features that contribute to quality
accommodations for elderly and frail people.

Almshouse Tradition in the United States

Institutional long-term care had its humble beginnings in the early American alms-
houses and rural “poor farms” that were developed by local societies and churches.
They were unspecialized institutions that offered welfare service to dependent
persons of all ages, which only incidentally provided some medical care for sick
residents (Malone, 1998; Starr, 1982). Being located in buildings originally con-
structed as private houses (Pratt, 1999; Shore, 1994), colonial American almshouses
maintained a residential appearance as well as a communal nature (Starr, 1982).
Nonprofit community groups, societies, or church organizations often converted
existing homes into almshouse facilities, and they incorporated rules and ways of
interacting that were developed in Europe (Shore, 1994).
Almshouses sponsored by county or municipal governments also emerged to
serve individuals who were unaffiliated with any of the private societies (Shore, 1994).
Publicly funded city almshouses were constructed—dating back to 1622 in Boston,
1713 in Philadelphia, and 1736 in New York—and they provided communal facili-
ties to care for sick, elderly, orphaned, lame, or blind persons (Shore, 1994).
Publicly funded institutions gave way to the first nonprofit hospital built in the
United States, the Pennsylvania Hospital of Philadelphia, which opened in 1756
(Goldsmith, 2005). It was followed by privately financed hospitals in New York
(chartered in 1791 and opened two decades later) and Boston (in 1821). These pri-
vate hospitals are notable because they were the first permanent facilities in the
United States that were specifically developed to provide care for the sick, and to
serve all social classes (Starr, 1982).
Despite the advent of the medical hospital, the almshouse continued to provide
a mainstay of care in the United States. The almshouse actually increased in impor-
tance in the 1800s, often duplicating services found in hospitals (Malone, 1998;
Starr, 1982). Starr (1982) explains that the need for almshouses increased in 1828
when the U.S. government ended “home relief” programs that had been financing
in-home care for the needy during difficult economic times. He states

By making the almshouse the only source of governmental aid to the

poor, legislatures hoped to restrict expenditures for public assistance.

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 Long-Term Care Housing Trends: Past and Present 䡲 223

Often squalid and over-crowded, a place of shame and indignity, the

almshouse offered a minimal level of support—its function as a deterrent
to poverty and public assistance ruled out any amenities. Deterioration
and neglect were common. (Starr, 1982, p. 150)

Differentiation of Specialized Groups

Following the Civil War, reformers wanted to dismantle the ill-reputed almshouse;
residents were often sent to other facilities that were being created specifically to
house the sick, the orphaned, the “insane,” and the blind (Starr, 1982). McArthur
(1970) notes that other specialized facilities were created for widows, seamen, and
military veterans and that this trend directly influenced long-term care by distin-
guishing aged individuals as a need-specific group. According to him, by the early
1930s the elderly were almost entirely separated from other need groups.
At the same time, public hospitals enjoyed improved public perception—especially
because their mortality rates were decreasing. For one, operators began the practice of
moving contagious and other undesirable patients to “pesthouses,” remaining alms-
houses, or specialized institutions. These new medically oriented facilities often also
excluded people with incurable conditions, sending them to long-term care facilities
(Starr, 1982). Asylums and similar long-term care institutions were developed on large
rural tracts of public land in remote areas, further reflecting a desire to separate the
general population from those with the most stigmatized conditions (Pratt, 1999).

Medical Model Formalizes

Interest in the layout and design of hospital facilities gained attention, and in 1858,
Florence Nightingale introduced a new ward design (Purves, 2002; Thompson and
Goldin, 1975). The Crimean War had precipitated Nightingale’s work to improve
hospital ward layout and efficiency, as well as hygiene and ventilation (Starr, 1982;
Thompson and Goldin, 1975). Nightingale’s open-ward floor plan provided efficient
ventilation and nurse stationing at the ward entrance (Bobrow and Thomas, 2000).
The Crimean War also prompted Isambard Brunel’s civil engineering designs for
mobile and rapid-deployment hospitals that could easily be extended at the ends;
this open-ended scheme is still in use today (Bobrow and Thomas, 2000; Thompson
and Goldin, 1975). American colonists borrowed plan layouts such as these from
Europe, as well as an English system of laws and values that mandated self-reliance
for the able-bodied (Shore, 1994).

Architectural Developments and Changing Public Perceptions

European precedents—regarding design and social values—have tremendously
influenced American attitudes toward healthcare as well as the physical form of

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long-term and acute care facilities. With the emergence of the public hospital, the
general tone of hospital architecture shifted to reflect an increasingly bureaucratic
organization, serve a changing user group, and render new medical services. The
hospital’s interior and exterior features shed their residential nuances in favor of a
more public style influenced by an increasingly business-like, paternalistic structure
(Starr, 1982).
According to Bobrow and Thomas (2000), nursing units that house patients for
long periods have historically formed the core of hospitals. Before 1200, nursing
units used the same type of open bay structure as church naves. In fact, the first
hospital nursing units were often part of an abbey and their form remained rela-
tively unchanged through the 1800s (Bobrow and Thomas, 2000; Thompson and
Goldin, 1975). Although construction methods of the time did not allow the long
spans possible today, the narrow form, typical of both nursing units and Gothic
church naves, provided ample day lighting. The rows of beds aligned along exte-
rior walls of the narrow space also benefited from natural cross-ventilation. This
was important because electric lighting and mechanical systems (to heat, cool, and
clean the air) had not yet been developed.
The character and number of hospitals changed markedly following the Civil
War. The open bay form dominated for many centuries, but studies conducted at
the Johns Hopkins University hospital in 1875 identified problems inherent in these
large, open nursing wards (Bobrow and Thomas, 2000; Thompson and Goldin,
1975). They recommended alternative models that could decrease noise, distribute
heat more evenly, increase patient privacy, and allow for isolating infected patients
(Bobrow and Thomas, 2000; Thompson and Goldin, 1975). Open wards disap-
peared as smaller patient rooms (arranged along double-loaded corridors) gained
popularity (Bobrow and Thomas, 2000).

Acute Care Takes Center Stage

Following the Civil War, acute care provided by hospitals became the dominant
concern in healthcare; long-term care did not receive the same proactive concern and
development. The advent of both antiseptic surgery and nursing as a profession rein-
forced the systems of order and cleanliness that characterized medical care of the late
1800s (Starr, 1982). Although hospitals came to be seen as places where people went
to recover, long-term care facilities acquired a negative stigma. In addition, hospitals
developed programs for research and teaching (Shore, 1994), but this sort of inquiry
and invention and hope and optimism did not transfer to long-term care.
The standard home for long-term care at that time provided meager services to
collections of elderly, orphans, disabled, and mentally ill people, and was viewed
as a last resort (Shore, 1994). The types of social support and services previously
available through the almshouse (such as companionship, meals, and basic personal
care assistance to people of all ages who could not provide these for themselves)
became increasingly less accessible. Malone (1998, p. 798) claims that between the

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 Long-Term Care Housing Trends: Past and Present 䡲 225

early and mid-twentieth century, the “almshouses disappeared, sometimes through

being transformed into other institutions (such as long-term care facilities).” Some
social welfare programs were developed (independent of care facilities) in the first-
half of the 1900s, but many of the services previously available at almshouses were
never replaced.
Starr (1982) indicates that need for almshouse-type care did not diminish with
the inception of the medical hospital. Migration to cities—such as that following
the American Civil War—actually increased the demand for both acute and long-
term care. These influxes changed the structure of the American family, detaching
people from their familial support systems.

Residential Model Differentiates Long-Term Care

As hospitals dedicated more of their beds to surgery and acute care, they discharged
patients earlier to private homes or newly emerging convalescent homes. The line
between patients and staff formalized, with care increasingly administered by
professional nurses rather than by the residents or live-in caregivers who had his-
torically provided care in the almshouses and early hospitals (Starr, 1982). This
formalization affected both the structure of, and life within, both long-term care
facilities and acute care hospitals. The facilities for long-term care took two primary
forms (Shore, 1994).
According to Shore (1994, p. 5), the “voluntary, philanthropic, fraternal, ethnic,
church-related home was the primary type of facility providing services throughout
the 19th century and up to the early 1920s.” Such places served retired missionaries,
poor people, and those abandoned or without families (Gordon, 1998), including
the elderly, orphaned, physically or mentally ill, or disabled.
For instance, during the late 1800s nonprofit groups such as the “Ladies Sheltering
Aid Society” organized homes that Shore (1994) describes as communal “collection
pots.” He states that this form of housing represented a “feared and dreaded fate
[that] was accepted only when there was no other alternative” (p. 5). Residents were
referred to as “inmates” and a quarter of people either in or waiting to get into
these homes died of pneumonia each year. Some organizations running these facili-
ties asked residents to turn over their remaining assets in exchange for the assurance
of life-long accommodation, meals, and care. These organizations became known as
“life-care facilities” and gradually evolved into a much more acceptable form of care
known as the continuing care retirement community (CCRC) (Gordon, 1998). This
method of pooled-risk (using a communal collection pot that financially supported
care for life) was carried over from Eastern Europe (Shore, 1994).
The financial incentive presented by housing wealthier people spurred the
growth of the second major form of accommodations that was in use between
the Civil War and World War II (WWII) specifically for seniors. According to
Shore (1994), this reputable type of housing emerged in the late 1800s, created

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 226 䡲 Handbook of Long-Term Care Administration and Policy

by German and Scandinavian immigrants familiar with the European Altenheim.

Such homes offered a clublike atmosphere and were unaffordable to most people
who needed long-term care.
Shore (1994, p. 5) states that these “two distinctly different types of facilities
coexisted until virtually the end of World War II.” Although post-Depression poli-
cies would discourage these types of housing for a time, aspects of these two models
would eventually reemerge in the 1970s and 1980s. Aspects such as the clublike
atmosphere and life-care assurance in exchange for prepaid assets would provide
precedent for long-term care development after a period of dormancy. The interven-
ing years reflected a marked influence by the federal government, and far-reaching
national policies were often designed in response to shifting economic conditions.
Improvements in medical care between the Civil War and World War I required
ever-increasing amounts of funding that immediately affected the design of acute
care facilities.

Cost Concerns Dominate

Starr (1982) notes that the issue of funding hospital care reached crisis proportions
in 1904. In New York City, government and private charities could no longer meet
the hospitals’ financial needs, and their focus turned to efficiency and business
management. Starr (1982, pp. 160–161) describes an increased “demand for more
careful accounting, more specialized labor, and better coordination of the various
auxiliary hotel, restaurant, and laboratory services that a hospital maintained.”
Old charitable hospitals and almshouses had been managed informally. How-
ever, the large new hospital organizations made efficiency paramount and man-
aged their affairs in a scientific way. Although the hospital quickly adopted a very
bureaucratic and institutional-feeling environment, the charitable retirement home
did not fall under the same regulations. Long-term care facilities did not shift in
this manner until later; rather, they faced a period of neglect as the existing system
was disassembled and replaced with unregulated private homes. Eventually, how-
ever, both long-term and acute care saw technology and institutionalization priori-
tized, and these trends had both positive and negative consequences.

Construction Technologies Evolve

The scientific discoveries that followed the Civil War celebrated order and effi-
ciency, as did the technical construction-related discoveries of the Industrial Revo-
lution, which was underway. Medical science and construction technology both
tremendously affected healthcare. New construction methods changed the look
and feel of acute care facilities, and eventually of long-term care facilities.
Modern materials and techniques allowed for buildings that were bigger and
taller than ever before. The development of long-span steel construction, elevators,

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 Long-Term Care Housing Trends: Past and Present 䡲 227

and air-conditioning prompted completely new building forms (Bobrow and

Thomas, 2000). After 1900, mechanical air-conditioning provided the means to
create wider buildings that no longer had to be oriented with regard to prevail-
ing breezes or natural convection (Bobrow and Thomas, 2000; Schiller, 2004).
The development of the flush-type toilet in 1870 (Pathak, 1995) and the subse-
quent installation of bathroom facilities also had important effects on the layout of
healthcare facilities.

National Policy
The marked change in building technologies and in healthcare systems, and the
emphasis on order and efficiency prevalent throughout the twentieth century, are
also reflected in government policies. The Great Depression of 1929 precipitated
federal government involvement in social welfare for the first time. To meet the
tremendous demand for services that was precipitated by soaring unemployment,
the government provided income assistance so that needy individuals could live in
privately owned homes. The Social Security Act of 1935 granted federal relief to the
aged, the blind, and to needy families with dependent children. This is considered
by most experts to be the beginning of the nursing home industry in America, the
growth of which spawned many other types of facilities for long-term care (Pratt,
1999; Shore, 1994).
The Social Security Act of 1935 and its associated welfare programs were devel-
oped as a way to extend economic relief to the general community. The Act provided
a system of “old age and survivors insurance” through which qualified individuals
could receive federal funds to assist in paying for their own care (Shore, 1994, p. 6).
Ordinary homeowners began to provide housing and care to the elderly, and a
haphazard cottage industry of privately owned rest homes emerged (McArthur,
1970; Shore, 1994).
Since the 1935 Act denied financial assistance to those living in government or
local “county” homes, many publicly run facilities closed, transferring their resi-
dents to private homes where these individuals would be eligible to receive Social
Security benefits (McArthur, 1970; Shore, 1994). The legislation also denied
financial assistance to those who contracted for life care, thus limiting such assis-
tance through organized, not-for-profit charities (Shore, 1994). It forced the clo-
sure of existing life-care facilities as well as any remaining almshouses (McArthur,
1970).
Unlike the charitable almshouse, the emerging cottage industry of nursing care
represented a source of profit, and private owner-operators sometimes abused their
unregulated status. McArthur (1970) explains that the care provided by these places
proved insufficient, especially as their residents aged and needed increasing levels of
attention. However, because payment for services was now channeled through indi-
vidual residents, users came to be seen as “residents” rather than indigent “wards”
as viewed previously (Shore, 1994).

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The Rise and Decline of Nursing Homes

Federal policies such as these fostered the private, unregulated nursing home as the
dominant provider of long-term care in the United States for several decades—the
institutional alternative to expensive extended hospitalization (Pratt, 1999; Scaggs
and Hawkins, 1994). These policies also dictated the quality and type of services
rendered, but declining quality led to negative public perception of the facilities.
Deteriorating through the 1970s, these facilities became notorious for fraud, abuse,
and deadly fires. Federal legislation, eventually enacted in 1965 and 1975, mandated
only limited state regulations (Gordon, 1998).
The need for extended care continued to increase throughout the twentieth
century, however, and nursing home waiting lists grew despite their growing stigma
(Shore, 1994). The number of elderly citizens needing care inflated, as general
improvements in living conditions extended the average life expectancy. Progress
included better water delivery and sanitation systems, the advent of antibiotics
(and a resulting reduction of pneumonia and many other infectious diseases),
advances in medical science, and increased accessibility to primary healthcare (Cox
and Groves, 1990; Shore, 1994).
Public housing programs developed by the federal government following the
Depression and WWII provided some housing for senior citizens. They were, how-
ever, geared toward the active and healthy elderly, and offered only the most basic
amenities (Pynoos and Matsuoka, 1996). Public housing was one component of a
vast construction boom following WWII that failed to provide infrastructure, both
in terms of physical design and service offerings, to accommodate the long-term
needs of residents. Postwar houses and apartments were designed and constructed
to accommodate the stereotypical young American family, without regard for how
the structures would function for an aging population. Much of this new housing
was located in suburbs with no public transportation, and with features such as
steps at the entrance and narrow bathroom doors that restrict mobility (Pynoos
and Matsuoka, 1996; Smith, 2003). Indeed, the typical housing stock has proven
to be quite ineffective at supporting an aging population, and has exacerbated the
current need for formal housing solutions.
The tremendous need for housing that followed WWII also led to the 1948
Hill–Burton Act, which in turn generated improvements in hospital facilities and
their nursing units (Bobrow and Thomas, 2000). The legislation funded two decades
of hospital construction in underserved areas (Goldsmith, 2005; Pratt, 1999). It also
promoted experimentation by giving communities the capability to develop local
hospitals “that reflected the latest trends” and it prompted innovation, especially
within nursing units (Bobrow and Thomas, 2000). The boom of post-WWII health
care construction was fueled by the development of private insurance for hospital and
medical care (Goldsmith, 2005). These postwar changes had consequences for long-
term care. In addition, a 1954 amendment to the Hill–Burton Act extended financ-
ing for a limited number of not-for-profit long-term care facilities (Pratt, 1999).

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The enactment of Medicare and Medicaid in 1965, stimulated the growth

of nursing homes and their emergence as corporate entities (Pratt, 1999; Shore,
1994). Through a 1967 congressional mandate, licensing boards were created in
all states to regulate facilities providing various types of medical and healthcare.
This federal legislation required that by 1970 each state would have a licensing
board to oversee nursing homes in its jurisdiction (Shore, 1994). At the same
time, the national and state governments were attempting to control the escalat-
ing costs of these facilities. Private insurance companies, as well as corporate and
private purchasers of insurance and healthcare, also pushed for increased cost
effectiveness (Pratt, 1999).
Financial support to nursing homes did not keep pace with the expectations
placed on them, and the long-term care industry struggled to balance service with
funding (Scaggs and Hawkins, 1994). Pressure to cut costs and produce profits, in
the face of strict funding limitations, contributed once again to inadequate condi-
tions and poor public perceptions (Pratt, 1999).
The deinstitutionalization of many mentally ill persons throughout the 1960
and 1970s produced another need that remains inadequately addressed. Pynoos
and Matsuoka (1996, p. 116) assert that this movement “placed many people
with mental health problems in the community. This shift to community-based
care led to the growth of special needs housing for people with developmental
disabilities, substance abuse problems, and a variety of mental health problems.”
These programs have received very little funding, have faced tremendous neighbor-
hood opposition, and have rarely succeeded in meeting needs—as reflected in the
numbers of mentally ill people living on American city streets today (Pynoos and
Matsuoka, 1996).
Regulations at the federal and state levels have also been used to control the
locations of healthcare facilities, including those for long-term care. The National
Health Planning and Resource Development Act of 1974 required states to insti-
tute “Certificate of Need” reviews to control the geographic distribution of such
facilities, specifically including nursing homes. Pratt (1999) explains that although
the Medical Facilities Survey and Construction Act (sponsored by Hill and Burton
in 1946) had encouraged construction of healthcare facilities, this new policy was
designed to do the opposite. It controlled competition, regulating and often dis-
couraging new construction. Although the Certificate of Need system was dis-
mantled in most states during the 1980s, this short-lived national policy had direct
and lasting effects on the distribution of long-term care facilities (Pratt, 1999).
Public awareness of the need for more long-term housing and services rose dur-
ing the 1970s. Waves of retirees, who could not obtain the support they required
to continue living in their existing homes, discovered that their main alternative
was to move into nursing homes or other “board-and-care” facilities. Pynoos and
Matsuoka (1996, p. 116) explain that “frail older people, especially those with low
incomes, had few residential options available.” Yet institutional facilities provided
higher levels of care than most seniors and other people with disabilities needed.

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In response to growing needs, some new services were developed to help people
stay in their private homes or in other residential-model facilities. One example of
such a program was created through the 1978 Congregate Housing Services Act,
which funded meals and other services for low-income seniors who lived in feder-
ally subsidized housing (Gordon, 1998). Residentially based “congregate housing”
gained acceptance and popularity throughout the 1980s. This type of housing was
constructed at a range of affordability levels and was available to those who required
government assistance as well as to those who did not (Gordon, 1998).
Largely due to wider housing offerings and declining levels of disability among
seniors, utilization of nursing homes has drastically declined since its height in the
mid-1970s. Only about 4 percent of the elderly reside in nursing homes at present,
in contrast to a figure of nearly 6 percent in the early 1970s (Vierck and Hodges,
2003).
Through various legislative measures, housing for long-term care began to fall
into three basic categories based on the level of dependence: housing for well and
independent seniors, housing for moderately impaired or semi-independent indi-
viduals, and housing for frail and dependent people (Pynoos, 1987). People living in
nursing facilities today are generally more vulnerable, weak, and cognitively impaired
than elders living in other settings (Mollica and Johnson-Lamarche, 2005).
The nursing home has continued to evolve and expand its range of services,
often being combined with other levels of care to create new hybrid forms. Stand-
alone nursing homes are increasingly rare today; traditional facilities now usually
constitute one component of a larger system, such as a CCRC. Contemporary nurs-
ing facilities may also combine traditional in-patient services with many out-patient
and outreach offerings, including research and public education programs (Shore,
1994).

Consumer Market Drives Change

Over the past three decades, an incredible range of housing types has emerged
to serve our aging population. Change has often been precipitated by the desires
expressed through market forces. Since the mid-1980s, for-profit real estate devel-
opers have become increasingly active in the construction and administration of
long-term care facilities, and an emphasis on customer service has developed under
the capitalist model. The call for more affordable options and services—and for
arrangements that ensure long-term security and provision for one’s increasing
needs for care over time—has spurred housing suppliers to develop a wide assort-
ment of products (Gordon, 1998).
In general, providers have developed creative ways to improve the quality and
types of services to attract more clients (Pratt, 1999). They have developed a wide
array of optional services, ranging from modest to luxurious (Gordon, 1998). Some
hospital operators have capitalized on underused wings by converting them into

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 Long-Term Care Housing Trends: Past and Present 䡲 231

nursing care or other types of long-term care facilities (Pratt, 1999; Scaggs and
Hawkins, 1994). Nursing homes have become highly efficient with regard to sched-
uling and cost (Shore, 1994). Nursing home and hospital operators have branched
out, offering services such as home healthcare (Pratt, 1999). It is likely that this
diversification will continue as the number of retirees grows, becomes increasingly
affluent, and represents a larger portion of the overall consumer market in America
(Gordon, 1998).
Services represent the characteristic that most distinguishes senior housing
from all other types; the physical features and the amount of amenities provided
differentiate “luxury” facilities from those tailored to elders of low- to middle-
economic status. According to Gordon (1998, pp. 25–26), such services “may
include restaurants, . . . periodic housekeeping and flat laundry services, game
rooms, fitness centers, tennis, golf and pool facilities, barber shops and beauty
salons, on-site banks, convenience stores and gift shops, concierge or activity
director services, [and] local minibus transportation.”
Breaking from more than a century of American tradition that required moving
people to new locations as their level of dependency increased, the idea of “aging in
place” reemerged. Although this concept is generally described as a new innovation,
it actually reflects an approach used across the globe where necessary care is provided
within a single community throughout one’s life. People, like plants, tend to thrive
in a stable setting; they tend to suffer when they are transplanted at their frailest. The
United States is now moving toward an arrangement that provides greater flexibility
to accommodate people’s changing needs for assistance and care. These include two
major hybrid models for long-term care and housing that emerged (or re-emerged)
toward the end of the twentieth century: assisted living and continuing care. Each of
these housing types is described in detail in Chapter 15 on housing types and design.
The very nature of “aging in place” necessitates having qualified caregivers and
support services available to meet increasing medical needs. Gordon (1998) raises
concern that government regulations, which segregate housing from care, are often
overly restrictive. He notes that under current guidelines, many aging residents
living in residentially focused facilities who require increasing levels of service, will
be forced to move into more supportive facilities.

Trends for the Future

Today, there are growing efforts to create a more comfortable, responsive, and wel-
coming environment that still honors the quantitative constraints of codes, cost,
and profitability. Over the past three decades, a new human-centered approach has
gradually re-emerged, in contrast to the economic and functionalist priorities shap-
ing so many existing healthcare facilities.
With thoughtful consideration, good design can actually increase profits and
save money while simultaneously addressing the vast array of legal stipulations and

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 232 䡲 Handbook of Long-Term Care Administration and Policy

functional needs. Building programs must convey pragmatic requirements, but

these written documents used to guide design decisions must also enumerate quali-
tative aspirations for the facility. Facility planners can ensure higher quality of life
for a facility’s users by stating minimum standards for personal control, privacy and
dignity, light and color, heating and ventilation, and for supporting specific needs
of patients, visitors, and staff. The people who are planning and designing facilities
must shift their emphasis from the procedure to the person, from functionality to
flexibility (Kobus, 2000; Purves, 2002).
Architectural and healthcare consultants working together—studying, ana-
lyzing, and developing new solutions—have already produced many convincing
results. Kobus (2000) states that these two groups of consultants must lead the way
in keeping the healthcare housing industry focused on the patient and the patient’s
family. At the same time, experts in healthcare, design, and policymaking should
work to correct past deficiencies regarding physical facilities as well as the overall
healthcare system.
Indeed, the United States is finally shifting to a more patient-oriented system
of medical and long-term care. Holistic approaches to both medicine and archi-
tecture are emerging, such as those that incorporate alternative therapies as well as
environmentally sustainable building systems (Purves, 2002). The contemporary
obsession with health and safety requirements (developed to create risk-averse envi-
ronments) is being tempered (Parker et al., 2004). Technology is increasingly seen
as assistive, rather than central to healing (Purves, 2002). These changes foster life
quality in a broader sense by protecting the dignity, identity, and independence
of frail people in addition to satisfying their safety and hygiene needs (Cox and
Groves, 1990). In this pursuit, Purves insists that researchers should develop ways
to measure emotional responses to, and ephemeral qualities of, environments cre-
ated for healthcare.
To correct past deficiencies, increased attention must be given to bridging social
disparities; citizens of all economic levels should be able to obtain adequate long-
term care. Although problems with housing have been “especially severe for minori-
ties, renters, and older persons living in rural areas” (Pynoos, 1987, p. 40), there is
evidence of a shift as “[s]ome developers are beginning to change their focus and
to develop projects that are affordable to middle-income seniors” (Gordon, 1998,
p. 49). Shifting priorities must continually inform the evolution of long-term care
facilities and the services they offer.

Features and Qualities to Include

Architectural features that should be taken into account when planning, construct-
ing, or renovating a long-term care facility vary drastically in size and scope.
Long-term care facilities must be organized in a logical way, so that users can
easily locate rooms and services, differentiate public and private spaces, and quickly
establish a sense of familiarity and community (Goodman and Smith, 1992).

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The physical environment can have powerful effects in the lives of its users. A well-
designed facility promotes a sense of comfort, safety, and meaning; it aids staff in
performing duties and tasks; and it also facilitates and encourages family visits
(Sloane et al., 2001). Parker et al. (2004, p. 956) explain that life quality is “multi-
dimensional” and combines “diverse attributes such as physical health, psychologi-
cal state, level of independence and social relationships.”
Connectedness and companionship are critical aspects for quality of life that
can be enhanced or hampered by the place’s architecture, policies, recreational
offerings, and overall culture (Thomas, 1998a; Eckert et al., 2001). Given conscien-
tious coordination throughout design and operation, long-term care facilities can
provide spaces that foster a sense of belonging and tranquility. The number of one’s
human contacts and the control one has over these interactions influence one’s level
of happiness, sense of personal identity, and satisfaction with life (Eckert et al.,
2001; Regnier, 2002).
Residents should have many spaces available for engaging with groups of people
as well as a range of places that provide a sense of privacy. The individual residential
unit constitutes the most intimate space within a long-term care environment. The
psychological aspects of control, ownership, and freedom provided by having one’s
own space hold deep symbolic meaning for people raised in Western societies, as so
eloquently expressed in Woolf’s (1929) essay A Room of One’s Own. The desire for
individual space carries into American healthcare, which has emphasized privacy
in many forms . . . from individual experience, to facility ownership and doctor’s
employment, to the architectural spaces designed for patient care (Starr, 1982).
Private dwelling units for long-term accommodation are on the rise in America.
Privacy also remains a central concern for people who must share their living unit
with another person (Scaggs and Hawkins, 1994). Designers of shared or “semipri-
vate” rooms should take care to provide a sense of control and privacy for each resi-
dent. Sloane et al. (2001) recommend that each individual should have his or her own
storage place, window, television, and telephone, and there should be a solid (perhaps
movable) barrier between individuals’ spaces. Sloane et al. (2001, p. 184) also note
that “the ability to control who exits and enters” greatly influences privacy. The pri-
mary aspect of perceived privacy, however, is having a private toilet area (Gordon,
1998). Although sharing bathing facilities is often considered acceptable, people gen-
erally desire a sink and toilet for their use alone (Gordon, 1998; Sloane et al., 2001).
Residents often experience a sense of alienation in arrangements where there is
inadequate delineation between public and private spaces, such as an insufficient
buffer between the corridor and the resident’s bed. Individual spaces that are out of
scale also feel repressive. Providing spatial variety and individual spaces that have
human, homelike scale can foster an overall sense of belonging and a noninstitu-
tional feel (Childs et al., 1997).
Positive morale among residents and staff who believe they are in a good place
can go a long way toward maintaining health; it can support healing and growth as
well. The suffering and boredom so often associated with long-term care facilities

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 234 䡲 Handbook of Long-Term Care Administration and Policy

can be mitigated by healing forces such as light, plants, and animals (Bobrow and
Thomas, 2000; Thomas, 1998b).
As stated by Eckert et al. (2001, p. 3), one study found that there are three
aspects shaping life quality in long-term care facilities: “the ability to communicate
with other residents and staff within the facility, the ability to care for oneself, and
the ability to care for and help others in more need than themselves.” Opportunities
to give care to people, pets, or even plants provide the type of “positive distraction”
that keep residents from feeling helpless and lonely (Purves, 2002; Thomas, 1998a).
Music, art, laughter, and nature have all been shown to produce measurable and
therapeutic benefits as well (Purves, 2002).
Some of the most important quality of life factors—choice and positive stimu-
lation—are closely related. Personal control of temperature, lighting, sound, and
odor are very important in long-term care facilities, especially because sensory tol-
erance for extremes tends to decline with age (Gordon, 1998; Regnier, 2002; Sloane
et al., 2001). Operable windows allow personal control of natural light and ventila-
tion. These features can also positively influence the operating costs of a facility.
Other, more practical design considerations involve safety, security, cleanli-
ness, and maintenance. A built or social environment that takes a heavy-handed
approach to these, however, will feel stifling and oppressive, especially to residents
with low levels of dependency (Parker et al., 2004). Facility designers and operators
must work to strike a careful balance between risk aversion and freedom.
Another practical consideration involves the high percentage of “service spaces”
necessary to support living and working within a long-term care facility. These
include nursing stations, medical care rooms, administrative offices, and break
rooms for staff as well as sufficient spaces for cooking and bathing facilities, janito-
rial closets, and storage of equipment.
Of all the service spaces required in a long-term care facility, however, circulation
can present the biggest design challenges and opportunities; it must be integrated
with the utmost sensitivity if it is to support the resident’s sense of orientation. The
flow of circulation around the site and through the building should be clear and
convenient, and must accommodate persons with varying levels of mobility. Way-
finding is important for all users, and especially for people experiencing memory
loss. Color, material, décor, and signage can help differentiate otherwise similar
wings of corridors and rooms (Scaggs and Hawkins, 1994). Creating a variety of
spaces within a facility that have their own distinct characteristics can also help res-
idents determine their location and distinguish the appropriate use of each space.

Special Care Facilities

Features that enhance way-finding are especially critical for residents suffering
from Alzheimer’s disease because their desire to wander increases as their disease
progresses. Because such patients share similar characteristics, many special wards
have been developed to provide care specific to their common symptoms and needs.

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 Long-Term Care Housing Trends: Past and Present 䡲 235

Specially designed wards have also been created to care for people who have various
developmental disabilities.
Wards for residents with Alzheimer’s disease usually incorporate increased secu-
rity measures, including key-coded doors and provisions for higher levels of observa-
tion to compensate for the tendency of these residents to wander (Scaggs and Hawkins,
1994). It is important to provide outdoor spaces, but they must be easily observable by
staff and be designed to keep residents from leaving the premises (Regnier, 2002).
Design features that aid in “place recognition” are especially important for
residents who are cognitively impaired. Giving each space a distinct character that
clearly indicates its use can help orient such elders (Childs et al., 1997). Toilets must
also be very easy to locate; placing them within the sight line of beds, or provid-
ing an easily recognizable symbol on nearby bathroom doors, can aid orientation
measurably (Sloane et al., 2001).
Regnier (2002, p. 268) explains that care for those “with memory loss often
requires a smaller, self-contained setting with fewer residents and a carefully
trained staff.” Special care facilities often subdivide cognitively impaired residents
into groups of four to fifteen, with small sleeping rooms clustered around living
spaces that are shared by individuals in each section (Childs et al., 1997). As cited
in Eckert et al. (2001, p. 298), one researcher found that, this arrangement fosters
a “small-group effect” and facilitates “high levels of communication, emotional
involvement, sharing, and commitment.” The type of care provided in special units
is changing as new diseases are identified and as new medications and treatments
are developed to address them (Regnier, 2002).
Researchers note that many smaller residential facilities naturally support place
recognition. Many large existing facilities are converting portions of their complexes
to special-care wards and integrating condition-specific support features. States are
increasingly involved in regulating facilities that provide care to special user groups.
As of 2005, 44 states had requirements regarding facilities for residents with Alzheim-
er’s disease and other forms of dementia (Mollica and Johnson-Lamarche, 2005).

Conclusion
Although the earliest facilities for healthcare supported recuperation and fostered
health in a holistic sense, history shows a subsequent decline in concern for these
aspects of well-being as medical technologies took center stage. As a result, the
institutionalized settings that came to typify the healthcare of twentieth-century
America failed to capture society’s imagination or endearment. Long-term care
facilities garnered particularly strong public disdain. Today, the general population
demands a change that will foster higher quality of life for users of long-term care
facilities. More and more people recognize that a well-designed facility can increase
a resident’s feelings of independence and autonomy, sense of belonging, satisfaction,
contentment, pride, and dignity.

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The emerging market of baby boomers, in particular, seeks a more compre-

hensive and considered approach to the design, development, and operation of
healthcare facilities. They are researching their options, asking questions, and spur-
ring change. As a result, housing providers are developing creative responses that
include various sets of services and features that create more pleasant and support-
ive environments.
Functional features are far less likely than qualitative features to get lost among the
complexities of the design process. It is crucial for those involved in the development
of long-term care facilities to understand—and be able to identify and specify—
attributes that contribute to a healthful, pleasant, and inspiring environment for living
and healing. We must prepare ourselves to address imminent needs as well as make
lasting contributions toward the improvement of housing for long-term care.

References
Bobrow, M. and Thomas, J. (2000). Inpatient care facilities. In Kilment, S. A. (Ed.),
Building Type Basics for Healthcare Facilities. New York: Wiley, pp. 131–191.
Childs, M., Grape, T. H., Webb-Johnson, A., and Wojciechowski, A. (1997). Long-term
care design: What you need to know about life-enhancing environments. Journal of
Healthcare Design, IX, 121–124.
Cox, A. and Groves, P. (1990). Hospitals and Health Care Facilities: A Design and
Development Guide (2nd ed.). Boston, MA: Butterworth Architecture.
Eckert, K., Zimmerman, S., and Morgan, L. A. (2001). Connectedness in residential care:
A qualitative perspective in the changing health care environment. In Zimmerman,
S., Sloane, P. D. and Eckert, J. K. (Eds.), Assisted Living: Needs, Practices, and Poli-
cies in Residential Care for the Elderly. Baltimore, MD: Johns Hopkins University,
pp. 292–313.
Goldsmith, S. (2005). Principle of Health Management Care: Compliance, Consumerism, and
Accountability in the 21st Century. Boston, MA: Jones and Bartlett.
Goodman, R. J. and Smith, D. G. (1992). Retirement Facilities: Planning, Design, and
Marketing. New York: Whitney Library of Design.
Gordon, P. A. (1998). Seniors’ Housing and Care Facilities: Development, Business, and
Operations. Washington: Urban Land Institute.
Kobus, R. L. (2000). Perspective. In Kilment, S. A. (Ed.), Building Type Basics for Healthcare
Facilities. New York: Wiley, pp. 1–7.
Malone, R. E. (1998). Whither the almshouse? Overutilization and the role of the emer-
gency department. Journal of Health Politics, Policy and Law, 23(5), 795–832.
McArthur, R. F. (1970). The historical evolution from almshouse to EFC. 2. A three part
discussion. Nursing Homes, 19(6), 26–27, 45.
Mollica, R. and Johnson-Lamarche, H. (2005). State Residential Care and Assisted Living
Policy: 2004. National Academy for State Health Policy of the United States Depart-
ment of Health and Human Services. Retrieved August 10, 2006, from http://aspe.
hhs.gov/daltcp/reports/04alcom1.pdf.

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Parker, C., Barnes, S., McKee, K., Morgan, K., Torrington, J., and Tregenza, P. (2004).
Quality of life and building design in residential and nursing homes for older people.
Aging and Society, 24, 941–962.
Pathak, B. (1995). History of Toilets. Paper presented at the International Symposium
on Public Toilets, Hong Kong. Retrieved August 14, 2006, from http://www.
sulabhtoiletmuseum.org/pg02.htm.
Pratt, J. R. (1999). Long-Term Care: Management across the Continuum. Gaithersburg, MD:
Aspen Publishers.
Purves, G. (2002). Healthy Living Centers: A Guide to Primary Health Care Design. New York:
Architectural Press.
Pynoos, J. (1987). Housing the aged: Public policy at the crossroads. In Regnier, V. and
Pynoos, J. (Eds.), Housing the Aged: Design Directives and Policy Considerations.
New York: Elsevier Science, pp. 25–40.
Pynoos, J. and Matsuoka, C. E. (1996). Housing. In Evashwick, C. J. (Ed.), The Continuum
of Long-Term Care: An Integrated Systems Approach. New York: Delmar Publishers.
Regnier, V. (2002). Designing for Assisted Living: Guidelines for Housing the Physically and
Mentally Frail. New York: Wiley.
Scaggs, R. L. and Hawkins, H. R. (1994). Architecture for long-term care facilities. In
Goldsmith, S. B. (Ed.), Essentials of Long-Term Care Administration. Gaithersburg,
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Schiller, M. (2004). Mechanical and Electrical Systems. Chicago, IL: Kaplan AEC
Architecture.
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Long-Term Care Administration. Gaithersburg, MD: Aspen Publishers, pp. 1–10.
Sloane, P. D., Zimmerman, S., and Walsh, J. F. (2001). The physical environment. In
Zimmerman, S., Sloane, P. D. and Eckert, J. K. (Eds.), Assisted Living: Needs, Practices,
and Policies in Residential Care for the Elderly. Baltimore, MD: Johns Hopkins
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Smith, E. (2003). Visitability Defined 2003. Disability Rights Action Coalition for Hous-
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Starr, P. (1982). The Social Transformation of American Medicine: The Rise of a Sovereign
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Thomas, W. H. (1998a). Building home-ness into existing long-term care facilities. Journal
of Healthcare Design, X, 57–61.
Thomas, W. H. (1998b). Cultural expectations and locale—creating the eldergarden.
Journal of Healthcare Design, X, 63–66.
Thompson, J. D. and Goldin, G. (1975). The Hospital: A Social and Architectural History.
New Haven, CT: Yale University.
Vierck, E. and Hodges, K. (2003). Aging: Demographics, Health, and Health Services.
Westport, CT: Greenwood.
Woolf, V. (1929). A Room of One’s Own. New York: Harcourt, Brace & Co.

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 ADMINISTERING IV
CARE

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 Chapter 13

Long-Term Care
Governance and
Administration: A
Historical Perspective

Stephen E. Proctor

Contents
Introduction ........................................................................................... 242
The Development of Governance ........................................................243
Development of Professional Leadership in Long-Term Care ............. 246
Boards of Directors ..................................................................................247
The Work of Boards ............................................................................247
Governance Activities..........................................................................249
Meeting Legal Requirements...............................................................250
Protecting Organizational Assets.........................................................250
Developing a Strategic Plan .................................................................250
Assessing Risk and Reward .................................................................251
Creating Strong Voluntary Board Leadership ......................................252
Current Expectations and Trends ........................................................253

241

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 242 䡲 Handbook of Long-Term Care Administration and Policy

Consumer Activism on Governance of Long-Term

Care Facilities ..........................................................................................254
Skilled Nursing: Assisted Living..........................................................255
Independent Living .............................................................................256
Residents as Board Members ...............................................................256
Effective Administration ..........................................................................257
Establishing a Climate of Transparency ..............................................257
Staff and Governing Board Roles ........................................................258
Staff.....................................................................................................259
Those We Serve ...................................................................................259
Constituent Groups............................................................................ 260
Business Partners .................................................................................261
Regulatory Agencies ............................................................................261
The Financial Community ..................................................................261
Limitations on Transparency ...............................................................262
Understanding the Essentials ...................................................................262
Long-Term Care Is a Human Resource Business .................................262
Combining Technology and Human Resources ..................................263
Creating a Culture of Leadership ....................................................... 264
References ................................................................................................265

Introduction
Th is chapter is intended to acquaint the reader with the development of effec-
tive governance and administration in long-term care organizations. Its historical
perspective takes the reader through the changes in board functioning as long-
term care organizations moved from a charity focus to more of a business orienta-
tion. It also includes recent trends that are likely to shape long-term care board
and staff roles in the future. Presbyterian Homes Inc. (PHI), with its 80-year
history, is a leading provider of long-term healthcare and housing. In this chap-
ter, PHI serves as an example of the dynamic environment in which changes in
the governance of long-term care organizations are taking place. Th is example
demonstrates the need for creative and energetic leadership to meet the chal-
lenges ahead.
The development of governance models in the for-profit long-term care sector
has, for the most part, paralleled that of publicly traded companies and other pri-
vate business ventures. These for-profit models, from large publicly traded compa-
nies to small family businesses, are well documented in business literature, and are
beyond the scope of this chapter. Rather, our discussion of governance and admin-
istration focuses on the unique blend of public expectations and relationships in the
not-for-profit sector.

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 Long-Term Care Governance and Administration 䡲 243

The Development of Governance

The development of boards in the not-for-profit long-term care sector is rooted in
the charitable intentions of community, fraternal, and religious groups. Not-for-
profit healthcare providers have a long and distinguished history. Emerging from
the almshouses of the past, these entities housed people thought to be “undesir-
ables,” including those needing long-term care. Facility names such as The Home
for Incurables, The Home for the Friendless, and sponsoring groups such as the
Humane Impartial Society and Women’s Aid and Relief Society clearly commu-
nicated that long-term care was something other than a business venture (United
States Bureau of Labor Statistics, 1941).
A few of these organizations date back to the early 1800s, with a larger group
established before the Depression of the 1930s. By 1939, the Bureau of Labor
Statistics identified 1,543 not-for-profit facilities with a capacity of 92,592 people
(United States Bureau of Labor Statistics, 1941). Nearly all these institutions were
founded before the advent of Social Security and the subsequent additions to the
publicly funded safety net for seniors. These not-for-profit organizations were rela-
tively small and unsophisticated, averaging approximately 60 residents per location.
They reflected the personality of the sponsoring group. The concept of governing an
organization was understood in traditional terms: “to exercise continuous sovereign
authority over the organization” (Merriam-Webster’s Dictionary).
Boards were focused on the essential aspects of doing good and were particu-
larly concerned with the organization’s operating details. Many times the found-
ers of the organization established defi ned areas of responsibility. Women, who
were often the driving force behind the charitable intentions of the organization,
were given certain responsibilities. They provided oversight of facilities and staff,
and even interviewed prospective residents. They often divided the responsibili-
ties of oversight and service delivery among board members. Specific assign-
ments included visiting residents and maintaining the gardens. In this division of
labor, the male counterparts were usually charged with fi nancial responsibilities
such as those related to the investment portfolio and major capital expenditures
(Swaim, 1961).
The minutes of the meetings of these boards were rich in detail due to the nature
of their work. These included reports on the health status of individual residents,
the hiring and firing of staff, and the establishment of salary levels, as well as other
day-to-day business decisions. Being a board member of a not-for-profit long-term
care facility could be an intensely personal experience, consuming a tremendous
amount of time and attention. It was a calling that could last for a lifetime.
With the advent of Medicare and Medicaid in the 1960s, the nature of not-
for-profit organizations, even those with a long history of providing charitable care,
began to change rapidly. The opportunity to serve a larger, publicly funded popula-
tion of older persons required staff and board members to adapt to the regulations

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and accountability that accompanies governmental support. The nature of these

organizations was also in transition in other ways, with a significant number of
them being formed to serve an older population not in need of charitable assistance.
In these situations, a more corporate model of governance was adopted as the most
appropriate fit for the changing organization. In some respects, many of these not-
for-profit entities were hard to distinguish from proprietary organizations, creating
confusion in terms of tax exemption, and public perception of the nature of not-for-
profit organizations and their role in the community.
As the services offered by not-for-profit long-term care providers expanded from
“homes for the aging” to an array of services, including postacute healthcare and
rehabilitation as well as a variety of housing options and community services, each
additional type of service brought added regulation and consumer expectations
that changed the role of board and staff. Regulations were developed that codified
public expectations for board oversight of quality and effective management of the
facility. The legal liability for failing to measure up to these standards became clear.
In addition, the consumer movement, which emerged in the 1960s and 1970s,
embraced long-term care; family groups and independent living residents became
more vocal. Some of them began demanding a seat on the governing board as a way
for their voice to be heard in the delivery of care and services.
As not-for-profit organizations became more complex, their governance began
to evolve into a more business-focused model. Still, they retained many of the under-
lying principles of public accountability that were historically a part of the not-for-
profit environment. Primary influences in this transition included a wider range
of health services, staff with greater professional and technical expertise, increased
government regulation, larger capital expenditures that required increases in debt
financing, and a more adversarial legal environment. The necessity for a different
relationship between board and paid staff emerged, as well as the need for board
members with a different skill set. As the business side of the enterprise grew, in
addition to religious personnel and persons from the community who were focused
almost solely on the charitable mission of the organization, there were now a grow-
ing number of laypersons with financial acumen. Correspondingly, the expecta-
tions of staff in not-for-profit organizations changed, and the relationship between
boards and staff assumed a more corporate flavor.
Even in this newly evolved state, many of the traditional responsibilities of
boards remained intact. Delegating day-to-day operations to paid staff, boards
retained many oversight functions. In a significant number of organizations,
board members continued to be called trustees, highlighting the board’s fiduciary
role of holding the institution in trust for the public interest. In recent years, the
Enron scandal and the aftermath have highlighted the fiduciary responsibility of
board oversight in protecting the public interest (Ivanovich, 2006). Interestingly
enough, the concept of stewardship, which has historically been at the center of
not-for-profit governance, is now being embraced by the for-profit sector in the
post-Enron environment.

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 Long-Term Care Governance and Administration 䡲 245

These traditional oversight responsibilities continue to be carried out with a

renewed enthusiasm.

䡲 Maintaining the ethical standards of the organization

䡲 Assuring that the organization meets all legal requirements and is operat-
ing in accordance with its mission and purpose, including adherence to the
organization’s bylaws and articles of incorporation
䡲 Assessing the effectiveness of staff in carrying out the mission of the organiza-
tion on a daily basis
䡲 Protecting the organization’s assets and managing the resources of the orga-
nization effectively
䡲 Representing the organization to the public and constituent groups, and
playing a central role in fund-raising.

The influx of more business-focused board members added a number of perfor-

mance expectations.

䡲 A more deliberate organizational planning process

䡲 A more proactive role and strategic outlook in assessing alternatives facing
the organization
䡲 A more financially oriented decision-making process, weighing risk and
reward while maintaining consistency with the organization’s mission and
purpose
䡲 Accountability for financial performance that is measured against financial
forecasts and the comparative results of other, similar organizations
䡲 A less insular view of the organization and the way it functions, including
how it competes for human resources in the marketplace.

These new types of board members also brought with them the perspective of a
wider world in terms of changes in technology, expectations of growth, and needs
of the community.
These adaptations have created a challenging situation for individuals who have
chosen to work in the not-for-profit sector. High ethical standards and a tradition
of care and compassion have been combined with an expectation of measurable
results that is more characteristic of the business sector. This evolution has created
a confusing and contradictory set of expectations that is more sharply defined than
is normally experienced in the for-profit world. The terms “mission” and “margin”
are often used in the same sentence, as are the terms “marketing” and “ministry.”
This intermingling of language, used in board discussions, has been a source of
individual and organizational stress. Those members who are focused on ministry
may question what marketing has to do with the mission of the organization.
The need to maintain close and supportive relationships with sponsoring orga-
nizations, such as churches and other sources of public support, continues to be

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required, although now with an increased expectation of professional business

management. Not-for-profit boards and staff who were once focused almost solely
on raising funds for the support of charity are now expected to be business strat-
egists and decision makers. Changes in board composition that spring from this
development have created profound alterations in the governance of long-term care
organizations.

Development of Professional Leadership in Long-Term Care

With its beginnings as a charitable enterprise, long-term care organizations attracted
staff that felt a calling to ministry and were focused on serving the underserved in
society. It is not surprising that the long-term care field tended to attract clergy,
often people who were in second careers.
As the for-profit sector emerged, it was essentially a family-driven business
model, usually sole proprietors or partnerships with strong connections with the
local community. The environment changed, however, with the flood of federal and
state funds that accompanied the Medicare and Medicaid programs. The number
of nursing home beds doubled between 1963 and 1973 (Johnson and Grant, 1985).
The development of investor-owned regional corporations and publicly traded
corporations grew. By 1972, it was estimated that there were at least 70 nursing
home chains, and by 1974, 106 publicly held corporations controlled 18 percent of
nursing home beds and one-third of the industry revenue (Butler, 1975).
The demand increased in the mid- to late 1950s and early 1960s for more profes-
sional leadership for long-term care. Organizations such as PHI were pioneers in the
effort to provide educational opportunities; its initial programs attracted people from
30 states and a number of foreign countries. Offered as “short courses,” they were
among the first halting steps toward creating a more professional administration
in long-term care. Later in the 1960s, university-based programs were established
(Friedsam, 2006). People from social services, business administration, nursing, and
a host of other backgrounds began to migrate to long-term care as a profession.
The advent of Medicare also brought long-term care closer to the mainstream
of medical care offered in hospitals and other community settings. Although Medi-
care did not develop into the predominant payer source for long-term care ser-
vices, it changed admission patterns, with transfers from hospitals assuming a more
important role as an entry point for older persons receiving long-term care services.
A posthospital focus for long-term care inspired the need to plan for ongoing reha-
bilitative programs to assure continuity of care.
Public payment for long-term care services through Medicare and Medic-
aid brought a heightened level of public scrutiny. A number of authors, such as
Mendelson (1975), in her book Tender Loving Greed, exposed poor care and called
for more regulations and stronger enforcement. Another author, Vladeck (1980),
later assumed a role as enforcer of national nursing home regulations.

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 Long-Term Care Governance and Administration 䡲 247

In the early 1970s, the licensure of long-term care administrators became a

requirement in every state. The then current nursing home administrators were
“grandfathered” in, waiving the new eligibility rules as a prerequisite for taking
standardized tests. Future generations of administrators, however, faced educa-
tional and relevant experience requirements, including a certain period of time to
be served as an administrator-in-training. Only on completion of these conditions
could an individual sit for the licensure exam. This situation resulted in an interest-
ing anomaly when persons with responsible positions in acute care chose to work
in long-term care. In spite of their education and healthcare experience, they were
required to serve as an administrator-in-training under a licensed administrator
for approximately six months before they could occupy a comparable position in a
nursing home (The Pennsylvania Code, Chapter 39, amended 2006).

Boards of Directors
Looking at the expanded expectations of board members, one might ask, “What
attracts people to serve on governing boards in this environment?” Many people his-
torically volunteered to serve primarily because being a board member of the govern-
ing board of a not-for-profit organization was easy. It also enhanced their social status
in the community. These individuals opted out when faced with heavier workloads
and additional risks. Those who remained began to ask themselves a different ques-
tion, “If I am going to have to work harder, give more time, and place myself at greater
personal and professional risk, does the good I can achieve outweigh the difficulties?”
Understanding this question is critical for long-term care organizations. It has shaped
the role of boards, including their relationship with the organization’s paid staff.

The Work of Boards

The governing board has the ultimate power and responsibility to direct the orga-
nization in the achievement of its mission. However, the power of board members
is collective, not individual. Individual board members are not given the authority
to act independently of the rest of the board in governance or in day-to-day opera-
tions. When board members gather in a meeting, however, they have the authority
to make decisions that shape the organization in numerous ways. They establish
policies and guidelines that limit or empower paid staff in the performance of their
duties, write bylaws that may permit committees of the board to make decisions or
perform functions on their behalf between board meetings, and form ad hoc com-
mittees to carry out specified duties and present recommendations for action. An
understanding of the principle of collective action is at the heart of every effective
board. It gives staff the confidence that, to the maximum extent possible, the board
speaks with one voice in providing direction to them, and that all board members
are included in the discussions surrounding important policy questions.

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The board primarily relates to the staff through the chief executive officer
(CEO), with other staff relationships of secondary importance. In some organi-
zations, a strict line of communication causes information to be funneled solely
through the CEO. This approach can result in clear communication to the board
from the staff. In organizations where various staff members communicate directly
with the board, lobbying of board members to favor one department over others
can result. In these cases, control of communication between board and staff may
be necessary. However, in a complex environment where the organization is com-
mitted to transparency in the way it deals with board members, such constraint
may not be the best approach. It may create other problems in the relationship
between board and staff members as they pursue the mission of the organization. If
the senior staff of an organization is secure and committed to fostering a collegial
environment, directing communication through various points of the organization
has many advantages. It avoids the problem of the board receiving a steady diet of
carefully filtered information, and may expose the board to important issues in
their decision-making process.
Before it begins to recruit members, the board leadership must reflect on its
priorities and expectations of them. For example, does the board exist primarily for
interpreting the mission of the organization to the wider community and raising
financial support for the organization and its charitable mission? This purpose is
expressed in the oft-repeated axiom to “give, get, or get off,” when the subject of
fund-raising is addressed. From this point of view, the reputation of board members
is a critical asset when it is used to promote the organization’s mission, gain access
to foundations and other funding sources, and inspire the confidence of existing
and potential donors.
Conversely, the board may focus its attention primarily on the effective opera-
tion of the organization and the way in which it strategically fulfills its mission in
a highly competitive and regulated environment. In this case, the level of expertise
that a board member brings to the table is of paramount consideration, not necessar-
ily his or her capacity to provide financial support. In most organizations, both tasks
are essential and require attention from the governing board. The range of expertise
and financial resources needed will influence the size and structure of the board.
A large board of more socially prominent community members is very impor-
tant if the goal is to increase public awareness of the organization and raise financial
support. Having more people involved in the organization’s decision-making pro-
cesses can foster a feeling of community ownership and affinity that will enhance
fund-raising efforts. However, a board that is too big and cumbersome may be
unable to make decisions on a timely basis, an essential ingredient in the modern
long-term care organization. A smaller board may be more conducive to efficient
decision making, but may lack the cross section of community members needed to
understand and support decisions when they are implemented.
One solution to meeting these varying needs is to form a charitable foundation
that assumes the first set of responsibilities, with oversight provided by the governing

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 Long-Term Care Governance and Administration 䡲 249

board. Another may be for the parent corporation to focus on charitable support,
with a subgroup of the board or a separate corporate entity offering strategic direction
and oversight of the activities of the organization. Combinations of these approaches
can provide additional options.
Another structural issue involves the extent to which the whole board delegates its
work to committees or functions as a board of the whole. The days of board commit-
tees providing reports that are automatically approved by governing boards has ended.
Their members correctly understand that approval of a committee recommendation
when there is incomplete understanding of the relevant issues can result in substan-
tial risk to the organization, and potentially to them personally. Given these dangers,
there is a trend toward smaller boards with fewer committees to preprocess their work.
Moreover, committees now have more sharply defined roles and, in many cases,
meet more often. A recent example is the more intensive work of audit committees
that do more than just play a part in selecting the auditor and receiving the results.
They are now charged with assuring the integrity of the financial systems of the orga-
nization by meeting throughout the year to oversee its internal audit functions.

Governance Activities
The responsibility to maintain the ethical standards of the organization is great-
est at the highest level of governance. Much of this leadership is carried out by
example, by keeping the conduct of the board above reproach, and communicating
to staff that anything less than the highest ethical standards will not be tolerated at
any level of the organization. This process often begins with lofty pronouncements
in the mission, vision, and values statements. It continues in the way conflicts of
interest are handled at the board level and the behavior of paid staff is monitored.
Certain aspects of establishing the tone or culture of the organization are dis-
tinctive for not-for-profit organizations. The expectations of boards in a for-profit
long-term care organization are relatively straightforward, with a primary focus on
maximizing profitability and shareholder value. Measurements of profitability and
growth are well-established and targets are relatively easy to define. Other variables
enter into the picture, but often to a lesser degree.
As in for-profit organizations, expectations of financial performance of not-
for-profit long-term care organizations can be strongly influenced by lending insti-
tutions or outside rating agencies (such as Moody’s or Standard & Poor’s) if they
have outstanding debt which requires it. Other important expectations that come
into play in the not-for-profit environment are based on the ethical standards of the
organization, as expressed by the board. Community values and other less quantifi-
able aspects of performance, often focused on process, can be equal to or greater
than measurable financial outcomes. The importance of identifying and monitor-
ing key quality indicators has become a critical board activity focused on protecting
the public interest.

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Meeting Legal Requirements

Assuring that the organization meets all legal requirements and is operating in
accordance with its mission and purpose, including adherence to its bylaws and
articles of incorporation, is a relatively straightforward function of the board of
trustees. These endeavors involve monitoring compliance with the various state and
federal inspection agencies as well as with accreditation processes of outside orga-
nizations. They also entail establishing effective compliance programs and moni-
toring compliance efforts in ongoing operations, billing, and financial practices.
The potential for compliance problems with the development of new ventures and
business relationships has added a new dimension in board legal oversight in the
current business and healthcare environment.

Protecting Organizational Assets

Both the board and staff are responsible for protecting organizational assets. This is
not simply directed at making a maximum profit and saving large sums of money for
some future catastrophic event. Boards are often engaged in a debate over applying
balance among providing charity care, improving quality, investing in physical plant
and new programs, and assuring the future financial security of the organization. The
expectation of long-term care residents and their families is that the organization will
be there for as long as they need care. When people enter a long-term care continuum
as independent living residents, this expectation may have a 20-year horizon.

Developing a Strategic Plan

From rather simple beginnings, strategic plans for long-term care organizations grew
into lengthy, formal documents, which attempted to forecast five years into the future,
melding environmental conditions with program development, growth, operating
budgets, and capital needs. In the past, strategic plans were reviewed and updated by
the board on an annual basis, and were often left on the shelf for the remainder of
the year. Given the constraints of time and the limited attention span of board and
staff, it is not surprising that they did not occupy a central role in the organizations’
daily functioning. These plans also outlined the tactical steps that would be required
to execute them and contained a significant amount of sensitive, proprietary informa-
tion. Their distribution was on a “need-to-know basis,” which tended to obscure the
focus of the organization from the very people who were charged with implementing
the plan. It was not surprising that the subsequent lack of clarity regarding the direc-
tion of the organization made the board slow to react to the surrounding environ-
ment (Mintzberg, 1994; Kim and Mauborgne, 2005, pp. 81–82).
The increasing rate of change in the healthcare and housing components of
long-term care and the desire for an increasing number of people to understand
the strategic direction of the organization have caused the planning approach to

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 Long-Term Care Governance and Administration 䡲 251

evolve into a more focused and concise format. At PHI, the strategic plan has been
reduced to seven pages, from the 200-page document of 20 years ago. Th is change
has made it easier for the board to be engaged in the most critical issues facing the
organization, and to have a greater influence on the direction of the organization.
Staff members are also forced to simplify their approach to planning by stripping
away the reams of supporting information that tended to be more tactical than
strategic. A shorter, more focused scheme invites a different strategy for its utiliza-
tion by staff and board members. At PHI, distribution of strategic plans is relatively
wide. They are used as communication tools with the board, staff, and the wider
community, and as a basic building block in creating a transparent environment.
Although most organizations have retained a formal strategic planning process,
some have moved even further, abandoning it in favor of “strategic thinking” that
places a higher value on flexibility and speed than on predicting the future. The
thought behind this approach is that the surrounding environment is so unpre-
dictable and fluid that formal strategic plans quickly become obsolete and tend to
make the organization less adaptable to the environment. Regardless of the specific
approach to formulating the strategy of the organization, it is an essential element
in effective governance.
In either case, once consensus is reached on the strategic plan, effective boards
constantly measure the performance of the staff against it. At PHI, the board affirms
the strategic plan for the organization, which is followed by six- and twelve-month
updates during the year. The performance of staff is measured by how effectively
their activities result in achieving the mission of the organization, as defined in the
strategic plan. Other organizations use differing approaches, but the result is always
the creation of a feedback loop by which the board is able to hold the staff account-
able for connecting their day-to-day activities with the board’s expectations.

Assessing Risk and Reward

One of the key fiduciary and strategic roles of boards is the assessment of risk and
reward. This extends beyond the financial calculations that are commonly under-
stood in a business context. As with the case of many not-for-profit providers of
housing and healthcare, PHI has a healthy tension between providing for a short-
and long-term social return of accomplishing its mission, and short- and long-term
financial gains. Risk and return for PHI has been as much about serving others and,
in effect, achieving a greater social return, as it has been about economic matters.
That being said, every board grapples with mission, financial constraints, and the
need to secure the future of the institution in the face of external threats to the orga-
nization. Boards must assure that the level of risk of every new undertaking (or the
risk of doing nothing) is commensurate with the rewards to be achieved—strategic
advantage, financial payback, and/or social good. These are essential mission ques-
tions that the board cannot delegate to any other group.

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Creating Strong Voluntary Board Leadership

Given the challenges facing not-for-profit organizations today, it is more important
than ever to secure talented individuals to serve on the governing board and to
mold them into a cohesive, high performing team. Because these individuals are not
compensated for the hours they spend on the organization’s behalf, creating strong
voluntary board leadership can be a challenge. Attracting intelligent and creative
individuals to serve is often a function of their perception of the organization and
their ability to make a difference in the way the organization’s mission is imple-
mented. A set of formal selection criteria, designed to facilitate identification of and
outreach to a diverse group of individuals, is a solid starting point. Diversity within
a board can and should take many forms—racial, ethnic, age, gender, and other
commonly understood definitions of diversity are a beginning. Differences in life
experience and expertise are equally important. Not-for-profit organizations must
reach out to embrace people with know-how and skills demonstrated in other areas
and educate them on the particular issues of long-term care. It is also important
to create a climate in which the experience the board members bring to the table
benefits the organization, especially in areas where there are common issues and
solutions that are transferable to the long-term care environment. Expertise in areas
such as human resources, financial measurement and benchmarking, investment
performance, forging relationships with rating agencies, application of technology,
and staff education are just a few of the most obvious areas where staff of long-term
care organizations can benefit from the knowledge and wisdom of board members.
The orientation and ongoing education of board members is critical to an effec-
tive board. At PHI, a parent corporation with a series of affiliate and subsidiary
boards exists to cover the range of activities of the organization. A standard ori-
entation process for all new board members and trustees that serves a number of
purposes has been developed.

䡲 It provides an understanding of the mission and culture of the organization.

䡲 It acquaints board members with the various components of the organization
that are connected by a common mission.
䡲 It outlines the expectations of board members—specific tasks and duties,
ethical standards, and the relationship between board and staff.
䡲 It fosters the development of relationships among board members so they
gain a better appreciation of their collective wisdom.
䡲 It provides a safe environment to ask questions so new board members spend
less time as observers in their first board meetings, and become active partici-
pants in organizational affairs more quickly.

This orientation, taught by current and former board leadership and staff, is seen
as the first investment in the education of board members. Ongoing education
is undertaken using a variety of approaches, including selected readings, e-mails,

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formal sessions as a part of retreats and regular meetings, and encouragement and
reimbursement to attend outside educational programs related to long-term care.
Ongoing staff support is provided to individual board members in areas where they
may find the terrain unfamiliar. This effort ranges from providing them with a
glossary of terms that is used in the field to presenting more detailed explanations
of specific financial issues. In the final analysis, investing in the intellectual capital
and wisdom of board members may provide the highest return a not-for-profit long-
term care provider can make.

Current Expectations and Trends

The public expectation for oversight of the mission and financial affairs rests heavily
on the minds of governing boards. They have the primary responsibility for shaping
the ethical climate of the organization and assuring that the financial condition of
the organization is disclosed to all interested parties. In the not-for-profit long-term
care organization, there are several other factors that enter into the equation to
heighten sensitivity to the governing board’s fiduciary role.

䡲 The volume of government dollars in the form of Medicare, Medicaid, state

and federal rent subsidies, and other types of public sector reimbursement
programs requires the highest level of accountability. Strict adherence to the
spirit and the letter of the laws and regulations that govern these programs
is essential.
䡲 Organizations with a significant charitable mission that depend on the gen-
erosity of donors and constituent groups (religious, fraternal, and community
sources) require a public perception of trustworthiness as the foundation of
this support.
䡲 There is no tolerance for the well intentioned but inept not-for-profit orga-
nization. The board must ensure that the organization has sound business
practices, including a compliance program that is able to identify and prevent
potential problems in a systematic way.
䡲 Not-for-profit staff compensation is under close scrutiny, and boards are being
held responsible for documenting wage levels that are considered reasonable
in the marketplace.
䡲 Sarbanes-Oxley, although initially focused on abuses in the for-profit sector,
has become the measuring stick in the not-for-profit sector as well. Many
organizations such as PHI that have been following aspects of Sarbanes-Oxley
for many years are now tightening these efforts to mirror public corporation’s
expectations.

In recent years, the trend in the fiduciary work of boards and staff has been moving
toward a stewardship model. This concept is based on an idea, with ancient roots,

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clearly understood in the Judeo-Christian tradition. Some of the recent works on

the subject of stewardship (Block, 1993) are quite provocative and challenging to
the status quo. In the wider business environment, shareholders, employees, and the
general public have begun to embrace the concept of stewardship as a way to look
beyond the present to achieve the best long-term results for the organization and
contribute to the greater good of society. This emerging view is that each of us
holds the resources of the world (and of the individual organizations to which we
relate) in trust for future generations. At the core, there is the recognition that as
human beings, we have relatively short personal and professional lives, and that we
have a responsibility to leave something of value behind—a legacy that will enable
future generations to have a better life. This elevates and ennobles the concept of
board governance, and bodes well for the future of not-for-profit long-term care
organizations.
In my view, the most exciting development in terms of board governance is the
trend toward engaging boards in a pre-strategic discussion of what is important to
the organization (Chait et al., 2005). In addition to discussing the fiduciary and
strategic roles of boards, Chait et al. outline what they call the “generative process,”
where boards are involved in a process that precedes strategy—a place normally
occupied by the senior staff of the organization. They use terms such as “deciding
what to decide, problem framing, engaging in sense making, discovering emergent
strategies, and promoting robust discourse” as they explain how boards get involved
in thinking that “makes sense out of circumstances.” This may be the new frontier
of governance that will inspire and engage the best and the brightest of society to
volunteer to serve on boards where they know they can make a difference. Long-
term care organizations that embrace this approach will discover an important
advantage over their counterparts in an increasingly competitive environment.

Consumer Activism on Governance

of Long-Term Care Facilities
With the advent of the consumer movement throughout society, there have been
increased expectations that the governance process will reach out to engage residents
and family members in a meaningful way. Greater involvement of the consumer in
care planning and other similar activities is common to other components of the
healthcare environment.
The emergence of consumer activism in continuing care retirement communi-
ties (CCRCs) has been a growing phenomenon for the past 20 years. A 2002 sur-
vey conducted by the American Association of Homes and Services for the Aging
illustrates its current status, with more than 35 percent of responding organizations
indicating that they had resident board members (AAHSA Leadership Develop-
ment Survey, 2002). In many parts of the country, CCRC residents have banded

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together to lobby for laws requiring such membership on the CCRC board of direc-
tors, and have formed statewide groups to exchange information and pursue their
common interests. Groups associated with nursing homes, such as the National
Citizens’ Coalition for Nursing Home Reform, are primarily driven by family
members due to the high prevalence of physical and cognitive impairments among
patients.
Some of the expectations placed on long-term care providers have created a
number of tension points that impact current and future organizational opera-
tions. Because long-term care involves a range of services, engaging residents, fam-
ily members, and other interested parties is a multidimensional effort that takes
into account the following:

䡲 Nature of the relationship between provider and consumer, including the

financial relationship with consumer—entry fee models, co-op models,
third-party payers—and anticipated length of relationship
䡲 Physical or cognitive limitations of residents
䡲 Family role as direct or indirect consumers

Each type of service provided within the long-term care spectrum must respond to
these factors in a different way, utilizing a variety of approaches that can range from
formal or informal advisory groups of residents and family members to full board
participation. In general, the increased frailty of assisted living or skilled nursing
residents will result in a higher likelihood that formal governance structures will
involve family members. Also, the shorter the anticipated relationship with resi-
dents, the more likely that engagement of these residents will be of a more informal
nature and less likely to be invested in governance structures.

Skilled Nursing: Assisted Living

All long-term care facilities are required to have a mechanism for residents to
gather, expressing their needs and desires collectively. Typically these are called
“residents councils” or “associations.” They were originally formed at a time when
lengths of stay in long-term care facilities were much longer, and residents generally
possessed better physical health and cognitive abilities. As long-term care residents
have become frailer, increased attention has been given to family and friends’ coun-
cils to elicit the consumer point of view and provide an outlet for the needs and
concerns of families who take an active part in the care of their elders. In recent
years, as the lines between skilled nursing and assisted living residents have become
more blurred, resident involvement has become more limited. Despite these diffi-
culties, there should be strong efforts to engage residents and their families. Regular
meeting times, bylaws, and election of officers may vary significantly and must be
tailored to the persons being served.

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Independent Living
With independent living residents, whether in a purely housing environment or
on a multilevel campus of care, consumer involvement can assume an entirely
different dimension. Typically, these residents are younger, and more physically
and cognitively able to express themselves. They expect to be treated as customers.
They may also look askance at a family member who presumes to speak on their
behalf. Structures to engage independent living residents tend to be much more
formal and self-sustaining. On state and federal levels, regulations often require
the governing body to have a mechanism for residents to express their needs, inde-
pendent of the facility management. In most independent living environments, it
is customary to have a resident representative on the board of the facility, at least
in an advisory capacity.
The most complicated of these relationships is found in the CCRC. In addition
to being younger and healthier, such residents have typically had higher incomes
and are more likely to have occupied decision-making positions throughout their
work life. If they paid an entry fee, they may regard themselves as owners or inves-
tors rather than as customers, and expect to have a formal position on the governing
board.
There are a variety of potential problems associated with having residents on the
governing board. The two most frequently cited concerns are the ability to set rates
and advocate spending policies focused on the long-term good of the organiza-
tion rather than the short-term advantage of current residents. However, it is PHI’s
experience that, when handled properly, these generally do not turn out to be major
problems. This conclusion has been confirmed by other continuing care providers
(Van Ryzin, 2004).
From PHI’s perspective, the key to successful relationships with CCRC resi-
dents is the latter’s trust that the governance structure permits them to commu-
nicate their needs and desires effectively, and that the organization will respond
promptly to their concerns. The presence of a resident or two on the governing
board will not be a substitute for establishing this level of responsiveness between
residents and the governing board.

Residents as Board Members

With a parent corporation and several operating subsidiaries, PHI has ample
opportunity for resident involvement in decision making. Elected resident associa-
tion officers may serve as advisors or as voting members of a governing board. There
are no automatic positions reserved for residents by virtue of election or holding an
office in the resident association. Rather, PHI has established guiding principles
for the selection of board members who have worked well in engaging residents in
governance.

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 Long-Term Care Governance and Administration 䡲 257

䡲 A focus on temperament, experience, and a forward-looking approach is

important in all board positions.
䡲 Family members of residents (past or present) have represented a strong pool
of board talent.
䡲 The nominating process for residents is the same as for all other potential
board members; residents are never tokens, but are regarded as equal to every
other board member.
䡲 Resident board members are expected to meet the same expectations as other
individuals on the board. In PHI’s case, this may include travel to other PHI
facilities for meetings.
䡲 As a not-for-profit organization, PHI has no owners. All board members are
stewards of the public trust. Residents may have made a financial investment
in their living accommodations, but that is not the equivalent of ownership.
䡲 As with all members, the power of the board occurs when it is in session.
Board members will not attempt to exercise power as individuals.

There are a few practical considerations that enter into a resident’s decision to serve
on the governing board. Besides devoting the needed time and attention to board
responsibilities, the resident may be lobbied by other residents to bring a special
issue before the board, or to vote a certain way on a matter under board consider-
ation. If residents are able to maintain a normal lifestyle between board meetings,
they are usually willing and able to serve with distinction.
Occasionally, due to illness of a spouse or other relative, a board member may
also serve as an advocate for a family member. Staff may respond to the board
member in a different way than they do to other family members. On these rare
occasions, staff education is critical to ensure that the board member is free to take
on this role without having his or her suggestions or concerns being treated as new
policy positions.

Effective Administration
Establishing a Climate of Transparency
In the wake of WorldCom and Enron, transparency has become a popular topic,
belying the reality that many effective leaders have successfully practiced it for
decades (Baum, 2004). The benefits of transparency in long-term care administra-
tion are significant. The creation of such an environment demands integrity from
everyone in the organization. It inspires confidence and invites the commitment of
stakeholders and, when combined with effective measurement tools, can focus the
attention of employees more successfully.
At its very core, transparency involves establishing a climate that is open and
honest in all of its internal and external relationships. A consistent matching of the

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behavior of the organization’s leadership with the values espoused in the mission
statement and other corporate publications is essential. Transparency plays out in
many ways in the work of a not-for-profit long-term care organization. At the most
basic level, transparency creates the trust that is at the heart of every important
internal and external organizational relationship. Some key applications of trans-
parency are outlined in the following sections.

Staff and Governing Board Roles

The ethical tone of the organization is established by the governing board’s stan-
dards related to conflict of interest. Such disclosure assures the public that no indi-
viduals associated with the organization will place their personal needs ahead of the
interests of the organization. One might call this paving the ethical high road on
which everyone must travel. Staff and board relationships are based on the confi-
dence that both give first priority to organizational requirements in every delibera-
tion. A lack of hidden motives does not preclude honest disagreement, which is, of
course, desirable for organizational growth.
It is the duty of staff to ensure that board members are given all the informa-
tion they need to make informed decisions, without swamping them with data that
can lead to confusion. Staff must distill the material in such a way as to make it
understandable and clear. They should take great care not to slant reports or board
discussion toward a predetermined outcome. Board members must be certain that
they are receiving the whole story. This confidence will enable board members to
take the kind of calculated risks that are required in the fast-moving long-term
care environment. In addition to having the facts associated with a particular issue,
the board must be privy to the debate, and even be informed of any staff conflict
regarding the subject. A high degree of trust among staff and willingness of the
governing board to value dissent are essential. Moreover, it must be understood that
when a decision is reached, the period of dissent is over; at that point, the organiza-
tion should be single-minded in the pursuit of the agreed upon action.
There are many methods for giving the board needed information. Once a solid
background has been established regarding the underlying issues facing the board,
a primary responsibility of the paid leadership is to provide ongoing data about the
state of the organization and its environment. A popular tool used at PHI is a periodic
narrative update that calls attention to the various organizational activities. Typically
less than six pages, it also includes regulatory and legislative changes that will have an
impact on the field of long-term care. A constant stream of such essentials serves as
education for the board, and provides a context for current and future issues.
At PHI, a “dashboard” has been created to provide board members with
details related to the organization’s health. Th is approach facilitates identification
of the most critical elements in the organization’s success and of the best ways to
measure performance in those areas. Debate over critical indicators or predictors
of future success is in itself an illuminating experience.

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Although the dashboard contains a number of key financial ratios, there are
many other measures of the organization’s health—human resources, quality of
care, fund-raising, etc. The most critical part of this process is the periodic review
of what should be measured, to make sure the board not only understands the
information, but can also add or delete items as needed.
Once the elements of the dashboard have been identified, the method and fre-
quency of distribution are established. With the advent of technology, the possibili-
ties are almost endless. At PHI, in addition to providing this information at every
board meeting, the data is also put on the board’s Web site for easy and timely
access by board members. By the 15th of the month, they can check all of the
predetermined key performance metrics of the earlier month, and if they notice
anything that requires further study, they can contact the administration for refer-
ral to the appropriate department.
This kind of transparency is also helpful in terms of outlining board expec-
tations of staff performance. The primary means of clarifying these performance
objectives is a well-written strategic plan and the tactical steps that spring from it.
Setting goals for achieving the organization’s mission and targets for growth in
volume, program variety, and financial performance are all key to giving the staff
direction and freedom to apply their collective energy toward a common purpose.
Whereas the strategic plan is the starting point for establishing expectations, the
dashboard provides clear measurements and targets for improvement.

Staff
Transparency also means that leaders continually reinforce the value of employees’
contributions to achieving the mission of the organization. Moreover, employees
should be given information needed for their work, praised for outstanding effort,
and informed when they fall short of expectations so they have an opportunity
for improvement. Finally, employees must be able to count on openness and even-
handedness in the application of policies related to employment, compensation, and
discipline.
Unity of purpose is the hallmark of a successful staff. A first step is to convey the
larger picture of the organization’s mission and how staff efforts in various parts of
the enterprise contribute to its success. As a result, each employee knows performance
measures and why they are important. Annual performance reviews provide a mini-
mal type of feedback, which must be supported by open and frequent, informal, and
sincere communication that constantly reinforces what is most important.

Those We Serve
The people we have been called to serve need to be aware of their financial obliga-
tions and to have access to financial information both before and after the decision
is made to become a resident. Such access can assure clients that the organization

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is fiscally secure and will be there for them in the future. In addition, residents are
engaged in the annual budget process and the regular disclosure of financial infor-
mation. In this way, they can evaluate the effectiveness of leadership in fulfilling
its stewardship responsibility. Although there are always consumers who focus on
providing services for the lowest possible cost, on balance they are also concerned
about the larger picture—the ability to attract and retain qualified staff by provid-
ing a fair wage and an advantageous benefit package, and assuring the financial
strength of the organization well into the future.
Transparency also means that residents and their family members will be given
all the information they need to make informed decisions about their medical care
and end-of-life decisions. Engaging consumers and family members early and often
is not an option but an essential method of operation for every long-term care
provider.

Constituent Groups
The way leadership articulates the organization’s values and holds itself account-
able assures constituent groups that leadership will remain faithful to the mission.
Regular reporting of the extent of the organization’s charitable care to those who
cannot pay for services and the ongoing need for financial support is essential. If
the organization’s sponsor is a community or religious group, the integrity and
openness of the long-term care organization have a direct impact on the reputa-
tion of the sponsoring group. This holds even if there are no legal ties to convey
legal responsibility or liability. A scandal (real or perceived) at PHI would have a
negative effect on the reputation of the Presbyterian Church as a whole, as well
as of nearby Presbyterian congregations. This would severely impair the ability
to recruit volunteers, raise charitable support, and attract board leadership from
constituent groups.
Donors are particularly significant. From their perspective, transparency
involves honesty in interpreting the organization’s needs and open accounting of
the sources and uses of donations. Stated needs for financial support must address a
number of questions: Why is the contribution needed to further the mission of the
organization? Are there other sources of support that the organization is seeking to
accomplish the same objectives? How will these funding sources work together to
avoid overlap?
Assurance that contributions are applied for the donor’s intended purpose is the
second area where transparency is essential. A clear trail from the contribution to
the expenditure must be maintained and be open for examination by the donor.
Finally, donors must be aware of the organization’s fund-raising expenses. This
is a basic stewardship question. A historical record of the ratio between fund-raising
expenses and dollars raised is vital to assure donors that their contributions actually
accomplish the organization’s goals.

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Business Partners
Relationships with business partners are critical to consistently providing superior
service. Suppliers of goods and services are selected based on articulated criteria
that represent the best value for money. The quality of products, services, and prices
takes precedence over personal relationships. Whether or not the business partner
is from the local community or a part of your constituent base is at best a second-
ary concern. At PHI, the consistency of long-term relationships is valued, but it is
clear that the presence of these ties raises, not lowers, expectations of performance.
Transparency here means that the organization’s decision-making process is known
by every potential supplier, and that the information they provide will not be shared
with competing organizations. In addition, vendors know that they are held to the
same high ethical business standards that PHI follows.

Regulatory Agencies
Full disclosure to governmental and accrediting organizations is part of fulfilling
the organization’s legal, moral, and ethical responsibilities. The spirit and the letter
of the law must be observed in this process as it is, in all aspects, of the organiza-
tion’s operation. State and federal regulations are clear about the need to reveal
any problems related to compliance, resident injury, and a host of other issues.
Although such information may create short-term difficulties for the organization
by triggering a more invasive review, a culture of transparency requires that even
the appearance of impropriety be avoided. Many regulators develop a sense about
whether or not an organization is open and willing to share information needed to
protect the public interest. A transparent environment is the only way to overcome
any suspicion that the organization has something to hide.

The Financial Community

There is probably no more important area where transparency is appreciated and
rewarded than in accurate reporting to the financial community. Financial integ-
rity is the foundation of the relationships with lending institutions, rating agencies,
bondholders, and other interested parties. In earlier years, PHI provided a stream of
written reports and briefings to these groups, but the information was often sporadic
or sorely inadequate. It seemed that everyone wanted additional insight into PHI’s
financial condition. In response to the need for more timely and accurate data,
PHI developed a system of financial disclosure. In consultation with our lenders,
bondholders, and Standard & Poor’s, a package of information was developed and
made consistently available on PHI’s Web site. It is updated as the financial state-
ments are closed every month. Now everyone has access to the most recent infor-
mation, and can inquire about what we are doing to remedy any areas of weakness.

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As a result, the confidence level of the financial community has been enhanced to
such a degree that the cost of capital for PHI is consistently lower than for many
peer organizations with approximately the same financial performance.

Limitations on Transparency
Even when an organization is committed to transparent leadership, honesty does
not require that societal restrictions on disclosure of information, legal imperatives,
or concern for the well-being of others be ignored. Much information handled by
the organization has legal and ethical restrictions on its use. However, these limita-
tions must never be used as an excuse to withhold information that allows for an
open climate.

Understanding the Essentials

Long-Term Care Is a Human Resource Business
From an operational standpoint, effective administration requires that the essen-
tials of the organization are clearly understood, and that everyone is focused on
them. In long-term care, it means that the management of human resource inputs
is the single most important indicator of success. In recent years, many long-term
care facilities have closed. The inability to recruit and retain the kind of staff needed
to deliver quality care is often cited as the main reason.
The critical nature of effective use of human resources is supported by data.
In a typical skilled nursing environment, approximately 65 percent of all costs are
related to human resources, including salaries and wages, benefits, and government-
mandated employment costs. Of the remaining 35 percent, there are fi xed depre-
ciation and interest expenditures that offer a limited opportunity for savings. From
a purely mathematical standpoint, the key to success lies in the effective deploy-
ment of human resources. Too few dollars remain in other areas to make up for
ineffective performance on the human side of the enterprise. Independent living
and assisted living facilities have a less labor-intensive profile, although home- and
community-based services are even more so.
If workforce management is the primary key to success, understanding the
complexities of the long-term care workforce is essential. The group employed by
long-term care organizations is predominantly female, representing a variety of dis-
ciplines, almost all of which are infused with a strong caring ethic, and in many
cases, with a loyalty to a professional discipline that exceeds allegiance to the orga-
nization. Many of these professionals are in very high demand. Nurses and thera-
pists are among the employees who do not fear changing jobs to find an employer
whose mission is more closely aligned with their personal goals and values. A large
percentage of these individuals must be willing to work weekends and holidays, and

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 Long-Term Care Governance and Administration 䡲 263

spend many hours away from their families. It is no wonder that in many long-term
care organizations employee turnover is high.
People who gravitate to the caring professions must be engaged intellectually
and emotionally with the mission of the organization and the people they serve.
The stability of work relationships is extremely important, as is the consistency
of leadership. Studies conducted by the Institute for the Future of Aging Services
(IFAS) have demonstrated the interplay between supervision and frontline employ-
ees and the effects on quality of care, job satisfaction, and retention (Stone et al.,
2002; Institute for the Future of Aging Services, Kansas Association of Homes and
Services for the Aging, 2003).

Combining Technology and Human Resources

Developments in technology have permitted long-term care providers to access
critical information on a real-time basis. This trend is expected to accelerate in the
foreseeable future. However, the benefit of new technology is only realized when
underlying systems are overhauled correspondingly. In the past five years, PHI has
significantly improved its accounting department’s performance as measured in
accuracy and speed of providing data to employees throughout the organization. In
addition, the accounting department staff has been reduced by 25 percent through
attrition in the same period. Increased productivity was the result of changing sys-
tems, applying new technology, and completely engaging the accounting workforce
in the larger aims of the organization.
Sharing of information and an open decision-making process are among the
first steps in establishing an intellectual and emotional bond as well as a team
identity or culture. As mentioned earlier, PHI has developed a dashboard approach
to information sharing at the governance level, and has expanded this approach to
the operational level to ensure that the workforce is well informed on the key met-
rics of PHI’s performance. Each area of the organization is analyzed and a limited
number of metrics highlighted for use by the entire team. Employees are able to
connect their personal and departmental efforts with the achievement of the identi-
fied targets. The timing of information is critical in assisting managers in making
operational decisions; any significant delay can lead to inertia or decisions based on
inaccurate assumptions or imperfect information.
Information related to essential PHI issues is placed on the dashboard. Peri-
odic discussions are held to decide the measures that should be added or dropped.
However, some areas are likely to continue receiving very close attention. In addi-
tion to the periodic dashboard reports, variables critical to the organization’s mis-
sion are monitored daily. For example, at PHI, human resource information is
considered so vital that systems are in place to provide reports on the previous day’s
staffing. A graphic display for the entire month is included to provide immediate
feedback on how well the staffing plan is being executed daily in each one of the 19
locations in a three-state area.

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Fear of technology is common among healthcare professionals, and is a major

obstacle to change. People in the caregiving professions frequently complain about
the burden of paperwork and other tasks that keep them from the resident and fam-
ily contact that inspired them to become caregivers in the first place. Therefore, the
primary goal of introducing technology into a long-term care environment should
be measured by the answer to the following two questions:

䡲 How will the change improve the quality of care from the consumer’s point
of view?
䡲 How will use of this technology allow more time to maximize human contact
between staff and residents?

Creating a Culture of Leadership

Recently, a great deal of emphasis has been placed on group culture as a critical ele-
ment in achieving objectives. The concept of organizational change is not new, but
some of the current language is more engaging. Whether the approach is called a
culture of discipline, as suggested by Collins (2001), or the “software” of organiza-
tional beliefs and behaviors, as proposed by Bossidy and Charan (2002), the focus
is on the role of culture in getting things done. Although culture is important in
every organization, one could argue that it is even more important in the long-term
care environment.
Many years ago, PHI acquired a skilled nursing facility from a for-profit
agency that was a subsidiary of an insurance company. During a meeting at the
time of the sale, the facility’s director indicated that his experience as a steel com-
pany executive served as excellent training for his role as a long-term care admin-
istrator. He explained, “Long-term care is not unlike the steel business. There
are inputs and outputs in every business. One simply has to manage the inputs
in a way to create the desired outputs.” It proved otherwise. The facility was los-
ing money and had high employee turnover, low occupancy, poor survey results,
and unhappy customers; ultimately it had to be sold. The industrial culture, as
practiced by this executive, did not transfer successfully into the long-term care
environment.
Mark Thomas, CEO of the Ebenezer Society in Minneapolis, observed that
“Culture eats strategy for lunch.” This is not to say that an impressive culture will
necessarily turn a flawed strategy into a winning situation. However, it does imply
that a solid strategy may put an organization in a position to become successful, but
even the best one cannot be properly executed within a poor culture. One of the
most vivid examples of the power of culture is Southwest Airlines, a company that
has always had a clear and effective strategy as a low-cost regional airline. However,
many other airlines have failed to replicate Southwest’s success because they just
could not replicate its culture (Gittell, 2002).

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 Long-Term Care Governance and Administration 䡲 265

Why is culture even more important in long-term care? First, the number of
persons who have direct contact with the customer (resident or family) represents a
very high percentage of the total workforce. Second, the length of stay means that
staff, residents, and family members have frequent contact over a long period of
time, and get to know each other well. Expectations can be raised because, for most
people, relationships are a reason to expect more, not less. In this environment,
values such as a strong work ethic, compassion, kindness, and attention to detail in
providing care must permeate the entire organization.
In long-term care, culture cannot be a veneer but must be solid throughout the
organization. Moreover, in long-term care, leadership is the soil in which a culture of
care can grow. The most dedicated adherents to a grassroots cultural change initiative
will be overpowered by lack of support by management. An unhealthy leadership
culture will ultimately result in a weak and impoverished culture of care. Conversely,
successful change has roots in healthy leadership. Organizational values such as
integrity, humility, transparency, stewardship, and continual striving for excellence
must be articulated and modeled daily by those in charge of the organization.

References
American Association of Homes and Services for the Aging (2004). AAHSA Leadership
Development Survey. Washington, D.C.
Baum, H. (2004). The Transparent Leader. New York: HarperCollins.
Block, P. (1993). Stewardship: Choosing Service Over Self-Interest. San Francisco, CA:
Berrett-Koehler Publishers, Inc.
Bossidy, L. and Charan, R. (2002). Execution. New York: Crown Business.
Butler, R. N. (1975). Why Survive Being Old in America. New York: Harper & Row.
Chait, R. P., Holland, T. P., and Taylor, B. E. (1996). The Eff ective Board of Trustees.
Phoenix, AZ: American Council on Education and the Onyx Press.
Chait, R. P., Ryan, W. P., and Taylor, B. E. (2005). Governance as Leadership: Reframing the
Work of Nonprofit Boards. Hoboken, NJ: Wiley.
Collins, J. C. (2001). Good to Great. New York: HarperCollins.
Friedsam, H. J. (2006). A Memoir. Department of Applied Gerontology, University of
North Texas. Denton, TX.
Gittell, J. H. (2002). The Southwest Airlines Way. New York: McGraw-Hill.
Institute for the Future of Aging Services, Kansas Association of Homes and Services for
the Aging. (2003). Keeping Frontline Workers in Long Term Care: Research Results of
an Intervention. Topeka, KS.
Ivanovich, D. (2006). Everybody knows Enron’s name, for better or worse. Houston
Chronicle. March p. 1.
Johnson, C. L. and Grant, L. (1985). The Nursing Home in American Society. Baltimore,
MD: Johns Hopkins University Press.
Kim, W. C. and Mauborgne, R. (2005). Ocean Blue Strategy: How to Create Uncontested
Market Space and Make the Competition Irrelevant. Boston, MA: Harvard Business
School Press.

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Mendelson, M. A. (1975). Tender Loving Greed. New York: Alfred A. Knopf.

Mintzberg, H. (1994). The Rise and Fall of Strategic Planning: Reconceiving Roles for Plan-
ning, Plans, Planers. New York: Free Press.
Stone, R., Reinhard, S., Bowers, B., Zimmerman, D., Phillips, C. P., and Hawes, C. (2002).
Evaluation of the Wellspring Model for Improving Nursing Home Quality. New York:
Commonwealth Fund.
Swaim, W. T. (1961). Short Course on the Organization and Administration of a Home for the
Aging, Topic Number 20. Pillsburg, PA: Pennsylvania.
The Pennsylvania Code, Chapter 39, State Board of Examiners of Nursing Home Admin-
istration, adopted 1972, amended June 2006. Harrisburg, PA.
United States Bureau of Labor Statistics. (1941). Bulletin Number 677. Washington:
U.S. Government Printing Office, pp. 5, 50–52, 100–108.
Van Ryzin, J. (2004). Resident leaders take a seat at the table. Best Practices (May/June), no
volume 28–29.
Vladeck, B. (1980). Unloving Care: The Nursing Home Tragedy. New York: Basic Books.

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 Chapter 14

Improving the Quality

of Long-Term Care with
Better Information*

Vincent Mor

Contents
Background .............................................................................................269
Assessing Nursing Home Residents .....................................................269
Home Health Agency Outcomes.........................................................270
Conceptual Issues in Quality Measurement.............................................271
Which Aspects of Quality Are Important? ..........................................271
Aggregated Quality Measures .............................................................272
Comparing Quality .............................................................................272
Care versus Outcomes .........................................................................272
Validity of Quality Measures...............................................................273
Establishing Benchmarks or Comparison Groups ...............................274
Technical Issues in Quality Measurement................................................275
Variation in Reliability of Measurement ..............................................275

* Milbank Quarterly, 83(3), 333–364, 2005, © 2005 Milbank Memorial Fund, Blackwell
Publishing. Reproduced with permission.

267

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Risk Adjustment..................................................................................276
Composite Quality Measures ............................................................. 277
Selection and Provider Specialization ................................................. 277
Experience with Long-Term Care Quality ...............................................278
Improvement Efforts ...........................................................................278
The Impact of Public Reporting ...............................................................279
Gaps in Research Knowledge ...................................................................281
Valuing Quality of Life versus Areas of Quality of Care......................282
Coping with Measurement and Statistical Complexity .......................283
The Impact of the Public Reporting Format ........................................283
Summary ................................................................................................ 284
Acknowledgments ....................................................................................285
References ................................................................................................285

Improving the quality of health care using clinical information is achieved either
by identifying targets for quality improvement (QI) efforts or by reporting intra-
or interprovider performance differences to consumers, regulators, or purchasers
using accepted indicators of quality of care. QI is a means of improving clinical care
in specific areas, with comparative reporting, particularly public reporting, acting
as a stimulant for improvement. The rationale is that providers will be stimulated
to invest in internal quality improvement efforts if they believe that consumers will
choose providers based on public reports of provider quality or if they will be other-
wise rewarded or penalized because of these comparisons. These two strategies can
operate synergistically or be implemented independently. QI uses clinical informa-
tion to gauge changes in a provider’s own performance after changing some existing
practices or procedures. Reports comparing providers’ performance are predicated
on the assumption that the underlying comparisons are valid. Both approaches have
advocates, and numerous companies, ranging from software vendors to specialized
consulting groups, have emerged to support providers’ QI efforts.
The long-term care service sector is a diverse group of institutional and community-
based providers but only Medicare- or Medicaid-certified nursing homes (NH) and
home health agencies (HHA) are subject to uniform data-reporting requirements. In
some states, however, assisted living facilities and state and privately funded home care
agencies serve many frail elderly individuals. Among nursing home and home health
agency providers, both the QI and the comparative performance reporting traditions
have strong advocates and are being supported both intellectually and financially
by federal and state quality initiatives. Indeed, the existence of universal, mandated
clinical data sets has facilitated the implementation of both internally motivated QI
efforts and public reporting. In the case of home health agencies, the uniform clini-
cal assessment tool mandated by the government grew out of an impetus to create
case-specific internal and external performance measures to facilitate this integrated

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 Improving the Quality of Long-Term Care 䡲 269

application of quality measures. In contrast, the uniform assessment mandated for

nursing homes in 1991 was designed primarily to plan care (Morris et al. 1990;
Shaughnessy et al. 2002).
In 1998 the Institute of Medicine (IOM) began a follow-up study of the progress,
or lack thereof, in improving the quality of care in nursing homes (IOM 2001).
A central issue in that report dealt with the adequacy of data regarding long-term
care quality on which to make policy, specifically how to evaluate the relative merits
of a regulatory approach to quality assurance versus an information-based approach
designed to stimulate quality improvement. The IOM report recommended pro-
moting the public reporting of information about the quality of long-term care
providers but cautioned that there still were many unanswered questions about the
adequacy of the data on which to base such comparisons.
This article examines the conceptual and empirical validity of the data underly-
ing the quality measures now in use in long-term care and highlights the principal
assumptions underlying the current and proposed uses. Then the article looks at
the impact of quality information on the introduction of CQI efforts, including
how the information is presented and used. This is followed by a review of how
the public reporting of quality information has influenced long-term care consum-
ers, their advocates, and long-term care provider organizations. Finally, the article
recommends further methodological and applied research in this area.
The questions relevant to long-term care providers and policymakers that this
article addresses are

䡲 How reliable and valid are the data used to construct quality measures on
which public reporting is based? Do the current measures reflect the quality
of the provider or the impact of case-mix differences?
䡲 If providers improve their care, will the outcomes actually improve?
䡲 Are the current measures of quality consistent with consumers’ interests?
䡲 How can we determine the “overall” best providers, and how should we estab-
lish benchmarks of quality?

Background
Assessing Nursing Home Residents
In 1984, a committee of the Institute of Medicine (IOM) began studying the quality
of care in nursing homes. Led by Sidney Katz, the committee’s recommendations
(IOM 1986) led to the 1987 Nursing Home Reform Act (OBRA). One of these
recommendations was mandating a comprehensive assessment that would provide
a uniform basis for establishing a nursing home resident’s care plan, or minimum
data set (MDS). The rationale was the perceived inability of staff to identify patients’
needs because of inadequate training and education. The MDS was a product of the

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recommendations of hundreds of experts representing the academic disciplines and

the professional organizations serving geriatrics, psychiatry, nursing, physical and
occupational therapies, nutrition, social work, and resident rights advocates (Morris
et al. 1990). The goal was an instrument to capture the basic information needed
to develop a care plan that considered individuals’ comorbidities, strengths, and
residual capacities. An initial version was nationally implemented in 1991, followed
by a revised and larger version introduced in 1996 (Morris et al. 1997).
After universally available patient information was assembled in computerized
form in 1998, it was used for policy applications and not just to drive clinical care
planning (Mor 2004). Nursing home case-mix reimbursement systems, initially
developed for certain states’ Medicaid programs, were refined using the more
detailed data in the MDS. The resulting resource utilization groups (RUGs-III)
system became the basis for Medicare’s prospective payment system for skilled
nursing facilities (Fries et al. 1994). The availability of clinically relevant, universal,
uniform, and computerized information about all nursing home residents raised
the possibility of using this information to improve the quality of the nursing
homes’ care. The Centers for Medicare and Medicaid Services’ (CMS) Nursing
Home Case-Mix and Quality Demonstration, which had refined the RUGs case-
mix classification system, thereupon created readily usable quality indicators based
on computerized data from the resident assessment instrument (Zimmerman et al.
1995). These indicators were refined, and MDS-based quality measures accounting
for shortstay, postacute patients as well as the long-stay residents were created. In
November 2002, the CMS mandated and began publicly reporting them, first
in a six-state pilot and then nationally (Harris and Clauser 2002). The revamped
quality improvement organizations (QIOs) funded by the Centers for Medicare
and Medicaid Services then were assigned to work with nursing home providers to
improve their quality of care (Baier et al. 2003, 2004).

Home Health Agency Outcomes

Throughout the 1990s, researchers at the University of Colorado worked with home
health agencies to establish a system to monitor the quality of care for HHA patients
(Shaughnessy et al. 1994). Based on the Outcome and Assessment Information Set
(OASIS), both the state of New York and the Robert Wood Johnson Foundation
supported a pilot test of a quality assurance system: Outcome-Based Quality
Improvement (OBQI). The OASIS data describe patients’ diagnoses, medical condi-
tion, treatments, and functional and cognitive status. The participating home health
agencies reviewed reports of the proportion of patients who improved or deteriorated
in selected domains between their admission to the service and subsequent discharge.
Data on the change in patients’ status were constructed by comparing their condi-
tion at the two points in time. In 1999, the Centers for Medicare and Medicaid
Services required the OASIS as a means of uniformly recording information about all

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 Improving the Quality of Long-Term Care 䡲 271

Medicare beneficiaries using a home health service. With the adoption of OASIS,
the entire Medicare-certified home health care industry began to submit the
required data to the CMS for the new Prospective Payment System (PPS) imple-
mented in October 2000, as well as data for monitoring quality and improvement
(Sangl et al. 2005; Stoker 1998). In 2004 this system was extended to the entire
nation, and now consumers can compare agencies’ QIs in local newspapers, at the
CMS website (http://www.cms.hhs.gov/quality/hhqi/), or by telephone.

Conceptual Issues in Quality Measurement

Quality is measured using information about individual patients’ experience (e.g.,
pressure ulcers) and aggregating it to determine the “rate” among all patients of a
given type served by the provider. The individual data come from clinical assess-
ments of patients that are recorded and then computerized. Measures designed to
reflect the “quality” of the provider are constructed after considering a number of
technical, sampling, and statistical stability and adjustment issues, as well as the
conceptual issues inherent in measuring quality in nursing homes and home health
agencies. Next we address several of these issues, using examples from both types
of long-term care providers.

Which Aspects of Quality Are Important?

Publicly reported measures of provider quality should reflect the value that society
in general, and consumers (and their advocates) in particular, attribute to various
aspects of quality. When we could report only hospitals’ mortality rates or countries’
number of live births, clinicians and policymakers were disappointed that the more
refined and desirable aspects of health care were ignored. Although Mukamel (1997)
suggested criteria for selecting quality measures according to their utility and mean-
ingfulness to designated audiences, the existing data tend to emphasize clinical rather
than psychosocial issues. But the quality of long-term care is fundamentally multi-
dimensional and encompasses clinical care issues, functional independence, quality
of life, and patients’ and families’ satisfaction with care (Mor et al. 2003c). In the
case of NHs and HHAs, despite the availability of much information about patients,
consumer advocates and many clinicians do not feel that the data on the Nurs-
ing Home Compare website, which is maintained by the CMS, capture important
aspects of quality. For example, it does not mention quality of life (Kane et al. 2003).
In addition, although patients’ and families’ satisfaction is widely used, particularly
in the nursing home industry, it has not been incorporated into a national reporting
system (Castle 2004; Kane et al. 2003; Simmons et al. 1997). Finally, some critics
of the OASIS data for home health do not believe that the outcome data reported
capture the content of nurses’ education of families (Fortinsky et al. 2003).

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Aggregated Quality Measures

Standardized, mandatory, patient assessment systems are computerized in all U.S.
nursing homes (NH) and in all home health agencies (HHA) serving Medicare ben-
eficiaries. These assessments are made by the nursing staff when the patient is admitted
into the service and periodically thereafter (for HHAs, upon discharge). Only those
patients cared for long enough to have two assessments are included in the calculation
of an aggregated measure of provider quality. Patients who cannot change (i.e., who
already have a pressure ulcer or whose functioning will not improve) are excluded
(Sangl et al. 2005). Furthermore, because these aggregate measures of provider quality
are based on clinical assessments made by different kinds of nurses in different facilities
and agencies, the resulting quality measures may reflect differences in clinical assess-
ment practices, such as directly asking patients about their pain (Wu et al. 2003).

Comparing Quality
Consumers using publicly reported data to compare providers are essentially asking
whether their experience will be better with one versus another. As noted, bas-
ing aggregated quality measures on clinical assessments means that patients and
their advocates who are comparing the performance of providers may not be able
to differentiate between “real” differences between two providers and those that
merely reflect differences in how the nurses in the two agencies conducted their
assessments. Thus, differences in how the data are collected may undermine the
validity of interfacility comparisons, which is at the heart of efforts to report
providers’ performance publicly (Sangl et al. 2005).

Care versus Outcomes

Quality measures reflect providers’ performance in their administration of treat-
ments as well as the outcomes of those treatments (Mor et al. 2003c; Sangl et al.
2005). The proportion of restrained NH residents indicates the kind of care given
in the home, whereas the proportion of HHA beneficiaries who become better
able to move by themselves from bed to chair is also an outcome, presumably of
the patients’ natural recovery rate and the HHAs’ treatment, support, and family
education. Establishing benchmarks to compare providers assumes agreement on
appropriate and inappropriate care and could reveal poor quality of care. Con-
versely, the quality of the outcome is a measure of the clinically desirable result of
the nursing home or home health care.
The kinds of treatments that may be provided vary substantially. For example,
treatments of postsurgical patients pertain to wound care and recovery and dif-
fer from those for patients admitted with terminal prognoses. In any case, the
universal applicability of indicators of care may be limited to evidence of effective-
ness (e.g., flu shots) or consensus about inappropriateness (e.g., physical restraints).

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Currently, the CMS’s publicly reported NH quality measures are a mixture of

process and outcomes, whereas the HHA data are almost exclusively based on out-
comes. Some critics have argued that both the NH’s and the HHAs’ approaches
overemphasize outcomes, since they fail to address important processes of care
(Fahey et al. 2003; Fortinsky et al. 2003; Sangl et al. 2005). A comparison of pro-
viders according to the rate at which their patients’ function changes is intended
to show the impact of rehabilitative, nursing, and medical treatments, whereas
the rates of pressure ulcer incidence are presumed to reflect inadequate skin care.
Whether in nursing homes or HHAs, nurses are particularly interested in indica-
tors of performance that can be specifically associated with the interventions they
provide (Rantz et al. 1996).

Validity of Quality Measures

Establishing measures of performance and interpreting their meaning to various
constituencies require a shared understanding of quality. This is why so many quality
standard–setting organizations have broadly representative groups reviewing perfor-
mance measures of quality and why the CMS asked the National Quality Forum
to recommend the final indicators of quality that would be posted on the CMS’s
websites for both nursing homes and home health agencies (Kizer 2001; Kurtzman
and Kizer 2005; Sangl et al. 2005). Assessing provider performance, particularly that
based on patients’ outcomes, implies that providers are accountable for the observed
score and that the quality measure resonates with our understanding of what true
quality is. The Donabedian model of good structure facilitating excellent care pro-
cesses, which, in turn, produce the desired outcomes, explicitly or implicitly, informs
much of the literature on quality measurement (Donabedian 1980). Many studies
have examined the relationship between staffing levels (structure) and various indica-
tors of quality (process and outcome). Harrington and colleagues reported that the
performance of nursing homes with more staff is superior, but others have not found
such consistent results (Harrington et al. 2000; Rantz et al. 2004a; Schnelle et al.
2004c). Most recently, Rantz and her colleagues identified those nursing homes that
performed best on the CMS’s publicly reported quality measures, but the medical
records reviewed by her researcher were found to be unrelated (Rantz et al. 2004b).
However, detailed care processes are difficult to document based only on records.
Just as important, Schnelle and his colleagues repeatedly found in the facilities they
studied that information in the records did not necessarily match the actual care
observed by the research staff (Schnelle et al. 2004a; Simmons et al. 2002).
It is important to differentiate the validity of the aggregated providers’ measures
from that of the patients’ data in the MDS or OASIS assessments. Much research
points to the construct and predictive validity of the MDS data, ranging from cogni-
tion, diagnoses, ADLs, and the like (Mor 2004; Sangl et al. 2005). Similarly, several
studies of the OASIS refer to the validity of the data, both in the correlation of perti-
nent items and the prediction of events such as hospitalization (Fortinsky et al. 2003;

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Fortinsky and Madigan 2004). There is far less information about the validity of the
provider measures now being used, both in their relationship to other structural,
process, and regulatory indicators of quality (e.g., deficiency citations from inspec-
tors) and whether they capture the impact of real changes in patient care thought
to be associated with good quality (Bates-Jensen et al. 2003; Madigan 2002; Mor
et al. 2003a; Zimmerman 2003). Research on the CMS’s nursing home quality
measures now being publicly reported found that they were not significantly cor-
related and were poorly correlated to the number, or severity, of regulatory defi-
ciencies, even when controlling for the interstate variation in regulatory “severity”
(Mor et al. 2003c; Sangl et al. 2005). Furthermore, Schnelle and his colleagues
observed little relationship between the indicator of MDS-based restraint quality
and care processes in nursing homes, even though the high-restraint facilities
revealed other kinds of poor care (Schnelle et al. 2004b).

Establishing Benchmarks or Comparison Groups

Almost all providers are compared as a group or, in some cases, against a specific
standard of care. Among the issues in establishing benchmarks are whether to use dif-
ferent benchmarks for different types of providers (peer based), whether benchmarks
should be “targets” for improvement that may change as providers improve, or whether
benchmarks should be based on the observed quality distribution across providers.
There is not necessarily a “right” answer to these questions. For example, establishing
minimums as measured by particular quality measures may not be appropriate in
all cases, since many areas of performance have no evidence-based standards that
could determine a minimum (Mor et al. 2003a; Shaughnessy and Richard 2002).
Conversely, relying on only empirically based benchmarks (e.g., below the median)
may “institutionalize” the poor performance of providers operating at the median.
Furthermore, while national benchmarks might make sense in the long run,
large geographic differences in medical practice may mean that patients enter-
ing long-term care from acute care may have had different treatments in different
regions of the country. For example, the large interstate variation in the use of
feeding tubes among cognitively impaired residents of nursing homes is likely to
affect the homes’ performance on quality indicators, ranging from weight loss to
drug use (Mitchell et al. 2005).
A related issue is whether to consider regional variations in care patterns at all.
For example, in markets offering alternative long-term care options, such as home
health, inpatient rehabilitation, and even assisted living, a different mix of patients
are admitted to and reside in nursing homes. Recent research on the prevalence of
long-stay nursing home residents assessed as requiring little functional or medical
support services, as well as the mix of cases, revealed substantial interstate variation
between 1999 and 2002 (Grabowski and Angelelli 2004; Grabowski et al. 2004).
This research confirms that observed differences in hospitalization rates are strongly
related to Medicaid payment rates (Intrator et al. 2005; Intrator and Mor 2004).

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Thus, states and facilities with higher hospitalization rates of long-stay residents
may, paradoxically, appear to be better because their patients are discharged when
they become sick, whereas in other states they may remain in the nursing home
(Grabowski and Angelelli 2004).

Technical Issues in Quality Measurement

Just because it is possible to construct aggregated measures that reflect providers’ per-
formance does not mean the measures are technically sound or valid. Constructing
valid measures of provider quality requires addressing issues such as small sample
sizes, low prevalence, and therefore instability, as well as knowing how much differ-
ence between providers is reflected in differences in the actual care provided.

Variation in Reliability of Measurement

The reliability of the MDS and the OASIS was extensively tested in their develop-
ment and implementation in the 1990s and more recently (Hittle et al. 2003; Mor
2004; Mor et al. 2003b; Morris et al. 1997). The two instruments’ items achieve
reasonable to excellent levels of interrater reliability as measured by the Kappa
statistic (Sangl et al. 2005).* However, most interrater reliability tests are made
under optimal conditions and may not reflect “real-world” conditions, since pro-
viders participating in such intrusive field studies tend to differ from the average
provider (Mor et al. 2003b). The largest multifacility reliability study undertaken
to date asked research nurses with established high levels of interrater reliability
to independently assess more than 5,000 nursing home residents in 209 facilities
(approximately 28 per facility). Despite the high average rates of interrater reliability
recorded, substantial interfacility variation in observed reliability levels was found
(Mor et al. 2003b).
Just as important, the direction of disagreement was examined and found to vary
both between and among the facilities in the six states that the study examined. Thus,
the facilities’ Kappas were systematically lower in some states; disagreements between
the raters were nonrandom; and in some facilities the raters were less likely to detect
a problem like pressure ulcers or pain, whereas in others they were more likely than
the research nurses to rate residents as having the clinical problem. Recent statistical
analyses of these data reveal that directional bias in the data can result in significant
differences in the relative quality ranking of facilities (Roy and Mor 2005).

* Volume 3 of the University of Colorado report summarizing the history of the development and
testing of OASIS and the OBQI process summarizes the results of several reliability studies.
The investigators chose not to present the Kappa statistics for low variance OASIS items or
dichotomous items with few discrepancies. Since these invariably result in lower Kappa levels,
slightly lower average Kappas would have resulted.

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This literature suggests that in both NHs and HHAs, more attention must be
directed to training the staff in making the MDS and OASIS assessments, since
the interfacility variation in reliability can undermine the validity of the aggregated
quality measures. Similarly, the variation among the staff of a HHA or NH can
undermine efforts to measure the results of quality improvement initiatives. Conse-
quently, some in the home health and nursing home industry have called for more
consistent training practices and commitment to high-quality data (Fortinsky and
Madigan 2004; Pentz and Wilson 2001).

Risk Adjustment
Comparing providers on the basis of quality measures assumes comparable patients
and similarly reliable data. Risk adjustment seeks to equilibrate the patients that the
providers are serving. In addition to specifying which types of patients are included
in a given quality measure, statistical regression–based approaches, or stratifica-
tion, can be used to adjust risk. Stratification promotes transparency, since provid-
ers can readily identify which patients are in which stratum (Arling et al. 1997;
Berg et al. 2002; Zimmerman 2003). The regression-based approach, used in all
OBQI measures for HHAs, essentially compares the observed and the expected
rate of the clinical event (e.g., an incident pressure ulcer), where the expected rate
is predicated on what would occur were the mix of patients served by one provider
like that served by the average provider (Hittle et al. 2003; Mukamel and Spector
2000). Both approaches have advocates and detractors. Stratification may result in
small numbers of patients per stratum, making the resulting estimate unstable. But
regression-based approaches can be very sensitive to the statistical model used and
its stability (Mukamel et al. 2003).
Even when using regression-based risk adjustment techniques, the CMS’s
publicly reported nursing home quality measures include fewer adjusters than do
home health agencies’ regression-adjusted models (Sangl et al. 2005). HHA quality
measures tend to examine change from the start of service to discharge, whereas
many NH measures are based on prevalence, because their residents are served for
extended periods. Therefore, it is hard to identify a “baseline” status for nursing home
patients, which has not already been influenced by the quality of the nursing home.
For example, being bedridden is predictive of acquiring a pressure ulcer (Berlowitz
et al. 2001; Mukamel and Spector 2000). However, patients may have become bed-
ridden because of inadequate mobility care earlier. Statistically controlling for this
“effect” could adjust away earlier poor care (Zimmerman 2003).
Home health agencies face a different type of risk adjustment issue, since it
is well known that social support and family members’ help influence patients’
outcome or improvement. However, although current HHA outcome measures
include many adjusters, they do not adjust for the adequacy of patients’ informal
support. This could be relevant, as it is reasonable to assume that not all HHA
patients have similar family and social support.

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 Improving the Quality of Long-Term Care 䡲 277

The inadequacy of current risk adjustment models is exemplified in research

examining correlates of the CMS’s NH quality measures. Using annual sur-
vey data and the quarterly quality measures, Baier and colleagues found that
aggregated measures of case mix (e.g., ADL, high acuity levels) were lower
among the facilities with high quality measures (Baier, Gifford, and Mor 2005).
Furthermore, the study found that facilities serving predominantly Medicaid
patients also were ranked high, even though numerous studies found that poor
quality, lower staffi ng levels, more regulatory deficiencies, and a greater risk of
termination from the Medicare/Medicaid programs were associated with high
concentrations of Medicaid patients (Castle 2002; Grabowski and Castle 2004;
Mor 2004).

Composite Quality Measures

Consumers, regulators and even payers would prefer having a single metric to
measure the quality of providers (Fortinsky et al. 2000; Mukamel and Spector
2003). Nonetheless, several studies have found very little correlation among the
various provider quality measures used in nursing homes (Baier, Gifford, and
Mor 2005; Mor et al. 2003c; Sangl et al. 2005; Stevenson and Studdert 2005).
A recent report commissioned by the Medicare Payment Commission to study the
consequences of offering prospective payments for HHAs acknowledged similarly
low correlations among HHA measures but nonetheless created a single quality
summary score for the existing HHA measures (Outcome Concepts Systems 2004).
When analyzing the data, the authors observed offsetting effects on the compos-
ite measure; that is, providers performed very well on one measure but poorly on
another, resulting in a fi nding of no effect, which is one of the dangers of com-
bining uncorrelated measures.

Selection and Provider Specialization

One difficulty of comparing providers is that some types of providers offer a
different mix of specialty services and therefore attract different patients. Much
of the literature documents how hospital-based HHA or NH providers differ
from those without a hospital affiliation (Fortinsky et al. 2003; Mor 2004; Zinn,
Aaronson, and Rosko 1994), and the influence of specialty care units in nursing
homes also has been well documented (Banaszak-Holl et al. 1997; Zinn and Mor
1994). Analyses of the characteristics of nursing home patients at the time of their
admission reveal substantial interfacility variation in the proportion of patients
with a preexisting pressure ulcer, lending credence to the notion that facilities may
have a reputation for special competence in this area (Mor et al. 2003a). Obviously,
geographic proximity has an enormous influence on the facility chosen, but the
provider’s specialization is important as well.

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Experience with Long-Term Care Quality

Improvement Efforts
Almost from the beginning of the design and testing of the OASIS and the MDS,
investigators and providers tried to use the information to influence practice for
both individual patients and organizations. The MDS was designed to facilitate
care planning with “resident assessment protocols” (RAPs) to identify clinical areas
of care possibly requiring extra attention (Hawes et al. 1997; Morris et al. 1990).
The aggregation of some RAPs to the level of the NH could be used to identify the
most common clinical problems. In the case of home health agencies, the outcome-
based quality improvement approach was built into the patient documentation
process (Kramer et al. 1990; Shaughnessy et al. 1994; Shaughnessy, Crisler, and
Bennett 2000). Nurses record patients’ functioning and clinical condition at their
admission and then again at their discharge. Any changes in condition could be
attributed to the care provided, up to and above the natural rate of improvement
expected for HHA patients.
Since OASIS was designed explicitly with outcome measurement and agency
feedback in mind, early evaluations of the introduction of OASIS focused on
responses to the reports summarizing each agency’s outcome performance relative
to the group averages. Shaughnessy and colleagues undertook a series of interrelated
demonstration and evaluation projects as they continued to refine the conceptualiza-
tion and measurement of home health care outcome–based quality (Shaughnessy et
al. 1995, 2002). Their evaluation revealed a significant reduction in the rate of hospi-
talization and in the risk-adjusted rates of improvement in the OBQI target outcome
measures of health status in both demonstration trials (p < 0.05) when compared
with similar HHAs (Shaughnessy et al. 2002).
Beginning in 1990, the first set of quality indicators derived from the MDS
began to be developed and tested under the six-state Nursing Home Case-Mix and
Quality Demonstration (Zimmerman et al. 1995). Building on the MDS’s universal
implementation and computerization, government regulators anticipated that creat-
ing indicators of nursing homes’ performance would guide and enable more sys-
tematic regulatory oversight. The more enlightened administrators felt that such
information could improve their own facility’s quality, and advocates thought that
making this information available would create greater “transparency” to guide
consumers’ choices of a long-term care facility (Mor et al. 2003c). In the late 1990s,
the Center for Medicare and Medicaid Services expanded its commitment to using
quality indicators to improve the quality of nursing homes. First, the CMS tried to
improve and expand the existing quality indicators (Berg et al. 2002). The CMS also
devised measures to respond to the quality-of-life concerns of long-term care facility
residents regarding the quality of food and their preferences, autonomy, and percep-
tion of treatment with respect, but the CMS soon recognized that these measures
were still in the early stages of development.

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 Improving the Quality of Long-Term Care 䡲 279

In November 2002 the CMS applied a set of indicators to the entire country.
A new set of chronic, long-stay, as well as postacute, short-stay, quality measures
were promulgated in January 2004. Some of the existing measures were dropped
while new measures were added based on a review by the National Quality Forum
(NQF) (Kizer 2001). As part of this rollout, CMS reinforced its efforts to involve
the quality improvement organizations (QIOs) in stimulating providers to improve
their performance. Almost all the states’ QIOs have now created or adapted quality
improvement training materials for the nursing home industry (Kissam et al. 2003).
Unfortunately, despite the many studies describing the scope of quality improve-
ment activities in nursing homes, there have been few systematic evaluations of their
impact (Bates-Jensen et al. 2003; Berlowitz et al. 2003; Lee and Wendling 2004).
Several surveys of facilities’ QI programs revealed them to be limited to nonexis-
tent (Lee and Wendling 2004). Saliba found relatively low adherence to pressure
ulcer prevention guidelines in a sample of Veterans Administration facilities (Saliba
et al. 2003), and Berlowitz and his colleagues documented considerable variation
in the extent of QI implementation in the prevention of pressure ulcers, with
greater efforts noted in those nursing homes emphasizing innovation and team-
work (Berlowitz et al. 2003).
In a series of applied studies to train nursing homes to use quality indicators as
the stimulus for improvement, Rantz and her colleagues observed similar results
in facilities in Missouri (Rantz et al. 2001, 2003; Wipke-Tevis et al. 2004). Their
efforts began with a randomized trial of more than 100 facilities exposed to either
training or quality measure feedback and consultation. They found no significant
improvement, which resulted in their efforts to strengthen the intervention and to
identify predictors of successful implementation (Rantz et al. 2001). While several
studies have documented improvement following the introduction of specific QI inter-
ventions, these studies have generally used highly selective facilities (Baier et al. 2003,
2004). Given the difficulty of implementing and sustaining improvement, some have
concluded that the success of the quality improvement movement in nursing homes is
predicated on leadership that is ill prepared to implement these innovations (Schnelle,
Ouslander, and Cruise 1997). Indeed, one of the main recommendations of the Insti-
tute of Medicine’s report on long-term care quality was to enhance managerial capac-
ity in nursing homes in order to improve quality (IOM 2001).

The Impact of Public Reporting

As noted, in 2002 CMS released Nursing Home Compare as a national resource
for consumers, their advocates, and providers to compare, with state and national
averages, facilities’ most recent survey and certification inspection reports as well as
their MDS-derived quality measures.
In 2004 the CMS released a national version of Home Health Compare, which
performed a similar function. Both Nursing Home and Home Health Compare

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 280 䡲 Handbook of Long-Term Care Administration and Policy

report only a subset of all the measures developed and tested over the years (Berg
et al. 2002; Shaughnessy et al. 2002; Zimmerman 2003). In addition, numerous
states have assembled their own Web-based “report cards” summarizing the quality
of nursing homes using different ways of presenting the information (Castle and
Lowe 2005; Harrington et al. 2003; Mattke et al. 2004).
Although there is evidence that interest in this kind of quality information is
substantial, according to the number of Internet site “hits” and the attention of
several states, we do not know who uses this information and whether, or how, it
informs or influences consumer decision-making. Indeed, it is not even clear who
is looking at the websites. Several reports suggest that in regard to acute care, the
public reporting has attracted the attention of more providers than consumers,
although large employers have been somewhat more sensitive to using the health
plans’ reports of quality (Chernew et al. 2004; Hibbard and Pawlson 2004; Hibbard,
Stockard, and Tusler 2003). In addition, there is evidence that reports of the quality
of hospital and health plans have only slightly altered practice patterns, choice, and
perhaps even the quality of care provided (Mukamel and Mushlin 2001; Mukamel
et al. 2000; Romano and Zhou 2004).
The audiences for public reports of long-term care providers’ performance
include elderly consumers and their family members, but hospital discharge
planners might be the most important audience (Potthoff, Kane, and Franco
1997; Sangl et al. 2005). Most patients are admitted to HHAs or NHs directly
from a hospital (Intrator and Berg 2002). Hospital stays are short, focused almost
exclusively on medical or surgical treatments; discharge planning is often just an
afterthought. Decisions about the postacute setting or provider are characteristi-
cally made hastily with insufficient knowledge about the patients’ prognosis and
the anticipated duration of care needed, and virtually no knowledge about the
quality of available alternative providers. Bowles and colleagues recently reported
that shorter hospital stays have affected nursing activities associated with discharge
planning and postacute care for older adults (Bowles, Naylor, and Foust 2002).
Indeed, one review found that predischarge assessment, education, and appropriate
follow-up reduced readmission by 12 to 75 percent (Benbassat and Taragin 2000).
Furthermore, a systematic meta-analysis found that organized discharge planning
that included specific mechanisms to effect the transfer of the treatment plan was
associated with a variety of positive patient outcomes (Richards, Coast, and Peters
2003). However, a recent survey of discharge planners in California hospitals
revealed that they rarely considered data on the quality of nursing homes (Collier
and Harrington 2005). Since part of discharge planning is finding an appropriate
postacute discharge venue, having information about the relative quality of long-
term care organizations could reduce rehospitalizations.
The efforts made by QIOs around the country to direct hospital discharge
planners to the Compare websites have apparently been only somewhat successful.
A project in Rhode Island designed to examine hospital discharge planners’ inter-
action with patients and families when considering postcancer surgery placement

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 Improving the Quality of Long-Term Care 䡲 281

options discovered that discharge planners did not know about, and did not feel
that they had time to explain, the various options to patients and their families
(Bourbonniere, Mor, and Allen 2003). Furthermore, anecdotal evidence from the
results of QIO efforts in various areas around the country reveals that discharge
planners and their hospital employers have little incentive to make selecting the
discharge setting easier, since their primary goal is to discharge patients quickly.
Although there is little information about the response to public reports of
nursing home quality, there is even less information about home health care
agencies’ response to the public reports of their performance. Many of the same
issues are pertinent to both nursing homes and home health agencies, particu-
larly discharge planning, since most markets include multiple HHAs from which
discharge planners and patients must choose.
Information about the quality of nursing homes and home health agencies has
been reported publicly for only a few years. Since the public continues to trust the
opinions of friends and family about the choice of their physician and hospital
more than most other sources, perhaps as families begin to accumulate experi-
ence with long-term care decisionmaking, they will become increasingly aware of
the availability of public reports (Kaiser Family Foundation and the Agency for
Health Research and Quality 2000). This relatively inefficient approach paral-
lels how consumers choose their health insurance plans, their hospitals, and their
physicians, so why should it be different for long-term care providers? Because
most Americans try not to think about requiring long-term care, it is unlikely
that they would browse websites linked to the CMS Compare sites. Rather, most
Americans will encounter long-term care services following a hospitalization or
similar medical encounter, either for themselves or their parents. This means that
consumers must rely on professionals to find out about the alternatives and to help
them choose.
Even in a planned “elective” admission for a hip or knee replacement, patients
and families are likely to assume that the admitting physician directs the hospital
admission and the postacute recovery program. Consequently, since only a third of
new admissions to NHs or HHAs are directly from home, publicly reported quality
information may have only a limited impact on consumers’ choice of provider
unless hospitals become more proactive (Decker 2005).

Gaps in Research Knowledge

Although long-term care has, in many ways, leaped over the public reports of hospital
and physician quality by having adopted uniform clinical measurements, substantial
gaps remain in our knowledge about the quality of existing measures, how they are
reported, how to get the designated audiences to use the information, and whether
and how providers can institute quality improvement programs. Improving the qual-
ity of information about providers is one area of research with both technical and

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 282 䡲 Handbook of Long-Term Care Administration and Policy

conceptual gaps. Conceptually, we need to know what consumers value and what
kinds of information about providers they want.
Technically, we need workable models for systematically handling measure-
ment errors that may be confounded with true quality differences and better ways of
handling small samples, rare events, and instability. Operationally, we need to know
who uses and would use quality performance data and whether the mode of present-
ing the information and the context in which it is placed would enhance its utility to
consumers and their advocates. Finally, we need to understand better the implications
of establishing clinically relevant performance benchmarks—not relative to statistical
averages or rankings of providers—for consumers’ and providers’ understanding of
the information.

Valuing Quality of Life versus Areas of Quality of Care

Monitoring the quality of long-term care using OASIS- or MDS-derived per-
formance measures necessarily limits the areas of quality reported to the public.
Information about quality of life, autonomy, and residents’ satisfaction is not cur-
rently available from either universally available instrument (Mor 2004; Sangl et al.
2005). However, some argue that it is precisely these dimensions that are of greatest
concern to consumers and their advocates (Kane et al. 2003; Kane et al. 2004).
Measures of quality derived from a clinical tool are necessarily based on values dif-
ferent from those of the consumer. An updated version of the MDS is now being
designed for nursing homes that is supposed to reflect recent research on residents’
quality of life (Kane et al. 2003). Future testing of a revised MDS that includes the
residents’ “voice” should address the fundamental issue of how to obtain unbiased
information about residents’ views about staff, food, and autonomy, particularly
if staff members are asking the questions. These issues are equally important to
home care, and the complications of obtaining the information are at least as great,
because home care workers cannot ask recipients of HHA services about their “satis-
faction” with the care they receive or whether they have unmet needs. While much
research has been on nursing home populations, almost none has focused on these
issues in home health agencies. In sum, we may end up having to obtain the family
members’ perspective, as is done for hospice care (Teno et al. 2001a, 2001b).
Another area of quality that is often mentioned but little studied as an indicator
of quality is consumers’ satisfaction with their experience as a recipient of care
(Kane et al. 1997, 2003). Numerous resident satisfaction instruments have been
developed and are being routinely fielded by chains as well as states to assess the
preferences of their “customers” (Lowe et al. 2003). The CMS has been pushing for
the development of a modified consumer assessment measure that can be applied
to nursing homes that is based on the one used for health plans (Carman et al.
1999). The quality-of-life research by Kane and colleagues also addressed consumer
satisfaction, and other investigators have developed and tested their own consumer
satisfaction surveys (Castle 2004; Kane et al. 2003). In addition to the possible

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 Improving the Quality of Long-Term Care 䡲 283

mismatch between clinical performance measures and those that might interest
consumers, consumers (and purchasers) would like to know which the “best” over-
all provider is. The recent emphasis on “pay for performance” requires that several
metrics of quality be reduced to a single dimension on which to base the financial
incentive (Goldfield et al. 2005). However, existing performance measures are clearly
multidimensional (Mor et al. 2003c). We know that NHs performing best on one
measure might be performing poorly on another and suspect that this is likely the
case among HHAs (Rantz et al. 2004b). Indeed, in a recent study comparing the
quality performance of Veterans Administration and community nursing homes,
Berlowitz and his colleagues concluded that since nursing homes’ performance was
not correlated across multiple quality measures, purchasers would not be able to use
the data to make decisions (Berlowitz et al. 2005). Whether consumers and their
advocates are able to understand this and to identify those measures of greatest
interest to them in choosing a provider is a very important research question that
must be addressed. Similar problems face those people educating consumers to
properly interpret information about the quality of health plans and hospitals
(Shaller et al. 2003; Sofaer et al. 2000).

Coping with Measurement and Statistical Complexity

While both the MDS and the OASIS have been subjected to a great deal of
reliability testing, and both instruments, under volunteer “test” conditions, per-
form reasonably well in the items’ interrater reliability, recent research reveals that
even acceptable levels of reliability still allow for systematic bias in the direction of
the errors (Roy and Mor 2005).
This is consistent with evidence from analyses suggesting a consistent
underassessment of pain and depression (Miller et al. 2002; Wu et al. 2003, 2005).
Because this is likely a universal issue associated with clinical administrative data
on which measures of provider quality are based, generalized strategies are needed
to audit the reliability and directionality of “disagreements.” Statistical models
also are needed to use the results of these audits to adjust quality measures for
biased measurement error, since it would be highly counterproductive to penalize
providers who conduct more thorough assessments. Using statistical analyses of
large-scale reliability data, Roy and Mor (2005) proposed a statistical model that
could address this problem in conjunction with an audit, but more work is required
to generalize this approach.

The Impact of the Public Reporting Format

The format in which information about provider quality is presented has become a
lively area of research over the last several years (Hibbard and Peters 2003; Shaller
et al. 2003). Hibbard and Peters tested formats for information about quality and
found that they dramatically changed consumers’ perceptions of the importance

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 284 䡲 Handbook of Long-Term Care Administration and Policy

of the information (Hibbard and Peters 2003). In both Nursing Home and Home
Health Compare, the CMS presents the actual rates of the performance measures.
Consumers can compare the rates of a particular provider with all others in the state
and with the national averages. However, there is limited guidance regarding the
meaning of the differences in rates between a provider and either state or national
averages. Acceptable performance measure rates are not defined, and how much
departure from the average, or the top, is meaningful is not explained. Furthermore,
the stability of a measure is not indicated, particularly for small facilities with rela-
tively few patients contributing to the performance measure. Even though both NH
and HHA Compare have minimal sample sizes, the stability of a measure based
on only 20 observations is questionable (Mor et al. 2003a). Several states that have
invested in nursing home reporting systems of their own have adopted a different
perspective, which was summarized by Mattke and his colleagues (Mattke et al.
2003). They identified numerous deficits in these sites related to the ease of under-
standing the content and the ease of navigating the website and accordingly tried to
avoid these pitfalls in designing and testing a site for the state of Maryland. Rather
than using the actual rates for each quality measure, they divided facilities into the
top 20th percentile, the bottom 10th percentile, and the remainder. They also chose
to use more quality measures but then grouped them into clinical care domains,
with a count of the number of measures in each domain that fell into each of the
three classes. While giving consumers and purchasers the actual rate may be desir-
able, we do not know whether this approach is the best for this target audience or
whether a simpler format that identifies facilities that perform better or worse than
expected would be better (Marshall, Romano, and Davies 2004). But this approach
would require that experts and advocates agree on the approach to determining
“better” or “worse,” since the Maryland model uses an empirical distribution to
identify good and poor facilities, an identification that can be problematic if most
providers do not do well in some areas.

Summary
The adoption of uniform, clinically relevant patient information systems for both
nursing homes and home health agencies has already begun to transform these
industries. Not only do they provide the basis for a common clinical language,
they also form the groundwork for two interrelated initiatives designed to improve
the care of long-term patients. By feeding back quality performance data to pro-
vider organizations, leaders at all levels can begin examining and changing their
current practices to reduce the occurrence of undesirable clinical events and to
increase the rate of functional improvement. Th is impetus, which may be will-
ingly adopted by only a minority of providers in each industry, is reinforced by
reporting the same information to the public and the providers’ local competi-
tion (Castle 2001; Crisler and Richard 2002; Lucas et al. 2005; Zinn, Weech,

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 Improving the Quality of Long-Term Care 䡲 285

and Brannon 1998). Spurred by either competition or fear of what consumers

might find out about them on public websites, providers have signed up for their
state’s quality improvement initiatives (Lee and Wendling 2004). Nursing home
chains also are using some of these quality improvement approaches internally
and are using competition among their different subunits or facilities to stimulate
action (Mukamel and Spector 2003). This is not to say that all this will necessarily
improve the care offered by the average NH or HHA, nor will it necessarily affect
the bottom tier of facilities, since they are unlikely to be able to make the needed
organizational changes (Mor 2004). But the providers, though worried, appear to
be more energized and are beginning to feel that they have the tools to make the
changes needed to improve the quality of their care.
The research community and the government have a responsibility to make sure
that the technical aspects of the quality measures being used to compare NH and
HHA providers are up to the challenge of being used both to stimulate the orga-
nizational changes needed to redesign care processes and to allow for legitimate
and valid comparisons across providers. The current crop of measures, albeit a great
improvement over the limited validity of the admittedly idiosyncratic survey and
certification process, continue to leave much to be desired (Sangl et al. 2005). While
they appear to be reliably measuring quality in certain areas, the measures cannot
capture a global notion of quality. Furthermore, problems with the consistency of
measurement across providers may undermine the legitimacy of the comparisons for
which these measures were created. There is evidence that this is the case in nursing
homes, but the research on home health care has not even begun. Nonetheless, we
should not stop the public reporting or other uses of these quality measures simply
because they continue to have significant deficits; rather, we should treat them as
merely one other product that should be continuously improved.

Acknowledgments
This article was supported in part by NIA grant AG11624, the Robert Wood
Johnson Foundation Health Policy Investigator grant, and the Commonwealth
Fund grant 20040412. The opinions expressed are those of the author and do not
necessarily reflect those of the funding agencies.

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Chernew, M., G. Gowrisankaran, C. McLaughlin, and T. Gibson. 2004. Quality and

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Hawes, C., V. Mor, C.D. Phillips, B.E. Fries, J.N. Morris, E. Steele-Friedlob, A.M.
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Mukamel, D.B. 1997. Risk-Adjusted Outcome Measures and Quality of Care in Nursing
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Saliba, D., L.V. Rubenstein, B. Simon, E. Hickey, B. Ferrell, E. Czarnowski, and

D. Berlowitz. 2003. Adherence to Pressure Ulcer Prevention Guidelines: Implications
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Stevenson, D.G., and D.M. Studdert. 2005. Nursing Home Consumer Complaints and
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(2, part 1):261–73.

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 Chapter 15

Long-Term Care Housing

Types and Design

Shannon M. Chance

Contents
Types of Housing for Long-Term Care ....................................................294
Twentieth-Century Paradigms .................................................................295
The Residential Model .............................................................................296
Standard Family Housing ...................................................................299
Age-Restricted Housing ..................................................................... 300
Congregate Housing .......................................................................... 300
The Medical Model..................................................................................301
Nursing Facilities ................................................................................301
Ambulatory Care ................................................................................302
Acute and Subacute Care Facilities ......................................................303
Hybrid Models.........................................................................................303
Adult Foster Homes ........................................................................... 304
Assisted Living Facilities..................................................................... 304
Continuing Care Retirement Communities ........................................305
The Building Process .............................................................................. 306
Roles and Responsibilities ...................................................................307
Design Sequence ................................................................................ 308
Predesign Phase ............................................................................. 308

293

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Schematic Design Phase ................................................................ 309

Design Development Phase ............................................................310
Construction Document Preparation .............................................310
Bidding, Negotiation, and Construction Administration ...............310
Quality Considerations .......................................................................310
Selecting the Architect .................................................................... 311
Selecting and Connecting the Site .................................................. 311
Programming the Facility ...............................................................313
Conclusion...............................................................................................313
References ................................................................................................ 314

Today, a myriad of housing types support long-term care—a myriad that results
from an array of complex issues that surrounds the planning and design of these
care facilities. This chapter describes major distinctions between various kinds
of housing facilities available today. It also provides an overview of services and
amenities typically offered in each category of housing. It then outlines the basic
process used to create long-term care facilities, explaining the general sequence of
events that occurs from the initial conception of a facility through its design and
construction. The chapter concludes by discussing three critical points in the design
sequence where health professionals can have the greatest impact on design quality:
choosing the architect, selecting the site, and programming the facility. These
aspects deserve special attention to overcome deficiencies that negatively impact the
quality of life in many existing facilities. Healthcare planners and administrators
can help remedy or avoid standard problems by understanding these issues and the
processes used in building facilities for long-term care.
The overall objectives of this chapter are to prepare the reader to (1) iden-
tify various housing types; (2) understand what groups of amenities are gener-
ally offered together; (3) distinguish the roles and responsibilities of the various
members of the development team as well as the sequence in which they work;
and (4) recognize design issues traditionally neglected in long-term care facility
development.

Types of Housing for Long-Term Care

Long-term care facilities provide support to the frail elderly as well as people who
have mental retardation, head trauma, Alzheimer’s disease, or who need physical
rehabilitation or psychiatric care (Scaggs and Hawkins, 1994). At present, facili-
ties provide various combinations of housing, healthcare, medical care, assistance
with the “activities of daily living,” and support services (such as housekeeping
and transportation). The contemporary proliferation of offerings results not only

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 Long-Term Care Housing Types and Design 䡲 295

from various combinations of these services, but also from how they are combined
with various types of physical facilities, delivery systems, and payment mechanisms
(Gordon, 1998).
The size and shape of facilities for long-term care run the gamut. Facility forms
range from standard single- and multifamily housing units to sprawling campuses,
from single-story to mid- and high-rise structures, and from stand-alone buildings
to large complexes. Housing for long-term care contains various types of dwelling
units: efficiency units, one- or two-bedroom apartments, and houses that stand
alone or are attached to other houses (Scaggs and Hawkins, 1994). Almost all
long-term care facilities include shared service space to support administration,
housekeeping, dining, indoor and outdoor gatherings, and at least some medical
services.
Naming and defining clear categories of facility types presents a definite chal-
lenge. Housing options are often grouped according to the level of dependence (or
the service needs) of their users. However, no single organization regulates the terms
used to describe the categories. Some definitions are determined by national policies
such as Medicare and Medicaid rules, but most of these decisions are left to state
regulation. They vary widely across the nation and remain in constant flux. Even
within the long-term care literature, the thresholds differentiating categories remain
unclear; terms such as “congregate housing” carry many different meanings.
It is, however, possible to distinguish two basic categories that have typified
long-term care housing in America, although the lines defining them have blurred
in recent years as new hybrid forms have appeared. Laws have generally differ-
entiated facilities operating on a medical-type model from the lesser-regulated
residential-model places that are less concerned with their occupants’ health-
care needs. In recent years, hybrid permutations of these two forms have gained
popularity as developers tailor facilities to users’ requirements through various
combinations of building types, services, and financing and in accord with state
regulations and federal policies.

Twentieth-Century Paradigms
Two distinct paradigms for long-term care—a medical model and a residential
model—emerged in the United States as a result of the regulation of hospitals but
more lax rules for nursing homes. As medical technology improved and people
lived longer, a growing number of individuals required higher levels of medical ser-
vices over longer periods of time. This fostered the demand for long-term care out-
side of medical institutions. Indeed, the traditional divide between regulated and
unregulated facilities emerged when the national government required the states
to license healthcare facilities within their boarders by 1970 (Shore, 1994). This
requirement formally separated long-term care along the two historic paradigms: a

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fairly technical and standardized medical model and a distinctly different residen-
tial one that was allowed to provide housing with very few health-related services.
Both aesthetically and medically, long-term housing facilities within the residential
model resemble many of the early almshouses that had a domestic appearance but
which provided no organized medical care.
Medical-model facilities do provide medical and other health-related care. This
paradigm of long-term care grew out of the medical hospital tradition that empha-
sized organization, efficiency, and sanitation. Housing within the medical model
has a much more institutional appearance and bureaucratic structure than housing
that grew from the residential model. Medical-model facilities have faced consider-
able state regulation in addition to being shaped by federal policies.
Many people who found themselves in a medically focused environment
for lengthy periods missed the comforts of a homelike residential setting. Turner
(2002, p. 20), a bioethicist, explains:

I am used to experiencing hospitals and geriatric facilities as bright,

white, sanitized, utilitarian institutions where little attention is given
to the moral, aesthetic, and spiritual dimensions of place. Trudging
through most hospitals, it is easy to understand why patients and visi-
tors regard them as such impersonal, dehumanizing institutions. There
are ways, however, of making hospitals and geriatric facilities more
humane and hospitable.

Efforts to bridge the divide between “residential” and “medical” facilities have fos-
tered new hybrid accommodations. Many of the features distinguishing residential
from medical places are now packaged together in various combinations, but this
shift has not been easily accomplished. Gordon (1998, p. 24) contends that

it is the tension among the housing, care, and services components of

seniors’ communities that makes their operation and regulation unique
and sometimes presents a tightrope walk for developers and operators
seeking to combine these disparate elements in a single setting.

In light of the current plethora of hybrid offerings, it is important to understand

traditional types of residential and medical-model housing to distinguish what
specific attributes are provided by a given hybrid facility.

The Residential Model

Residential-model housing has historically accommodated people who are healthy
and independent as well as many semi-independent or moderately impaired per-
sons. A number of younger individuals who have mental illness or developmental

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disabilities also reside in long-term residential-model housing. Owing to the high

cost of such service, only the frailest, most dependent people reside in medical-
model facilities.
Building types within the residential model include standard single- and mul-
tifamily dwellings found in typical neighborhoods or in age-restricted complexes.
The latter often are referred to as congregate housing, senior living, independent
living, or planned retirement communities. These options avoid the cost and com-
plexity involved with state licensure of medical care. They focus on providing
housing alone—and sometimes meals. Thus, residents must obtain medical and
most other services from outside sources. States generally allow these housing pro-
viders to either supply or arrange a few additional services (such as meal delivery
and transportation) for their residents. However, because they are not licensed,
residentially focused facilities are seldom permitted to coordinate residents’ medi-
cal care or even assistance with activities of daily living (such as bathing or taking
medication).
Regardless, many people who reside in unlicensed residential-model housing
still need occasional support. A range of programs has been developed to pro-
vide home care to them. Such assistance includes home modification, day facili-
ties, chore services, meals, shopping, transportation, and housecleaning, as well as
healthcare assistance (ranging from help with the activities of daily living to more
medical forms of care). For the elderly, these services may be obtained directly from
individuals, for-profit companies, or nonprofit organizations; services may also be
secured and coordinated with the help of Area Agencies on Aging.
Common services involve in-home therapies. These include physical and reha-
bilitation therapy, mental health therapy, speech therapy, and occupational ther-
apy, among others. Many states require licensure for agencies that provide these
types of services. However, licensure is often not required of providers who only
offer assistance with activities of daily living such as dressing, bathing, and climb-
ing stairs.
Home modifications can help people live independently longer and more com-
fortably. Alterations are especially advantageous when they increase the usability
of kitchens, bathrooms, and stairways. They can make a place safer and more user
friendly by enhancing mobility, facilitating the work of caregivers, and thereby
delaying the need to move elsewhere. However, Pynoos and Matsuoka (1996) note
that a number of barriers deter people from modifying their dwellings. Consumers
(and even the healthcare professionals who advise them) are often unaware of the
risks posed within their existing housing, or of the changes that could be made to
enhance their daily experience. According to Pynoos and Matsuoka, surprisingly
few people are able to identify potential modifications that could offer physical
support. Even fewer understand the process of constructing or installing such
features, or even how to contract for construction services. These researchers cite
numerous obstacles in financing the work, noting that individuals must often pay

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for housing modifications out of pocket or apply to several different assistance pro-
grams to obtain adequate funding.
Adult day facilities, senior centers, and the geriatric day hospitals common in
the United Kingdom can also help delay institutionalization and can provide relief
for caregivers (Cox and Groves, 1990; Vierck and Hodges, 2003). Seniors living
independently can use such facilities, along with semi-independent and chronically
ill people who reside with their family members or with other informal caregivers.
These facilities provide meals, community interaction, and organized activities, in
addition to supervision and personal care assistance during the day (Pratt, 1999;
Vierck and Hodges, 2003). They may also provide counseling, therapy, reha-
bilitation, and outdoor recreation (Cox and Groves, 1990; Scaggs and Hawkins,
1994). Some of these facilities are freestanding, whereas others are housed within
schools, churches, recreational centers, nursing homes, or continuing care retirement
community (CCRC) complexes (Scaggs and Hawkins, 1994). As in other areas
of long-term care, states’ licensure requirements may affect the range of services
provided by these facilities.
In addition to Title III funding under the 1965 Older Americans Act, fed-
erally subsidized services are available through Social Service Block Grants
and Community Service Block Grants (Vierck and Hodges, 2003). However,
there are limited government resources for such community-based assistance,
especially in comparison to those allocated for institutional care, which cap-
tures about 72 percent of total national spending on long-term care (Vierck and
Hodges, 2003).
Although home care services are greatly needed by seniors who reside in all
kinds of residential-model housing, their utilization drastically declined between
1996 and 2000. In fact, the Balanced Budget Act of 1997 decreased Medicare expen-
ditures by half between 1997 and 1999, which forced the closure of many agencies
(Vierck and Hodges, 2003). Currently, slightly less than 3 percent of seniors use
home care service; in 2000, this represented 1.5 million Americans, or 49 percent
fewer people than in 1996 (Goldsmith, 2005; Vierck and Hodges, 2003).
Although residential-model housing accommodates the lion’s share of the older
population, it is clear that these arrangements often provide inadequate services
and physical supports. When asked if they receive enough assistance, 37 percent
of older persons who live in regular communities describe that they receive either
no help or less than they need (Jackson and Doty, 1997, as cited by Vierck and
Hodges, 2003).
Inadequacies are common in the places that house most seniors, including
standard single- or multifamily dwellings, and even in many age-restricted, senior-
oriented communities.
Moreover, a comprehensive and coordinated system for delivering in-home care
has yet to be developed. Some multiunit housing facilities do assist residents in
securing home care services, but the amount of help they can legally offer varies
from state to state.

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Standard Family Housing

Standard “family housing” is available through private ownership or rental-type fee
arrangement. Most of the senior population lives in housing that is privately owned,
either by themselves or by another individual. This owner is typically a relative who
provides care as well as housing, or an unrelated person who provides “adult fos-
ter care.” Private ownership often involves detached housing (such as single-family
dwellings and mobile homes) or attached housing (including multifamily structures
organized as condominiums or cooperatives) with privately owned townhouses or
flats. Alternatively, rental methods can also be employed to secure many of these
same housing types. Rental arrangements proliferate among residential hotels and
publicly subsidized housing (complexes or dispersed units).
Single-family housing remains the top preference among seniors, who often
stay in the homes they obtained earlier in life (Gordon, 1998). About 77 percent
of elders own their homes and, although homeownership rates do tend to decrease
at higher ages, “67 percent of older adults over age 85 residing in the community
still own their own homes” (Pynoos and Matsuoka, 1996, p. 118). However, a sig-
nificant number of these homes do not include physically supportive features that
promote independence. Seniors who find their abilities declining are often forced to
move in with their children or relocate to more medically oriented facilities.
Most of the non-homeowners who live independently reside in apartments, and
21 percent of them live in structures that include more than 50 dwelling units
(Naifeh, 1993, as cited in Pynoos and Matsuoka, 1996). Urban residence hotels
are inhabited by about 76,000 older people who rent rooms on a monthly or
long-term basis (Gordon, 1998). In addition, over one million seniors reside in
government-assisted housing, funded through programs such as Section 202,
Section 8, or Farmers Home Administration (Pynoos and Matsuoka, 1996).
Although multifamily housing options (including apartment complexes, urban
residence hotels, and public housing projects) are distinctly less popular than sin-
gle-family housing, they present a major advantage due to their greater density
(Gordon, 1998). Concentrated populations of seniors provide ready markets for
products and services that can be offered economically. They can also boost com-
petition among private-sector providers. Although dense multifamily housing often
provides a ready market for senior services, this potentially lucrative market is just
beginning to gain recognition. In some places like New York City, where large
groups of older people living in close proximity have formed Naturally Occurring
Retirement Communities (NORCs), providers sometimes do offer services known
as “cluster care.”
Urban planners coined the acronym NORC to designate areas with dispro-
portionately high numbers of senior residents (Dover, 2006). NORCs also rep-
resent pockets where increased levels of service will be needed as the health of
their residents continues to decline. NORCs are emerging in many older existing
neighborhoods, because these places already offer ready access to many diverse

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services, activities, and neighbors. Although older houses may have features that
impede mobility, their location in “walkable” inner-city neighborhoods allows
easy access to a range of products and services, and often to rich and vibrant
community life.

Age-Restricted Housing
Most of the same forms of dwellings available on the standard housing market can
also be found in age-restricted housing communities. The use of age restrictions
simply allows housing providers to collect more homogeneous, and generally qui-
eter, resident populations. U.S. “fair housing” legislation established in 1968 does
make it illegal to discriminate based on personal characteristics that include age,
and so only officially certified communities are legally permitted to control the
demographics of their residents.
Age-restricted housing complexes are often called “active adult” or “planned resi-
dential” communities. They can be utilized through a variety of payment mechanisms
including private ownership, rental, or other periodic fee systems. Age-restricted
complexes provide various levels of amenities—such as grounds maintenance and
shared recreational space—typical in regular housing complexes (Gordon, 1998).
Because these age-restricted residential communities provide concentrated
markets of people who need frequent healthcare, medical-type facilities are often
constructed near them. In many cases, adjoining medical- and residential-model
facilities are built by a single owner or provider. These include the increasingly
popular CCRCs that are described in the section on hybrid models.

Congregate Housing
Various public and private organizations offer congregate housing facilities, which
generally hold anywhere from four to forty residents each (Pynoos, 1987; Pynoos
and Matsuoka, 1996). They are often referred to as “independent living” facili-
ties and are used most often by healthy and independent seniors who desire a
number of convenience services (Gordon, 1998; Pynoos and Matsuoka, 1996).
Congregate housing is generally rental-based, and differs from other forms of
age-restricted housing in that it includes prepared meals as well as facility main-
tenance. Although the individual units typically include private kitchens and
baths, these facilities also provide shared dining rooms and other gathering spaces
(Pynoos and Matsuoka, 1996). Residents may be assisted in taking medications,
but other medical and personal care services are usually contracted separately by
the individual, as needed.
Congregate housing is a popular form of housing among semi-independent peo-
ple as well as completely independent seniors. Many moderately impaired individuals

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also reside in these settings, where they sometimes live with family members or
share their units with other seniors (Gordon, 1998). One advantage that congregate
and multiunit housing complexes often offer over traditional single-family homes
is some level of supportive physical and architectural features, including bathroom
grab bars and wide doorways (Zook, 2005).

The Medical Model

Although hospitals evolved out of the almshouses that had provided little in the
way of medical care and which had served primarily residential functions, the
character of hospitals changed drastically following the Industrial Revolution.
Round-the-clock availability of trained nursing personnel became, and remains,
common to all medical-model facilities (Gordon, 1998). A medical model of care
emerged in the twentieth century that left domestic and residential-life issues on
the periphery of concern. Instead, it stressed scientific technology, sanitation, and
efficiency.
National policies were developed throughout the past century which served
to regulate and standardize the service delivered by hospitals, and after 1970,
state licensure extended some degree of standardization to nursing homes as well.
Although licensure has been implemented at the state level, national mandates have
resulted in definitions and requirements regarding medical-model facilities that are
quite consistent from coast to coast. As a result, medical-model facilities provide a
highly regulated and comparatively consistent system of care. States almost always
group nursing facilities together with hospitals. Generally, such medically oriented
facilities are distinguished legally from residential-type facilities. Overall, state reg-
ulation of residentially based facilities is drastically less than that of medical-model
facilities. In fact, Gordon (1998) asserts that some states do not regulate residential
housing for seniors any differently than regular housing.

Nursing Facilities
In 2000, more than 1.5 million people lived in over 17,000 nursing homes certified
by Medicare and Medicaid (Goldsmith, 2005; Nursing Homes, 2005). Vierck and
Hodges (2003) have found that these facilities average 105 beds, with an 87 percent
occupancy rate. They note that about 27 percent of nursing homes are run by non-
profits, less than 7 percent by governmental entities, and the remaining two-thirds
by private, profit-making companies. About 60 percent of all nursing homes are
affiliated with large franchise operations (Vierck and Hodges, 2003).
Medicare and Medicaid policies have fostered consistency among medical-
model facilities with regard to delivery of acute, semiacute, and long-term care.
These federal programs categorize nursing facilities as intermediate care facilities

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(ICFs), skilled nursing facilities (SNFs), or special care facilities (SCFs). The admis-
sion policies and levels of care offered by these facilities are often tailored to Med-
icaid and Medicare payment allowances.
Nursing facilities provide room and board in addition to nursing services and
therapies, with the major distinction between ICF and SNF involving intensity of
care (Pratt, 1999). It is common for nursing facilities to offer both ICF and SNF
in separate areas.
ICFs provide minimal nursing assistance. ICF residents are usually able to move
around by themselves, but they often require physical, occupational, and recre-
ational therapies. They also tend to need continuous supervision with their medica-
tions and with various activities of daily living (Scaggs and Hawkins, 1994).
The residents of SNFs generally require ongoing supervision by nursing staff,
mostly aides. A high percentage of residents are bedridden; some are incontinent
or severely debilitated and many have multiple health problems. These facilities
usually do not provide acute care services in-house. However, they may provide
long-term maintenance programs and short-term rehabilitation for individuals
who need physical, substance abuse, or physiological rehabilitation (Goodman
and Smith, 1992).
SNFs usually contain 40–60 beds (Scaggs and Hawkins, 1994), although large
facilities may include 250 beds or more. Single- or double-occupancy rooms, with
attached toilet and shower rooms, typically surround shared spaces. These “shared
spaces” shelter various services or accommodate collective activities such as dining,
recreation, and therapy; they sometimes include collective bath facilities (Goodman
and Smith, 1992). Regulations mandate that SNF residents may choose to take
meals at bedside or in the collective dining room, although nursing personnel may
encourage them to leave their rooms in an effort to promote mobility, socialization,
and an overall sense of independence (Goodman and Smith, 1992).
SCFs offer services that are similar to SNFs. However, the former have special
design features that accommodate the needs and conditions of specific user groups;
they may provide focused care for people who are dependent on ventilators, who
suffer head trauma or comas, or who have Alzheimer’s disease. States often require
SNFs to include specialized facilities for the acute care procedures that are typically
needed by the facility’s special user group (Scaggs and Hawkins, 1994).

Ambulatory Care
Ambulatory care facilities, which tend to be regulated by the states, provide medical-
type services that prolong a person’s ability to live in residential-model facilities.
They include “physicians’ offices, hospital outpatient departments, hospital
emergency rooms, and a range of other facilities such as surgical day centers, optom-
etrists’ offices, day-care centers, neighborhood health centers, substance abuse clin-
ics, mental health centers, and pharmacies” (Goldsmith, 2005, p. 13).

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Acute and Subacute Care Facilities

Hospitals provide acute care and are geared toward treating patients quickly so
that they may be discharged to private homes or to lower-cost facilities that provide
“stepdown” levels of care. Subacute care facilities provide intermediate or “post-
acute care” at levels between that offered by hospitals and the nursing homes.
Like hospitals, subacute care facilities are intended for short stays, with multi-
disciplinary teams of care providers focused on moving patients elsewhere. They
provide more intensive supervision, skilled nursing, and therapies than do nursing
homes (Pratt, 1999).

Hybrid Models
Although this chapter uses the term “hybrid” to describe new types of long-term
care housing that blend aspects of more traditional models, hybrid forms are more
commonly referred to by the umbrella term “residential care” (RC). The range of
housing available within the hybrid model is often difficult to describe; however,
these facilities can generally be classified as adult foster homes, “assisted living”
(AL) or board-and-care facilities, or CCRCs.
Hybrid facilities are designed to create a feeling that is more residential and
less institutional than the traditional medical model. They use various strategies
to extend regulated medical and other health services to residents. Such facilities
include the domestic, homelike attributes associated with residential-model hous-
ing, while bolstering residents’ access to the type of healthcare services available at
more medically oriented facilities. As such, they often support the resident’s ability
to “age in place.” However, AL facilities are often prohibited from offering medi-
cal care beyond assistance in taking medication; instead, they may help residents
obtain such care from outside the facility.
Hybrid facilities are visually similar to standard American residential hous-
ing. However, they also include components that support the various medical
and personal care services crucial to more comprehensive, long-term care. The
form and nature of shared service spaces in hybrid facilities vary greatly, due to
different combinations of regulatory, fi nancial, and design constraints. Services
may be provided in separate facilities near the housing site, in the same building
as the dwellings, or within individual housing units.
Eckert et al. (2001) applaud the hybrid model’s lack of standardization. They
emphasize the “remarkable diversity” of the hybrid model which they label as RC/
AL: “Settings vary in size; ownership; profit or not-for-profit status; religious or
nonreligious affiliation; and urban, suburban, or rural location, to mention but a
few.” They maintain that this diversity offers important possibilities for “linking
person (in terms of prior life circumstances, history, and preferences) with place.
In this regard, until there are data to the contrary, every effort should be made to

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resist rules and regulations that homogenize RC/AL through a ‘one size fits all’
formula” (p. 310).
By 2004, there were 36,450 facilities for RC across the United States that pro-
vided 937,601 units or beds. These figures from Mollica and Johnson-Lamarche
(2005) do not include some types of hybrid facilities, such as those specifically
licensed to provide adult foster or family care, or SCFs for people with developmen-
tal disabilities, mental retardation, or psychiatric needs.

Adult Foster Homes

Adult foster care may be provided to one or more individuals in a single setting.
Because most states do not regulate facilities that serve just a few individuals, very
small-scale operations often fit within the residential model described previously.
However, as their resident population grows, adult foster care homes face increas-
ing levels of regulation typical of facilities within the hybrid category. Regulation
ultimately affects the physical facility’s design and layout. Contemporary facilities
for adult foster care and AL have roots in the board-and-care facilities that were
available in many places during the 1960s and 1970s.
Mollica and Johnson-Lamarche (2005) found that 13 states regulate facilities
with one or more residents; three states, with two or more residents; and eight
states, with three or more residents. North Carolina classifies homes with two to six
residents as “adult family homes,” and those with seven or more residents as “adult
care homes.” North Carolina, like some other states, licenses both of these types
as AL. Although population size is no longer the main factor used to distinguish
adult foster care from AL, these researchers note that many states “still designate
the number of people who may be served to distinguish between types of settings
for other regulatory purposes, e.g., staffing requirements” (p. 1).

Assisted Living Facilities

AL facilities have steadily gained popularity since the 1990s. Residents generally
live in private apartments and utilize a variety of common areas (Goodman and
Smith, 1992). AL facilities offer essentially the same services and emulate the resi-
dential character of traditional board-and-care facilities (Regnier, 1994). However,
they are subject to increasing levels of regulation and enjoy a better reputation than
previous forms of board and care. The negative stigma associated with the latter
resulted when some operators abused their unregulated status; they became notori-
ous for fraud, abuse, and deadly fires (Gordon, 1998). The term “assisted living” is
becoming standard today; the application of a new term, as well as increasing levels
of regulation, has helped counteract the stigma.
Twenty-nine states had policies regarding AL or other forms of board-and-care
homes in 2000 (Mollica, 2000, as cited in Bernard et al., 2001). However, there is

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constant modification of these rules, with 28 states revising them in 2003 and 2004
alone (Mollica and Johnson-Lamarche, 2005). There is still no uniform model or
definition for AL, and this has allowed levels of financial assistance among hybrid
facilities to vary widely (Bernard et al., 2001). Recently, a number of states have
been granted Medicaid waivers to fund a small portion of AL facilities.
In essence, AL facilities offer a less intensive level of care than nursing homes;
they can provide some healthcare but only with limited nursing services avail-
able on-site (Goodman and Smith, 1992; Scaggs and Hawkins, 1994). As with
congregate housing, in some AL facilities medical services are provided by home
health agencies that are licensed but are not affi liated with the housing operator
(Goodman and Smith, 1992).
Because AL facilities tend to provide care at about 30 percent less cost than
nursing homes (Gordon, 1998), they have become very popular and competitive
alternatives to SNFs (Goodman and Smith, 1992). However, the component of
personal care that they do provide carries a cost. As such, they are used by peo-
ple who need some daily personal assistance but who are mostly ambulatory and
independent (Gordon, 1998; Scaggs and Hawkins, 1994). Most personal assistance
services are provided only as needed, both to keep costs down and to promote
independence.
AL facilities aim to retain each resident for as long as possible and to delay the
resident’s need to move into a more care-intensive nursing facility (Regnier, 1994).
Achieving this goal requires a high level of flexibility. Both the physical facility
and the AL operator must be able to accommodate the resident’s changing levels
of function, mobility, and cognition (Bernard et al., 2001; Sloane et al., 2001). AL
facilities are often designed to provide a sense of freedom and encourage the resi-
dent’s continued independence (Goodman and Smith, 1992). This can be enhanced
by using the various home modification techniques described earlier.
Gordon (1998) notes that the population of seniors able to support themselves
financially is growing. At the same time, government continues to search for ways
to care for an aging population, cut costs, and create less demand on medical-model
facilities. Thus, “we are seeing a significant rise in the development of high-quality
assisted-living facilities as an alternative to nursing care” (p. 35). The design of the
physical facilities that support AL is constantly changing as the industry grows
and evolves.

Continuing Care Retirement Communities

CCRCs are also referred to as “life care” communities (Gordon, 1998). They are con-
sidered the most accommodating form of care because they provide the full extent of
services throughout a resident’s life. CCRCs often offer congregate or independent
housing, AL, and nursing facilities within one site. These may include intermedi-
ate and SNFs, and they sometimes include SCFs such as a hospice (Goodman and

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Smith, 1992; Scaggs and Hawkins, 1994). On-site acute care hospitals are rarely
found within these communities; CCRCs generally negotiate with nearby facilities
to provide residents with coordinated care (Gordon, 1998).
CCRCs generally involve large-scale complexes, in the form of campuses
or high-rise buildings. They offer an assortment of residential and healthcare
facilities necessary to accommodate residents across changing levels of depen-
dency. Although residents must sometimes relocate from one facility within the
CCRC to another, they continue to live within a single community despite their
changing needs.
Vierick and Hodges (2003) indicate that only about 2 percent of seniors use
CCRCs; nearly 625,000 people reside in 2,100 facilities across the United States.
They are generally run by private, nonprofit agencies, many of which have a reli-
gious affiliation (Gordon, 1998).
According to the American Association of Retired Persons (AARP), “costs of
living in a CCRC can be quite high and unaffordable to those with low or mod-
erate incomes and assets.” Most CCRCs require monthly payments in addition
to the entry fee (which may or may not have provisions for refund if unused).
AARP further indicates that entry fees “can range from lows of $20,000 to highs
of $400,000. Monthly payments can range from $200 to $2,500. In some places,
residents own their living space, and in others the space is rented.” Monthly fees
average $1,500 and some newly developed CCRC programs are utilizing coopera-
tive and condominium approaches (Gordon, 1998).

The Building Process

Long-term care presents a very specialized set of design constraints. Creating effec-
tive long-term care facilities requires input from many sources. The current flurry
of construction strives to meet the growing demand for housing tailored to the
needs and desires of America’s aging baby boomers. Long-term care providers are
utilizing both renovation and new construction to create housing that will meet
the aspirations of these customers. The following overview of the building process
is intended to provide long-term care administrators and policy makers with an
understanding of the professional expertise and the sequence of events involved in
developing long-term care facilities.
Housing for long-term care must provide function, versatility, and beauty. These
attributes enhance the quality of life for the many diverse users who will rely on a
single facility to sustain most of their needs. Many of the specific design qualities
and features that have come to be considered most desirable in new housing—and
most lacking in traditional forms of long-term care housing—are described in
Chapter 12, on housing trends. Creating welcoming, efficient structures for aging
long-term residents requires careful management, a solid understanding of the user
group, and strong architectural design skills. The same basic process applies to new

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 Long-Term Care Housing Types and Design 䡲 307

construction, adaptive reuse (which retrofits buildings originally constructed for

some nonhousing purpose), and renovation (which modifies or upgrades facilities
initially constructed for residential use).

Roles and Responsibilities

When an organization proposes to develop a long-term care facility, the first steps
involve determining the type of facility to build. The terms “developer” or “owner”
refer to this organization, which may be for-profit, nonprofit, public, or even a
conglomeration of entities structured as a “joint venture.” This developmental orga-
nization generally appoints an individual or group of people to serve as the “project
coordinator.” Project coordinators can be most effective when they have a clear
understanding of the developer’s goals and awareness of retirement facility opera-
tions, as well as experience with developing real estate and supervising the many
different types of consultants who will help produce the housing product (Gordon,
1998).
The project coordinator establishes a preliminary project schedule and assem-
bles a team of experts in various fields. Securing a range of expertise is mandatory
because this team is expected to identify and define the consumer market, deter-
mine the types of facilities and services that will be offered, navigate legal and
financial issues, and design and construct the housing product.
To provide a well-rounded understanding of the task and to create a realiz-
able work plan, this team should include healthcare facility consultants, as well
as financial, legal, and architectural consultants. The development process works
most effectively with input from all these fields from the outset of the project.
Developers may contract with one single source in each of these categories. In
other cases, they may choose to contract directly with a number of specialized
consultants within each of the mentioned areas. Once the project team has been
established, it begins by structuring the basic concept for the housing product that
will be developed.
The healthcare consultant, who often eventually serves as the facility’s admin-
istrator, provides advice regarding the daily operations of a long-term care facility
(Gordon, 1998). Th is person develops service packages, provides insight regarding
local market conditions, projects staffing needs and operational expenses, devel-
ops policies and procedures, and helps define the architectural building program
(Gordon, 1998; Scaggs and Hawkins, 1994).
Financial consultants include a range of specialists such as experts in marketing
and economic feasibility; they base their assessments on market conditions, need
projections, and financial capacity (Scaggs and Hawkins, 1994). Their goal is to
develop a product that is competitive with regard to services, housing amenities,
and payment mechanisms (Gordon, 1998). Marketing—of both sale and rental
housing—often begins before any construction takes place (Gordon, 1998).

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Legal consultants typically assist the owner or developer by interpreting aspects of

zoning and land use, as well as preparing and reviewing various financing agreements
and contracts. Developing a long-term care facility involves a high level of legal intri-
cacy. Gordon (1998) maintains that clearly defining the regulatory constraints at the
start of the process is critical to shaping an appropriate product, business plan, and
residence agreement. All these aspects influence spatial requirements, overall layout
of the physical facility, and construction standards and schedules.
The architectural consultant oversees the design and construction aspects of
the project. The architect will determine the building form and spatial layout—
coordinating these with the site plan and the structural, electrical, plumbing, heat-
ing, and air conditioning systems. In this endeavor, the architect usually employs
individuals or outside firms that are specialized in structural, civil, mechanical,
and electrical engineering.

Design Sequence
The American Institute of Architects (1997) B141 contract known as the Stan-
dard Form of Agreement between Owner and Architect defines the five “basic ser-
vices” typical to most building design projects. These are schematic design, design
development, construction documents, bidding and negotiation, and construction
administration. Projects as complex as long-term care facilities usually require con-
tracting for “additional services” besides the five basic ones. The AIA-B141 contract
provides a framework for delineating extra services that are needed on a specific
project, including the scope of the architect’s involvement and methods of pay-
ment. Additional services commonly required in long-term housing include “prede-
sign,” landscape design, interior design, and graphic or signage design (Scaggs and
Hawkins, 1994; Spreiregen, 2004).

Predesign Phase
Although listed as additional services, many “predesign” activities are absolutely crit-
ical to the success of a project. These include site selection and analysis, master plan-
ning, building programming, and feasibility studies. Predesign services have been
held outside the five basic ones because they may be conducted before the project’s
architect has been selected. Although the practice of having these activities done by
someone outside the design process became commonplace in the United States over
the past century, it has weakened the continuity of the design process. Getting the
project architect involved at the earliest stages of conceptualizing a long-term facility
will ensure a higher overall quality of design (Scaggs and Hawkins, 1994).
The architect selected for this job should have experience with the intricacies
of designing long-term care facilities, and should be contracted to provide detailed

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site analysis. This consultant should also provide leadership in defining the building
program, a critical aspect that traditionally receives inadequate attention—largely
a result of being classified as “pre-design” by the AIA. The AIA and healthcare
experts are now stressing the importance of site design and building programming
in creating high-quality physical environments.
A design that emphasizes function and technology at the expense of life quality
often results when the initial building program identifies only tangible, quantifi-
able goals such as cost, size, use, and schedule. To ensure that ephemeral qualities
are not overlooked in the maze of technical issues, it is important to identify desir-
able, intangible qualities at the outset and to specify these in the formal building
program.

Schematic Design Phase

During schematic design, the architect proposes various schemes and then develops
one or more of these into a tentative design proposal. It shows the basic arrange-
ment of rooms, as well as the building’s form, appearance, and orientation on the
site. On the technical side, the architect balances the functional and adjacency
requirements outlined in the building program with various structural and legal
considerations.
Legal issues always include attention to municipal zoning as well as health and
safety codes and the Americans with Disabilities Act (ADA). The architect should
look for opportunities to tie the new building to its natural, built, and social con-
text and provide artistic expression. In many cases, the architect will propose an
overarching concept that helps tie the design together and give it meaning beyond
the obligatory function. This overarching concept is used to guide future design
decisions and to foster a cohesive, evocative design.
The architect’s job involves tasks such as sizing the building(s), establishing
building layouts, choosing structural and mechanical systems, and arranging the
components on the site (Scaggs and Hawkins, 1994). Because each of these tasks
influences the others, the architect must synthesize a great deal of information.
Every design project requires the architect to make thousands of decisions, cross-
referencing these various aspects and resolving conflicts (Regnier, 2002). The archi-
tectural language—massing, form, and appearance—is developed in relation to the
owner’s spatial, operational, and functional needs. Technology, cost, and schedule
constitute one set of concerns for the architect creating a meaningful design that
will support and foster life represents another.
The owner, the owner’s consultants, and the architect’s consultants usually pro-
vide input throughout the schematic design phase. The architect meets with the
owner’s representatives periodically during this phase to discuss options, confirm
preferences, and determine which scheme or schemes should be developed in further

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detail. When the schematic design has been completed, it is presented to the owner
with a preliminary estimate of construction costs (Heuer, 2004).

Design Development Phase

The project moves into design development following formal review and approval
of the schematic design. This phase entails refining the schematic design, which
requires a high level of coordination and a great deal of input from the architect’s
consultants. The end result is a polished final draft that is again provided to the
owner—along with a more refined cost estimate—for formal review and approval
(Heuer, 2004).

Construction Document Preparation

During the subsequent construction documents phase, detailed “working draw-
ings” and written specifications are created that will instruct the contractor in
assembling the building. The working drawings graphically present information
regarding layout, adjacencies, and dimensions. The specifications describe quality
expectations, performance ratings, assembly methods, and so on. The contractor
uses these documents to determine construction fees.

Bidding, Negotiation, and Construction Administration

The bidding and negotiation phase is used in the traditional design-bid-build
approach, wherein the architect helps the owner select a contractor and negotiate
the construction fee (Heuer, 2004). The process traditionally involves obtaining
and comparing bids from a number of qualified companies. The architect’s role
throughout construction is described as “construction contract administration,”
and entails providing experienced oversight to ensure that the owner’s interests are
represented (Kornblut, 2004). During this administration phase, the architect typi-
cally observes progress to confirm that the quality of construction meets the design
intent as described in the construction documents.

Quality Considerations
A facility’s design will have tremendous influence over the long-term quality of life
for residents, staff, and visitors. Healthcare consultants, long-term care administra-
tors, housing developers, and even policy makers need to understand several key
aspects of the design process. There are three main points in the process of develop-
ing a new facility where input by these individuals is critical to producing a quality
design: selecting the architect, choosing and designing the site, and programming
the facility.

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 Long-Term Care Housing Types and Design 䡲 311

Selecting the Architect

Public financing almost always dictates a formal selection process—including
prequalification and competitive bidding—to choose both the architectural and
construction firms that will be hired (Heuer, 2004). In the private market, how-
ever, it is common for a developer to select the architect and the contractor based on
personal familiarity, without regard to the firm’s specialization. Selection by conve-
nience poses risk. The complexities of developing a long-term care facility—which
may integrate housing, dining, recreation, AL, with health and medical services—
necessitate that the architect as well as the builder possess special skills (Gordon,
1998). These facilities must meet a myriad of very specialized codes and regulations,
and provide higher-than-typical levels of strength, fire resistance, exiting capacity,
and air exchange (Gordon, 1998; Regnier, 1994). Long-term care facilities must also
support the specific physical and emotional needs of the residents, and they must
facilitate care giving.
Although some formal methods of selecting the architect and builder do
improve chances of achieving quality, the competitive bidding process that is com-
monly used has its own potential drawbacks. Public financing generally requires
that the lowest qualified bidder be offered the job. This system inadvertently encour-
ages architects and contractors to underbid to win the contract. Low-bid selection
prioritizes cost above other concerns. As such, the low bidder may discover that the
winning fee is inadequate to produce a refined product.
Creating a design that will enhance the quality of life for users of long-term
care facilities requires dedicated commitment from the architect and from the
owner or developer. Allotting sufficient resources to the design process is crucial to
shaping a quality, cost-effective product that will enhance the lives of users (Kobus,
2000; Purves, 2002). The demand to control the costs associated with design and
construction must be weighed against the ultimate goal of life quality—efficiency
should not overshadow concerns for the users’ experience (Kobus, 2000).
Dedicating sufficient time and effort to proper coordination during program-
ming and design leads to a more efficient and functional facility, and often results
in lower life-cycle costs. It renders “hospitals, geriatric facilities and other health
care institutions more human, decent, aesthetically and spiritually moral habitats”
(Turner, 2002, p. 19). All of these aspects raise the quality of life in these facilities
for residents, workers, and even visitors.

Selecting and Connecting the Site

One of the most overlooked but critical features influencing quality of life at a long-
term care facility involves its location (Regnier, 2002). Although acreage require-
ments for a site will vary depending on the size and complexity of the facility, there
are other site attributes that are desirable regardless of the specific type of long-
term care facility. The site must accommodate the necessary buildings, roadways,

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and parking. It must also provide ample outdoor spaces for communal gathering,
recreation, and introspection. Long-term care facilities require larger sites than
one might anticipate. For instance, ICFs and SNFs with 100–120 beds usually
need about 5 acres of land that can be developed (Scaggs and Hawkins, 1994).
Facilities for residents who are more ambulatory require additional space for
outdoor activities.
Transportation represents a critical aspect of site selection (Heuer, 2004; Purves,
2002; Spreiregen, 2004). The site must be large enough to provide clear circulation
for automobiles as well as delivery and emergency vehicles. It should be located on
public transportation routes to enhance access by residents, staff, and visitors alike.
The facility should also be placed near hospitals (Payette, 2000), specialized health-
care and other “ambulatory” facilities, shopping, entertainment, churches, and so
on (Scaggs and Hawkins, 1994).
The unique features of a site—its existing views, topography, vegetation, rock
outcroppings, or water features—can enhance the user’s experience as well (Wood,
2004). Sites with security issues, high traffic or noise, or problematic odors should
be avoided (Goodman and Smith, 1992; Scaggs and Hawkins, 1994).
Municipal zoning plays a major role in the use of land, and often regulates every-
thing from the size and use of buildings placed on a site, to the public utilities and
services that the municipality will provide. “Zoning ordinances” dictate setbacks
and easements, building heights, and densities, while “building codes” regulate other
health, safety, and welfare issues (Scaggs and Hawkins, 1994; Spreiregen, 2004;
Wood, 2004). Code issues include fire rating, egress requirements, and construction
classifications (Heuer, 2004).
Zoning represents one method for controlling the way a new construction project
will fit into the larger community; it is a means to protect the rights of surrounding
property owners and taxpayers (Spreiregen, 2004; Wood, 2004). As such, zoning
may dictate certain design types, especially where the site is adjacent to (or within) a
recognized historic building or district. Zoning regulations also tend to distinguish
single-family areas from denser multiunit dwelling areas, and to subdivide residential
districts based on house size (Wood, 2004). This system has segregated the American
population by income level, and often by age and ethnicity as well. It has fostered
urban sprawl because our low-density residential districts are not located near the
areas where we shop and work.
Our zoning models are shifting as more and more people recognize the
value of fostering diverse experiences, services, and resident groups in American
communities. Although long-term care facilities often provide housing to those
with very specific needs, these buildings should be carefully woven into vibrant
communities to gain from and contribute to social diversity. Long-term care
facilities should welcome and accommodate visitors. They should be located and
designed to provide residents with easy access to the outside world (including
stores and services). To promote social interaction, many long-term facilities today
offer classes, activities, and services that will appeal to residents of both the facility

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 Long-Term Care Housing Types and Design 䡲 313

and the surrounding community. Some long-term care facilities even include child
care facilities on-site.
Zoning is inherently tied to community perceptions, attitudes, and political
clout because it primarily serves to protect the rights of surrounding property own-
ers (Spreiregen, 2004; Wood, 2004). Gaining approvals will be easier in areas where
the local community supports developing multiunit residences and health facilities
(Gordon, 1998). By law, variance hearings, which are usually required for large-
scale development such as a long-term care facility, must involve area citizens. As
such, it is critically important to gauge community support for the project before
investing large sums of time and effort.

Programming the Facility

The “building program” is a written description of expectations and requirements
for the projected facility; it is best shaped by the owner’s project coordinator
under the direction of the architect with ample guidance from the owner’s other
consultants (Spreiregen, 2004). Th is program almost always includes functional
descriptions, but it should also describe the character of the place to be built.
Thus, it is good practice to open with a statement of intent, or general overview
that conveys the desired psychological and social qualities of the place (Ballast,
1995; Purves, 2002). Overall, a good building program describes the pertinent
needs and limitations of the project, conveys a comprehensive vision, and lists
specific attributes that are necessary to achieve the owner’s goals and the users’
needs (Ballast, 1995).
The programming process provides an invaluable opportunity to investigate
and describe various tangible and intangible qualities of the future design. Purves
(2002) writes “There are many . . . guides to the management of design briefing
which are logical, analytical and scientific in their approach to the problem.” But he
notes that these guides often omit the most critical aspect, failing to “build in the
‘delight’ factor. Time must be allocated to thinking about emotions, and discussing
ideas, which must be encapsulated in a written document” (p. 120). Finding ways
to address those aspects that will create the “spirit of the place” can help ensure that
these qualities will not be overlooked during the technical periods of design. The
program must do more than list functions, costs, and time schedules. It must pro-
mote meaning and protect the human and moral aspects of living in the facility.

Conclusion
Over the past century, American society has emphasized functional aspects in
healthcare and in architectural design, but has recently begun to develop a more
holistic way of thinking. In healthcare, the boundaries separating residential and
medical offerings are blurring at an ever-increasing rate. The resultant hybridization

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allows individuals to select the grouping of provisions that best suits their personal
needs. Their increasing ability to choose—coupled with their rising purchasing
power—encourages competition, research, and development of new combinations,
products, and services.
There is a growing insistence for attention to “quality of life” and “aging in
place” by experts and citizens alike. The ethos of building is changing as we come
to understand that the therapeutic benefits of good design are as important as
flexibility and efficiency (Purves, 2002). As the bioethicist Turner (2002, p. 21)
posits, “the way in which places are designed, built, and sustained over time has
an important effect upon the moral, aesthetic, and spiritual lives of the inhabitants
of these settings . . . [and] upon the kinds of moral experiences that occur in these
settings.” It is critically important that those who create and maintain healthcare
environments understand these human aspects as well as the technical and scien-
tific components of long-term care.

References
American Institute of Architects. (1997). AIA-B141 Standard Form of Agreement Between
Owner and Architect. Contract Document.
Ballast, D. K. (1995). Architectural Exam Review, Volume II: Nonstructural Topics (3rd ed.).
Belmont, CA: Professional Publications, Inc.
Bernard, S. L., Zimmerman, S., and Eckert, J. K. (2001). Aging in place. In S. Zimmerman,
P. D. Sloane, and J. K. Eckert (Eds.), Assisted Living: Needs, Practices, and Policies
in Residential Care for the Elderly. Baltimore, MD: Johns Hopkins University,
pp. 224–241.
Cox, A. and Groves, P. (1990). Hospitals and Health Care Facilities: A Design and Development
Guide (2nd ed.). Boston, MA: Butterworth Architecture.
Dover, V. (2006, July 21). Draft Fort Monroe Reuse Concepts. Dover, Kohl and Partners
public presentation to the Hampton Federal Area Development Authority, Hampton,
Virginia.
Eckert, K., Zimmerman, S., and Morgan, L. A. (2001). Connectedness in residential care:
A qualitative perspective in the changing health care environment. In S. Zimmerman,
P. D. Sloane, and J. K. Eckert (Eds.), Assisted Living: Needs, Practices, and Poli-
cies in Residential Care for the Elderly. Baltimore, MD: Johns Hopkins University,
pp. 292–313.
Goldsmith, S. (2005). Principle of Health Management Care: Compliance, Consumerism, and
Accountability in the 21st Century. Boston, MA: Jones and Bartlett.
Goodman, R. J. and Smith, D. G. (1992). Retirement Facilities: Planning, Design, and
Marketing. New York: Whitney Library of Design.
Gordon, P. A. (1998). Seniors’ Housing and Care Facilities: Development, Business, and
Operations (3rd ed.). Washington: Urban Land Institute.
Heuer, C. R. (2004). Construction Documents and Services 1. Chicago, IL: Kaplan AEC
Architecture.

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Kobus, R. L. (2000). Perspective. In S. A. Kilment (Ed.), Building Type Basics for Healthcare
Facilities. New York: Wiley, pp. 1–7.
Kornblut, A. (2004). Construction Documents and Services 2. Chicago, IL: Kaplan AEC
Architecture.
Mollica, R. and Johnson-Lamarche, H. (2005, March 31). State Residential Care and
Assisted Living Policy: 2004. National Academy for State Health Policy of the United
States Department of Health and Human Services. Retrieved August 10, 2006, from
http://aspe.hhs.gov/daltcp/reports/04alcom1.pdf.
Nursing Homes. (2005, July 25). Medicare: The Official U.S. Government Site for Peo-
ple with Medicare. Retrieved August 9, 2006, from http://www.medicare.gov/
Nursing/Overview.asp.
Payette, T. M. (2000). Ambulatory care facilities. In S. A. Kilment (Ed.), Building Type
Basics for Healthcare Facilities. New York: Wiley, pp. 193–240.
Pratt, J. R. (1999). Long-Term Care: Management across the Continuum. Gaithersburg, MD:
Aspen Publishers.
Purves, G. (2002). Healthy Living Centers: A Guide to Primary Health Care Design. New York:
Architectural Press.
Pynoos, J. (1987). Housing the aged: Public policy at the crossroads. In V. Regnier and
J. Pynoos (Eds.), Housing the Aged: Design Directives and Policy Considerations. New
York: Elsevier Science, pp. 25–40.
Pynoos, J. and Matsuoka, C. E. (1996). Housing. In C. J. Evashwick (Ed.), The Continuum
of Long-Term Care: An Integrated Systems Approach. New York: Delmar Publishers.
Regnier, V. (2002). Designing for Assisted Living: Guidelines for Housing the Physically and
Mentally Frail. New York: Wiley.
Regnier, V. A. (1994). Assisted Living Housing for the Elderly. New York: Wiley.
Scaggs, R. L. and Hawkins, H. R. (1994). Architecture for long-term care facilities. In
S. B. Goldsmith (Ed.), Essentials of Long-Term Care Administration. Gaithersburg,
MD: Aspen Publishers, pp. 254–280.
Shore, H. H. (1994). History of long-term care. In S. B. Goldsmith (Ed.), Essentials of Long-
Term Care Administration. Gaithersburg, MD: Aspen Publishers, pp. 1–10.
Sloane, P. D., Zimmerman, S., and Walsh, J. F. (2001). The physical environment. In
S. Zimmerman, P. D. Sloane, and J. K. Eckert (Eds.), Assisted Living: Needs, Prac-
tices, and Policies in Residential Care for the Elderly. Baltimore, MD: Johns Hopkins
University, pp. 173–197.
Spreiregen, P. D. (2004). Pre-Design. Volumes 1 and 2. Chicago, IL: Kaplan AEC
Architecture.
Turner, L. (2002). Medical facilities as moral worlds. Journal of Medical Ethics: Medical
Humanities, 28, 19–22.
Vierck, E. and Hodges, K. (2003). Aging: Demographics, Health, and Health Services.
Westport, CT: Greenwood.
Wood, P. H. (2004). Site Design. Chicago, IL: Kaplan AEC Architecture.
Zook, P. (2005). Accessibility in Multi-Family Housing for Design Professionals. Richmond,
CA: Virginia Fair Housing Office.

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 POLICY MAKING V
AND FINANCING

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 Chapter 16

Long-Term Care
Politics and Policy

William Weissert

Contents
Barriers to Agenda Setting: Tough Problem, No Ready Solutions............321
Constituents ............................................................................................322
Federalism and Path Dependency ............................................................323
Interest Groups ........................................................................................324
Congressional Structure and the Critical Role of Policy Entrepreneurs....328
Policy Entrepreneurs ................................................................................329
Senator Frank Moss (D-UT 1959–1977) ............................................329
Congressman Claude Pepper (D-FL 1948–1989) ................................331
Congressman Henry Waxman (D-CA 1975–) ....................................332
Other Advocates ..................................................................................333
Conclusion...............................................................................................336
References ................................................................................................337

Long-term care is not a subject Congress knows much about, and it tends to care
about it even less. Nor have most presidents been cheerleaders for long-term care.
Mostly, the making of policy within broad federal program guidelines is left to the

319

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states, the federal bureaucracy, and when they cannot agree, to the courts. Even
when the Gulf of Mexico floodwaters pushed by Hurricane Katrina rose inexorably
to drown some nursing home patients because evacuation plans were not imple-
mented by various nursing home owners and public officials, there was little outrage
and less policy change in response other than indictments of two hapless owners
(www.cnn.com, 2005).
Long-term care policy is the policy of neglect. Somehow this does not seem to
fit with our representative system of government, in which members of Congress
hotly debate issues of great concern to their constituents and about which they feel
a passionate thirst for good policy. Americans are dying in nursing homes of negli-
gence, abuse, and policy indifference. Books have been written about the problem,
exposing scandalous conditions approaching the level of outrage of the original
muckrakers (Mendelson, 1974; Butler, 1975; Vladeck, 1980). Nursing homes rank
near the bottom in surveys measuring perceptions of healthcare providers. Nearly
three-quarters of the public think nursing homes do not have adequate staff. And
nearly two-thirds say that the government inadequately regulates nursing home
quality (Kaiser Public Opinion Spotlight, 2006). Yet elderly people are active
voters. So why have policymakers not risen in anger over this abuse of a potentially
important constituency?
This chapter argues that several factors contribute to this policymaking
disconnect in a situation for which public policy is largely responsible as the pri-
mary payer for long-term care through the federal-state Medicaid program. Expla-
nations lie at the heart of the way America makes policy. In this country, it is made
through a pluralistic system of power shared by levels of government, impelled and
constrained by the legacies of past policy choices, altered only when a mobilized
committed constituency demands change, and very much shaped by organized
private interests even in the face of constituent interests. Few policies succeed in the
uphill struggle against powerful interest group opposition, and fewer still succeed
when no interest group is pushing them. Exceptions prove the rule: only when a
“policy entrepreneur”—a political leader with sufficient clout and skill—brings to
bear concentrated and persistent pressure for change in a venue where policy is
made, do neglected policies garner sufficient support to move from dormancy to
deliberation and sometimes passage.
Th is chapter argues that long-term care has few of the necessary elements to
motivate policy change and is compounded by the intractability of the underly-
ing problems and lack of the solutions necessary to place problems on the public
policy agenda. The key elements of policymaking addressed here are the very
difficult nature of the problem, lack of solutions available, absence of mobilized
constituents, dearth of reform-minded interest groups, the inexorability of path-
dependent policy, and a lack of policy entrepreneurs available to lead the charge
for change.

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 Long-Term Care Politics and Policy 䡲 321

Barriers to Agenda Setting: Tough Problem,

No Ready Solutions
Models of how the policy process works—what it takes to pass legislation—make
it clear that political change occurs only when issues move to the public policy
agenda. But for long-term care, the problem itself and a lack of ready solutions
make that unlikely to happen very often. There is nothing easy about long-term
care. The patients have used up most of their resources (physical, mental, social,
and financial), and are frail and vulnerable. For many, their health status trajectory
is downward, meaning that good quality care, if it were to be designed and deliv-
ered, could hope at best to improve only pain management, comfort, dignity, and
privacy. It would do little more than slow the rate of decline. Many of the long-term
care population’s underlying health and disease problems are chronic or incurable
with present technologies. Because so much of medical training is focused on cura-
tive interventions, too little attention is paid to finding better ways to manage
chronic problems. The challenges are made more difficult by the multiplicity of dis-
eases suffered by many long-term care patients and the large number of drugs, with
multiple side effects, which many long-term care patients consume daily. Worse, the
small numbers of patients in any given subgroup suffering a particular combination
of diseases and conditions make research or even assessment of health status change
difficult. Nor is the situation helped by the very limited state of our knowledge
of the marginal benefits for marginal treatment investments in this population.
Improvement of healthcare quality in general—even simple procedures to fix rou-
tine problems—has proven all but impossible in the years since the Institute of
Medicine highlighted the often unsatisfactory nature of American healthcare deliv-
ery (Kohn et al., 1999). For the long-term care population, an equivalent systematic
assessment has not even been written, let alone major solution options proffered.
Long-term care is also fragmented, moving from physicians’ offices to
hospitals, to care at home, to nursing homes, and around the loop again, with few
consequences for failure and few rewards at any point along the way. There is also
no good way to attribute success or failure to any set of providers because of the
frequently long lapses between care and outcome. Staffs are poorly paid, often inad-
equately trained, often overburdened, and likely to change jobs frequently. Perhaps
worst of all, states know that the surest way to cap their expenditures is to limit the
construction of nursing home beds. Some states directly limit Medicaid payment
amounts to discourage building of new beds. The result is that although nursing
homes compete for private pay patients, they have no need to compete for those
whose charges are paid by Medicaid. Facilities do not need to offer a better product
to publicly supported patients.
In short, no one really knows how to fi x long-term care, and no one seems
ready to pay for a fi x if one were found. From a political perspective, this problem’s

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complexity and lack of ready solutions are deadly. When a window of opportu-
nity opens in the policy process, something that occurs only rarely, three streams
must intersect: a problem, a solution, and a receptive moment in the political ven-
ues where legislation is made—the White House and Congress (Kingdon, 1995).
With no ready solution available—ideally one that has been around for a while and
shaped by debate and compromise—even if events were to push long-term care
onto the public policy agenda, an opportunity for legislation is not likely to lead
to enactment.

Constituents
Constituents can be a force for policy change. For other causes, those with the
most to gain from reform have organized themselves to demand it. Workers have
traditionally organized to demand higher wages and better working conditions.
Blacks mobilized for equal access to public transportation and housing, school
integration, voting rights, and job opportunities. Gays and lesbians are insisting on
equal protection and equal treatment in the institution of marriage and workplace
benefits. People with disabilities have at least partially succeeded in pressing their
case for job opportunities and public accommodations. Animal rights advocates
have raised awareness to the special needs and high vulnerability of pets, animals
used in medical testing, and even the plight of geese force-fed to fatten their livers
for pâté de foie gras.
It is not just because old people are not politically active. Some are. And when
they are, their grassroots lobbying has often worked. For example, elderly Chicago
constituents of Dan Rostenkowski (powerful Ways and Means Committee chair in
the late 1980s) left a senior center meeting to chase him down the block and across
parking lots in their rage over his support of means-tested Medicare premium
increases. This event made the evening news on all the three network channels and
played a major role in causing Congress to reverse itself and repeal the Catastrophic
Health Insurance Act, passed only a year earlier by a wide margin (Kollman, 1998).
Two Florida congressmen received 75,000 pieces of mail opposing the new law
(Kollman, 1998). Arizona Senator John McCain said, “Every Member of Congress
was getting accosted at town meetings” (Kollman, 1998).
Baby boomers have money, political savvy, and a long history as a genera-
tion that gets what it wants. Why have long-term care users and their families
not mobilized to get policy action? Two reasons explain the lack of an organized
long-term care constituency. The first one is obvious: nursing home residents, even
home care patients, are simply too disabled, often disoriented and functionally
impaired, frequently too poor, and certainly too immobile to offer much hope of
organized action. Among nursing home patients in particular, perhaps two-thirds
suffer from dementia. Moreover, there are not very many institutionalized people
at any given moment. Despite their impressive costs to Medicaid budgets, the fact

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 Long-Term Care Politics and Policy 䡲 323

that nearly half of all Americans spend some time in a nursing home (Murtaugh
et al., 1997), and nearly 85 percent say that they have some experience with nurs-
ing homes directly or through a friend (Kaiser Public Opinion Spotlight, 2006), at
any given time, nursing home patients still represent only about 5 percent of elderly
Americans.
Numerous problems may also plague their families. Although daughters—the
primary caregivers of frail elderly people (and to a lesser extent, sons)—could in
theory mobilize to demand better treatment of their elders, the reality is that most
caregivers are themselves beyond the age at which people are willing to take to the
streets, sleep in parks, and participate in demonstrations. Moreover, no group is
more overburdened than family caregivers of long-term care patients; they have
enough to do already without expecting them to mobilize and march in the streets.
Respite care was invented to give caregivers a rare break in an often unrelenting and
isolated routine of caregiving that leaves little free time for even the most pressing
problems.
It also appears that once their loved ones have passed away (most nursing home
patients die within two or three years of admission), few family caregivers are
much interested in involving themselves in long-term care reform issues. Thus, the
potential for constituent mobilization seems to be hamstrung by small numbers,
physical and mental limitations, caregiving burdens, and finally, the transient nature
of the long-term care caregiver role.
Of course, political scientists have argued that it is not the broad geographically
defined population of a congressman’s district that defines his or her constituency
on a given issue. Instead it is the “attentives” (Arnold, 1990), people within the
district who are concerned about a particular issue. Unfortunately, the attentives for
long-term care are likely to be the nursing home lobby and other narrow economic
interests, discussed in the section titled Interest Groups. But first, the inertia of past
policies must be considered.

Federalism and Path Dependency

Some political science theory suggests that policies tend to remain in their steady
state unless some major upheaval occurs to change them (Pierson 2000). This
description of policy is called “path dependency,” the tendency of a policy once
launched on a path to continue along that path unless a major force comes along to
change it. The path for nursing home policy, and for that matter, home care policy
as well, has long been state dominance, and since the mid-1960s, all but exclusively
a state responsibility. Medicaid, the primary payer for nursing home residents, is
regulated primarily by the states. Federal policy sets broad guidelines, but states
make the important choices, especially the important budget-driven ones. Even
when national policy is adopted, surveillance and enforcement is typically delegated
to the states.

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But state responsibility tends to mean tight budgets, very strong competi-
tion for resources from primary and secondary education, prisons, highways,
and other state spending priorities, and very little willingness to raise taxes for
social welfare improvements. Moreover, Medicaid is a poverty program. Why it
should be that acute care (provided under Medicare) is a universal entitlement for
elderly people, while public funding of long-term care is conditioned on abject
poverty, is nothing short of an accident of history. The conditions set in place for
Medicaid’s treatment of the poor were never intended to be applied to institu-
tionalized elderly people who had outlived their resources. It just happened that
way when life expectancy stretched out the years of postemployment living from
months or a few years to many years and often decades. Long-term care policy is
now a derivative of poverty policy, funded by a program designed to pay for the
healthcare needs of poor people, but twisted and adapted to support the end-
of-life care of huge swaths of the population. As long as long-term care remains
a state-federal responsibility, with leadership vested principally in the states, it
will suffer only the most limited financing: Medicaid is always among the fast-
est growing components of state budgets despite cost-containment efforts. These
funding constraints invariably breed the curse of very low quality expectations
and little vision for improvement.

Interest Groups
Interest groups are an essential element of America’s pluralistic form of govern-
ment in which power is widely shared among formal representative bodies such as
Congress and state legislatures, the courts, and private businesses interests, citizens’
groups, and foundations. Without interest group pressure, few issues make it to the
top of the policy agenda. Those that do rise to saliency as a result of disaster or crisis
often do not get turned into legislation without a major interest group framing the
issue, brokering deals to line up supporters, and dogging members and leaders in
both the houses of Congress. When there is no active interest group supporting
an issue, it tends to get caught at one of the many veto points that are purposely
designed into the political system to limit the number of congressional enactments.
Committees and subcommittees tend to work on one problem at a time. When an
issue is pushed by a group, others must wait their turn, wait until the next Con-
gress, or just keep waiting.
The New York Times (Rudoren and Pilhofer, 2006) recently reported an
excellent example of the dramatic difference it can make when lobbyists become
involved in a cause. Unable for years to win federal support of $15 million for a
bridge-rebuilding project, the small town of Treasure Island, Florida, hired a lob-
byist to achieve its goal. A few weeks later, he came back with $50 million for the
project, more than triple of what had been asked for. Since that time, he has con-
tinued to win new federally funded projects for the town.

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 Long-Term Care Politics and Policy 䡲 325

To be sure, there are a number of organizations interested in long-term care.

But they come in two major types: economic interests and externality groups. The
American Health Care Association (previously called the National Nursing Home
Association), American Association of Homes and Services for Aging, the National
Organization of Home Care, Alliance for Quality Nursing Home Care, National
Hospice and Palliative Care Organization, and the Alabama Nursing Home
Association represent the economic interests. Their efforts are focused on their
own industry’s well-being: improving reimbursement rates, stifling competition,
relaxing regulatory burdens, and shielding themselves from tort liability. When
they help themselves, only sometimes are nursing homes and home care patients
assisted as well. For example, higher payments to nursing homes or home care agen-
cies do not necessarily translate into more attentive care, better food, or cleaner and
safer facilities. Indeed, considerable research shows that higher across-the-board
Medicaid payment rates may actually reduce access for Medicaid patients because
facilities may use the extra reimbursement to improve their appeal to private clients
who pay more (Nyman, 1985).
One example is the Alliance for Quality Nursing Home Care, a coalition group
organized in 2000 by 15 for-profit members of the nursing home industry’s trade
group, the American Health Care Association. Its members include HCR Manor
Care, Sun Healthcare Group, Tandem Health Care, Kindred Healthcare, and
Advocate Inc. According to the group’s Web site, “Its founding members include the
nation’s 11 largest nursing home companies,” whose operators support “reduced
federal regulation—and the Republicans who promise it” (www.sourcewatch.com).
Major system reform is not mentioned as a goal of the group.
However, externality groups seek benefits that do not accrue only to their
members but to the larger society (e.g., the Sierra Club, the American Public
Health Association, and AARP). Not many groups such as these exist on behalf
of long-term care patients, far fewer, for example, than serve the interests of
environmental concerns or even poor people generally. But how many groups
does it take to achieve a particular end? If AARP is on the job, why is long-
term care not a larger policy concern in Congress? The answer lies in the abso-
lute necessity of successful lobbyists to set priorities, concentrate their efforts on
“winnable” issues, and leverage support from other groups that can gain some-
thing for themselves.
Unfortunately for long-term care patients, AARP works on a broad range of
issues as the champion of elderly people. Long-term care is only one of the group’s
many priorities (AARP, 2006), including Social Security, pensions, prescription
drug coverage, health insurance, workplace age discrimination, and a host of other
issues. It is also worth noting that for AARP, aging begins at 50. The group puts
much of its effort into the concerns of those who have been called the “young-
old” (not frail, not dependent), especially those who are middle class and are still
important consumers. On long-term care at the federal level, AARP is often the
dog that does not bark much. Although its staff pays more attention to long-term

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care than most groups do, and an entire chapter of its 2006 policy book is devoted
entirely to long-term care reform proposals, for AARP the frail elderly popula-
tion in nursing homes is seldom its primary focus (AARP, 2006). Indeed, AARP
changed its name in 1998 as part of a major effort to recruit baby boomers into its
ranks and rid itself of “retirement” in its name (AARP Woos Reluctant Boomers
with a High-Priced Makeover, 2000).
The long-term care reforms it pushes often tend to be lobbied through its local
chapters, on a state-by-state basis, and generally in the context of Medicaid. The lat-
ter is limited by spending constraints, low expectations, minimal popular awareness,
and provider resistance to any reforms that would increase their costs or regulatory
burdens. These initiatives are unlikely to succeed, including such AARP-endorsed
proposals as social insurance for long-term care. Rarely does AARP make the all-
out effort for long-term care that it did for Medicare drug coverage, although two-
thirds of elders already had drug coverage before the Medicare Modernization Act
was passed. However, most Americans have no good idea how they will pay for
long-term care (Kaiser Public Opinion Spotlight, 2006). Moreover, AARP does
list long-term care reform as fourth on its list of five items shown on its Web site
(under “AARP on the Issues” the two reforms AARP advocates are long-term care
insurance and consumer-directed at-home services—www.aarp.org/issues). That
these two limited proposals could be supported by many Republicans may reflect
the need for lobbying efforts to be directed at achievable goals during a Republican
administration unlikely to support major regulatory reforms in nursing homes or
home care.
In the final analysis, however, the reality is that a major effort on behalf of
long-term care would be a bad investment of its resources for AARP. Leaving
aside the concerns of some that the organization may be too focused on selling
insurance and other products, AARP, like every other interest group, confronts
a major flaw in the nature of organized interests: the free rider problem. Free rid-
ers are those people who benefit from a group’s efforts, but do not join or buy its
products. Focusing on the issues of importance to the young-old, and to some
extent the well-heeled among them, makes sense because these individuals will
pay membership dues, consume products, vote, and remain with the group for
many years.
Interest groups rely on what are called solidarity and material benefits to
control the free rider problem. Solidarity benefits relate to policy goals and
improvements for the interest group and its members. Material benefits are items
such as newsletters, magazines, and travel discounts. But neither of these is likely
to be an effective membership incentive to a frail, very old population, many of
whom are demented. Resources spent pursuing the interests of the very old group
of Americans who make up the long-term care population would be unlikely to
increase AARP’s membership, dues receipts, or political clout. In the final analy-
sis, AARP lacks many of the powerful tools used by economic interest groups. It
has no political action committee (PAC) that can funnel campaign contributions

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 Long-Term Care Politics and Policy 䡲 327

from its membership to members of Congress on key committees and subcommit-

tees. AARP can be very good at grassroots lobbying, and it has an excellent track
record in its direct lobbying efforts with legislators and their staffs, the bureaucracy,
state legislatures, and even local Medicaid agencies. But not having campaign
contributions to offer deprives it of an important strategy that other groups com-
peting for members’ attention have available to them. AARP has little to offer, for
example, in the biennial battles for legislative and congressional committee chair-
manships, when much of the focus is on how much campaign money a member
has been able to raise on behalf of other committee members. In the limited time
and space available for agenda setting, deftly placed campaign contributions may
just tip the scales. This may partly explain why every year physicians and hospitals,
drug companies, the insurance industry, medical equipment suppliers, and a host
of other health interests see their issues rise to the top of the congressional agenda
while long-term care reform remains in the queue.
Another way to think about the important role of interest groups in dominating
the political environment was offered by Wilson (1989). He categorized issues
into a four-cell matrix representing the different kinds of politics associated with
issues of different types. He labeled each one based on whom they benefited and
who paid the costs. “Interest group” issues were those with competing interests,
such as employers and labor unions fighting over minimum wage requirements
and worker safety. Benefits to one group are costs to the other. Policies must be
negotiated between the positions of the two groups, with every aspect of the issue
not only raising the ire of one or the other group but also inducing politicians to
pick sides.
“Client” issues are those like farm subsidies that concentrate benefits on farmers
and food processors, causing them to closely follow policy changes and make sure
that Congress keeps the issue at the top of its agenda. Although the costs are paid
by taxpayers, the amounts are so small (only a few cents per person in tax increases)
that most Americans pay little attention.
“Entrepreneurial” issues include nursing home regulations—they concentrate
costs on an industry, giving its members incentives to mobilize, while bestowing
benefits on a disorganized group of often vulnerable citizens. The industry will
support legislators who oppose stronger rules (as the mission statement of the Alliance
quoted earlier suggests), but there is a conspicuous lack of groups which will mobi-
lize on the patients’ side of the issue.
Finally, issues such as broad long-term care system reform are called
“majoritarian” ones because they diff use both costs and benefits to the large swath
of society that will eventually need such care. But most people will not benefit
from them sufficiently to mobilize broad support. President George Bush learned
in 2005 just how difficult it is to mobilize citizens in favor of another majoritarian
reform when he sought to enlist public and congressional support of the Social
Security reform. These kinds of issues just do not appeal strongly enough to the
average American to win many supporters.

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Congressional Structure and the Critical

Role of Policy Entrepreneurs
Congress is a large organization, and as such, suffers from all the problems of col-
lective action typical of large groups. With 435 House members and 100 senators,
all trying to get benefits for their districts, pursue their own notions of good public
policy, and make their tries at moving up to leadership positions, the potential for
chaos and disorder is profound. Without positive institutional controls, the classic
dilemmas of collective action would lead to self-interested behavior: individualistic
opportunism, broken promises, free riding, outright dishonesty, and little attention
paid to the needs for expert information, conflict resolution, routine scheduling,
staff sharing, and even regular order.
Like all successful large groups, Congress relies on its institutional powers to
bring order from chaos. Members must be assured that if they promise their vote
in exchange for another’s vote on their different priorities, the commitment will
be honored. They must know that if one member agrees to become an expert on
complex issues such as Medicaid, others will learn about energy policy, defense
weaponry, pharmaceutical regulation, etc. Moreover, each Congress adopts certain
rules of behavior. Among the most important of these are election of a speaker,
majority and minority leaders, and their assistants. They set the agenda for the
group, assuring that if members will wait for their turn, their personal priorities
will be taken up, that those who work to become experts will be rewarded with
deference by others on their respective topics, and that members selected to handle
the complex and powerful tasks of appropriations will channel money fairly and
appropriately, not simply to their own districts. Congress does all this through
rules, leaders, party control, and committee jurisdiction.
Those who care about healthcare policy volunteer to join the health committees
and subcommittees and work hard to learn the complex details of the topic. The
committees are endowed with power within their jurisdiction: any healthcare-
related bill introduced will be directed to the health committee and will die or
survive depending almost exclusively on its committee chair and members’ pref-
erences. Members not on the health committees cannot hold hearings on health
bills. Only health committee members can participate in the closed-door markup
sessions during which the legislators rewrite their bills. The health committee will
likely be given deference when requesting a rule from the Rules Committee. The
health committee chair will manage the bill on the House floor. Amendments
offered by non-committee members will probably be rejected by the House major-
ity in deference to the committee (Hall, 1992).
Throughout the process, subcommittees will wield more influence over issues
in their jurisdiction than that of the full committee (Hall, 1992). Indeed, in
subcommittees, for most issues, no more than a mere handful of members will hold
much influence over any given issue. Charles Clapp reports that “less than half of
committee’s members regularly participated in its deliberations” (Hall, 1996, p. 23).

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 Long-Term Care Politics and Policy 䡲 329

For example, John Manley found that for the Ways and Means Committee,
“on many important issues a ‘subgroup . . . sometimes as small as three individuals
dominated the executive session deliberations’” (Hall, 1996, p. 23). Similarly, Lynette
Perkins reported that “two-thirds of the House Judiciary Committee’s membership
were described by committee staff as not interested . . .” (Hall, 1996, p. 23).
In short, jurisdictional rules and party control are used by the House to make it
function, resulting in dominance of its agenda on most issues by a small handful of
members, sometimes one or two people. If no members are committed to an issue,
it has no chance of getting on a subcommittee agenda, surviving markup, and
making it through the rest of the congressional process in both chambers (the full
committee, the Rules Committee, onto the speaker’s agenda, House floor vote, the
Senate, and the conference committee). After that, if it survives, it must go through
the process again to be funded through an appropriations bill, or get tucked into a
reconciliation act.
For all these reasons, if difficult, complex, neglected issues such as long-term care
policy are to be reformed, the effort must be led by a policy entrepreneur (Kingdon,
1995). These are individuals who by passion, hard work, deft bartering, and most
importantly, persistence, move an issue onto the agenda and push it through its
many hurdles to become law. Typically, they hold some position that permits them
to speak with authority. Examples include the president, speaker, majority leader,
committee or subcommittee chair, and department secretary. They know how to
negotiate and use their institution’s rules and norms to make things happen; and
they do the hard work that makes them an expert on a given topic.

Policy Entrepreneurs
Policy entrepreneurs for long-term care have been few and far between over many
decades.

Senator Frank Moss (D-UT 1959–1977)

Nursing home quality assurance problems had begun to emerge long before Frank
Moss moved the issue to the top of his legislative agenda in the mid-1960s to late
1970s. The Old Age Assistance provisions of the Social Security Act (Title I), which
provided limited matching funds to states that offered assistance to their elderly
citizens, predated his efforts by decades. That legislation permitted payments to
individuals in private homes but not public poorhouses, the latter disdained for
their abysmal conditions, and led to the expansion of what would become the
nursing home industry (Congressional Research Service, 1972). This prohibi-
tion was removed in 1950 after advocacy by the Advisory Commission on Social
Security (Congressional Research Service, 1972). Standard setting and enforcement
were left to the states. Rampant problems were particularly well documented by

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the 1956 Commission on Chronic Illness, and a year later by the Council of State
Governments, which synthesized a number of state reports (U.S. Senate, 1957).
U.S. Public Health Service surveys validated these concerns, showing that states
had few standards, limited enforcement, and little or no training or qualifica-
tions requirements for staff; nearly half of all skilled nursing beds did not even
meet fire safety standards as late as 1960 (U.S. Department of Health, Education
and Welfare, 1963). Congress responded by establishing the Senate Subcommit-
tee on Problems of the Aged and Aging in 1959, which found that states feared
that enforcement of standards would close most nursing homes. Six years later,
the U.S. Public Health Service produced a manual of guidelines for nursing home
licensure by the states (Congressional Research Service, 1972). The Senate next
created the Special Committee on Aging in 1961, chaired by Utah Senator Frank
Moss, who became famous for dressing himself in old clothes and checking into
facilities to get firsthand exposure to conditions. His committee again confirmed
weak enforcement and concern that it would lead to closure with nowhere to send
residents. Moss pushed for the Medicare Extended Care Facility (ECF) as a sub-
stitute for skilled nursing homes. Of 6,000 applicants for ECF certification, only
740 could meet the standards; another 3,000 were given a provisional status called
“substantial compliance” (Institute of Medicine, 1986). Nonetheless, Senator Moss
pushed for yet higher quality requirements, and in 1967 led the fight for passage of
Skilled Nursing Facility (SNF) standards for Medicare-certified facilities that did
not meet them (Institute of Medicine, 1986). Implementing regulations, delayed by
the Johnson administration, were later issued by the Nixon administration in 1969,
but sans Intermediate Care Facility (ICF) standards. The Department of Health,
Education and Welfare (DHEW) wrote and then declined to issue them for a num-
ber of reasons, including fear that they would weaken industry compliance with
SNF requirements. Moss wanted enforcement: he mounted a series of hearings that
stretched from 1969 to 1973 and produced reports that demonized and scandal-
ized the nursing home industry for its poor quality of care (U.S. Senate, 1974).
Over the course of these hearings—and with Moss’s help—some of the scandals
became front-page news, including the deaths of 32 Ohio nursing home residents
and 36 Maryland residents caused by fire and food poisoning, respectively.
Moss also used the investigative powers of the congressional staff agency, the
U.S. General Accounting Office (GAO). After auditing state facilities, it found
that Medicaid was not enforcing its own ICF standards that required the states
to certify facilities as a condition for the receipt of Medicaid funds. In addition,
the Senate Finance Committee found that states were certifying facilities as ICFs
without their inspecting them (U.S. Senate, 1974). Because of the Moss hearings,
“substantial compliance” was dropped as a certification standard.
The Nixon administration responded to the furor that Moss, the fires, and
the salmonella contamination had created in 1971 with two major speeches. The
president condemned nursing home conditions and asked Congress to approve an
eight-point initiative aimed at increased DHEW enforcement staff, state surveyor

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 Long-Term Care Politics and Policy 䡲 331

training, establishment of a nursing home ombudsman program, creation of an

Office of Nursing Home Affairs in DHEW, and a “comprehensive study of federal
long-term care policies” (U.S. Senate, 1974, p. 244). A year later, Congress included
many of these initiatives as part of its Social Security Act Amendments (redefining
ECFs as SNFs, unifying Medicare and Medicaid SNF standards, and raising some
standards, but lowering others).
In 1974, new ICF standards were adopted for the Medicaid program. Efforts
in the DHEW office of Nursing Home Affairs shifted to developing standards
for patient evaluation to include as a part of the certification survey process that
previously had been overly facility focused. Competing evaluation instruments,
industry opposition to compliance costs, and a new focus added late in the Carter
administration on “residents’ rights” slowed publication of the survey instrument
and procedures until 1980. When the Reagan administration came into office, it
immediately rescinded the new rules.
As Baumgartner and Jones (1993) predicted, although the issue cycle that Moss
helped start was over and long-term care had fallen off the agenda, institutional
changes spawned by his efforts persisted and added to the momentum when the issue
was put back on the agenda years later. As will be shown, the Institute of Medicine
took up the long-term care issue at the behest of another policy entrepreneur, Henry
Waxman, D-CA.

Congressman Claude Pepper (D-FL 1948–1989)

An advocate for vulnerable populations, the working person, and the little guy
throughout his very long public career, and for elderly people during at least the
last two decades of it, Claude Pepper predicted what would happen if Congress
failed to spend money on elderly and other needy groups. He told Time magazine
in 1986, “I would rather live with $200 billion deficits and have more people
living, than the reverse. And if we don’t spend the money fighting cancer and
arthritis and poverty and poor housing and all the rest, they’ll just spend it on the
military or something else” (Fessler, 1989).
From his chairmanship of the House Aging Committee, Pepper could do little
more than hold hearings, toss bills into the hopper, and challenge his colleagues to
do more for elderly people. His committee had no legislative authority and at times
may have undercut its credibility with press releases, including one which claimed
that large increases in pet food sales were perhaps because some elderly people were
forced to eat it.
When he chaired the powerful Rules Committee, the broad range of concerns
of that committee and the practical needs of his party to pass legislation forced
him into compromises. Yet he would have forced a Medicare long-term care cov-
erage amendment onto the ill-fated Catastrophic Health Insurance Act of 1988,
had the Democratic Speaker of the House, Jim Wright (Texas), not promised him
a direct floor vote on a separate bill, bypassing the recalcitrant House Commerce

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Committee. When it was eventually brought to the floor and voted on, he lost; John
Dingell (D-MI) vehemently opposed the measure on grounds that his committee’s
jurisdictional rights had been violated.
Pepper next seized on the renewal of the Older Americans Act to attach an
amendment that would broadly cover home care services for people requiring
assistance with activities of daily living. (Critics complained that it was so broadly
written that it would cover all children who needed help dressing and using the
toilet—Rovner, 1987.) The program would have been financed by removal of the
cap on earnings to which Medicare taxes are applied. This would have raised an esti-
mated $30 billion, possibly enough to cover the $20–40 billion cost of the Pepper
home care bill. Again, Pepper tried to end-run the jurisdiction of the Ways and
Means and Commerce committees, incurring their wrath. He did get the bill out
of his Rules Committee with a favorable rule. “When you own the umpire, chances
are you’re going to win the ball game,” growled Ways and Means Committee Chair
Dan Rostenkowski (D-IL) (Rovner, 1987). Ultimately, however, Pepper was again
defeated on the House floor amid concerns about both the procedural violations
and the looming budget deficit, which the Democrats were committed to reducing
(Rovner, 1987).
Pepper was also a critical factor in the formation of the 1989 congressional
“Pepper Commission,” charged with solving both long-term care issues and prob-
lems related to people lacking healthcare coverage. But alas, commissions are a favor-
ite way Congress has of pushing real problems with no easy solutions off the agenda
while taking credit for having done something. The Pepper Commission offered
a proposal that outlined a detailed coverage plan with no budget attached (later
estimated to cost $66 billion). Everyone (rightly as it later turned out) assumed that
the cost would be too high to get a serious hearing in Congress. The commission
disbanded, the report was ignored, and when Congressman Pepper died in 1989,
the House abolished its Aging Committee altogether. The House Rules Commit-
tee was eventually taken over by a conservative Republican whose primary concern
was agriculture policy. Nonetheless, at Pepper’s death, colleagues acknowledged his
earnest and important appeal on behalf of the nation’s neglected populations: “He
was a giant,” one colleague observed (Fessler, 1989).

Congressman Henry Waxman (D-CA 1975–)

President Ronald Reagan’s policy choices were not intentionally friendly to long-term
care. His top priority for Medicaid was to cap spending, but his efforts were eventu-
ally turned inside out by Congressman Henry Waxman. After rescinding the Carter
administration’s nursing home reform regulations, the Reagan administration’s
attempts to modify and weaken the rules ran into fierce congressional opposition. To
quell the anger, Department of Health and Human Services (DHHS) Secretary
Richard Schweiker withdrew the effort as well. He suggested changes in survey

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 Long-Term Care Politics and Policy 䡲 333

procedures that would have permitted some nursing homes to have less frequent
evaluations. In response, Congressman Waxman proposed a moratorium on any
modifications to nursing home regulation until the Institute of Medicine did a
study of nursing home quality. Not only did he achieve the study but its 1986
report also led to the important 1987 and 1989 nursing home reforms that he
authored (Institute of Medicine, 1986).
Although the 1980 Omnibus Reconciliation Act was the centerpiece of the
Reagan administration’s efforts to shrink the size and regulatory prowess of the
federal government, Congressman Waxman, chair of the Health and Environment
Subcommittee of the House Commerce Committee—a position he held for nearly
24 years—used the same legislation for his own purposes: he wrote the Social Security
Amendments that added Section 1915(c), authorizing home- and community-based
care demonstration projects under Medicaid. These have been used over the subse-
quent decades to substantially expand Medicaid services for home and community
care. Waxman also authored long-term care coverage improvements in the short-lived
Medicare Catastrophic Healthcare Act of 1988 that was repealed the following year.
Since the Republicans took control of the House in 1994, and he lost his chair-
manship, he has been seriously constrained by his minority status in the House and
on the Commerce Committee and its Health and Environment Subcommittee. No
Republican subcommittee chair has stepped up to take on his limited role as a policy
entrepreneur on behalf of long-term care. Indeed, under Republican leadership, the
issue did not even get listed in the Health and Environment Subcommittee’s priority
list. Nonetheless, even from his minority assignment on the Government Operations
Committee, where he also serves, Waxman has been able to initiate investigations by
the Government Accountability Office (formerly General Accounting Office) and
House minority staff that have exposed long-term care abuses.

Other Advocates
In the Senate, both Senator Edward Kennedy (D-MA) and later, Senator Jay
Rockefeller (D-WV) have at times pressed for long-term care issues. But both men
have a broad range of interests, and in their minority party status have had few
opportunities to push for new initiatives. For instance, although Senator Rockefeller
previously chaired the Senate Long-Term Care Subcommittee for several years, he
lost interest in the topic by 2003.
The Senate Aging Committee, chaired by Gordon Smith (R-OR), did not even
list long-term care on its Web site’s “issues” page this year, although the committee
did hold a hearing on financing long-term care. The committee chair also sent a
letter to Centers for Medicare and Medicaid Services (CMS) protesting regula-
tory changes that would prohibit states from continuing their long-time practice of
maximizing their federal cost-sharing contributions for Medicaid. Senator Smith’s
interests in long-term care reform have been rather limited, as indicated in his

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 334 䡲 Handbook of Long-Term Care Administration and Policy

statement to the committee when it opened hearings in March 2006. To solve the
pending long-term care financing problem facing the baby boomers, he advocated
incentives to induce greater purchase of long-term care insurance (Smith, 2006).
Yet most experts regard long-term care insurance as a solution available only to the
few who can afford to pay the costly premiums. Senator Smith also introduced the
Long-Term Care Trust Account Act of 2006.
Republicans have not typically championed reforms that would increase Med-
icaid spending and they are even less likely to suggest that Medicare takes over
responsibility for funding long-term care. That they enacted prescription drug cov-
erage was surprising; some observers suggest that they had to do so only to take the
issue away from the Democrats. Because long-term care has little or no prominence
in the Democratic Party’s agenda either, it is unlikely to be a major political concern
in the foreseeable future. Nonetheless, very important and ultimately expansionary
changes in long-term care policy have taken place during Republican administra-
tions. Whatever his motives, President Reagan did not veto the 1980 Omnibus
Reconciliation Act despite its inclusion of the expansionary home- and commu-
nity-based waiver program. More recently, two Republican Department of Health
and Human Services (DHHS) secretaries have greatly enlarged that program.
Former Republican Wisconsin Governor Tommy Thompson used waivers to
gain national attention for his welfare reform program, and as DHHS secretary he
led the charge for greater use of them under Medicaid. He endorsed broad changes
in their scope, permitting states to revise service delivery systems and payment
methods as well as introduce patient copays. As a result, home- and community-
based waivers eventually increased from 227 (in 2000) to 252 (in 2002 and 2005)
(Kitchener et al., 2005).
Thompson was followed into DHHS by an equally fervent fan of individualized
care choices, former Bush White House staffer and the then Food and Drug
Administration (FDA) Commissioner Mark McClellan, who believed in vouchers to
permit disabled individuals to make their own choices as long-term care consumers.
Secretary McClellan had also supported the legislative changes in waiver authority
included in the Deficit Reduction Act (DRA) of 2005, signed by President George
W. Bush on February 8, 2006. The law contains six chapters and 39 sections devoted
to Medicaid. Among them, the new law allows states to offer home- and community-
based care and self-directed personal care services without a waiver, allowing states
to include these as optional services in their state plans. Importantly, for the states,
home- and community-based services can be provided to a predetermined number
of recipients, essentially capping the program and assuring states more fiscal control
than if the services were guaranteed to all those eligible. States can now also tighten
the medical standards for admission to institutions and refine eligibility for home-
and community-based waiver services (HCBS) on their own.
Many ideas that found their way partially or completely into the DRA came from
the other broad set of entrepreneurs for long-term care reform, the nation’s states
(Weissert and Weissert, 2002). The National Governors Association (NGA), the

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 Long-Term Care Politics and Policy 䡲 335

National Conference of State Legislatures (NCSL), individual governors, Medicaid

directors, and others who are responsible for Medicaid, push ideas that can become
state programs; many of them are eventually adopted by Medicaid as broad national
policy. The DHHS office of the Assistant Secretary for Planning and Evaluation—the
major policy design office within DHHS—compiled a summary of recent proposals
that had been considered for inclusion in the DRA, noting their source and the extent
to which they wound up in the law (Medicaid Commission Staff, 2006). A number
of the proposals came from the states’ associations, NGA, NCSL, and other groups,
ranging from the Heritage Foundation to a Michigan consulting firm that works
with Medicaid programs around the country (Health Management Associates). The
proposals were new to the 2005 DRA, but they represent a long history of healthcare
innovations by the states related to long-term care, Medicaid quality and informa-
tion technology, and program administration (Medicaid Commission Staff, 2006).
Ideas generated locally have proven useful over the years for reforms in long-term
care payment policy, eligibility expansions and implementation, alternative service
settings, the development of home care options, case management, and ombudsman
programs. Although the changes are incremental, they are often innovative.
Some of the most important developments at the state level have been in
HCBS, implemented by the states under Section 1915(c), authored in 1981 by
Congressman Waxman. Nominally intended to save costs and make long-term
care more efficient (which they do not), these programs have grown from their
original demonstration project status to broad, nearly permanent expansions of
the Medicaid program (Weissert, 1981; Weissert, 1985; Weissert et al., 1988;
Weissert and Hedrick, 1994; Weissert et al., 2001; Weissert et al., 2003). Clients
range from people who are elderly and disabled or developmentally disabled to
those with mental illness or chronic brain disorders. Many services are included:
acute and posthospital home care visits, personal care, aid and attendant care,
foster care, chore services, friendly visits, and more. After a slow start in 1981,
with half a dozen programs in as many states, by 2002 there were 252 programs,
at least some functioning in every state, at a total cost of over $17 billion annually
(State Health Facts, 2006). These programs have expanded steadily, with little or
no congressional involvement, and once approved by DHHS, they receive only the
most minimal (or nonexistent) oversight (U.S. Government Accounting Office,
2003). The DRA expanded waiver authority even further, converting most of the
waivers to optional services under Medicaid. Thus, states can now adopt them
without filing a special application. Again, they were adopted as a cost-saving
strategy, intended to improve program efficiency by giving the states more control,
the opportunity to place more responsibility on individual patients to pay their
own bills, and generally relaxing further the already limited role of DHHS in
protecting patients from restrictive state fiscal policies.
A related development is expansion of the so-called consumer-directed care.
These programs permit would-be home care clients to hire and supervise their
own home care workers, using a voucher. Some programs offer case management

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 336 䡲 Handbook of Long-Term Care Administration and Policy

supervision to support the client-purchaser. Given their inherent expectation for con-
sumer sovereignty, however, they tend to be an option only for disabled clients—or
their families—capable of rendering such decisions. An additional concern should
be the quality of services in home care settings. Enforcement of standards has long
been a challenge in congregate housing and nursing homes. Inspecting the quality
of services in each and every house is an even greater problem.
Nonetheless, there is no denying that states are the engines of innovation in
long-term care as in other aspects of public policy, an important legacy of our fed-
eral system. As DRA 2005 further frees them to try out their own plans, new ideas
may emerge (Kane et al., 2004).

Conclusion
Long-term care is a technically difficult problem with no ready solutions. Constituents
tend to be frail, often immobile, and most importantly, transient. There are few
effective interest groups for the clients of long-term care, and those that do exist
are preoccupied with their own limited concerns. The legacy of past long-term care
policy has condemned it to treatment as poverty policy, dependent on constrained
state budget. At the national level, long-term care tends to be at the bottom of con-
gressional committee agendas. The dearth of policy entrepreneurs interested in the
topic contributes to its neglect as well.
Yet some reforms have occurred, and in every case a policy entrepreneur led the
charge. What motivated them was not obvious, although the usual suspects—sense
of good policy, desire to get ahead in the House or Senate, take credit back home
for good policy, and reelection payoff potential—all contributed. What has to hap-
pen for the nation to see the next modest round of long-term care improvements
is for policy entrepreneurs (chair of a committee, secretary of DHHS, vice presi-
dent, or first lady) to take on the issue and make it their cause célèbre. The history
briefly recapped here, the complex nature of the problem, and the organizational
structure of Congress suggest that success is likely to come from a legislative policy
entrepreneur, and most probably a Democrat. Items on the agenda could include
improved training of nursing home aides, strengthening state inspections of nurs-
ing homes, and federal oversight of regulatory compliance. Other possibilities
include expansion of nursing home ombudsman programs, increased home care
and design of innovative ways to monitor quality of care delivered there, and pay-
ment systems that encourage efforts to achieve maximum outcome potential for all
clients (Kane et al., 2004). Or perhaps reform will come on cat’s feet, as home care
has experienced, quietly expanding as state-by-state policy makers try to respond
to the needs of their most vulnerable populations within budgets constrained by
economic cycles and competing demands. Indeed, state innovations may be most
likely because, for the most part, long-term care remains both the poor stepchild of
state policy making and a product of congressional neglect.

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 Long-Term Care Politics and Policy 䡲 337

References
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Arnold, D. R. 1990. The Logic of Congressional Action. New Haven, CT: Yale University
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Baumgartner, F. and B. Jones. 1993. Agendas and Instability in American Politics. Chicago,
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Butler, R. N. 1975. Why Survive: Being Old in America. San Francisco, CA: Harper & Row.
Congressional Research Service. 1972. Nursing Homes and the Congress: A Brief History of
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Fessler, P. 1989. Florida’s unabashed Liberal Left 41-year mark on hill. CQ Weekly
(June 3). p. 1298.
Hall, R. L. 1992. Measuring legislative influence. Legislative Studies Quarterly. 17(2):
205–231.
Hall, R. 1996. Participation in Congress. Ann Arbor, MI: University of Michigan Press.
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Institute of Medicine. 1986. Improving the Quality of Care in Nursing Homes. Washington:
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Kaiser Public Opinion Spotlight. 2006. The Public’s Views on Long-Term Care. Updated
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Kane, R. L., B. Bershadsky, R. A. Kane, H. H. Degenholtz, J. (Jason) Liu K. Giles, and
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nursing homes. The Gerontologist. 44: 624–632.
Kingdon, J. 1995. Agendas, Alternatives, and Public Policy. 2nd ed. New York: Harper
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Kitchener, M., T. Ng, N. Miller, and C. Harrington. 2005. Medicaid home and community-
based services: national program trends. Health Aff airs. 24(1): 206–212.
Kohn, L. T., J. M. Corrigan, and M. S. Donaldson (Eds.). 1999. Committee on Quality of
Health Care in America, Institute of Medicine. Washington: National Academy Press.
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Murtaugh, C., P. Kemper, B. Spillman, and B. Carlson. 1997. The amount, distribution,
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Nyman, J. A. 1985. Prospective and “cost-plus” Medicaid reimbursement, excess demand,
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Pierson, P. 2000. Increasing returns, path dependence, and the study of politics. American
Political Science Review. 94(2): 251–267.
Rovner, J. 1987. Pepper wins a round on long-term care bill. CQ Weekly (November 21).
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Rudoren, J. and A. Pilhofer. 2006. Hiring federal lobbyists, towns learn money talks. The
New York Times. July 2. www.nytimes.com.
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Chairman Gordon H. Smith. U.S. Senate Special Committee on Aging. March 9.
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Guide: Recommendations Relating to Standards for Establishing, Maintaining, and
Operating Nursing Homes. Public Health Service, Division of Chronic Diseases,
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U.S. Government Accounting Office. 2003. Federal Oversight of Growing Medicaid Home
and Community-Based Waivers Should Be Strengthened. GAO-03-576.
U.S. Senate. 1957. Recommendations of the commission on chronic illness on the care of the
long-term patient. In Studies of the Aged and Aging. Vol. 1, November. Committee on
Labor and Public Welfare. Washington: Government Printing Office, pp. 275–309.
U.S. Senate. 1974. Nursing Home Care in the United States: Failure in Public Policy.
An Introductory Report. Senate Report No. 93-1420, 93rd Congress, 2nd Session,
December 19. Subcommittee on Long-Term Care, Special Committee on Aging.
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Weissert, W. 1985. Seven reasons why it is so difficult to make home and community based
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Weissert, W., M. Chernew, and R. Hirth. 2001. Beyond managed long-term care: paying
for home care based upon risks of adverse outcomes. Health Aff airs. 20(3): 172–180.
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Weissert, W., C. M. Cready, and J. E. Pawelak. 1988. The past and future of home and
community based long-term care. The Milbank Quarterly. 66(2): 309–388.
Weissert, W. and S. C. Hedrick. 1994. Lessons learned from research on effects of community-
based long-term care. Journal of the American Geriatrics Society. 42(345): 348–353.
Weissert, C. and W. Weissert. 2002. Table 5.6, Some state innovations in health policy,
1965–2000. Governing Health: The Politics of Health Policy. Baltimore, MD: Johns
Hopkins University Press, p. 277.
Wilson, J. Q. 1989. Bureaucracy: What Government Agencies Do and Why They Do It. New
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www.sourcewatch.org. Accessed December 24, 2006.

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 Chapter 17

Geriatric Mental Health

Policy: Impact on Service
Delivery and Directions
for Effecting Change*

Bradley E. Karlin and Michael Duffy

Contents
Enduring Underuse................................................................................. 340
Previously Identified Barriers to Mental Health Services for Older Adults....341
The Role of Regulatory and Administrative Barriers ............................... 342
Restrictive Local Medical Review Policies .......................................... 342
Medicare–Medicaid Crossover Restrictions ....................................... 343
Nursing Home Quality-Indicator Exclusion of Psychotherapy ........... 343
Carrier Restriction of Psychological Services
for Patients with Dementia ................................................................. 344
Why the Schism? .................................................................................... 344
Recent Legislative and Regulatory Developments ................................... 346
Future Directions.....................................................................................350
References ................................................................................................357

* Professional Psychology: Research and Practice. Copyright 2008 by the American Psychological
Association, 35(5), 509–519, 2004. Reproduced with permission.

339

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The mental health needs of the nation’s geriatric population (defined here as indi-
viduals age 65 years and older) have been significantly neglected. This longstanding
neglect has contributed to the enduring underuse of mental health services by older
adults and has resulted in a service delivery system unable to adequately respond to
mentally ill elderly persons. Over the next couple of decades, the need for mental
health treatment by older adults will become even greater in light of evidence of
increased prevalence of mental disorders in future elderly cohorts (Gfroerer, Penne,
Pemberton, & Folsom, 2002) and anticipated demographic changes in this coun-
try and in nations abroad. Because of increases in life expectancy and the aging of
the baby boom generation, the number of Americans age 65 or older is expected
to double by the year 2030 (U.S. Department of Health and Human Services,
1999).
Unfortunately, little has been done to address enduring barriers and new chal-
lenges to service access and availability. Psychologists and others have lacked criti-
cal knowledge and advocacy acumen necessary to promote substantive change.
This article provides a more complete knowledge base of the barriers to the use
and provision of mental health services for older adults, identifying the significant
but previously neglected role of regulatory policies and administrative practices
in inhibiting service use and provision. These factors, although the least under-
stood and recognized by psychologists, researchers, and laypersons, are also the
very factors on which psychologists and the public can have the most potential
influence. This article then examines several recent legislative proposals and regula-
tory developments that offer potential for advancing the field of clinical geropsy-
chology, while addressing the importance of advocacy on legislative agenda setting
and policy enactment. Last, the article provides several proposals and directions at
various levels for improving geriatric mental health care delivery.

Enduring Underuse
For years, the rates at which older adults have received mental health services in
this nation have been strikingly low, particularly in the outpatient sector. Data
from the Epidemiological Catchment Area (ECA) Program conducted in the
early 1980s revealed that 4.2% of young–old (65–74 years) and 1.4% of old–old
(75 years) individuals received any mental health treatment compared with 8.7%
of younger (18–64 years) adults (German, Shapiro, & Skinner, 1985). Older adults
were even less likely than their younger counterparts to use specialty mental health
services. Only 0.3% of young–old and no old–old respondents visited a mental
health specialist, whereas 4.1% of younger adults saw a specialty mental health pro-
vider. Moreover, elderly individuals have been found to receive only 2.7% to 4.0%
of clinical services rendered by private-sector psychologists and psychiatrists (Swan
& McCall, 1987; VandenBos, Stapp, & Kilburg, 1981). Underuse is even more
profound in rural regions (Durenberger, 1989; Stefl & Prosperi, 1985).

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 Geriatric Mental Health Policy 䡲 341

In the public sector, underuse of mental health services by elderly individuals is

just as dire, even though the public mental health care system has been specifically
charged by the U.S. Congress with targeting the mental health needs of older adults.
Several studies conducted in the 1970s and 1980s consistently found older adults
to constitute between 4% and 6% of community mental health center (CMHC)
consumers (Flemming, Buchanan, Santos, & Rickards, 1984; General Accounting
Office, 1982; Goldstrom et al., 1987; Redick, Kramer, & Taube, 1973).
Unfortunately, contrary to social, political, and professional developments
that portend a recent increase in mental health care use by older adults, including
greater understanding of mental health and aging, increased Medicare coverage of
mental health services, the recognition of psychologists as independent providers
pursuant to the Omnibus Budget Reconciliation Act of 1989 (Sherman, 1996),
and the development of empirically validated geropsychological treatments (Gatz
et al., 1998), substantial underuse remains. A recent study examining service use
and delivery throughout the Texas public mental health care system found that
only 5% of adults beginning mental health treatment at CMHCs in Texas in
1999 were 60 years old or older, though that age cohort represents one quarter
of the state adult population (Karlin & Norris, 2001). Demmler (1998) similarly
found that older adults continue to use outpatient specialty mental health services
at disproportionately low rates.

Previously Identified Barriers to Mental

Health Services for Older Adults
The limited use of mental health services by older adults is not due to lack of mental
health need. Conservative estimates are that 12% of community-dwelling indi-
viduals age 65 or older suffer from one or more clinically diagnosable mental dis-
orders (Gatz, Kasl-Godley, & Karel, 1996; Regier et al., 1988). Recent reports on
mental illness released by the U.S. Surgeon General (U.S. Department of Health
& Human Services, 1999) and the U.S. Administration on Aging (2001) have esti-
mated that approximately 20% of younger and older Americans suffer from mental
disorders. Rates of subclinical emotional disturbances (particularly depression and
anxiety) have been found to be considerably higher and often greater than the
corresponding rates in younger adults (Blazer & Williams, 1980; Himmelfarb &
Murrell, 1984; Mc-Kegney, Aronson, & Ooi, 1988). Furthermore, the prevalence
of psychopathology in nursing home residents, who are among the least likely to
receive mental health care (Burns et al., 1993; Lombardo, 1994), is between 65%
and 90% (Lair & Lefkowitz, 1990; German, Rovner, Bertner, & Brant, 1992).
Over the last couple decades, various dynamics implicating individual, system,
and policy domains have been cited as contributing to the disproportionately low
use of mental health services by the nation’s geriatric population. These barriers
include stigma toward geriatric mental health held by professionals and the public

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 342 䡲 Handbook of Long-Term Care Administration and Policy

(Gaitz, 1974; Lasoski, 1986), physicians’ underdetection of psychopathology in

older adults (Gatz & Smyer, 1992), the medical community’s overreliance on phar-
macotherapy with older patients (Kisely, Linden, Bellantuono, Simon, & Jones,
2000), physicians’ low referral rates of older patients for psychotherapy (Alvidrez
& Areán, 2002) and limited confidence in the efficacy of geropsychological treat-
ments (Mackenzie, Gekoski, & Knox, 1999), a shortage of geropsychology profes-
sionals (Halpain, Harris, McClure, & Jeste, 1999), older adults’ limited knowledge
of mental health and mental health services (Yang & Jackson, 1998), and restric-
tive legislative policies, namely limited Medicare mental health reimbursement
(Sherman, 1996).
Although these obstacles are significant, they only paint part of the picture. In
addition to the foregoing barriers, discriminatory regulatory policies and adminis-
trative practices have considerably restricted Medicare beneficiaries from receiving,
and practitioners from providing, mental health treatment. In fact, it is in the regu-
latory arena where some of the most considerable constraints to the practice and
provision of geriatric mental health care lie. At the same time, the nature and scope
of regulatory and administrative policies and practices, and the processes underly-
ing their development and revision, have been neglected in the extant literature.
These factors are examined below.

The Role of Regulatory and Administrative Barriers

Restrictive Local Medical Review Policies
The Health Care Financing Administration (HCFA), recently renamed the Cen-
ters for Medicare and Medicaid Services (CMS) as part of an effort to improve
the agency’s image (Centers for Medicare and Medicaid Services, 2001b), is the
regulatory body responsible for managing the Medicare program. In implementing
the Medicare mental health benefit, HCFA and its contractors have restricted psy-
chological services for older adults through inconsistent and limited reimbursement
of claims and, in many cases, through outright preclusion of appropriate services.
CMS administers the Medicare program by contracting with private insurance
companies, known as Medicare carriers and intermediaries. (A list of Medicare car-
riers and intermediaries by state is available at www.cms.hhs.gov/contacts.) Part A
(hospital insurance) claims for mental health services are processed by intermediar-
ies. Part B (physician and outpatient medical insurance) claims for mental health
services are processed by carriers. There are 10 CMS regional offices that oversee
carriers and intermediaries. (A list of CMS regional offices and their respective
jurisdictions is available at www.cms.hhs.gov/about/regions/professionals.asp.)
Medicare carriers administer outpatient mental health care claims. Through their
medical directors, carriers develop policies for what is “medically necessary,” which
is required for a service to be covered by Medicare. These policies are known as
“local medical review policies” (LMRPs). Coverage decisions are based on a specific

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 Geriatric Mental Health Policy 䡲 343

carrier’s LMRP, which must be consistent with clinical science and standard prac-
tice (Centers for Medicare and Medicaid Services, 2003).
Many psychologists, because of overly restrictive LMRPs or narrow interpre-
tations thereof, have been denied coverage for services. Moreover, because of the
decentralized nature of the regulatory system, it is not uncommon for a psycholo-
gist in one state to be denied reimbursement for a claim whereas a psychologist
elsewhere receives reimbursement for the identical service provided in the same
context.
Furthermore, a review of carrier LMRPs by the first author revealed that several
carriers do not have guidelines addressing the provision of psychological services
in nursing homes, leaving psychologists in the dark. The silence of many LMRPs
on this issue renders psychologists vulnerable to claims denials and with limited
recourse to appeal. Moreover, a recent report by the Office of the Inspector General
(OIG) of the Department of Health and Human Services found that several car-
riers had no LMRPs for mental health services (U.S. Department of Health and
Human Services, 2002). Furthermore, some LMRPs that included provisions for
mental health services lacked sufficient detail and specificity, and documentation
requirements for psychotherapy and medication management were often limited
and inconsistent.

Medicare–Medicaid Crossover Restrictions

Indigent older adults are eligible for both Medicare (government health insurance
for the elderly) and Medicaid (government health insurance for indigent persons).
These individuals, also known as “dually eligibles” or “crossover” patients, have
typically been able to receive psychological services under Medicare and would
not be responsible for Medicare deductibles and copayments (usually 50% for out-
patient psychological treatment), which would be covered by Medicaid. However,
in an effort to curtail spending during the sluggish economy, many states have
recently restricted or limited Medicaid crossover payments for psychological ser-
vices (Nelson, 2002). Consequently, copayments have been left unpaid, and many
indigent older adults are not able to receive mental health treatment.

Nursing Home Quality-Indicator Exclusion of Psychotherapy

The provision of psychological services in nursing homes is further limited by the
process used by the federal government to assess the level of quality of care in
skilled nursing facilities. The quality of care provided by nursing homes is assessed
using 24 quality indicators (QIs) that are based on the Minimum Data Set (MDS),
which contain data from mandatory quarterly resident assessments. The QI related
to the treatment of depression (QI 5) provides an incentive for nursing homes to
treat depressive symptomatology with pharmacological means and discourages the

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use of psychotherapy. QI 5 considers only medication as antidepressant therapy.

Thus, a nursing home resident receiving psychotherapy but not medication would
be considered “without antidepressant therapy,” according to the indicator. Nursing
homes, wishing not to be marked as deficient in its care of depressed residents,
therefore have a clear motivation to favor pharmacotherapy over psychotherapy.

Carrier Restriction of Psychological Services

for Patients with Dementia
Perhaps the most egregious example of discrimination and restraint on mental
health treatment of older adults concerns the past policy of many Medicare carriers
to preclude the provision of psychological services to individuals with dementia, on
the basis of the erroneous belief that dementia patients cannot benefit from psycho-
logical interventions. This mentality is unsupported by clinical science, with which,
as noted above, LMRPs and carrier decisions must be consistent. There is growing
research demonstrating the efficacy of various psychological interventions for a mul-
titude of psychological and behavioral conditions, including agitation, aggression,
depression, verbal disruption, wandering, sleep disturbance, and certain cognitive
functions in dementia patients, contrary to the policies of many Medicare carriers.
Reviews of studies evaluating psychosocial interventions for behavioral and psycho-
logical symptoms associated with dementia are available (Burgio & Fisher, 2000;
Opie, Rosewarne, & O’Connor, 1999).
The likely effects of the foregoing regulatory policies and practices are signifi-
cant and pervasive. First, they impede older adults’ access to needed treatment, even
those with Medigap (Medicare supplement) policies because these policies only
take effect and cover the 50% copay requirement for Medicare-approved claims.
Second, payment restrictions and denials, administrative time requirements, audit-
ing procedures, and bureaucratic complexity are significant disincentives for practi-
tioners to serve older adults. Finally, because Medicare sets the tone and establishes
standards that private insurers, employers, and the rest of the private sector follow
(Ourand, 2003), restricting mental health services and limiting reimbursement
send the message that mental illness has little significance in late life and that gero-
psychological treatment is not a priority.

Why the Schism?

For several years, CMS and providers have not been amiable bedfellows. There is cur-
rent consensus among health care professionals and government officials that CMS
has neglected providers’ concerns (Centers for Medicare and Medicaid Services,
2001b; Miller, 2001). The agency’s disposition toward mental health care has been
particularly unfavorable. The recent schism between CMS and the general health
care community may be attributed in significant part to the antifraud and abuse

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 Geriatric Mental Health Policy 䡲 345

zeitgeist within the government agency during the 1990s when the Clinton admin-
istration spearheaded a drive to curtail the exponential rise in Medicare spending.
Efforts to crack down on the wasteful provision of services and the submission of
fraudulent and inflated claims by providers attempting to bilk the Medicare Trust
Fund came at the expense of then HCFA’s relationship with the health care com-
munity. As detailed below, the mental health sector was no stranger to Medicare
fraud and abuse, which likely accounts for much of HCFA’s heightened scrutiny of,
and vigilance toward, mental health care services.
With the enactment of the Omnibus Budget Reconciliation Act of 1990,
Congress expanded Medicare coverage of partial hospitalization (PH) services to
include services provided by CMHCs. Although this was expected to have limited
effect and result in an increase of only $15–$20 million per year, the change led
to an exponential rise in costs. Between 1993 and 1997, Medicare reimbursement
for PH claims increased nearly 500%, from $60 million to $349 million. Aver-
age payments per patient increased 530% during this period (U.S. Department
of Health and Human Services, 1998). Rather than the benefit extending merely
to state sponsored CMHCs established by the CMHC Act of 1963, a spate of
private centers calling themselves CMHCs were created to benefit from the new
PH benefit that previously applied only to hospitals. HCFA failed to realize that
many states do not have CMHC licensure requirements, making it relatively easy
for these entities to set up shop and bill Medicare for PH services in those states.
Furthermore, many unallowable services were billed as PH to Medicare by unscru-
pulous providers. Medicare contractors poorly monitored PH claims and had little
direction from HCFA in doing so. When HCFA eventually caught on, it responded
in stern fashion. In addition to heightening its scrutiny and denial of claims, it shut
down many facilities across the nation. Thus, directly and indirectly, the PH calam-
ity restricted older adults’ access to care. Perhaps most significant, it changed the
way in which HCFA would come to administer Medicare mental health benefits
(Karlin & Norris, 2000).
To add insult to injury, a misleading and unjustifiably scathing report regard-
ing the delivery of psychiatric services in nursing homes was released by the OIG
in January 2001. The report, entitled Medicare Payments for Psychiatric Services in
Nursing Homes—A Follow Up, concluded that 27% of psychiatric services pro-
vided in nursing homes are medically unnecessary (U.S. Department of Health and
Human Services, 2001). Among the shortcomings of the report was the exclusive
determination of what is and is not medically necessary. For example, the report
implied that psychological treatments are inappropriate for cognitively impaired
nursing home residents. This false notion is the same scientifically inconsistent
belief that, as noted above, has led many Medicare carriers to preclude the provision
of psychological services to individuals with dementia. In addition, the report criti-
cized the use of several psychological measures, including the Geriatric Depression
Scale (Sheikh & Yesavage, 1986), with nursing homes residents, though it did not
elaborate on its basis for this conclusion. Furthermore, carrier guidelines on this

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issue and on mental health care reimbursement in nursing homes, in general, were
lacking or nonexistent (U.S. Department of Health and Human Services, 2002).
Unfortunately, the OIG’s report falsely implied that mental health services in
nursing homes are excessive when, in fact, they are in great need but short supply
(Lombardo, 1994). The report also failed to acknowledge the substantial degree of
unmet mental health need in nursing homes. Also unmentioned in the report were
important recent steps by the psychological community to limit unethical practice
in long-term care. For example, standards have been developed by Psychologists
in Long Term Care (Lichtenberg et al., 1998) for the responsible provision of psy-
chological services in nursing homes, and guidelines have been approved by the
American Psychological Association (APA; 2003b) for psychological practice with
older adults. Indeed, the OIG’s efforts to reduce fraud and abuse are important,
although, contrary to its goal of ensuring medically necessary services in nursing
homes, the consequential effects of the report are likely to increase unmet mental
health need following in part from increased coverage surveillance and stringency.

Recent Legislative and Regulatory Developments

In the past few years, there have been a handful of legislative efforts to eliminate the
disparity in Medicare’s coverage of outpatient mental health services, eliminate the
lifetime limit on inpatient mental health care, and extend other mental health ben-
efits, including the Medicare Mental Health Modernization Act of 2000 (S. 3233)
and 2001 (S. 690, H.R. 1522) and the Medicare Mental Illness Nondiscrimination
Act of 2000 (H.R. 5434) and 2001 (H.R. 599, S. 841). Unfortunately, these pro-
posals failed to emerge from committee. The Medicare Mental Health Moderniza-
tion Act was reintroduced in the Senate (S. 646) by Senator Jon Corzine (D-NJ)
and in the House (H.R. 1340) by Representative Pete Stark (D-CA) on March 18,
2003. The bills were last referred to the Senate Committee on Finance and the
House Subcommittee on Health. Senators Olympia Snowe (R-ME) and John Kerry
(D-MA) and Representative Ted Strickland (D-OH) introduced similar legislation,
entitled the Medicare Mental Health Copayment Equity Act of 2003 in the Senate
(S. 853) and House (H.R. 2787) on April 10, 2003, and July 17, 2003, respectively.
Similar to the Medicare Mental Health Modernization Act, this proposal provides
for parity in Medicare’s coverage of outpatient mental health services, but through a
gradual phasing down of the copay from 50% to 20% over 6 years. The Senate bill
was referred to the Committee on Finance, and the House bill was last referred to
the Subcommittee on Health.
In July 2002, Representative Patrick Kennedy (D-RI) introduced in the House
legislation designed to improve mental health care access, service integration, out-
reach, and quality. Entitled the Positive Aging Act of 2002 (H.R. 5077), the bill was
the most expansive piece of legislation of its kind. It called for the development of
implementation projects to integrate psychological screening and treatment services

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 Geriatric Mental Health Policy 䡲 347

at primary care facilities, the establishment of a new federal grant program to sup-
port mental health outreach teams in social service settings serving older adults,
the creation of a new deputy director for geriatric mental health services within
the Center for Mental Health Services and advisory council positions for geriatric
mental health providers, as well as other provisions. The bill, which was referred to
the Subcommittee on Health, was not acted on before the close of the legislative
session. The Positive Aging Act of 2003 was introduced in the House (H.R. 2241)
by Representative Kennedy on May 22, 2003, and an identical bill (S. 1456) was
introduced in the Senate on July 25, 2003, by Senator John Breaux (D-LA). The bills
were referred to the House Subcommittee on Health and the Senate Committee
on Health, Education, Labor, and Pensions, respectively. Another bill designed to
provide for Medicare coverage of prevention services, including screening for depres-
sion, entitled the Medicare Wellness Act of 2003 (H.R. 1860), was introduced by
Representative Carl Levin (D-MI) on April 29, 2003. The bill was referred to the
House Subcommittee on Health.
The failure of significant policy change, including recent legislative proposals, is
undoubtedly largely a consequence of limited mobilization and advocacy. In fact, in
his study on legislative agenda setting, political scientist John W. Kingdon (1995)
found that mental health was the subject least likely to be discussed by health
policymakers and specialists, even though it undeniably deserved much greater
attention. Unfortunately, many psychologists are unaware of public policy issues
affecting older adults and are detached from the legislative process. This passivity
is perplexing and disconcerting in a profession of individuals that epitomize the
very skills of a successful advocate, including analytical proficiency, communica-
tion skills, persuasive abilities, and interpersonal skills. In fact, psychologists have
been conspicuously absent whereas other professions have consistently contributed
to past policy debates, including social work, nursing, medicine, and psychiatry
(see, e.g., Heaney, 2003; Sosi & Caulum, 1983). Furthermore, psychologists often
underestimate their potential political influence. As constituents, experts, and
members of interest groups, psychologists can have significant influence on legisla-
tive agenda setting and on policymakers’ voting decisions (Kingdon, 1995). In fact,
constituents are one of the two most important factors influencing how legislators
vote (Kingdon, 1989).
The limited involvement of professional psychology in recognizing and influenc-
ing geriatric mental health care policy exists not only at the individual or grassroots
level, but also at the organizational and leadership hierarchy. The APA has histori-
cally exerted little effort on legislative and regulatory policy issues relating to older
adults and mental health care delivery. On the other hand, geriatric psychiatry,
represented by the American Association for Geriatric Psychiatry (AAGP), has been
successful in providing coordinated advocacy responses. For example, the Positive
Aging Act of 2002 (H.R. 5077), noted above, was originally initiated by the AAGP,
and its influence was clearly evident in the legislative language of the initial bill,
which excluded psychologists. In addition, the APA has been missing in the past

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 348 䡲 Handbook of Long-Term Care Administration and Policy

among organizations mentioned by members of Congress in hearings or introduc-

tions of Medicare mental health parity (or similar) bills and in letters of support
printed in the Congressional Record, whereas the AAGP, the American Psychiatric
Association, and other medical associations are often prominent (see, e.g., Kerry,
2003). In fact, the medical profession as a whole has historically done a better job
than the psychology profession in responding to managed care and other health
care changes and in initiating and providing coordinated legislative and regulatory
responses. In a recent study examining organizations’ reputations for influence in
health policy, the American Medical Association ranked 2nd among 171 organiza-
tions because of significant grassroots presence (Heaney, 2003). The APA ranked
94th (78th when a more liberal ranking method was applied). Significantly, many
high rankings were more a function of successful grassroots organization than of
financial resources (Heaney, 2003).
More recently, the APA has exhibited greater attention to important policy
issues affecting mental health care for older adults, efforts that have begun to yield
significant dividends. This renewed commitment is reflected in the APA’s hiring of
its first full-time aging issues officer, who was at the center of the advocacy efforts
behind the reintroduction of the Positive Aging Act of 2003 (H.R. 2241; S. 1456)
and the inclusion of new legislative language more inclusive of psychologists. The
experience with the Positive Aging Act is an interesting example of psychology’s past
and present involvement in advocacy for clinical aging issues and the success that
such advocacy (and the pitfalls silence) can bring. A recent legislative development
to improve geropsychology training is another mark of victory and advocacy suc-
cess for the geropsychology community. In December 2001, Congress approved the
creation of the Graduate Psychology Education (GPE) program. The GPE program
is designed to support programs that train health service psychologists working
with underserved populations, including older adults. Beyond additional funding,
the GPE program, and its location in the Bureau of Health Professions, increases
positive recognition of, and legitimacy for, the profession for psychology. Congress
approved $3 million for the GPE program as part of its Fiscal Year 2003 appro-
priations bill. This represents a two-fold increase over the previous appropriation.
Of even greater significance to geropsychology is the fact that $1.5 million of the
appropriation was allocated for geropsychology education and training, as part of
the new Graduate Geropsychology Education Program (GGEP). The passing of this
appropriation is especially noteworthy in that it is the first time Congress has allo-
cated funding specifically for geropsychology education and training. Contributing
to this development was an advocacy campaign spearheaded by the APA Public
Policy Office. This success is an example of the importance of what political scien-
tists call “problem definition” in legislative agenda setting, which involves linking
private problems to public causes and a possible governmental solution (see Stone,
1989). The APA and others helped bring legislative attention to the seriousness of
mental illness in late life and the impending growth of mental health need, as well
as a controllable public cause, namely the shortage of geropsychology professionals.

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A recent development in Medicare reimbursement for health care services has the
potential of transforming the delivery of psychological services to older adults. In
2002, six “Health and Behavior Assessment and Intervention” (H&B) codes were
established, extending the nature and scope of services psychologists may provide
and the circumstances in which they may do so. Psychologists and other health
care professionals bill Medicare for services provided to a Medicare beneficiary
using codes from the Current Procedure Terminology (CPT) system developed by
the American Medical Association and approved by CMS. The six new CPT codes
provide for reimbursement for behavioral, social, and psychophysiological services
to prevent, treat, or manage physical health problems or illnesses, rather than for
the treatment of mental illness or symptoms related thereto. Prior to the H&B
codes, which became effective January 1, 2002, Medicare reimbursement for psy-
chological services required that such services be provided only to individuals with
a mental health diagnosis. The new CPT codes have the potential of greatly increas-
ing older adults’ access to psychological services. They provide particular oppor-
tunities for providing services in residential and institutional facilities, including
nursing homes and hospitals. The new codes cover services for assessment, reas-
sessment, individual intervention, group intervention, family intervention with the
patient present, and family intervention without the patient presence. Significantly,
Medicare reimbursement for services billed under the H&B codes is provided from
funding for medical services and will not reduce funding earmarked for mental
health services. Furthermore, the 50% copay requirement for outpatient mental
health services does not apply to the health and behavior assessment and interven-
tion codes.
In addition to the obvious benefits to the delivery of psychological services the
new codes provide, the creation of them affirms the benefit of biopsychosocial ser-
vices and further certifies that psychologists and other qualified health profession-
als should provide such services. The new codes may also reduce the stigma older
adults attach to seeing a psychologist or other mental health professional. Last, the
H&B codes have the potential of reducing fragmentation of services and increas-
ing interdisciplinary collaboration that can provide psychologists another point
of entry into the care for older adults and, most important, lead to better health
outcomes. The new codes were first published in CPT 2003 (American Medical
Association, 2002).
In a highly significant regulatory development, CMS issued a memorandum
(Transmittal AB-01-135) to its contractors on September 25, 2001, instructing
them to no longer preclude reimbursement for psychological services provided to
dementia patients (Centers for Medicare and Medicaid Services, 2001a). However,
implementation of this instruction must be monitored by the mental health com-
munity because the memorandum specifically stated that contractors may not
install computer edits that result in the automatic denial of services provided to
patients with dementia. Contractors still have considerable discretion in processing
the claims, including the ability to deny such claims.

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Forthcoming regulations will establish important changes to the Medicare

claims appeals process and have the potential to improve the reimbursement pro-
cess for mental health (and medical) services by increasing fairness and accuracy
and decreasing economic and time constraints on providers (67 Fed. Reg. 69312,
2002). Perhaps most significant, the proposed rule establishes “qualified indepen-
dent contractors” (QICs) to conduct reconsiderations of claim determinations made
by contractors in an effort to introduce greater impartiality to the Medicare appeals
process. In an acknowledgement of the reimbursement system’s past imperfections,
CMS has stated that it believes that the establishment of QICs “can result in sig-
nificant improvements in the Medicare fee-for-service appeals system” (67 Fed.
Reg., 69312, 2002). The reduced bureaucracy and increased efficiency and equity
intended by the new regulations can potentially reduce disincentives facing current
and prospective practitioners serving older adults. The changes also offer psycholo-
gists the potential opportunity for greater involvement in the appeals system.
A final development offering potential for improving geriatric mental health
care concerns the findings of the New Freedom Commission on Mental Health,
which was established by President George W. Bush to conduct a comprehensive
study of the U.S. mental health service delivery system, including public and pri-
vate sector providers (New Freedom Commission, 2003). The study is the first
extensive federal study of the nation’s public and private mental health care systems
in nearly 25 years. The interim final report highlighted the significant access dif-
ficulties that limit mental health treatment in the United States, specifically for
older adults. Unfortunately, the final report made little reference to older adults and
lacked specific recommendations for this population. Nevertheless, by identifying
the inadequacies of the mental health care delivery system at the federal level, the
report offers opportunities for action and change that will hopefully be acted on
with input from the geropsychological community. In the words of policy experts,
the report provides a “policy window” (Kindgon, 1995, p. 165).

Future Directions
Despite these developments, there is considerable work that needs to be done at
various levels to reduce barriers to geriatric mental health care. The remainder of
this article provides proposals and strategies to aid psychologists, other advocates
of elderly persons who are mentally ill, and policymakers to improve the state of
geriatric mental health care delivery.
To enhance access and reimbursement for psychological services for older adults,
it is important that psychologists who serve elderly individuals be active advocates
for their clients and their profession at legislative and regulatory levels. Admittedly,
this will require a shift in professional identity that recognizes the important role
psychologists, as agents of change, can have at the macro level (Levant et al., 2001).
Broader level change may seem formidable to psychologists more familiar with

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 Geriatric Mental Health Policy 䡲 351

exerting influence within the confines of the therapy room; however, psychologists
can have significant political influence as individual advocates, constituents, and
members of organized interest groups. Specific legislative advocacy efforts include
promotion of legislation that would eliminate the disparity in Medicare reimburse-
ment for psychological services (e.g., the Medicare Mental Health Modernization
Act, the Medicare Mental Health Copayment Equity Act) as well as reforms that
would enhance funding for geriatric mental health outreach, prevention, research,
and training (e.g., the Positive Aging Act).
Mechanisms for legislative advocacy include individual and organizational letter-
writing campaigns, attendance at town hall meetings, and individual conferences
with legislators. The latter two processes are particularly effective for reducing the
“signal-to-noise” ratio. The signal-to-noise ratio represents the likelihood a constitu-
ent’s message or concern will be perceived by his or her elected official. The degree to
which a concern or request (signal) is recognized by an elected official depends on the
ability of that message to get through the thousands of messages (noise) from other
constituents and interest groups competing for attention (personal communication,
Representative Brian Baird, October 6, 2000). For example, in a town hall meeting,
often convened by elected officials (although sometimes attended by only a handful
of constituents), noise is greatly reduced and signal detection enhanced. This forum
also allows the importance of messages to be better recognized (problem defini-
tion). Furthermore, it puts elected officials on the record, thus promoting account-
ability. Town hall meetings, which are held by elected officials in many localities
throughout the country, are largely unknown to many and, for this reason, provide
ideal opportunities for psychologists and other mental health advocates to relay their
signal. A central database of town hall meetings is maintained by the U.S. Cham-
ber of Commerce. The database is accessible at www.uschamber.com/government/
townhall.htm. In addition, advocates can join the Grassroots Action Information
Network (GAIN) at the same Web site to receive regular e-mail or fax notifications
of upcoming town hall meetings and legislative events in their local community.
Communication of important issues through the popular press can be another effec-
tive method of legislative agenda setting (Levant et al., 2001). The media’s focus
on issues affects legislators’ attention through both direct and indirect channels.
Legislators often follow the mass media (direct influence), and they are influenced
through the media’s effect on constituents (indirect influence; Kingdon, 1989).
Urging local representatives to cosponsor existing or impending legislation is
also an important step to enactment. Moreover, in addition to soliciting support
and cosponsorship, thanking elected officials for introducing favorable legislation is
important, because it lets them know that their actions are recognized and valued.
Involvement in the drafting and revision of legislation and advocacy for legislative
language that is favorable toward, and inclusive of, psychologists, are important
and effective ways for professional psychology to influence and effect change.
In addition to advocacy at the individual policymaker level, direct advocacy at
the Congressional committee level is essential. Committees (and subcommittees) are

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typically the first main hurdle in the legislative process and, as such, act as gatekeep-
ers. If a committee fails to consider a piece of legislation, which is common, the bill
is effectively defeated. Committees may also reshape the bill through markups, hold
hearings, and debate legislation. Advocacy efforts include requesting legislators to
vote for or against a bill and supporting or objecting to legislative language included
in the bill in committee markups. Constituents of committee or subcommittee
members can have particular influence. Methods of contact include letters, e-mail
messages, telephone calls, and in-person meetings. Discussions with Congressional
staffers, particularly legislative directors, are also important because staffers typically
have significant influence in setting and shaping a legislator’s policy agenda and
positions. Advocates can identify their House representatives and Senators and even
send direct correspondence at www.house.gov and www.senate.gov. It is also impor-
tant that psychologists, as well as other mental health professionals, urge professional
organizations (e.g., APA, state associations) to advocate for aging-related issues and
hold these organizations accountable for doing so. APA has pledged continued sup-
port in advocating on behalf of aging issues (DiGilio & Levitt, 2002). State psycho-
logical associations are also good vehicles for advocacy, though, unfortunately, they
have not historically been highly involved in advocacy on aging-related issues.
It is important to note that interest groups in and of themselves often have lim-
ited influence on policymaking. The most effective way for interest groups, such as
the APA, to exert influence on a policymaker is to engage in advocacy through the
legislator’s home constituency. In addition to connecting with local constituents,
another effective strategy of influence is to use members of Congress sympathetic
to or supportive of mental health issues to persuade others. Legislators often look to
their congressional colleagues in deciding if and how to act on an issue (Kingdon,
1989). There are several psychologists and friends of psychology in Congress today
who could serve as effective advocacy agents.
Practitioners can also have influence by becoming familiar with and involved in
regulatory policymaking and administrative procedures. The time appears ripe for
improving regulatory practices relating to geriatric mental health service delivery.
Since taking its new name, CMS has been working to revamp its image and “bring
a culture of responsiveness to the Agency” (Medicare Regulatory and Contracting
Reform, 2001). As part of this effort, CMS has pledged to be more provider friendly.
One method by which it is trying to accomplish this mission and increase providers’
role in shaping regulatory polices and administrative procedures is through open-
door telephone meetings. Among other benefits, the open-door forum is a good way
for providers to put concerns on the radar screens of influential government officials
and promote accountability. A meeting schedule and list of topics, as well as informa-
tion on how to participate, can be found at www.cms.gov/opendoor/schedule.asp.
To promote service access and reimbursement for mental health services to older
adults, it is important that practitioners be knowledgeable of Medicare reimburse-
ment and relevant decision making policies and respond quickly and assertively
to unfavorable or unjust decisions. Because of improper denials and restriction of

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 Geriatric Mental Health Policy 䡲 353

appropriate services by Medicare carriers, as well as ambiguous and often medically

inconsistent LMRP provisions, carriers should be held accountable by CMS, prac-
titioners, and provider organizations for ensuring that their mental health medi-
cal review policies are comprehensive, clear, and consistent with clinical science.
CMS has instructed carriers to reduce ambiguities in their medical review policies,
although there is little evidence that this guidance has had any effect. Policies gov-
erning outpatient psychological services are typically found in the LMRP section
entitled “Psychiatry and Psychology Services.” Centralized access to all LMRPs is
now available through the Medicare Coverage Database, a user-friendly Internet
resource recently developed by CMS, greatly simplifying the process for obtaining
LMRPs. The database (available at www.cms.hhs.gov/mcd/) allows one to search
by state and coverage topic (e.g., outpatient mental health). Practitioners can also
obtain LMRPs by contacting their local Medicare carrier or visiting their carrier’s
Web site. Moreover, it is imperative that carriers consider the views and experi-
ences of psychologists, who have been absent from the LMRP development process.
Carriers have been required for several years to develop LMRPs in an open forum
and to periodically review these policies; psychologists, however, have been largely
left out of this development phase. Therefore, psychologists are encouraged to initi-
ate efforts, not only to become knowledgeable of their carrier’s LMRP but also to
be actively involved in LMRP development and revision phases, involvement that
can and does have important impact. Proposed draft LMRPs can also be obtained
through the Medicare Coverage Database.
Practitioners and others are encouraged to request elaboration of vague local
medical review policies and appeal provisions that are inconsistent with clinical
standards and quality care. Psychologists can appeal inappropriate, inconsistent, or
unclear LMRP provisions by writing to the carrier medical director (CMD), with
copies sent to the administrator of the CMS regional office, the executive director
of the state psychological association, and the APA Practice Directorate. A letter
written by the first author appealing a highly restrictive LMRP for psychiatry and
psychological services provided in nursing homes in Wisconsin, Illinois, Michigan,
and Minnesota was included as a model in a LMRP toolkit recently developed
by the APA and is also available on request of the first author. The toolkit can be
accessed at: www.apa.org/pi/aging/lmrp. Furthermore, it is important that state
associations establish relationships with local carriers and provide comments on
new and revised LMRPs. Practitioners are also advised to respond to claims denials
for services they deem appropriate by writing an appeal to the Medicare carrier, first
examining the carrier’s LMRP for provisions that may relate to the denied service.
As part of its commitment to be more responsive to providers’ concerns, CMS
has required that carriers establish a standard reconsideration process in which practi-
tioners and beneficiaries may request a revision to an LMRP (Centers for Medicare
and Medicaid Services, 2002, Ch. 13, §11). As part of this process, carriers are
required to place on their Web site information describing the reconsideration pro-
cess and instructions for submitting reconsideration requests.

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The monitoring and involvement of psychologists (and state and national asso-
ciations) in the development and implementation of regulatory policies will be par-
ticularly important as the new Health and Behavior CPT codes are implemented
and to ensure that the new CMS policy disallowing the automatic preclusion of
psychological services provided to patients with dementia is appropriately imple-
mented by carriers. In light of HCFA’s past experience with the implementation
of new benefits (e.g., the PH benefit), vigilance and communication are essential.
In fact, there have already been problems with the implementation of the new
H&B codes. Some carriers have denied reimbursement to psychologists for services
billed under the new codes because of the erroneous assertion that psychologists
are not eligible to use them. The APA Practice Directorate has been working with
CMS and local Medicare carriers to resolve inappropriate denials under the codes
(American Psychological Association, 2003a).
It is also important that the psychology community monitor and respond to
proposed changes to Medicare regulations. Before final implementation, federal
regulations are published as a proposed rule in the Federal Register. In the proposed
rule, the issuing agency solicits comments from providers and other interested
parties, with instructions and a timeframe for submitting feedback. Professional
psychology therefore has an opportunity to help shape final regulations during
the comment period to ensure that they are inclusive of and favorable toward the
profession. The Federal Register can be accessed at www.gpoaccess.gov/nara/index.
html. If advocacy and oversight are to be successful, they must have collaboration
and coordination. According to Kingdon (1995), “Part of a group’s stock in trade in
affecting all phases of policymaking—agendas, decisions, or implementation—is
the ability to convince government officials that it speaks with one voice and truly
represents the preferences of its members” (p. 52). Unfortunately, collaboration and
coordination have been lacking in the psychology profession. Professional psychol-
ogy is a highly disjointed community. Fragmentation has been especially prevalent
among practitioners serving older adults, a problem identified by Niederehe, Gatz,
Taylor, and Teri (1995): Clinical geropsychology will not advance substantially as
a field until other organizational structures are developed with greater potential
for transforming the current professional context, in which geropsychologists are
isolated from each other, strapped for resources, and struggling just to maintain a
toehold. (p. 144)
As noted above, the limited coordination in clinical geropsychology is not seen
in many related professions. Improving coordination, communication, and cohe-
sion among psychologists serving older adults (and between professions, including
geriatric psychiatry) would yield significant effects on reducing social, policy, and
system barriers to care and benefit the professional image of psychology.
Collaboration among young and seasoned professionals in mental health and
aging is also important for developing and implementing a coordinated research
agenda and procuring necessary funding. In a significant step along these lines,
the National Institute of Mental Health (NIMH) recently released a program

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 Geriatric Mental Health Policy 䡲 355

announcement (PA) entitled Research on Mental Illnesses in Older Adults (National

Institute of Mental Health, 2002). The PA is the most expansive of its kind. It
delineates specific research questions in the areas of risk factors and basic research,
diagnosis, treatment, prevention and services, mood disturbance, and bioethics. In
addition, the NIMH recently established an aging research consortium to increase
research on mental health in late life, enhance coordination and collaboration of
aging research within and outside of NIMH, and improve training in research on
mental illness and late life.
Furthermore, the fact that older adults lack knowledge of mental health and
mental health treatment should not be surprising in light of the disconnected ser-
vice delivery infrastructures in this nation and the limited degree of mental health
outreach provided to the elderly. In its investigation of the Texas and New York
public mental health systems, the GAO found that no CMHC officials indicated
that they engaged in any outreach efforts to attract elderly clients (General Account-
ing Office, 1982). The fragmented mental health care delivery system was identified
as a key obstacle to quality mental health care by President Bush (Bush, 2002).
The Positive Aging Act of 2003 (H.R. 2241; S. 1456), discussed above, would help
close the service gap, if enacted. In addition to limited outreach and service coor-
dination, even less effort is devoted to mental health prevention in late life, even
though psychological risk factors for mental and physical illness in late life are sig-
nificant (Smyer, 1995). Mental health prevention strategies in late life could have
profound social, economic, emotional, and health benefits. There is a growing body
of research demonstrating the impact of psychological factors and early intervention
on physical health and independence in younger and older adults (e.g., Lebowitz &
Pearson, 2000; Ritchie, Touchon, & Lendesert, 1998; Smyer, 1995; Smyth, 1998).
This research suggests that, among other consequences, psychological interventions
could delay or perhaps prevent the onset of physical and psychological illness, extend
the period of independent living, and delay or render unnecessary nursing home
placement. One randomized study of counseling and support versus usual care for
family caregivers of patients with Alzheimer’s disease found that the intervention
delayed patients’ nursing home admission by over 300 days (Mittelman, Ferris,
Shulman, Steinberg, & Levin, 1996). Accordingly, greater efforts to increase late-
life mental health outreach (including nontraditional case finding), service coordi-
nation, and prevention should be taken by federal agencies (e.g., CMS, Substance
Abuse and Mental Health Services Administration, NIMH), professional organi-
zations (e.g., APA, AAGP, American Medical Association, American Psychiatric
Association), and health care professionals, including incorporating mental health
prevention into Medicare. A campaign to increase medical prevention benefits under
Medicare is currently being spearheaded by the Partnership for Prevention, a national
nonprofit organization dedicated to preventing disease and promoting health.
Local area agencies on aging (AAAs) could play an important role in mental
health care outreach, education, and referral. Established by the Older Americans
Comprehensive Services Amendments promulgated in 1973, AAAs provide

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 356 䡲 Handbook of Long-Term Care Administration and Policy

information and access services, in-home and community-based services, and hous-
ing and elder rights services to elderly individuals throughout the country. AAAs
have had limited involvement in mental health outreach and referral, though they
are well suited to serve in this capacity. In fact, Lebowitz, Light, and Bailey (1987)
found that coordination between CMHCs and AAAs was associated with higher
mental health care use by older adults. Accordingly, linkages between AAAs and
community mental health resources should be further developed.
To reduce the unmet mental health need in nursing homes, it is essential that
the favoring of pharmacotherapy over psychotherapy following from the narrow
method of QI 5, discussed earlier in this article, be eliminated. Specifically, the QI
should be revised to capture both treatments. There is a simple method for making
this change. The MDS includes an item that assesses whether residents receive psy-
chotherapy (Item P1be). Including this item in the calculation of QI 5 would count
both psychotropic medication and psychotherapy as antidepressant therapy.
Finally, greater education of professionals, paraprofessionals (e.g., nursing assis-
tants), and the public, including older adults, family members, and other potential
referral sources, regarding the nature and treatment of mental illness is essential. One
method for increasing physicians’ knowledge, detection, and referral of mental ill-
ness in older adults that offers considerable potential concerns a recent effort within
the profession of child clinical psychology to do the same with children. In 1996,
the American Academy of Pediatrics developed a mental health classification system
for children and adolescents, compatible with the Diagnostic and Statistical Manual
of Mental Disorders, fourth edition (DSM–IV; American Psychiatric Association,
1994), for use by primary care physicians, known as the Diagnostic and Statistical
Manual for Primary Care (DSM–PC) Child and Adolescent Version (American Acad-
emy of Pediatrics, 1996). In addition to diagnostic information, the DSM–PC
includes additional information such as diagnostic vignettes to help physicians make
more informed diagnoses and provide referrals when necessary. Furthermore, the
project advisory committee identified training faculty to teach pediatric residents
how to use the manual. Using this initiative as a model, geropsychologists and the
medical community should consider developing similar resources to facilitate non–
mental health specialists’ detection and diagnosis of mental illness in older adults
and provide appropriate referrals. In a general sense, the foregoing initiative suggests
that geropsychologists could learn from the experiences of child psychologists, as the
two professions confront many similar issues in service delivery. Accordingly, greater
collaboration between the two professions should be explored.
Widespread public education campaigns should be implemented to improve
the public’s knowledge of mental illness in elderly persons and the availability of
effective treatments for them. A recent major public education campaign initiative
to educate older adults and family members about Alzheimer’s disease (AD) is a
model for this proposal. The initiative, known as the IDentify Alzheimer’s Disease
(ID.A.D.) Resource Kit (National Family Caregivers Association, 2002), is designed
to educate older adults and families on recognizing and managing early symptoms

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 Geriatric Mental Health Policy 䡲 357

of AD and how to seek treatment. The toolkit is sponsored by the National Family
Caregivers Association and the Novartis Pharmaceuticals Corporation, and it is
free of charge to the public. The initiative, which has been publicized through
national radio, print media, and the Internet (www.AlzheimersDisease.com), is
the most aggressive and widespread of its kind. It offers promise for increasing
the diagnosis and treatment of AD and related disorders. Similar public education
campaigns should be developed to increase awareness and treatment of depression,
anxiety, and other mental disorders in late life.
In conclusion, this article provides for a more complete understanding of the
restrictions to geriatric mental health care use and provision and offers several
micro- and macro-level processes and proposals for effecting change. It is hoped
that this article will stimulate individual advocacy and collective action to improve
mental health service access and availability. With greater knowledge and a broader
conceptualization of and commitment to change can come substantial dividends to
both the profession of psychology and the clients (and potential clients) we serve.

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 Chapter 18

Private Financing for

Long-Term Care

Galen H. Smith and William P. Brandon

Contents
Introduction ............................................................................................363
Economic Principles Related to Private Long-Term Care Insurance.........365
An Illustration of Risk Pooling ................................................................367
Private Long-Term Care Financing Strategies ..........................................369
Risk-Pooling Strategies ........................................................................369
Individual Asset Accumulation Strategies............................................375
Barriers to Private Long-Term Care Insurance Coverage..........................378
Trends and Recent Developments in the Private Financing
of Long-Term Care ..................................................................................380
Government Interventions in the Private Long-Term
Care Insurance Market ............................................................................380
Policy Considerations to Improve Private Long-Term Care Financing .....382
References ................................................................................................383

Introduction
In 2005, an estimated $206.6 billion was spent on long-term care services in
the United States (Georgetown University, Health Policy Institute, 2007). Med-
icaid represents the greatest proportion of total long-term care expenditures

363

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 364 䡲 Handbook of Long-Term Care Administration and Policy

50 48.9
Percentage

20.4
18.1
7.2
0
Medicaid Medicare Out-of-pocket Private
insurance

Figure 18.1 Long-term care financing sources in the United States (2005).
(Adapted from Georgetown University, Health Policy Institute. 2007. National
Spending for Long-Term Care. Fact Sheet. Washington. Retrieved April 4, 2007,
from http://ltc.georgetown.edu/pdfs/natspendfeb07.pdf.)

(48.9 percent), paying for about one-third of long-term care spending on the elderly
in 2004 and about 60 percent of long-term care spending for nonelderly persons
with disabilities in 1998 (Congressional Budget Office, 2004).* The Medicare
program, with its limited coverage of nursing home care and home healthcare,
finances about 20 percent of total long-term care spending. Medicare is followed
closely by out-of-pocket spending, which constitutes 18.1 percent of total long-
term care expenditures. Private health and long-term care insurance accounts for
only 7.2 percent of expenditures (see Figure 18.1). Despite the relatively low cur-
rent market share of private insurance in paying for all forms of long-term care,
recent evidence indicates that the private market is growing (America’s Health
Insurance Plans, 2004).
These descriptive statistics reflect the disparate nature of long-term care financ-
ing in the United States, where the combination of private and public mechanisms
has historically been inadequate in terms of pooling risks or spreading costs over
time (Rivlin et al., 1988). The important role that private options can play in financ-
ing long-term care is underscored by the fact that most individuals who enter nurs-
ing homes do not, at least initially, qualify for financing by public programs such
as Medicaid. Financing of long-term care through the Medicaid program is means-
tested; individuals with income or asset levels in excess of a critical threshold level
fail to qualify. In contrast, Medicare-related financing of long-term care was origi-
nally designed for convalescence posthospitalization, and therefore requires individ-
uals to enter a skilled nursing facility (SNF) directly from a hospital. The emphasis

* Because a large proportion of long-term care for the nonelderly disabled is financed by the
Medicaid program, the remainder of the chapter will focus largely on the private financing of
long-term care for individuals aged 65 or above.

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 Private Financing for Long-Term Care 䡲 365

on home and community-based services as an alternative to nursing home care and

its public financing developed after the enactment of Medicare in 1965.
In the future, likely constraints on public budgets may further compromise the
provision of public long-term care financing for those individuals who do qualify
for public assistance. These considerations suggest that when it comes to long-term
care, the United States will need to continue for the foreseeable future to rely on
private risk-sharing mechanisms to provide financial security and well-being. Most
experts concede that private insurance of long-term care has so far been underuti-
lized as a strategy to protect an individual’s wealth against the pernicious effects
of costly episodes of long-term care. However, inherent structural problems, which
may be unavoidable, constitute significant barriers.*
This chapter examines several facets of private long-term care insurance in the
United States and the reasons for its relative insignificance. Initially, the focus is
on economic principles such as market failure, incomplete markets, externalities,
moral hazard, and adverse selection that characterize insurance markets. A brief
discussion of risk pooling is included because a number of the existing and potential
private funding mechanisms are based on this important concept. Next, the vari-
ous structural components of private long-term care risk sharing are identified and
described, with attention to their strengths and weaknesses and how each might
improve the portfolio of private long-term care funding alternatives. Subsequent
portions of the chapter describe emerging trends within this market and examine
ways in which access and affordability of private long-term care financing might be
improved to create incentives for expanded consumer participation.

Economic Principles Related to Private

Long-Term Care Insurance
Friedman (2002, p. 593) defines market failures as “situations in which ordinary
market coordination does not lead to an efficient (perfectly competitive) equi-
librium.” Weimer and Vining (2005) and Friedman describe at least four com-
mon types of market failure: public goods, externalities, natural monopolies, and
information asymmetries (also referred to as imperfect information). Rosen (2002)
explains the remarkable efficiency and productivity that markets provide in his
discussion of the first fundamental theorem of economics, arguing that a market

* The proportion of long-term care services paid by private insurance specifically for long-term
care compared to other forms of private insurance (i.e., private health insurance and automo-
bile insurance) is quite low. Only $1.4 billion in claims was paid by private long-term care
insurance policies in 2002 (Desonia, 2004). In contrast, approximately $16 billion in long-
term care services was covered by all private insurance policies in 2003 (Kaiser Commission
on Medicaid and the Uninsured, 2005).

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economy best promotes social welfare because individuals will only make Pareto-
optimal exchanges.* Market failures arise when the two underlying assumptions
associated with the theorem are compromised. The first assumption states that
all producers and consumers act as perfect competitors. However, the presence of
“market power,” where some individuals or firms engage in “price-making” behav-
ior (monopsony or monopoly) instead of the “price-taking” behavior that charac-
terizes competitive markets, undermines this assumption. The second assumption
necessary to realize the first fundamental theorem of welfare economics maintains
that a market exists for each and every commodity. “Nonexistence of markets”
violates this assumption and leads to market failure.
Few would dispute that a market for privately funded long-term care insurance
exists, however anemic. But, as suggested earlier, it has so far failed to provide a
meaningful alternative to the public sources of long-term care financing. Why?
According to Weimer and Vining (2005), “incomplete insurance markets” arise
from voluntary (noncompulsory) participation in insurance markets and from sev-
eral other factors including

䡲 Moral hazard, or “the reduced incentive that insurees have to prevent com-
pensable losses” (p. 121)
䡲 Adverse selection, where high-risk enrollees are attracted to insurance and low-
risk enrollees decline insurance coverage, resulting in only those with the
highest risk choosing to remain covered
䡲 Limited actuarial experience and therefore uncertainty regarding the cost of
claims, which will cause insurers to charge very high premiums to cover the
unknown probability of high loss ratios

The market for long-term care insurance suffers from each of these handicaps.
Brandon (1989) describes distorted incentives in the Medicaid program that pro-
mote the use of its nursing home coverage features as a form of public catastrophic
nursing home insurance for the middle-class elderly. The existence of Medicaid
long-term care financing as a “free” substitute to private insurance after individuals
“spend down” to Medicaid eligibility thresholds supports the role of moral hazard
in establishing an incomplete insurance market. Adverse selection also occurs in
the private long-term care insurance market, largely due to low take-up rates by
younger people; individuals tend to postpone the decision to purchase insurance
until later in life when they are at greater risk of requiring long-term care services.
Additionally, Weimer and Vining (2005, p. 254) point to suboptimal purchasing
decisions by consumers as a result of “biases inherent in the heuristics commonly
used to estimate and interpret probabilities.” This point becomes apparent in terms

* A Pareto-optimal exchange is one in which no party is made worse off than before the exchange
and one or more are better off. Side payments by winners to losers that bring the latter back to
their initial position are a common way of achieving Pareto-optimality.

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 Private Financing for Long-Term Care 䡲 367

of an individual’s inability to assess or predict accurately his or her risk for needing
long-term care services, thereby supporting the imperfect information argument.
All of these factors support the argument for categorizing the private long-term care
insurance market as incomplete, if not a failure.
The outcomes associated with incomplete insurance markets often entail nega-
tive externalities* imposed on society because of losses suffered by uncovered indi-
viduals. These negative externalities may serve as the basis for public intervention
expressed either directly by government provision of insurance or indirectly in the
form of industry regulation. Feder (2001) argues that public sector interventions
are necessary because reliance on personal saving is inefficient (people will save
either too much, too little, or not at all) and the ability of private insurance to
spread risk is limited (if few purchase it). However, Pauly (1990, p. 167) argues that
the nonpurchase of private long-term care insurance is rational behavior and that
“the mere absence of coverage does not necessarily imply the existence of a problem
of market failure requiring government intervention.”

An Illustration of Risk Pooling

From an individual’s perspective, there is great uncertainty as to whether or not
he or she will require long-term care in his or her lifetime and the extent of the
costs associated with those services. The aggregate risk and concomitant costs can
be more accurately predicted, however, when various populations or subgroups
become the unit of analysis. Several techniques described in this section explain
the measurement and evaluation of risk. This brief discussion establishes a baseline
understanding of the principles that are employed by several of the private long-
term care financing strategies and outlines the economic barriers that may limit the
provision of and accessibility to these goods and services.
By definition, uncertainty is associated with more than one possible outcome.
One way of measuring the effects of a number of possible outcomes is to calcu-
late the “expected value” of all possible outcomes. Pindyck and Rubinfeld (2001)
analyze expected value in terms of weighted probabilities of values associated with
possible outcomes and illustrate it using the following convention:

E(X ) = Pr1X1 + Pr2 X 2 + · · · + PrnXn

where
E(X ) = sum of the expected value of all possible outcomes
Pr1X1 = probability of outcome 1 multiplied by the value of outcome 1
Pr2 X 2 = probability of outcome 2 multiplied by the value of outcome 2
PrnXn = probability of outcome n multiplied by the value of outcome n

* A negative externality occurs when the action of one party imposes costs on another party that
are not accounted for by the market price (Pindyck and Rubinfeld, 2001).

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One of the cornerstones of private long-term care financing is the concept of “risk
pooling.” The mechanics of risk pooling are illustrated by the following hypothetical
example. Suppose that each of two households has wealth totaling $100,000 and
that each household has a 10 percent probability of total loss of wealth (wealth = $0)
due to an extended stay in a long-term care facility. If the households bear the risks
independently, the expected value of wealth for each household is $90,000 because
there are only two possible outcomes: $100,000 with a probability of 0.9 and $0 with
a probability of 0.1.

E(X ) = [($100,000)0.9 + ($0)0.1] = $90,000

If the individual households decide to pool their risks, then any losses from an
extended stay in a long-term care facility will be evenly divided between them.
Under this arrangement, there are three possible outcomes:

䡲 Neither of the households experiences a loss from the extended long-term

care facility stay (average wealth for the two households = $100,000 each)
䡲 Both the households experience total loss of wealth from the extended long-
term care facility stay (average wealth for the two households = $0 each)
䡲 One household has a total loss of wealth and the other does not (average
wealth for the two households = $50,000 each)

The probability that neither of the households experiences a loss of wealth from the
extended stay in a long-term care facility is 0.81(0.9 × 0.9); the probability that both
the households experience a total loss of wealth from the extended long-term care
facility stay is 0.01(0.1 × 0.1); and the probability that one household experiences
no loss of wealth and the other experiences a total loss is 0.18(1 − 0.81 − 0.01).
The probability of extreme outcomes declines as a result of the risk-pooling arrange-
ment, yet the expected value of wealth remains the same at $90,000:

E(X ) = [($100,000)0.81 + ($0)0.01 + ($50,000)0.18] = $90,000

E(X ) = [$81,000 + $0 + $9,000] = $90,000

The risk costs are reduced even further as more households join the pool. In practi-
cal terms, this example means that families can reduce their chances of major losses
by pledging to pay some of the costs of a risk pool that guarantees large numbers of
individuals against large-scale losses.*

* See Friedman (2002, pp. 220–243) for a comprehensive analysis of risk control and risk-
shifting mechanisms under uncertainty.

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 Private Financing for Long-Term Care 䡲 369

Private Long-Term Care Financing Strategies

A handful of strategies have been either implemented or proposed to provide long-
term care financing within the private sector. These strategies are broadly classified
into two major categories (Rivlin et al., 1988; Alecxih and Kennell, 1994). The first
one consists of financing mechanisms that involve risk pooling and include pri-
vate long-term care insurance, continuing care retirement communities (CCRCs),
and social/health maintenance organizations (S/HMOs) and the Program of All-
Inclusive Care for the Elderly (PACE). Risk-pooling strategies involve “mechanisms
by which individuals spread the costs of incurring a risk among all persons who
contribute to the pool” (Alecxih and Kennell, 1994, p. 2).
The second broad category involves an individual’s accumulation of assets and
includes individual medical accounts (IMAs), home equity conversions (HECs),
and accelerated life insurance benefits. Individual asset accumulation strategies
encourage people to save or use each household’s own existing assets to finance
current or future long-term care needs. Each of these specific risk-pooling and indi-
vidual asset accumulation mechanisms is discussed in detail in the following sec-
tions on Risk-Pooling Strategies and Individual Asset Accumulation Strategies, and
is summarized in Table 18.1.

Risk-Pooling Strategies
Friedman (2002, p. 235) tells us “Risk-pooling occurs when . . . individuals, each
facing a risk that is independent of the risks faced by others, agree to share any
losses (or gains) among themselves.” Risk-pooling strategies are based on the “law
of large numbers,” a theoretical premise, which states that risk is minimized when
the average outcome of many similar events can be predicted, despite the random
and unpredictable nature of a single occurrence (Pindyck and Rubinfeld, 2001).
As noted earlier, the specific risk-pooling strategies for financing long-term care
include private long-term care insurance, CCRCs, and S/HMOs, including their
recent iteration as PACE.
Long-term care insurance represents the predominant form of private financing
of long-term care. It is a mechanism by which individuals pay premiums to create
financial reserves that are used to pay the costs of those individuals in the pool who
actually end up needing long-term care (Alecxih and Kennell, 1994). In addition
to its primary effect of providing financial support for individuals in need of long-
term care services, long-term care insurance may also be beneficial for those who do
not yet require services by relieving anxiety and the need to plan further for future
catastrophic needs. The broad benefits conveyed by long-term care insurance are
the primary source of its social value.
Long-term care insurance is distinguished from health insurance in two distinct
ways. The former provides coverage for extended care services (at least 12 months)
and covers services not provided in acute care settings. Nursing home stays and

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 370 䡲 Handbook of Long-Term Care Administration and Policy

Table 18.1 Summary of Private Long-Term Care Financing Mechanisms

Risk-Pooling Strategies
Private long-term care Individuals pay premiums to create financial reserves
insurance that are used to pay the costs (up to the specified
limits) of those individuals in the pool who actually
end up needing long-term care
CCRCs “Residential campuses consisting of independent
(analogue: NORCs) apartments and cottages and a variety of social and
health services in one setting” (Rivlin et al., p. 83)
S/HMOs and PACE Use case-managed utilization controls and other
restrictions in acute and long-term care to generate
cost savings designed to reduce premiums and
improve affordability of long-term care services for
the low-income elderly; keep residents in the home
and community and out of SNFs or intermediate care
facilities (ICFs)
Individual Asset Accumulation Strategies
IMAs Create a form of savings account, with deposits
earmarked for long-term care services or the
purchase of private long-term care insurance
HECs Elderly homeowners transfer the equity in their
homes into an income stream that enables them to
purchase long-term care insurance or long-term care
services
Accelerated life Convert existing universal or whole-life insurance
insurance benefits and policies into long-term care coverage
riders to life insurance

Sources: Adapted from Rivlin et al., Caring for the Disabled Elderly: Who Will Pay?
The Brookings Institution, Washington, 1988; Alecxih, L. and Kennell, D.,
The Emerging Private Financing System, U.S. Department of Health and
Human Services and Lewin/ICF, Washington, 1994.

home care visits, especially for supportive services, comprise the services not covered
in acute care settings.
Most of the long-term care insurance products sold in today’s marketplace are
indemnity products that vary greatly in terms of cost, covered benefits, and eli-
gibility criteria. Long-term care insurance policies typically pay for at least two
years of nursing home coverage and involve a deductible period with no coverage
for the first 20–100 days. The premiums for most long-term care insurance poli-
cies are based on the age of the individual purchaser and can be either “issue age”
or “attained age” premiums (Alecxih and Kennell, 1994). Issue age premiums are
charged based on the age at which an individual initially purchases the insurance,

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whereas attained age premiums represent premiums that alter with the insured
individual’s age. Both types of premiums are susceptible to modifications based
on the experience of others in the risk pool. Premiums may increase if more claims
than expected are incurred.
The private long-term care insurance market of the twenty-first century is sub-
divided into two broad categories. These include the “individual market,” where
the insurance policies are sold by insurance companies directly to individuals or
through group associations that are individually underwritten, and the “group
market” (Johnson and Uccello, 2005; Alecxih and Kennell, 1994; America’s Health
Insurance Plans, 2004). Most private long-term care insurance policies are sold
through the individual market (America’s Health Insurance Plans, 2004).
Employer-sponsored plans are examples of group insurance. Few employers
actually subsidize plan premiums; therefore, most employees who choose long-
term care coverage bear the full cost of the policy. However, premiums paid by
participants in employer-sponsored plans are usually smaller, due to their lower
administrative costs and the younger age of the typical purchaser. Another attrac-
tive feature is that employer-sponsored group plans offer long-term care insurance
to the employee’s spouse and parents as well. Policies sold in the individual market
continue to represent the vast majority of total long-term care insurance coverage
(Singh, 2005), but the growth of employer-sponsored plans in the group market has
been impressive in recent years.
Companies that provide private long-term care insurance products offer poli-
cies that cover a wide range of services. Thirteen insurance providers accounted for
approximately 80 percent of the private long-term care insurance policies sold in
2002, and all 13 companies offered plans that covered nursing home, assisted living
facility, home healthcare, hospice care, and alternate care services. Case manage-
ment services, homemaker or chore services, restoration of benefits, reimbursement
of bed reservations in long-term care facilities, coverage of some medical equip-
ment, survivorship benefits, and caregiver training were other common benefits
(America’s Health Insurance Plans, 2004). All plans covered Alzheimer’s disease
and were “guaranteed renewable,” meaning that the insurer is required to renew
the policy for a specified amount of time, regardless of changes to the health of the
insured. All companies offered plans that have inflation protection at an annual
5 percent compounded rate as well as a “nonforfeiture” benefit, which promises
return of the value of the premiums paid, even if the insured ceases to pay on the
coverage.*
The administrative and overhead costs of private long-term care insurance prod-
ucts are generally higher on a per unit basis compared to those of health insurance
policies. Health insurance plans benefit from economies of scale that are unlikely

* Because long-term care insurance coverage with affordable premiums generally requires the
insured to take out the coverage at a relatively young age, it is quite common for individuals to
cease paying premiums if their economic circumstances change.

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 372 䡲 Handbook of Long-Term Care Administration and Policy

to be matched by the small number of private long-term care insurance policies

currently in force. The higher administrative costs of long-term care insurance lead
to higher premiums, which adversely affect affordability and the uptake rates of
private long-term care insurance.
Another problem with long-term care insurance is inherent in the fundamental
structure of this kind of insurance. Long-term care insurance creates the potential
for insurance companies to seek immediate financial success and sacrifice long-term
financial stability or even solvency. Unlike health insurance, which typically func-
tions as prepayment for ongoing consumption of acute healthcare that is covered
by that year’s premium, affordable long-term care insurance depends on healthy
insureds who pay premiums for years before claims are likely. Especially if intense
competition leads insurers to shave long-term care profit margins to gain market
share, insurers may prosper over the years when healthy insureds are paying premi-
ums without receiving any benefits. However, this strategy leads to losses in later
decades when high cost claims begin to accumulate.
One way to avoid such losses is to deny or delay paying benefits when insureds
require long-term care. Achieving cost savings by avoiding payment on valid poli-
cies is easier in the relatively new long-term care insurance market than in more
established insurance sectors: first, the typical claimant is impaired and likely to die
in a short period of time; and second, state insurance commissioners (the relevant
government regulators) are not greatly concerned with this relatively small portion
of the insurance industry. A recent investigation in The New York Times reveals
that this has been a real problem for policyholders of at least three of the ten largest
long-term care insurance companies in the United States (Duhigg, 2007).
Long-term care insurance represents the major form of private financing.
A second type of private sector long-term care financing strategy that has histori-
cally been classified as risk pooling is the CCRC. Rivlin et al. (1988, p. 83) define
CCRCs as “residential campuses consisting of independent apartments and cot-
tages and a variety of social and health services in one setting.” Access to CCRCs
usually requires a relatively large lump sum entry fee plus a monthly fee that covers
facility operating and maintenance costs. These fees vary considerably from insti-
tution to institution, but are typically based on the size of the dwelling and the
number of occupants (Rivlin et al., 1988). In exchange for the entry and monthly
fees, CCRCs offer

䡲 Residential housing
䡲 Basic long-term care services, including nursing home care, which is often
financed by additional cost-sharing mechanisms
䡲 Access to other health services

Access to nursing services is the feature that attracts most elderly individuals to
CCRCs. Utilization of this form of long-term care financing occurs more frequently
among the upper-income elderly because of the high costs, especially the entry fees.

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In addition to their residential and care-providing capabilities, some CCRCs

are insurance vehicles where portions of the entry fee finance the provision of long-
term care or the purchase of long-term care insurance (Rivlin et al., 1988). Prepaid
financing through entry payments may create an incentive to provide fewer services;
CCRCs may capitalize on the fact that they are often the lone access mechanism
to long-term care services for CCRC residents and that management can move the
location of care delivery from more expensive settings (i.e., nursing homes) to less
expensive settings (i.e., home care).
In theory, CCRCs have the potential to finance a significant portion of long-
term care for the elderly, due to their risk-pooling features. However, many of them
no longer provide long-term care insurance, opting instead to provide long-term
care services on a fee-for-service basis, with users at full risk for the cost (Rivlin
et al., 1988; Alecxih and Kennell, 1994). This change has limited the role that
CCRCs might play in expanding private financing of long-term care initiatives.
There are CCRC analogues that serve low- and moderate-income elders, but
they also do not function as insurance. Because disproportionate numbers of older
persons often reside in specific apartment buildings or neighborhoods, especially in
urban areas, gerontologists have long recognized the existence of “naturally occurring
retirement communities” (NORCs) (Masotti et al., 2006). Often such “affordable
clustered housing care” provides an important sense of community for low-income
elderly persons who cannot afford to live in CCRCs (Golant, 2005). Such housing
patterns afford an economical opportunity to locate needed social and health ser-
vices near the homes of elderly recipients, and sometimes within the same apartment
building, thereby functionally replicating many of the advantages enjoyed by more
affluent elders who live in CCRCs. The federal government in the United States has
done little to mobilize social and health services around these naturally occurring
housing patterns (Golant, 2005). Canadian scholars emphasize that local govern-
ments in Canada and the United States have the primary responsibility for fostering
“healthy NORCs” by improving the physical and social environment of the elderly
population. However, they indicate that the strategic focus of policymakers has been
directed more toward improving traditional health services, resulting in a haphazard
approach toward achieving healthy NORCs (Masotti et al., 2006).
A third type of private long-term care financing strategy is the S/HMO, which
functions much like an HMO in the acute care setting, and a similar managed care
arrangement largely financed by the public sector, known as PACE. Experience
with S/HMOs has been limited to demonstration projects, initiated in the mid-
1980s, within the Medicare program. S/HMOs are financed with prepayments
similar to acute care HMOs. Generally, the HMO links payers (insurers) with
acute care providers by capitated reimbursement mechanisms that shift financial
risk from the insurer to the provider. S/HMOs do much the same thing, except that
both acute and long-term care services are consolidated into a single, risk-pooled
financing mechanism, thereby leading to the integration of acute and long-term
care. The goal of S/HMOs is to achieve cost savings in both acute care and the more

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expensive long-term care arena by instituting case-managed utilization and other

controls (such as restrictions on service eligibility and benefit packages), increasing
cost sharing, rationing the supply of services, and restricting access to specialty
care providers (Rivlin et al., 1988). The savings achieved by these means are sub-
sequently used to reduce premiums and improve affordability for the low-income
elderly (Rivlin et al., 1988; Weiner et al., 1994).
Like CCRCs, S/HMOs represent the single point of access to long-term care for
participants. S/HMOs cover a variety of long-term care services for the qualified
disabled elderly, including “homemaker services, personal care services, respite care,
adult day care, transportation, case management . . . and nursing home care” (Rivlin
et al., 1988, p. 97). Considerable control over utilization and price accrues to the
payer (insurer) when access to a wide range of services is combined with financial
incentives. This consolidation could foster enhanced services and lower overall costs
but, alternatively, could lead to diminished quality of and restricted access to care.
The long-term viability of S/HMOs as a private funding source of long-term care
depends on how well organizational management “can control the use of services
and on the market demand for managed care services” (Rivlin et al., 1988). To date,
S/HMOs have depended on the demonstration project funding from the federal
government. The acute care experience with HMOs indicates that long-term cost
reductions may be difficult to sustain. Additionally, the market demand for HMO-
specific managed care services has waned in recent years, due in large part to the
consumer backlash against stringent gatekeeping activities. These circumstances,
coupled with a major adverse selection problem (Rivlin et al., 1988), cast doubt on
the long-term viability of this strategy as a long-term care financing mechanism.
PACE, which combines Medicare and Medicaid funding in a capitated arrange-
ment, was built on the promising experiences with S/HMOs demonstration proj-
ects in 11 cities in the 1990s. Integrated, comprehensive medical and social services,
which allowed impaired and frail Medicare beneficiaries to remain at home rather
than become institutionalized, saved Medicare dollars and resulted in longer life than
a comparison group.* This striking finding led Congress to incorporate PACE as
a permanent Medicare option in the Balanced Budget Act of 1997 (P.L. 105-33).
Despite this legislative endorsement, widespread availability of PACE programs has
not ensued: only 10,500 individuals were covered in 73 programs, according to a
2002 report by the National PACE Association (Leatherman and McCarthy, 2005).
Gross et al. (2004) discuss a number of possible barriers to participation in the
PACE program, including the high out-of-pocket outlays for the elderly who fail to

* An Abt Associates evaluation reported that PACE enrollees required 38 percent fewer Medi-
care dollars in the first six months and 16 percent fewer in the second six months than if they
had remained in fee-for-service Medicare. Moreover, clinical outcomes were superior, with
PACE enrollees having a median life expectancy of 5.2 years compared to 3.9 years for a com-
parison group (Leatherman and McCarthy, 2005).

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 Private Financing for Long-Term Care 䡲 375

qualify as dual eligibles under both Medicare and Medicaid. These costs are based
on Medicaid capitation rates for PACE, which varied from $1,624 to $4,706 per
patient per month in January 2003 (National PACE Association, 2003). As such,
they represent a substantial out-of-pocket burden for middle-income senior citizens
who must pay the Medicaid share if they want to buy into PACE.

Individual Asset Accumulation Strategies

IMAs represent a fourth strategy for funding private long-term care, but, as of this
writing, they have not been implemented. Nonetheless, IMA continues to draw
considerable attention, particularly because of the claims of its supporters.
IMAs resemble individual retirement accounts (IRAs) in terms of their func-
tionality and administration. Unlike CCRCs or S/HMOs, IMAs are an individual
asset accumulation strategy and do not involve the pooling of risk. IMAs would
create a form of savings account, with deposits “earmarked for long-term care ser-
vices or (the purchase of ) private long-term care insurance” (Rivlin et al., 1988,
p. 109). They would convey tax advantages to those who save for long-term care
services by allowing deductions for IMA contributions and exempting interest
earnings on deposited funds. Withdrawals without penalty would be made at the
applicable tax rate on reaching a certain predetermined age, as long as the funds are
used exclusively for long-term care services.
The major advantage of IMAs is their ability to provide discretionary income
to the disabled elderly that can be directed to those long-term care services deemed
most appropriate for the specific individual’s needs. There are, however, several
problems that undermine the effectiveness of IMAs. One is the tendency of people
to postpone “aging preparation” (retirement, long-term care, etc.) until middle age
or older, thereby losing the benefit of compounded interest. The result would be
less-than-adequate funding to cover worst-case scenarios. A second problem with
IMAs is that participants are likely to save more than necessary for catastrophic
expenses that probably will never occur. Depending on the plan’s provisions, fail-
ure to use the savings in the fund for the earmarked purpose of long-term care
could result in forfeiture. This relates to the fact that IMAs are not structured as
risk-pooling instruments. Another drawback of IMAs, similar to the experience
with IRAs, is that participants are likely to be individuals at upper-income lev-
els, with very low participation rates among those with low or moderate incomes
(Rivlin et al., 1988).
HECs represent a fifth type of long-term care financing instrument, where
elderly homeowners transfer the equity in their homes into an income stream that
enables them to purchase long-term care insurance or long-term care services. Risk
pooling is not an integral component of this type of financing arrangement. HECs
do provide an opportunity for low-income individuals who are homeowners, espe-
cially those with significant amounts of equity in their houses (Rivlin et al., 1988).

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 376 䡲 Handbook of Long-Term Care Administration and Policy

There are two types of HEC options. The first is a “reverse mortgage,” in which
a bank or other lending institution gives the homeowner a loan, usually in the form
of monthly installments, with repayment of the loan occurring when the home is
sold by the homeowner or his or her heirs. Reverse mortgages are structured as
either a “fi xed-term loan,” where it is repaid after a set period of time (usually five
to fifteen years) regardless of the borrower’s long-term care status, or an “open-
term loan,” where it is repaid after the borrower dies, moves, or sells the home
(Rivlin et al., 1988; Alecxih and Kennell, 1994). Under the second HEC option,
the familiar “home equity line of credit,” the homeowner can borrow funds up to
a credit limit secured by the equity in the house.
The major advantage of HECs is their ability to permit discretionary spending
by borrowers for those long-term care services deemed most necessary or useful by
the individual. They are also quite promising in terms of increasing the participation
of the low-income elderly in the private long-term care financing market. One major
drawback is the reluctance of elderly individuals to part with their homes. Another
is the uncertainty that results to lenders if borrowers desire to remain in their homes
at the end of a fixed-loan reverse mortgage or if they live much longer than expected,
thereby postponing repayment of the loan. Fluctuations in property values also con-
tribute to uncertainty for the lender, particularly in the context of a 20- to 30-year
time horizon that may accompany a reverse mortgage. This form of uncertainty may
result in higher interest rates or lending only small portions of the established equity
(Rivlin et al., 1988). These perceptions have resulted in a low volume of HECs.
However, the U.S. Department of Housing and Urban Development (HUD)
and Fannie Mae provide reverse mortgages for borrowers and coborrowers aged 62
and above that greatly reduce the risk borne by commercial lenders and older
homeowners who wish to convert an illiquid asset into cash. The HUD program,
Home Equity Conversion Mortgage (HECM), involves Federal Housing Admin-
istration (FHA) mortgage insurance that costs a mere 2 percent (two points) of
the maximum being claimed at closing and 0.5 percent per year on the actual-
outstanding HECM loan balance. Both costs can be paid by the income generated.
This mortgage insurance guarantees that the lender will receive complete repayment,
even if the value of the mortgaged home at sale fails to equal the amount loaned
or if a homeowner receiving a promised income stream lives longer than expected.
The Fannie Mae offering, Home Keeper Mortgage, requires no insurance other than
normal property coverage on the home; presumably, allowances for default (i.e.,
declining value of the home when the elder vacates it) are built into its fees.
Neither of these HEC plans is restricted to low-income homeowners. The only
limitations are the amounts that can be loaned. HUD will provide the full appraised
value of a home up to the limits of FHA mortgages in a given geographical area.
Fannie Mae’s Home Keeper limits its loans by the life expectancy of the borrower
(to ensure that it receives actuarially fair fees), the appraised value of the specific
property to be mortgaged, and the average U.S. home price (which functions as a
maximum that can be loaned).

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 Private Financing for Long-Term Care 䡲 377

In both programs, older homeowners can live in their homes as long as they
wish; the house is sold only after it ceases to be an owner’s principal residence.
Fannie Mae and HUD also give the homeowner flexibility in how they wish to
receive payment, ranging from lump sums and revenue streams (time limited or
for as long as the home is a principal residence) to standby lines of credit to be used
only when needed. Moreover, because the loan is only converting an illiquid real
estate asset owned by the homeowner into cash, the lump sum or income stream is
tax-free (Fannie Mae, 2002).
Both programs involve commercial mortgagers, but the private sector does
not appear to have marketed these opportunities vigorously. Moreover, despite
the attractive features of such federal guarantee programs, these opportunities
appear to be underutilized. Government-guaranteed reverse mortgages should be
particularly useful in allowing sophisticated homeowners in a real estate bubble to
monetize the inflated value of a principal residence while they continue to reside
in it, thereby protecting themselves against future declines in home values. Any
appreciation in the value of the home beyond the amount that is borrowed under
HECM or Home Keeper programs goes to the homeowner or the homeowner’s
heirs. FHA or Fannie Mae will also reimburse commercial lenders for any losses
(Fannie Mae, 2002).
Technically different, but conceptually very similar to HECs, accelerated life
insurance benefits and riders to life insurance are examples of individual asset accu-
mulation strategies that convert existing universal or whole-life insurance policies
into long-term care coverage. Accelerated life insurance arrangements pay lump
sum accelerated death benefits to the insured in the event of terminal illness, a spe-
cific disease, or nursing home confinement (Alecxih and Kennell, 1994). Riders to
life insurance arrangements, which also pay benefits to the insured from universal
or whole life, must meet the following criteria:

䡲 Conform to National Association of Insurance Commissioners (NAIC)

guidelines
䡲 Payments must be used for long-term care services
䡲 Payments must not be made in a lump sum fashion

Riders to life insurance plans were a fashionable means of providing long-term care
insurance coverage in the early 1990s, but their popularity has declined in recent
years. Indeed, many insurance providers no longer extend this option (America’s
Health Insurance Plans, 2004). Riders to life insurance pay a percentage of the
policyholder’s death benefit each month that the policyholder needs long-term care
in exchange for a small extra premium. The policyholder’s death benefit is reduced
accordingly.
Accelerated life insurance benefits as a means of financing long-term care would
display promise only if significant numbers of the elderly had high-value whole-life
or universal life policies, which is not the case. America’s Health Insurance Plans

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 378 䡲 Handbook of Long-Term Care Administration and Policy

(2004, p. 11) reports that sales of life insurance rider products have peaked in recent
years and they surmise that “consumers view their life insurance and long-term care
insurance needs differently and therefore do not want to combine these risks and
needs in one product.”

Barriers to Private Long-Term Care Insurance Coverage

A number of long-term care financing experts have identified factors that prevent
or dissuade individuals from pursuing or maintaining private long-term care insur-
ance coverage (Weiner et al., 2000; Alecxih and Kennell, 1994; Duhigg, 2007;
Johnson and Uccello, 2005; Brandon, 1989). Most point to “affordability” as the
primary barrier, with the magnitude of the problem exacerbated for those who
delay purchasing long-term care insurance coverage until older ages. Social Secu-
rity Administration data in Johnson and Uccello (2005) show that 12 percent of
married couples and nearly half (44 percent) of single adults aged 55 to 61 received
less than $25,000 as income in 2000. For ages 70 to 74, the proportion of adults
receiving incomes less than $25,000 in 2000 increased to 29 percent of married
couples and 62 percent of single adults. Yet the annual premium in 2002 for a
policy that provided up to four years of long-term care benefits with a $150 daily
benefit, a 90-day waiting period, and 5 percent per year inflation protection was
$1,134 if issued at 50 years of age; $2,346 if issued at 65 years of age; and $7,572
if issued at 79 years of age (America’s Health Insurance Plans, 2004). In fact,
Cohen (2003, p. 82) notes that “many regulators and policymakers suggest that
individuals with annual incomes below $20,000 and low levels of assets should not
purchase the insurance” and should instead look to Medicaid as their institutional
long-term care financing vehicle. According to Weiner et al. (2000), the daunt-
ing premiums are mainly due to the large proportion of individually sold policies,
which involve significant administrative and marketing costs and the dispropor-
tionate number of policies bought by higher-risk, older people.
Imperfect information, particularly among potential consumers, is another
major barrier to the development of the private long-term care insurance mar-
ket. Many individuals lack knowledge about their risks of needing long-term care
(Weiner et al., 2000) and many believe that their long-term care needs can be
financed unconditionally through the Medicare program (Alecxih and Kennell,
1994; Weiner et al., 2000). Additionally, the vast array of coverage features, options,
conditions, and related terminology may be confusing to many potential buyers
(Alecxih and Kennell, 1994). They are also less likely to purchase long-term care
insurance if reports about insurance companies not paying claims, similar to The
New York Times investigative account, become common (Duhigg, 2007).
Another important barrier to the purchase of private long-term care insurance
is the presence of health problems (Johnson and Uccello, 2005). Many private

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 Private Financing for Long-Term Care 䡲 379

insurers either deny coverage to those individuals with medical infirmities or

charge considerably higher premiums that are often not affordable.
Johnson and Uccello (2005) argue that the most significant obstacle to private
insurance coverage for affluent, impoverished, and near-impoverished individuals
may be the presence of Medicaid coverage for long-term care needs. Low-income
individuals will look to the Medicaid safety net more or less by default. Moreover,
the authors argue that at least some of the affluent conclude that they will not derive
much utility from their wealth if institutionalized (presumably in a nursing home)
and, therefore, lack an incentive to protect their assets with coverage for long-term
care. In other words, if bad luck causes them to have expensive long-term care costs,
they do not mind exhausting their resources at the end of an active life. Meanwhile,
this group prefers to enjoy their income in more rewarding endeavors than paying
long-term care premiums.
Cultural characteristics, including religious beliefs and ethnic customs, may deter
some individuals from seeking institutional forms of long-term care. Clemetson
(2006) describes the struggle of many American Muslims who face confl icts between
religious injunctions about a child’s responsibility to care for his or her parents and
the realities of providing the degree of care that a loved one’s condition may require.
The conflict may be particularly intense when the major long-term care option
involves institutionalization and may escalate if family members are divided about
which option(s) to pursue. The demand for long-term care insurance will decrease
in response to cultural characteristics that dampen the more general market for
paid long-term care. It may be possible, however, for other financing mechanisms
such as CCRCs to bridge the cultural divide and become a more acceptable form
of long-term care under these circumstances. Religious sponsorship of culturally
grounded programs and facilities may also ease the dilemma faced by religious and
ethnic minorities. A brief summary of the barriers to purchasing long-term care
insurance is presented in Table 18.2.

Table 18.2 Barriers to Purchasing Long-Term Care Insurance

Inadequate affordability
Imperfect information
Presence of health problems
Presence of Medicaid coverage of long-term care services
Cultural barriers

Sources: Adapted from Johnson, R. and Uccello, C., Is Private Long-

Term Care Insurance the Answer? Issue in Brief No. 29,
Trustees of Boston College, Center for Retirement Research,
Boston, MA, 2005; Clemetson, L., The New York Times,
June 13, A1, 2006.

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 380 䡲 Handbook of Long-Term Care Administration and Policy

Trends and Recent Developments in the

Private Financing of Long-Term Care
Despite the relatively small proportion of total long-term care expenditures cur-
rently financed by the private sector, recent evidence indicates that there has been
considerable growth in the number of long-term care insurance policies purchased.
In time, these policies can be expected to pay claims that amount to a larger pro-
portion of the cost of long-term care services (unless policyholders cease paying pre-
miums). Although sales in the life insurance rider market sector have stalled in the
past decade, more than 900,000 policies in the total private insurance market were
sold in 2002, the largest surge in single-year sales since 1987 (America’s Health
Insurance Plans, 2004).
The individual private long-term care insurance market is fairly concentrated
in terms of the number of providers selling policies and the geographic regions
where policies are sold. Thirteen insurance companies accounted for approximately
80 percent of all individual policies sold in 2002. Additionally, half of all the indi-
vidual policies sold since the inception of private long-term care insurance in 1987
through 2002 occurred in ten states: California, Florida, Illinois, Iowa, Minnesota,
New York, Ohio, Pennsylvania, Texas, and Washington. Market penetration rates
in 2002 were highest in the Midwest, with the top ten states consisting of Iowa,
Kansas, Indiana, Minnesota, Missouri, Montana, Nebraska, North Dakota, South
Dakota, and Washington (America’s Health Insurance Plans, 2004).
There has also been substantial recent growth in the number of policies sold in
other markets, particularly in the employer-sponsored market. In 2002, 28 percent
of long-term care insurance carriers sold policies in either the employer-sponsored
or life insurance markets, compared to only 14 percent in 1988. The growth in the
employer-sponsored market has been particularly impressive. In 2002, more than
280,000 new long-term care insurance policyholders purchased coverage through
their employer; these policies constituted nearly one-third of all long-term care
policies sold that year. Approximately 1,700 employer-based plans were introduced
in 2001 and 2002 alone. The increasing popularity of these policies is striking,
especially in light of the fact that most are not subsidized by employers (America’s
Health Insurance Plans, 2004).

Government Interventions in the Private

Long-Term Care Insurance Market
Weiner et al. (2000, p. 61) discuss three general strategies of governmental interven-
tion intended to increase the market share of private long-term care insurance. These
include (1) “providing individuals with tax incentives that encourage purchase of
long-term care policies by reducing the net price of such policies”; (2) “encourag[ing]
employer-based private long-term care insurance through tax incentives and through

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 Private Financing for Long-Term Care 䡲 381

the federal and state governments serving as role models for private employers by pro-
viding governmental employees, retirees, and their dependents the opportunity to
purchase insurance”; and (3) “waiv[ing] some or all of the Medicaid asset depletion
requirements for purchasers of qualified long-term care insurance policies, allowing
them to retain more of their assets and still qualify for Medicaid.”
The Health Insurance Portability and Accountability Act (HIPAA) of 1996
(P.L. 104-191) currently provides some federal tax incentives for purchasing long-
term care insurance by allowing individuals to add the value of their long-term
care insurance premiums to their medical expenses on their income tax returns
and granting tax deductions for total expenses above the 7.5 percent adjusted gross
income (AGI) threshold. Weiner et al. (2000) analyze several new federal tax-related
proposals that may enhance the incentive to purchase long-term care insurance.
One of them would expand the deduction for long-term care insurance premiums
by removing the AGI threshold requirement, thereby permitting deductibility of
the entire premium. Another proposal is to allow employers to include long-term
care insurance as part of their cafeteria plans and flexible spending accounts and
permit individuals to withdraw tax-free funds from their retirement accounts to
pay long-term care insurance premiums. Of course, the attractiveness of these mea-
sures should be considered in the larger context of their impact on “tax revenue
loss, the distributional effect of the tax incentive, and the efficiency of the subsidy
in encouraging additional [long-term care insurance] purchases” (Weiner et al.,
2000, pp. 65–66).
State governments also have attempted to stimulate growth in the private long-
term care insurance market by extending both individual and employer-based tax
credits and deductions. “In general, these tax incentives are likely to have only a
minimal impact on long-term care insurance premiums because of the relatively
low state tax rates, which make a deduction or credit less attractive” (Weiner et al.,
2000, p. 68).
Weiner et al. (2000, p. 72) also assess the government’s role in providing incen-
tives to secure private long-term care insurance in the employer-sponsored market.
The centerpiece of this strategy was codified in HIPAA, which allowed “employer
contributions to the cost of qualified private long-term care insurance to be tax-
deductible as a business expense in the same way that employer contributions to
health insurance are deductible.” However, the researchers argue that despite this
important tax incentive for health benefits, many employers find the costs of long-
term care coverage increasingly prohibitive and are even curtailing benefits cur-
rently provided to retirees by dropping them altogether or imposing considerably
greater cost sharing. Certainly, few companies will be willing to pay for their retired
workers’ long-term care coverage now or in the future.
The government also has a role as an employer at both the state and federal
levels in terms of providing long-term care insurance to public employees. Such a
“lead-by-example” strategy to heighten awareness of the relative dearth of private
long-term care insurance has not been particularly effective in spurring the market.

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 382 䡲 Handbook of Long-Term Care Administration and Policy

One major factor is the low take-up rates by employees, most of whom are discour-
aged by the pay-all nature of the premiums and the use of medical underwriting
by state governments to prevent adverse selection and moderate premium costs
(Weiner et al., 2000).
The third major government initiative to expand the market for private long-
term care insurance involves public–private partnerships, where “partnership”
policyholders can protect a portion of their assets and still qualify for Medicaid.
Under this arrangement, “consumers are able to purchase insurance equivalent to
the amount of assets they wish to preserve [before becoming eligible for Medicaid],
potentially reducing the amount of insurance individuals need to buy” (Weiner
et al., 2000, p. 85). Despite the apparent attractiveness of this strategy, consumer
interest in it has been low. One reason is that potential beneficiaries regard the
“partnership” policies as relatively expensive and view the Medicaid program unfa-
vorably (Weiner et al., 2000). Participation has also been stymied because until
recently the program had been limited to only four states. The Deficit Reduction
Act of 2005 (P.L. 109-171) expanded this option to all the states and, consequently,
the situation may change.

Policy Considerations to Improve Private

Long-Term Care Financing
Stone (2001, p. 99) argues for a “disability approach” to long-term care financing,
where the focus is support “to enhance a person’s quality of life, to help ensure
as much independence as possible, and to provide flexibility and choice to indi-
viduals and their families.” According to the author, it trumps the “care/indemnity
approach” prevailing in most private long-term care insurance plans that are char-
acterized by purchase of a discrete amount of service per diem. Financing long-
term care using the disability model would entail cash payments to beneficiaries
or implementation of a voucher system. There appears to be a strong support for
the disability approach method of financing long-term care among disabled people
below 65 years of age (Simon-Rusinwitz and Mahoney, 1997; Barents Group of
KMG Consulting, 2001) and higher satisfaction among those purchasing such
policies compared to indemnity coverage (Cohen and Miller, 1999).
According to Stone (2001), the major advantages of the disability approach to
financing long-term care are

䡲 Providing consumers with the flexibility to address their individual needs

䡲 Circumventing the tendency for benefits under the indemnity approach to
become obsolescent as the scope of needed services changes over time
䡲 Providing resources that family caregivers may use to purchase complemen-
tary services
䡲 Expanding the pool of long-term caregivers

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 Private Financing for Long-Term Care 䡲 383

She notes that the primary disadvantages include the following:

䡲 Difficulty in monitoring how benefit dollars are spent (particularly in the

context of the potential for fraud or abuse)
䡲 Costs associated with determining eligibility for benefits (i.e., costs associated
with determining disability status)
䡲 Quality assurance
䡲 Limited application to consumers with substantive cognitive impairments

Although the market share of employer-sponsored long-term care insurance plans

has increased in recent years, private long-term care insurance on the whole lags far
behind publicly financed programs. To date, the risk-pooling strategies described
earlier in this chapter (long-term care insurance, CCRCs, and S/HMOs and the
PACE program) have been the mainstay for the private financing of long-term
care. If the overarching policy goal is to expand the private market for long-term
care financing, it seems logical that the government should promote the disabil-
ity approach, particularly through various funding mechanisms that increase its
viability. Perhaps the time has come for bolder action to expand and develop the
individual asset accumulation strategies (IMAs, HECs, and accelerated life insur-
ance benefits). These tactics are especially adept at generating discretionary funds
that characterize the disability approach and are most capable, at least in theory,
of expanding participation among the middle- and lower-income strata of the
population.

References
Alecxih, L. and D. Kennell. 1994. The Emerging Private Financing System. Washington:
U.S. Department of Health and Human Services and Lewin/ICF. Retrieved July 22,
2006, from http://aspe.hhs.gov/daltcp/reports/emerges.htm.
America’s Health Insurance Plans. 2004. Long-Term Care Insurance in 2002. Washing-
ton: America’s Health Insurance Plans. Retrieved July 22, 2006, from http://www.
ahipresearch.org/pdfs/18_LTC2002.pdf.
Barents Group of KMG Consulting. 2001. Summary Findings from Long-Term Care Focus
Groups, April 26–June 6, 2001. McLean, VA: KPMG.
Brandon, W. 1989. Cut off at the impasse without real catastrophic health insurance: three
approaches to financing long-term care. Policy Studies Review, 8(2): 441–454.
Clemetson, L. 2006. For U.S. Muslims, an aversion to nursing homes. The New York Times,
June 13, 2006, A1.
Cohen, M. 2003. Private long-term care insurance: a look ahead. Journal of Aging and
Health, 15(1): 74–98.
Cohen, M. and J. Miller. 1999. A Descriptive Analysis of Patterns of Informal and Formal
Caregiving among Privately Insured and Non-Privately Insured Disabled Elders Living
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Congressional Budget Office. 2004. Financing Long-Term Care for the Elderly. Washington:
Congressional Budget Office.
Desonia, R. 2004. The Promise and the Reality of Long-Term Care Insurance. Washington:
National Health Policy Forum.
Duhigg, C. 2007. Aging, frail and fighting insurers to pay up. The New York Times, March
26, 2007, A1, A16.
Fannie Mae. 2002. Money from Home: A Consumer’s Guide to Reverse Mortgage Options.
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Feder, J. 2001. Long-term care: a public responsibility. Health Aff airs, 20(6): 112–113.
Friedman, L. 2002. The Microeconomics of Public Policy Analysis. Princeton, NJ: Princeton
University Press.
Georgetown University, Health Policy Institute. 2007. National Spending for Long-Term
Care. Fact Sheet. Washington. Retrieved April 4, 2007, from http://ltc.georgetown.
edu/pdfs/natspendfeb07.pdf.
Golant, S.M. 2005. Affordable clustered housing-care for poor and frail older Americans:
a promising but still immature long-term care strategy. Revised manuscript origi-
nally presented at the 2005 Colloquium “Building Bridges: Making a Difference in
Long Term Care” conducted by AcademyHealth, Boston, MA, 25 June 2005.
Gross, D., H. Temkin-Greener, S. Kunitz, and D. Mukamel. 2004. The growing pains of
integrated health care for the elderly: lessons from the expansion of PACE. The Mil-
bank Quarterly, 82(2): 257–282.
Johnson, R. and C. Uccello. 2005. Is Private Long-Term Care Insurance the Answer? Issue in
Brief No. 29. Trustees of Boston College, Center for Retirement Research, Boston,
MA: Center for Retirement Research at Boston College. Retrieved July 24, 2006,
from http://urbaninstitute.org/UploadedPDF/1000795.pdf.
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medicaid/upload/Long-Term-Care-Understanding-Medicaid-s-Role-for-the-Elderly-
and-Disabled-Report.pdf.
Leatherman, S. and D. McCarthy. 2005. Quality of Health Care for Medicare Beneficiaries:
A Chartbook—Focusing on the Elderly Living in the Community. New York: The Com-
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Masotti, P.J., R. Fick, A. Johnson-Masotti, and S. MacLeod. 2006. Healthy naturally
occurring retirement communities: a low-cost approach to facilitating healthy aging.
American Journal of Public Health, 96(7): 1164–1170.
National PACE Association. 2003. PACE Census and Capitation Rate Information, 2002/03.
Unpublished manuscript.
Pauly, M. 1990. The rational nonpurchase of long-term care insurance. The Journal of Politi-
cal Economy, 98(1): 153–168.
Pindyck, R. and D. Rubinfeld. 2001. Microeconomics (5th ed.). Upper Saddle River, NJ:
Prentice-Hall.
Rivlin, A., J. Wiener, R. Hanley, and D. Spence. 1988. Caring for the Disabled Elderly: Who
Will Pay? Washington: The Brookings Institution.
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Simon-Rusinwitz, L. and K. Mahoney. 1997. Determining consumer preferences for a cash

option: Arkansas survey results. Health Care Financing Review, 19(2): 73–96.
Singh, D.A. 2005. Eff ective Management of Long-Term Care Facilities. Sudbury, MA: Jones
and Bartlett Publishers.
Stone, R. 2001. Providing long-term care benefits in cash: moving to a disability model.
Health Aff airs, 20(6): 96–108.
Weimer, D.L. and A. Vining. 2005. Policy Analysis: Concepts and Practice (4th ed.). Upper
Saddle River, NJ: Pearson Prentice-Hall.
Weiner, J., L. Illston, and R. Hanley. 1994. Sharing the Burden: Strategies for Public and
Private Long-Term Care Insurance. Washington: The Brookings Institution.
Weiner, J., J. Tilly, and S. Goldenson. 2000. Federal and state initiatives to jump start the
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CRC_AU5327_CH018.indd 386 1/2/2008 10:57:24 PM
 Chapter 19

Public Financing of
Long-Term Care

Stephen A. Stemkowski and William P. Brandon

Contents
Introduction ............................................................................................388
Public Programs Providing Long-Term Care............................................391
Medicaid .............................................................................................392
Medicare .............................................................................................393
Veterans Health Administration..........................................................395
Indian Health Service .........................................................................396
Recent Changes Affecting Long-Term Care Hospitals ........................396
Recent Changes in Medicaid to Control Costs ...................................397
Long-Term Care Reform: Federal Failure and State
Incremental Strategies ..............................................................................398
Promoting Private Long-Term Care Coverage .....................................399
Regulatory Approaches....................................................................... 400
Delivery System Reform ..................................................................... 400
Substituting Home- and Community-Based Services .....................401
Integrating Long-Term Care and Acute Care
Delivery Systems.............................................................................401
Program of All-Inclusive Care for the Elderly ......................................402
Social Insurance .......................................................................................403

387

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 388 䡲 Handbook of Long-Term Care Administration and Policy

International Perspectives on Social Insurance

for Long-Term Care.............................................................................405
Why Does the United States Have So Few Social
Insurance Programs? .......................................................................... 406
Conclusion.............................................................................................. 408
References ............................................................................................... 409

Introduction
Generally, like the fi nancing of U.S. healthcare, current fi nancing arrangements
for long-term care (LTC) in the United States are confusing and fragmented,
and promote a delivery system that is increasingly unable to serve the needs of
American elderly and disabled individuals. Over the next several decades, LTC
issues will become increasingly important to individuals and policymakers alike.
Increases in longevity and decreases in birthrate have increased the proportion
of the U.S. population aged 65 or above by more than 34 percent from 1960 to
2000. Over the coming decades, the increase in the percentage of the popula-
tion above 65 years will be even more profound. By 2040, the proportion of
the total population aged 75 or above will be greater than those aged 65–74,
doubling from 6 to 12 percent of the total population by 2050 (National Center
for Health Statistics, 2005). The transition from serving the needs of 31 mil-
lion persons aged 65 and above in 1990 to an estimated 40 million Americans
in 2020 will require a significant reorganization of the health and social ser-
vice system in the United States (National Center for Health Statistics, 2005;
Ikegami, 1997).
Although the impending problems of providing LTC may seem overwhelming
and significant public funds already pay for much LTC, few analysts currently sup-
port the development of a tax-funded LTC system. Without active public support,
the issue of publicly funded LTC has not been prominent in the public agenda in
recent years. Yet a Handbook of Long-Term Care Administration and Policy would be
incomplete without a chapter on public financing for LTC. The discussion of public
LTC funding in this chapter attempts to provide a comprehensive overview of the
subject. Thus, it will cover

䡲 Public programs that currently fund LTC, Medicaid, Medicare, the Veterans
Administration, and the Indian Health Service (IHS)
䡲 Recent changes to Medicaid and Medicare that affect LTC financing
䡲 Policy options at the state level to alleviate pressure on the financial and deliv-
ery systems that range from efforts to promote the purchase of private LTC
insurance to delivery system reform
䡲 The general principles of social insurance and examples of universal, tax-
financed LTC programs in other countries

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 Public Financing of Long-Term Care 䡲 389

䡲 A concluding discussion that asks why the United States is an exception among
advanced industrial nations in its reluctance to enact social insurance pro-
grams to promote the welfare of its citizens in need of LTC, healthcare, etc.

Despite a prevailing opinion that LTC is a private affair, the facts reveal that LTC
financing has evolved from private, out-of-pocket sources to slowly growing pri-
vate LTC insurance and finally to the expansion of public expenditures, primarily
Medicaid and Medicare. Despite the shift from private to public financing, the
United States remains reluctant to implement any form of explicit government pro-
gram. Instead, we rely on voluntary insurance programs and safety net approaches
to help citizens pay the cost of caring for the elderly and persons with disabilities.
Several reasons explain the fragmented approach to financing LTC. The pub-
lic’s attitude reflects a psychological reaction of denial when confronted with the
painful realities of aging and debilitating conditions. A second reason is that cur-
rent fiscal pressures and uncertainties about future costs make governments reluc-
tant to promise to pay for a general entitlement to LTC. A third reason involves
the medical profession. Physicians, recognizing limited resources, favor directing
them to acute care services and the application of biomedical interventions that
are more likely to show measurable improvement in their patients’ health status.
Physicians may also be concerned that their professional dominance and autonomy
would be threatened if the focus of patient care is shifted from curative acute ser-
vices to LTC, where nurses and social workers constitute the dominant professional
workforce.
Spending for LTC is an increasing portion of total U.S. healthcare costs. Yet it
continues to be financed by a disorganized and disparate mixture of government,
commercial, and private sources. In 1995, nearly $105 billion was spent on nurs-
ing home and home healthcare with more than half coming from public sources
(Stone, 2000). Since 1995, expenditures have increased by more than 51 percent
to nearly $155 billion in 2004 (National Center for Health Statistics, 2006). Since
1960, the percentage of freestanding nursing home care paid for by private, out-
of-pocket sources has declined dramatically from nearly 78 percent to less than
28 percent in 2003, whereas the share paid from government sources has risen to
nearly 61 percent. Figure 19.1 outlines the proportion of funds by source for 2004
and clearly illustrates that very little of the coverage for LTC services is reimbursed
by commercial and employer-provided insurance (Stone, 2000).
Estimates in 1998 put the number of Americans who reported needing nurs-
ing home services at 12.8 million people. More than 57 percent were above
65 years; the others were disabled adults below 65 years and children. Yet for the
same period, there were only an estimated 1.8 million certified nursing home beds
available. By 2003, the number of beds decreased by 3 percent, and the occupancy
rate by 1 percent (Gibson et al., 2004). Thus, the vast majority of the elderly with
activities of daily living (ADL) impairments live in community- and home-based
settings. One-third of people in these settings continue to report that they do not

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 390 䡲 Handbook of Long-Term Care Administration and Policy

Other governments,
2.6 percent

Out of pocket,
27.7 percent

Medicaid,
44.3 percent

Other private sources,

3.6 percent

Private insurance,
7.8 percent

Medicare,
13.9 percent

Figure 19.1 Source of nursing home care funds—2004. (From National Center
for Health Statistics (2005). Health, United States 2005 (DHHS Publication No.
2005-1232). Washington: U.S. Government Printing Office.)

receive the help that they need. Because the demand for LTC increases significantly
with age, special attention is needed for people aged 85 and above (Stone, 2000).
Chapter 18 of this volume by Smith and Brandon discussed the failure of pri-
vate LTC financing options to provide adequate financial protection for most older
and disabled Americans. Insurance is typically considered more attractive as the
magnitude of a potential loss or the probability of loss increases. National estimates
indicate that a year in a nursing home may cost between $36,000 and $70,000
(ConsumerAffairs.com, Inc., 2006) and that more than 40 percent of all elderly
individuals will require nursing home services at least once in their lifetime. Yet
LTC insurance is not widely purchased and the recent increase in the number of
policies has not significantly increased its share of LTC payments (Norton and
Newhouse, 1994; Smith and Brandon, Chapter 18 of this volume).
Two factors help explain the low demand for private LTC insurance. The first is
selection. Insurance is more appealing to those who are more likely to use it. Termed
“adverse selection,” the problem stems from consumers knowing more about their
own health risks than do the insurers, which is likely to result in insurance pre-
miums that do not accurately reflect the risk of the insured. Like life insurance,
LTC insurance requires an application process that enables insurance carriers to
decline applicants or offer coverage for a high premium that reflects the perceived
risk. Because of adverse selection, high-risk individuals are more likely to accept

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 Public Financing of Long-Term Care 䡲 391

the terms of the policy despite higher premiums. In addition, premiums reflect the
high administrative costs to insurers that result from individual sales approaches
and the expense of underwriting and administering policies. The costly LTC insur-
ance premiums that result typically do not attract healthier individuals (Norton
and Newhouse, 1994).
Second, Medicaid is the payer of last resort, functioning as catastrophic LTC
insurance (Longest, 2006; Brandon, 1989). Almost all legal residents of a state
are covered for LTC under Medicaid once they have spent nearly all of their
nonhousing assets to secure the care that they need. States are prohibited from
trying to seize the principal residence of beneficiaries or their automobile to
recover state Medicaid payments before the recipient’s death. Most other assets,
however, are subject to liquidation before a beneficiary can qualify. Known as
“spending down assets,” in effect this practice serves as an individual deductible
that must be satisfied to qualify for LTC benefits. For those with few assets to
protect, Medicaid is clearly a better deal because the “deductible” is low and there
are no premiums. Private LTC insurance for such individuals is hardly worth
the monthly premiums that must be paid before the need for LTC arises. For
those with significant assets at risk, Medicaid may not be an attractive alternative
due to its potentially high “deductible”; for them, LTC insurance is often a more
attractive means of protecting individual wealth, particularly for individuals who
are risk averse.
Whether these factors or others explain the dearth of private LTC insurance,
the fact is that few individuals have purchased private LTC coverage. Consequently,
public programs have been enacted to help individuals secure LTC care when the
need arises and private resources fail. The U.S. public LTC policy has involved
incremental attempts to alleviate a growing social problem by adapting existing
programs and instituting new, highly targeted programs that benefit select por-
tions of the population. Such minimally invasive public policy approaches have
most often been incorporated in Medicaid and Medicare, the two most prominent
public programs that together constitute nearly 57 percent of all LTC financing
(National Center for Health Statistics, 2005).

Public Programs Providing Long-Term Care

As a result of the failure of the private sector to provide financial protection to
the majority of the population, public programs have been enacted or modified
to provide assistance for individuals facing expensive LTC requirements. Despite
a 533 percent increase in private insurance as a source of funds for freestanding
nursing home services since 1980, all types of private coverage financed only 7 per-
cent of LTC services in 2003 (National Center for Health Statistics, 2005). Other
private and out-of-pocket sources have declined considerably, leaving Medicaid
and Medicare to finance an increasing proportion of total LTC expenditures.

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Medicaid continues to be the single largest source of financial assistance for LTC.
Revisions to the Medicare regulations related to home health services and acute
LTC have increased the portion of public funds for LTC from this program. The
remaining expenditures, about 2.6 percent, are financed through public service
agencies such as IHS and the Veterans Administration (National Center for Health
Statistics, 2006).
Although the Federal Employees Health Benefit program is sometimes proposed
as a model for general healthcare reform, it functions just as any other employer-
sponsored insurance in its LTC coverage. In fact, active and retired federal employ-
ees must pay the entire premium by a payroll deduction to purchase a private LTC
insurance contract if they choose to have LTC coverage. Therefore, this federal
employment benefit is not included among the public programs considered in this
chapter.

Medicaid
Title XIX of the Social Security Act (P.L. 89-97) created Medicaid, a federal-state
entitlement program that pays for medical assistance for certain individuals and
families with low incomes and few financial resources. Medicaid is the largest pro-
gram for LTC benefits for the elderly and the disabled of all ages. It also includes
the State Children’s Health Insurance Program (SCHIP) for uninsured children in
low-income families.
Within broad national guidelines governed by federal statutes, regulations, and
policies, each state establishes its own eligibility standards; determines the type,
amount, duration, and extent of covered services; sets the rate of payment for ser-
vices; and administers its own program. Medicaid was initially conceptualized as
a program for mothers and children who received income support from Aid to
Families with Dependent Children (AFDC), now known as Temporary Assistance
for Needy Families (TANF). In addition to covering in- and outpatient acute care
services, Medicaid pays for care in skilled or intermediate care nursing homes or
in intermediate care facilities for the mentally retarded if medically necessary. The
patient’s income cannot exceed a threshold established in state Medicaid regula-
tions. If the patient or his or her representative gifts assets or sells them below mar-
ket value to prevent those assets from being considered in determining the patient’s
eligibility, he or she may be ineligible for benefits.
Ironically, the Medicaid program’s benefit and eligibility structure contributed
significantly to the creation and growth of the nursing home industry, an unan-
ticipated effect of the program. Those who previously would have never considered
nursing home care due to its cost were now able to access nursing home services
because of Medicaid. Not only did this coverage enable Medicaid recipients to
afford nursing home care, but it also offered publicly financed LTC options to
those with higher income levels who were willing to disperse their nonliquid assets

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 Public Financing of Long-Term Care 䡲 393

to qualify for Medicaid benefits. A new market that encouraged expansion opened
up for nursing home providers.
Medicaid policies for eligibility, services, and payment are complex and vary
considerably from state to state (U.S. Department of Health and Human Services,
Centers for Medicare and Medicaid Services, 2006). States receive matching fed-
eral funds for services provided to the categorically needy, those whose income falls
below the eligibility level established by the program. In addition, the federal govern-
ment finances acute care services and medical care provided in LTC facilities for the
elderly and permanently disabled. As a result of the initial focus in Medicaid, there
is a strong institutional bias toward more expensive inpatient services for LTC.
However, states are increasingly interested in utilizing home- and commu-
nity-based services to lower their costs and extend coverage to those with incomes
too high to qualify for Medicaid as categorically needy (U.S. Department of
Health and Human Services, Centers for Medicare and Medicaid Services, 2005).
Known as the “medically needy,” these people represent an additional burden on
state health expenditures for which states do not receive federal funding. The
medically needy option allows states to extend Medicaid eligibility to certain
individuals whose income and resources are above the eligibility level for the
categorically needy. Individuals may qualify immediately based on income and
the extent of their personal assets or they may “spend down” by incurring medi-
cal expenses that reduce their income to a level at or below the state-designated
eligibility level.
Federal matching funds are available for some medically needy programs if they
coincide with funds for categorical groups; however, there are federal requirements
that certain groups and certain services must be included for the state to receive
them. As of 2003, 35 states and the District of Columbia offered medically needy
programs. All the remaining states utilize a “special income level” option to extend
Medicaid to the “near poor” in medical institutional settings (U.S. Department of
Health and Human Services, Centers for Medicare and Medicaid Services, 2006;
Crowley, 2003).

Medicare
The Health Insurance for the Aged and Disabled Act, Title XVIII of the Social
Security Act (P.L. 89-97), known as “Medicare,” is available to nearly every
American 65 years of age and above. It is primarily a health insurance program
designed to assist elderly people with meeting hospital, medical, and other health-
care costs. Health insurance coverage is also available to people below 65 years
who have been disabled for 24 months or longer and those suffering from end-
stage renal disease (ESRD) or amyotrophic lateral sclerosis (Lou Gehrig’s disease).
In addition to acute medical care services, Medicare pays for medically necessary
skilled nursing care and home health services. Typically, it does not cover custodial
care, although some Medicare advantage plans include limited benefits for skilled

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 394 䡲 Handbook of Long-Term Care Administration and Policy

nursing and home health. Medicare is composed of three related health insurance
programs—hospital insurance (Part A) and supplementary medical insurance con-
sisting of Parts B and D, which provide prescription drugs. LTC-associated cover-
age is provided by Parts A and B (U.S. Department of Health and Human Services,
Centers for Medicare and Medicaid Services, 2004, 2005).
Part A (hospital insurance) is financed by payroll taxes and does not require an
individual premium for most beneficiaries. Medicare Part A helps cover inpatient
care and prescription medications provided in hospitals, critical access hospitals,
long-term care hospitals (LTCHs), and skilled nursing facilities (SNF) but does not
cover custodial or LTC services. It also helps pay for hospice care and medically
necessary home healthcare services required after a patient is discharged from a
hospital. Beneficiaries must meet certain conditions to receive these benefits.
Part B (medical insurance) helps cover doctors’ services and outpatient care and
is financed in part by individual premium payments and general revenues of the
federal government. It also covers other medical services that Part A does not cover,
such as the services of physical and occupational therapists and medically necessary
home healthcare and medical supplies (U.S. Department of Health and Human
Services, Centers for Medicare and Medicaid Services, 2006).
As a result of the Medicare Prescription Drug, Improvement, and Moderniza-
tion Act of 2003 (MMA, P.L. 108-173), the distinction between medically nec-
essary home health services and assistance services to the homebound is further
blurred. The MMA contains provisions that alter existing LTC components of the
Medicare program such as home health services, definitions of homebound, and
coverage of religious, nonmedical institutional services provided in the home (U.S.
Department of Health and Human Services, Centers for Medicare and Medicaid
Services, 2004). The MMA redefines homebound to include those who are in adult
day care and institutional settings that provide for the ADL-impaired. This change
effectively increases the extent to which Medicare finances LTC services. The sub-
tle shift may ultimately be more profound than anticipated, because historically,
Medicare focused only on acute care expenses and only reimbursed short-term
skilled nursing and home health services for patients in postoperative recovery fol-
lowing an acute hospital discharge.
Beginning with the implementation of prospective payment for acute care hos-
pitals in 1983, an increase in the number of nursing home residents, particularly
short stay residents, increased Medicare funding of postacute care in nursing homes
(Decker, 2005). The single greatest increase in the proportion of total expenditures
for freestanding nursing home services is from the Medicare program. Between
1980 and 2003, Medicare nursing home expenditures had increased by about
600 percent; by 2003, it provided more than 12 percent of total nursing home
expenditures (U.S. Department of Health and Human Services, 2005).
Over time, the program began to include a greater number of nonmedical,
personal care services. As a result, the growth in Medicare home health spend-
ing through the mid-1990s came from greater utilization of nonmedical, low-tech

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personal services that were previously not covered by Medicare. The program con-
tinued to serve an increasing number of ADL-disabled beneficiaries who required
more personal services. For these reasons, many policymakers observed that an
increasing number of beneficiaries receive long-term care through the Medicare
program despite Medicare’s stated focus on acute care (Stone, 2000).
In October 2005, there were 8,082 home health agencies certified to care for Medi-
care patients; at least one home health agency provided services in geographical areas
where 99 percent of Medicare beneficiaries resided. The volume of services measured
in terms of number of users and episodes of care was higher in 2004 than in 2003.
In 2004, 2.8 million beneficiaries received about 4.6 million episodes of care. The
volume of services was the same in 2003 and 2004, averaging 18.4 visits per episode
(Medicare Payment Advisory Commission, 2006). The number of Medicare-certified
home health agencies was 14 percent higher in 2005 than in 2000. However, there
was a decline in the more than 10,000 home health agencies that served Medicare
beneficiaries in 1997, when prospective payment was mandated for home health.
Many states and home health providers have attempted to take advantage of this
liberalization in Medicare by instituting maximization programs that help Medicaid
beneficiaries become dual-eligible for both Medicare and Medicaid, thereby allow-
ing states to shift a portion of the Medicaid cost to the federal government. In
addition, subacute care experienced more comprehensive coverage under Medicare
than under Medicaid. The Medicare program fails to define subacute care specifi-
cally and therefore excludes reimbursement for such services, which leaves ample
opportunity to reclassify services and expand coverage to include home care.

Veterans Health Administration

In March 1989, the Veterans Administration, as it was then known, became the
Department of Veterans Affairs, a cabinet department. More than 5.3 million vet-
erans and eligible dependents of deceased veterans receive medical care and LTC
services from the Veterans Health Administration, part of the U.S. Department of
Veterans Affairs (VA). The single largest integrated healthcare delivery system in
the country, the VA operates 154 hospitals, 136 nursing homes, and 88 compre-
hensive home care programs as well as hundreds of community-based outpatient
clinics, rehabilitation centers, and veteran’s centers across the country. Overall,
nearly 25 percent of the U.S. population is potentially eligible for VA benefits (U.S.
Department of Veterans Affairs, 2006a).
The VA offers a broad range of geriatric and LTC services to enrollees including
home-based services, adult day-service programs, and institutional care in VA nursing
homes or state nursing homes. The VA focuses on home- and community-based pro-
grams both in accordance with its members’ preferences and as a more cost-effective
care setting. In 2005, nearly 90 percent of VA LTC recipients received care through
such programs. In addition, the VA estimated its average daily inpatient LTC census
at more than 70,000 for 2005 (U.S. Department of Veterans Affairs, 2006b).

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Indian Health Service

The IHS, an agency of the U.S. Department of Health and Human Services,
administers the health programs for enrolled members of 557 federally recognized
Native American tribes in 35 states. It provides services directly to more than
1.3 million members through 61 health centers, 38 hospitals, and 12 IHS-run
nursing homes. Unlike Medicare and Medicaid, which are entitlement programs,
IHS funding requires an appropriation in the annual budget process; that is,
funding depends on congressional discretion rather than the commitment of an
entitlement. Tribes also receive funds from the Older Americans Act, sharing
about $25 million among 233 federally recognized tribes.
Federal funding has declined significantly in recent years as a result of an unfa-
vorable political climate that has not supported discretionary increases. Average
federal expenditure per patient for Indian patients has decreased from 75 percent
of the national average per person healthcare cost in 1977 to only 34 percent in
1999 (Benson, 2002). Limited federal financing has restricted the IHS’ ability to
expand LTC services for its beneficiaries. Its most widely offered LTC services are
transportation, home-delivered meals, housekeeping, and home modification for
disabilities, whereas the least offered services include Alzheimer’s or dementia care,
adult day care, and nursing home services. Indeed, the 12 IHS-run nursing homes
have only 627 LTC beds in total.
As a result, tribal members have had to rely more on Medicaid to finance
services from an increasing number of non-IHS providers. Yet Native American
elders remain underserved, with only 6.5 percent of them receiving any LTC
services. Poor economic conditions, transportation issues, and rural isolation make
obtaining home and community services even more difficult. Thus, older Native
Americans suffer even more than other Americans from fragmented and uncoordi-
nated financing and minimal services (Benson, 2002).
Perhaps the most interesting aspect of the IHS is that structurally and cultur-
ally it is more of a government-run, social health system than is the case with health
and LTC programs provided to other Americans. The social structure of the tribe
encourages the development of services that are provided directly to the members
of the tribe from facilities that are owned by the tribe for its collective benefit.
Many of the tribal strategies involve generating financial resources to support such
social services through gaming and other tribal enterprises. Perhaps similar pub-
licly financed approaches could usefully be developed to meet the needs of other
communities for more LTC services.

Recent Changes Affecting Long-Term Care Hospitals

Two significant legislative acts passed in 1999 and 2000 have had a significant impact
on Medicaid and Medicare by further blurring differences between the two programs
where LTC coverage is involved. The Medicare, Medicaid, and SCHIP Balanced

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Budget Refinement Act of 1999 (BBRA, P.L. 106-113) and the Medicare, Medicaid,
and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, P.L. 106-554)
established Medicare prospective payment system (PPS) for hospital inpatient stays
in LTCHs under Medicare Part A. Section 1886(d)(1)(B)(iv)(II) of the act also pro-
vided alternative definitions of LTCHs that were designed to more clearly distinguish
LTCHs from acute care hospitals and to restrict the growth of LTCHs.
LTCHs treat “patients with clinically complex problems, such as multiple acute
or chronic conditions who may need hospital-level care for relatively extended
periods”; they are defined as hospitals with average lengths of stay (ALOS) greater
than 25 days. LTCHs can be freestanding or a “hospital within hospital” (HWH).
Centers for Medicare and Medicaid Services, citing concern that the latter may
function as a step-down unit for acute care patients of the host hospital, established
a rule limiting the number of the host hospital’s patients that could be admitted to
the HWH LTCH.
In October 2002, a PPS for LTCHs replaced the reimbursement program in
place since 1982, which was based on average costs per discharge. The PPS for
LTCHs is similar to the diagnosis-related group (DRG) classification that is used to
reimburse acute care hospitals for Medicare patients. This system reflects the lower
intensity of services and costs in LTCHs and maintains budget neutrality. Like
the DRG system for acute care hospitals, LTC-DRGs are based on the patient’s
principal diagnosis, comorbid conditions, procedures, patient demographics, and
the discharge status of the patient. LTC-DRG payments provide adequate reim-
bursement for the efficient delivery of care and are adjusted by LTCH case mix to
reflect variations in patient severity. Annual updates to the LTC-DRG payments
determined by the Department of Health and Human Services are based on total
patient days and total charges (Federal Register, 2006).
Despite the hopes of policy makers, the change in reimbursement does not seem
to have discouraged the development of LTCHs. They have become much more
common sources of LTC in recent years. Yet many beneficiaries, especially in rural
areas, do not have easy geographical access to an LTCH. In 1990, 90 LTCHs served
Medicare patients; at the end of 2004, this figure had risen to 357 with 71 new LTCHs
beginning their participation between 2001 and 2004. The number of nonprofit and
for-profit LTCHs had increased by 12 and 11 percent, respectively, since the end of the
cost-based reimbursement in 2002, whereas the number of government-run LTCHs
had declined by 5 percent. During the same period, the number of cases discharged
from LTCHs had also increased 12 percent per year and Medicare payment per case
rose 10 percent per year (Medicare Payment Advisory Commission, 2006).

Recent Changes in Medicaid to Control Costs

Regulatory efforts to limit the growth of public LTC spending occur at both
the federal and state levels. In a direct effort to address Medicaid estate planning,
the Deficit Reduction Act of 2005 (DRA, S. 1932) includes provisions to reduce

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the extent of asset transfers by increasing penalties on individuals who transfer per-
sonal assets for less than the market value to qualify for Medicaid benefits. The act
extends the look-back period, the period of time before an application for Medicaid
benefits, from three to five years. Assets that were transferred during the look-back
period remain subject to spend-down requirements. The DRA also makes individu-
als with substantial home equity ineligible for Medicaid nursing home benefits.
These measures are expected to save the federal government $6.3 billion from 2006
to 2015.
States are also required to establish Medicaid Estate Recovery programs to
recover expenses from patients’ estates. Before the year 1993, such programs were
voluntary on the part of the state, but the Omnibus Budget Reconciliation Act
of 1993 mandated recovery programs. Thus, states must now recover the costs of
medical assistance for nursing home services, home- and community-based ser-
vices, and hospital and prescription drug expenses (U.S. Department of Health and
Human Services, Office of Assistant Secretary for Policy and Evaluation, 2005).
The DRA also reduces payment rates for home health services to 2005 lev-
els and establishes a 5 percent add-on payment for home health services provided
in rural areas during 2006. The act also requires home health agencies to report
quality-related data for 2007 or face a 2 percent reduction in reimbursement. The
Congressional Budget Office (2006) estimates that these measures will save the
program $5.7 billion from 2006 to 2015.

Long-Term Care Reform: Federal Failure

and State Incremental Strategies
The long-running healthcare debate has only occasionally addressed key choices in
LTC policy. Early versions of President Clinton’s Health Security Act included a
large, state-run, non-means-tested home care program. It also included a proposal
to increase the level of protected assets under Medicaid to reduce the amount of
spend down required for institutional care in a nursing home. As the last major
national LTC proposal, it fostered a greater debate over the relative merits of public
programs versus private insurance rather than focusing on the plight of the elderly
and disabled.
In the same period, the American Health Security Act of 1993 was introduced by
U.S. Representative Jim McDermott (D-WA) and Senator Paul Wellstone (D-MN).
More liberal than the Clinton administration’s proposal, the proposed plan specified
extensive coverage for nursing home and home health benefits within a single-payer
health insurance system on a non-means-tested basis.
Ultimately, national LTC reform failed, in part because the LTC proposals
were part of the larger healthcare reform packages. Proponents of both the Clinton
and McDermott–Wellstone proposals failed to gain sufficient support to overcome
the objections of numerous special interest groups. None of the comprehensive

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healthcare and LTC reform bills ever came to a vote; reform efforts thereafter
have focused on incremental changes (Wiener et al., 2001). Until the political will
in the United States can support a social insurance program for LTC, other means
will be required to increase efficiency in the current system.
In the absence of national reform, states are choosing among three strategies
to manage public LTC expenditures. States can attempt to offset state expendi-
tures by increasing private insurance enrollment. They can use traditional cost-
containment methods such as managing the number of nursing home beds or
reducing reimbursement levels. Or they can try to reform the healthcare and LTC
delivery systems.

Promoting Private Long-Term Care Coverage

Many states, most notably California and New York, attempt to induce individuals
to purchase private LTC insurance. They do so by allowing those who purchase a
state-approved LTC policy to retain a higher proportion of personal assets than they
normally would be allowed to retain and still qualify for Medicaid. In California,
for example, residents may purchase private LTC coverage up to a level that equals
the amount of assets they are trying to protect. Similarly, New Yorkers can exempt
personal assets of unlimited value from Medicaid spend-down requirements by
buying a private insurance policy with at least three years of coverage. Other states
have developed public–private partnerships with private insurance carriers that
offer lower premiums to promote the individual purchase of private coverage. To
date, all have failed to create any appreciable increase in LTC enrollment (Wiener
and Stevenson, 1998). These poor results suggest that such programs and market
reforms will not be sufficient. In light of that failure, continuing to promote the
purchase of LTC insurance, particularly among lower- and middle-income groups,
seems futile.
Policymakers have considered another initiative that involves reducing Med-
icaid estate planning to reduce state expenditures for LTC and promote the pur-
chase of private LTC coverage. Many policymakers consider the practice of asset
transferring, sheltering, and otherwise underreporting personal assets by middle-
and upper-class elderly to prepare for Medicaid eligibility without surrendering
substantial amounts of family wealth to be an extensive problem. Although there
is no universal agreement that transferring assets is a major policy problem, most
experts believe that reducing the practice is difficult, but essential to increase the
purchase of LTC insurance (Wiener and Stevenson, 1998). As long as there are ways
to circumvent prohibitions against them, such practices will continue and efforts
to increase enrollment in private coverage will go largely unrewarded. States that
adopt strategies to curb Medicaid estate planning hope that eliminating opportuni-
ties to transfer wealth will further encourage the purchase of private LTC insurance
policies.

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Regulatory Approaches
Under federal Medicaid and Medicare rules, states have wide discretion in adopt-
ing regulatory cost-control mechanisms such as certificates of need that limit the
supply of LTC beds. Because most LTC beds are likely to be filled by Medicaid
patients, limiting the number of beds enables states to control the rate of growth
of Medicaid LTC expenditures. Of course, the cost of home- and community-
based LTC may well rise as Medicaid copes with the unmet need for institutional
care. Such approaches may produce short- and midterm reductions in cost, but the
increasing need for LTC as the country’s population ages is likely to render such
strategies ineffective in the long term. Moreover, a strategy that creates a shortage of
LTC beds is incompatible with efforts to control costs through competition among
LTC institutions.
Another public policy mechanism attempts to contain costs by decreasing
reimbursement levels to LTC providers. As the largest payer of LTC services, states
can apply leverage on providers to agree to lower rates for the same level of service
in much the same way that private health insurance carriers use the promise of
large patient volume to negotiate lower rates with providers. The potential effec-
tiveness of this cost-reduction strategy was significantly increased by the repeal of
the Boren Amendment in the Balanced Budget Act of 1997 (P.L. 105-33). This
amendment had required states to reimburse providers of Medicaid at “reason-
able” rates. Losses in a number of lawsuits in the 1980s and 1990s had greatly
constrained the ability of states to contain Medicaid costs by restricting reim-
bursements. Since the repeal of the amendment, many states have become more
aggressive in “negotiating” lower rates with providers (Wiener and Stevenson,
1998).
However, states cannot restrict the revenues of LTC facilities too much with-
out damaging the quality of care. Painful policy experiences over the years have
taught state officials that egregious lapses in quality rouse public ire to a much
greater extent than continuous annual increases in cost, even when those costs
reach double digits. Reimbursement reductions may be effective only in the short
run or in cases where the reimbursements exceed providers’ costs. Putting pressure
on providers to maintain quality while reducing their revenue creates a squeeze on
operators that will probably result in long-term increases in rates and decreases in
quality.

Delivery System Reform

Many states have attempted to reform the LTC delivery system to create greater
efficiency, hoping thereby to relieve the pressure to increase reimbursements. In
general, delivery system reform efforts fall into two categories: expanding home-
and community-based services and integrating LTC and acute care services within
the same program.

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 Public Financing of Long-Term Care 䡲 401

Substituting Home- and Community-Based Services

Most states support the view that they can reduce the cost of LTC by encouraging pro-
viders to substitute alternative, home-based and other outpatient, community-based
services for lengthier and presumably more expensive inpatient hospital and nursing
home care. States also believe that they can shift the cost of such services to Medicare
for those individuals who are covered by both Medicaid and Medicare because Medi-
care will pay for a greater proportion of home healthcare than for care in SNF. By
encouraging enrollment in zero premium Medicare Part C Health Maintenance
Associations (HMOs), states may also save money on dual enrollees (Wiener, 2003).
Research on the effects of expanding home services on nursing home costs indi-
cates, however, that the popular notion that savings can be realized by shifting
utilization from institutional settings to home- and community-based services is
not true. Instead of noninstitutional services expanding as a result of a shift from
the institutional setting to home-based settings, use of community-based services
has increased without any commensurate decrease in institutional care. The growth
in utilization of home-based services resulted from the reality that institutional
and community-based services are typically not substitute goods or alternatives to
each other, but rather that they are complementary in nature. Overall utilization
increased because expanded home-based services attracted patients who were not
receiving LTC services previously (Rivlin and Wiener, 1988).

Integrating Long-Term Care and Acute Care Delivery Systems

Integrating LTC and acute care delivery systems is intended to allow states to
achieve two key objectives by overcoming the difficulties presented by an incoher-
ent delivery and financing system, which too often treats patients in settings that
are suboptimal. First, states hope to improve the quality of care. In most current
arrangements, providers must balance the requirements of two different programs
to serve the needs of patients requiring LTC services (Wiener, 2003). Second, inte-
gration creates opportunities to consolidate funding between two government pay-
ment sources and introduce capitated payments so that more efficient care may
be provided for the three-quarters of LTC residents who rely on Medicaid and
Medicare to pay for the services that they receive.
It is often assumed that increasing the reimbursement rates for LTC programs
will lead to improvements in quality. Research by Cohen and Spector (1996),
Wiener (2003), and others, however, does not support this idea. Examining the
effects of reimbursement on accepted standards of nursing home quality including
mortality, incidence of bedsores, and patient functional health, Cohen and Spector
(1996) concluded that increased reimbursements had no significant effect on qual-
ity. In an earlier study, Nyman (1988) reached similar conclusions regarding the
relationship between reimbursement levels and quality of care. Nyman’s results
suggest that higher reimbursement merely leads to more staffing in LTC settings

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 402 䡲 Handbook of Long-Term Care Administration and Policy

and is not associated with improvement in LTC quality measures. Increased reim-
bursement for Medicaid and Medicare does, of course, add to the cost of funding
these programs without a commensurate increase in offsetting savings or quality.
Thus, the results of research on quality and cost make this policy difficult to sup-
port on those grounds (Wiener, 2003).
However, integration efforts enable states to reduce the total number of provid-
ers and develop contract standards and performance monitoring mechanisms. Each
of these initiatives facilitates the use of capitation payments. Capitation payment
systems shift the financial risk from the state to the providers and help stabilize
state budgets. Building the budget for these services on a fi xed per member per
month (pmpm) rate enhances the state’s ability to budget effectively and puts the
short-term risk for the cost of services in the hands of the providers. Congress devel-
oped an option for states to capitate acute care and LTC services when it enacted
the Program of All-Inclusive Care for the Elderly (PACE).

Program of All-Inclusive Care for the Elderly

PACE became a state option as a result of the Balanced Budget Act of 1997 (BBA,
P.L. 105-33). It is now offered as an integrated acute care and LTC model through
qualified providers in a limited number of states. The BBA, which established the
PACE model as a permanent entity within the Medicare program, allowed states
to provide PACE services to Medicaid beneficiaries as a state option. In 2002,
the National PACE Association reported that 73 PACE centers served more than
10,500 enrollees (Leatherman and McCarthy, 2005).
The PACE program is a capitated benefit program that offers a comprehen-
sive service delivery system and integrated Medicare and Medicaid financing to
address both medical care and LTC needs of clients. No patient cost-sharing
mechanisms such as deductibles or copayments are permitted. By combining
funding streams into a single global capitation, PACE overcomes the fragmenta-
tion in funding between Medicaid and Medicare and the resulting disintegration
in the delivery of care. Integrated financing allows providers to deliver all the ser-
vices that participants need rather than limiting providers to those reimbursable
under the Medicare or Medicaid fee-for-service systems.
PACE is an outgrowth of several notable home- and community-based demon-
stration projects in the 1970s and 1980s that included “social health maintenance
organizations,” which enabled frail elderly participants to continue living at home
while receiving services rather than entering presumably more expensive LTC insti-
tutions. They involved interdisciplinary care teams that coordinated services for frail
or impaired elderly patients in conjunction with the patient’s regular attendance at
an adult day service center. The PACE system of care, like the social health mainte-
nance organizations, enables participants to continue living at home while receiving
services. Evaluations of several demonstration projects compared patients receiving
PACE interventions to those receiving the standard of care at the time. The results

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 Public Financing of Long-Term Care 䡲 403

suggest that PACE interventions reduced nursing home and hospital days and the
number of nurse visits, while increasing ambulatory care visits which provided the
required care in less expensive settings (Leatherman and McCarthy, 2005).
Opponents of integrated LTC, however, make two points against such a strat-
egy. They argue that the managed care industry’s relative inexperience in LTC ser-
vices will increase costs. Managed care tends to shift patients to ambulatory care
settings when possible to reduce patient volume in high-cost inpatient settings.
The practice raises the question of whether integrating acute care and LTC would
foster home- and community-based services at the expense of necessary inpatient
or institutional care. Opponents are also concerned about the possibility that LTC
would become overmedicalized and eventually consume a greater portion of the
healthcare budget (Wiener et al., 2001).

Social Insurance
Among the public programs for LTC discussed so far, only Medicare is a social
insurance program. To understand why only a few such public programs exist,
especially in the United States, it is first necessary to understand what constitutes a
social insurance program.
According to the first welfare theorem of economics, private markets provide
commodities in efficient quantities. When a market does not provide a commodity in
sufficient quantity at a price that the market will bear, either market conditions must
change or government must intervene. In the case of LTC insurance, the market has
failed to produce a product that satisfies the need for a comprehensive LTC plan at a
price most consumers are willing to pay. Consequently, when faced with the need for
extensive LTC, most Americans spend down personal assets to qualify for Medicaid,
which places a great burden on the state-run program. The role of Medicaid as the
universal LTC insurance is costly for state and federal governments and spending
down personal assets creates hardships for families who lack LTC insurance.
Social Security, Medicare, and Federal Unemployment Insurance are the U.S.
examples of such social insurance programs. Medicaid does not fulfill the criteria
for a social insurance program. Although social insurance programs may address a
variety of losses, they share the following common attributes:

䡲 Participation is compulsory
䡲 Eligibility and benefits depend to a great extent on prior compulsory contri-
butions made by the worker or employer
䡲 Benefits are paid as the result of a readily identifiable event or occurrence
䡲 There is no means testing (Rosen, 2002)

Social insurance programs are compulsory, a key aspect that differentiates social from
private insurance. The latter must maintain sufficient reserves to cover future claims

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 404 䡲 Handbook of Long-Term Care Administration and Policy

as well as purchase reinsurance. In contrast, compulsory government programs based

on taxing power function in the secure knowledge that government obligations do
not require actuarially balanced savings from premiums to cover future payments.*
The fundamental concept behind insurance, social or private, is that as the size
of the risk pool increases, the cost of protecting against the risk to the individual
becomes negligible. This principle is called the law of big numbers.† The cost to
individuals of risk decreases as the risk of an insured independent event is pooled.
From this perspective, social insurance serves to create larger risk pools than can
be generated by competition among multiple insurance firms and is very consistent
with the fundamental principles of insurance. The fact that it is compulsory serves
to create this large pool (Friedman, 2002).
Compulsory social insurance programs also provide massive advantages of scale,
do not need to generate profits, and have inexpensive promotional requirements. In
contrast, private insurance carriers must pay for costly marketing efforts to increase
market share and generate profits. These cost advantages allow Medicare to pay
out nearly 99 percent of revenues in medical benefits, as compared to 85 percent of
premium revenue typically paid by private health insurers (Rosen, 2002).
A danger of compulsory insurance is that the excess of revenue over claims pro-
duced in some periods in its history will encourage government to fund its other
activities in the short term without raising taxes or borrowing from the capital mar-
kets. Thus, assets in the Medicare and Social Security Trust Funds have allowed
the annual consolidated federal budget to show smaller deficits than without the
surpluses that these trust funds have accumulated.
Another common objection to social insurance is that such programs are really
income-transfer programs and not insurance. Positive symbolic value comes from
labeling such programs “insurance,” for the word suggests that benefits are earned
and are therefore neither charity nor the result of an unsavory political deal benefit-
ing some special interest group. The reality is that these are “event-conditioned”
programs, which means that benefits are paid on the occurrence of a particular
insured event such as disability or, in the case of pension funds, achieving a spe-
cific age. Health insurance pays when an individual falls ill and files a claim for
reimbursement of a covered charge. Indeed, all insurance programs are event-
conditioned (Feldstein, 1976).

* The government IOUs in the Social Security Trust Fund are real obligations, but the perma-
nence of Social Security and Medicare do not rest on any projected “solvency” of projected
claims balanced against reserves. The U.S. obligation to pay future retired baby boomers, like
the obligation to pay the People’s Republic of China for all the money that it has loaned the
U.S. government, ultimately depends on the willingness of future voters to keep promises that
have been made in good faith to fellow citizens since 1935 and 1965. In light of the dispro-
portionately high proportion of older Americans who vote, one can be assured that the United
States will renege on its debts to China long before the elderly will lose promised benefits.
†
For a more detailed explanation of insurance theory, see Chapter 18 by Smith and Brandon in
this volume. It provides a quantitative example of risk sharing.

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 Public Financing of Long-Term Care 䡲 405

A further objection to social insurance covering LTC is that it will create unac-
ceptable “moral hazard.” Moral hazard, the negative consequences for individual
and group incentives that are created by insurance, exists when behavior is likely
to be affected by the fact that a potential loss will be indemnified. The presence of
insurance may provide an incentive to engage in activities that present greater risk of
loss than those that might occur without the insurance (Rosen, 2002). For example,
the availability of federal flood insurance encourages building in flood-prone areas
and subsidizes the mortgages that make such building possible. If LTC is covered,
individuals may seek nursing home care sooner or utilize more home care than they
may actually need. Such behavior increases the potential loss to the risk pool and
is of great concern to policymakers, who must balance the social benefits of a pro-
gram with higher program costs that may result from riskier behavior. Medicare, for
example, struggles continuously with managing the utilization of services by vari-
ous cost-containment methods such as case management and benefit limitations.

International Perspectives on Social Insurance

for Long-Term Care
Unlike the United States, many industrialized countries have instituted social insur-
ance programs to assist families with the financing of LTC. Germany, Denmark,
Japan, and the Netherlands, in particular, have created social insurance programs that
address the needs of their growing elderly populations. Each of these countries has a
highly developed healthcare system, a strong cultural sense of equity and social solidar-
ity, and increasing LTC needs generated by a rapidly aging population. These nations
commonly resort to social insurance solutions for their social welfare problems.
Denmark, for example, operates a national health service that integrates LTC and
acute care under a single administrative unit. Local authorities operate the majority
of nursing homes and are experimenting with a transition from traditional institu-
tional nursing home settings to specialized, self-contained dwellings designed for
the elderly, while maintaining the institutional setting for residents with the great-
est need. The other countries, Germany, Japan, and the Netherlands, each operate
a social insurance system to finance the cost of LTC services, but services including
those provided in institutional residential settings are provided by the private sector
and reimbursed by the social insurance funds (Meijer et al., 2000).
Germany established its Pflegeversicherung, an LTC insurance program, in
1995, as a separate component of the German social insurance system. It covers
nearly 90 percent of the population. Those whose annual gross income is below a
specified threshold must participate in the public LTC system and make contribu-
tions to it. Individuals with incomes greater than the specified threshold must choose
between participating in the public system and purchasing private LTC insurance.
Contributions to the public LTC system are proportionate to the individual’s income
and are capped every year. More than 75 percent of the population is required to

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 406 䡲 Handbook of Long-Term Care Administration and Policy

participate based on income. An additional 13 percent of the population chose to

participate in the public LTC system even though they were not required to do so.
The German program explicitly provides assistance to those who are unable to
perform ADLs due to physical, intellectual, or mental impairment for periods antici-
pated to be longer than six months. Assistance covers the spectrum from home health
services to institutionalization (Geraedts et al., 2000). It organizes services and needs
into three stages: stage 1 in which daily care is necessary for a minimum number of
activities, stage 2 in which more extensive care for multiple ADLs is required through-
out the day, and stage 3 for which around-the-clock care is required. The program
covers both ambulatory and institutional care. Belgium and the Netherlands operate
similar social insurance programs (Wahner-Roedler et al., 1999).
Of course, these countries also experience the pressures of escalating costs and
quality challenges that are the results of an aging population. All of these countries
have, therefore, begun reviewing their payment structures and changing policies
to address current and anticipated increases in their age-dependency ratios, the
number of workers relative to the number of elderly. These countries are trying
to restrain cost increases by making entry and admission criteria more selective,
regulating the number of beds, and requiring greater amounts of private cost shar-
ing. Establishing market-based approaches and industry regulation within a social
insurance context gives these governments hope of increasing competition among
providers that will improve quality and provide a restraining force on prices paid by
social insurance funds (Meijer et al., 2000).
An obvious question arises at this point. In a world of global convergence,
why does the United States resist adopting social insurance programs when other
advanced industrial nations, such as those discussed in this subsection, embrace
social insurance as the best way to provide for many of the needs of their citizens?
European nations and Japan, in particular, have many social insurance programs:
examples range from childcare to LTC and notably include universal healthcare.
The answer to this revealing question involves addressing the cause of what has
come to be called “American exceptionalism.” The following section of this chapter
will turn away from the minutiae of programs and economics involved in public
financing of LTC to suggest some reasons for the profound resistance in the United
States to providing universal, tax-based coverage for LTC without means testing.

Why Does the United States Have So Few

Social Insurance Programs?
A brief review of the major points established so far in this chapter highlights the
policy problem of paying for LTC in the United States.

䡲 Extensive LTC is the kind of relatively rare but catastrophic expense for
which insurance to spread risk and reduce individual loss is appropriate.

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 Public Financing of Long-Term Care 䡲 407

䡲 Asymmetric information, when the insured knows more than the insurer
about the likelihood of incurring losses, increases the chances of adverse
selection and the cost of insurance in a voluntary system.
䡲 Most individuals are financially unable or volitionally unwilling to purchase
LTC insurance in the current voluntary system.

When the problems of financing LTC are laid out in this straightforward fashion,
the obvious public policy solution is for the government to establish a system cover-
ing all residents that is financed by compulsory payment. These payments may be
called “premiums” if that term is more appealing than “taxes.” The social insurance
solution for LTC seems so obvious that reference to fundamental characteristics of
the American polity is necessary to understand why this solution does not have a
place in U.S. policy discussions of LTC issues.
Historically, Americans have valued personal liberties and individual rights more
than public welfare. The focus on liberty entails a concomitant emphasis on personal
responsibility. American society admires risk takers, rewards entrepreneurialism, and
is structured in ways that promote these attributes. It was founded on the principles
of Locke (1960) and Smith (1981) that the government has the responsibility to
establish property rights, provide for national and personal security, and protect free
enterprise. De Tocqueville (1956) captured the implications of this unique American
approach to social organization in his remarkable chapters on the “novel [in 1835]
expression individualism.” De Tocqueville also “celebrated vibrant American com-
munities where people understood that their own best interest—their ‘self inter-
est rightly understood’—required the whole community to pitch in and help one
another, to work together, to see their fates as deeply interconnected” (Morone and
Jacobs, 2005). When Americans look beyond the individual for support or action,
the initial response is to search for that succor in “civil society,” also called the non-
profit or voluntary sector, rather than government (Lipset, 1996; Salamon, 1987).
As a result, American society is ready to assist those truly in need, but will not
reward or encourage idleness and will discourage even “deserved” social assistance
that might sap habits of self-reliance.* This attitude formed the basic premise of
welfare reform in the 1990s, which introduced return-to-work requirements and
benefit limits to recipients.
Two aspects of this culture, in particular, help explain why so little social insur-
ance infrastructure exists in the United States and why Social Security, Medicare,

* A broad range of cultural evidence supports this generalization. For example, Bremner’s (1988)
discussion on the influence of the Charity Organization Society as “scientific philanthropy” in
post-Civil War America or the moral tale “True and False Philanthropy” credited to Anonymous
(1848) in the McGuff ey Readers of the 1840s. The McGuff ey Readers propagated a specific set of
white, Protestant moral and cultural values in the process of teaching basic reading, speaking,
and other academic skills. Much of the rhetoric used to discuss the safety net and proposed
welfare reform in the 1981–1996 period would have been instantly familiar and comfortable to
mid-nineteenth-century American elites engaged in debating essentially the same problems.

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 408 䡲 Handbook of Long-Term Care Administration and Policy

and limited unemployment insurance are the only forms of social insurance offered.
First, the American government is pluralist in nature and lacks the structural ele-
ments of a “neocorporatist” environment like that found in European countries,
which have established numerous, comprehensive social insurance programs.
Pluralism promotes the self-interested actions of special interests and requires coali-
tions to form around issues to place policy issues on the national agenda and move
them through the approval process. Fewer coalitions generally represent the middle
and lower classes that benefit more from social insurance. In contrast, the disci-
plined multiple-party parliamentary systems commonly found in Europe, espe-
cially those with class-based voting patterns, are better structured to withstand the
blandishments and threats of special interests (Lipset and Marks, 2000).
Second, within this political environment, society is willing to help those in
need, but only to a certain extent. It will not tolerate shirkers. Therefore, benefits in
state and federal programs targeted at specific populations are limited in both extent
and length of time. Applying for benefits from such programs may be rather involved
and may require the individual to undergo means testing to receive benefits. In this
way, policies are used to protect programs from the risks of asymmetric informa-
tion. Administrators often cannot know the intent or real condition of individuals.
Bureaucratic barriers are constructed to help busy officials discriminate between
those who truly need benefits and those who would like to have them, but do not
require them. Obviously, a humane bureaucracy must balance these approaches and
use common sense to avoid inadvertently excluding those in greatest need.
Although the elderly and disabled constitute a large and growing segment of
the U.S. population and have developed greater political presence, they have not
yet established LTC as an item on the public agenda. The special interests advocat-
ing for private insurance have succeeded so far in maintaining government support
of the current fragmented financing and chaotic organization of LTC. They have
endorsed a number of efforts by individual states to entice the public to purchase pri-
vate LTC plans rather than depend on Medicaid as catastrophic LTC insurance.
Thus, in the United States, only Medicare, Social Security, and federal
Unemployment Insurance meet the political and economic criteria necessary to
count as social insurance. The social, psychological, and economic costs of the fail-
ure to provide additional social insurance programs, such as LTC, do not affect
everyone equally: The costs are particularly low for the interests that exert the great-
est influence on the political process in the United States, whereas those least able
to influence policy bear the greater burden.

Conclusion
This chapter has covered a great deal of material. It started by providing some
statistics about current funding sources, demand for LTC, and measures of
expected future LTC needs in the United States. Then it explained the principal

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 Public Financing of Long-Term Care 䡲 409

national programs for financing LTC: Medicaid, Medicare, the Veterans Health
Administration, and the IHS. More attention was focused on recent policy changes
in Medicare and Medicaid, particularly the growth of LTCHs and the extension
of prospective payment to them, policy efforts to foster the purchase of private
LTC insurance, and regulatory and budgetary efforts to limit the growth of LTC
spending. Two broad strategies for controlling cost through system reform were
examined next: the belief that providing alternative home- and community-based
services can reduce the demand for and cost of nursing homes and efforts to inte-
grate LTC and acute care, principally through the PACE program.
The last section of the chapter moved to a more theoretical level in its explana-
tion of the concept of social insurance. After discussing insurance and social insur-
ance, it provided several specific examples of nations that have social insurance for
LTC. The final substantive subsection addressed the “big picture” question of why
social insurance is not part of the “policy stream” (Kingdon, 2003) when policy
discussions about LTC arise in the United States.

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R.H., Skinner, A.S., and Todd, W.B. (Eds.), 2 vols. Indianapolis, IN: Liberty Fund.
Stone, R.I. (2000). Long-term care for the elderly with disabilities: Current policy,
emerging tends, and implications for the twenty-first century, Milbank Memorial
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org/reports/0008stone/.
U.S. Department of Health and Human Services, Centers for Medicare and Medicaid
Services. (2004). CMS Legislative Summary: Summary of H.R.1 Medicare Prescription
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July 30, 2006, at http://www1.va.gov/opa/fact/index.asp.
Wahner-Roedler, D.L., Knuth, P., and Juchems, R.H. (1999). The German Pflegeversicher-
ung (long-term care insurance). Mayo Clinic Proceedings, 74(2), 196–200.
Wiener, J.M. (2003). An assessment of strategies for improving quality of care in nursing
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Wiener, J.M., Estes, C.L., Goldenson, S.M., and Goldberg, S.C. (2001). What happened
to long-term care in the health reform debate of 1993–1994? Lessons for the future.
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 LOOKING AHEAD VI

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 Chapter 20

Focal Points of Change

Cynthia Massie Mara

Contents
National Long-Term Care Debate............................................................ 417
Demographics ..................................................................................... 417
Economics and Financing ...................................................................418
Politics and Policy ...............................................................................418
Social and Cultural Issues ................................................................... 419
Long-Term Care Needs, Services, and Caregivers............................... 420
Health Status and Medical Technology...............................................421
Conclusion.............................................................................................. 422
References ............................................................................................... 423

The landscape of long-term care (LTC) is sure to change. Demographics alone will
force adjustments. Technological advances will increasingly facilitate the distance
monitoring of vital signs, cardiac function, and other indicators of health sta-
tus, enabling more people to remain in their homes and communities. Economic
pressures will necessitate change in the financing of services. Societal perceptions of
aging will alter as the baby boomers continue to age, and changing attitudes toward
disability, already evident, are sure to evolve further. The business community will
increasingly take note of the aging of its customers and exploit new financial oppor-
tunities to address their declining functional abilities.

415

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 416 䡲 Handbook of Long-Term Care Administration and Policy

Nonetheless, the many contradictions that exist in LTC must be addressed.

Choices are expanding in some geographic areas although gaps in services con-
tinue to pose problems in other locations. High-quality care is offered to recipi-
ents of LTC services delivered by many organizations even as abuse and neglect
are inflicted on clients of others. Technological advances are being developed, but
the resources allocated to LTC are not keeping pace with demand, even for basic
services. The need for more paid and unpaid caregivers is steadily growing at the
same time that fewer and fewer people are available to do the work. Integration of
components of healthcare within networks is emphasized even as multiple LTC
programs with different eligibility requirements, services, and financing mecha-
nisms continue to proliferate; indeed, certain efforts to coordinate the healthcare
system may be “more rhetoric than reality” (Feder et al., 2000).
Creative approaches, with goals such as the following, are needed to address
inconsistencies:

䡲 Integrate acute care and LTC more effectively, providing a smoother contin-
uum of services for people needing both types of assistance, without falling
into the trap of overmedicalizing LTC.
䡲 Design policies and programs that foster continuing development of a capable
workforce in numbers sufficient to meet needs.
䡲 Render LTC entities places where people want to work and receive care.*
䡲 Address housing issues in coordination with a person’s medical and LTC ser-
vice needs.
䡲 Support independence and choice for LTC recipients, within the limits of
their abilities.
䡲 Restructure financing mechanisms so as to avoid impoverishment as a pre-
requisite for receiving Medicaid, the primary source of public payment for
LTC services.
䡲 Provide adequate support and training for the vast number of people who
informally provide assistance to family members, friends, and neighbors;
without them, the costs would be significantly greater, even unbearable.
䡲 Break down even further the institutional bias in Medicaid by pressing for
alternative care options.
䡲 Implement public education programs to counter misconceptions about
LTC.
䡲 Develop incentives for people to prepare financially for their potential LTC
needs.

* This approach is in line with the principles of culture change in LTC. Culture change focuses
on person-directed values and practices. More information on this organizational change
model can be found at http://www.pioneernetwork.net/who-we-are/our-history.php.

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 Focal Points of Change 䡲 417

䡲 Foster the development of medical advances and care systems aimed at pre-
venting, delaying, and effectively treating chronic illnesses.
䡲 Design technologies and assistive devices that enable people to live more
independently.
䡲 Focus our collective attention on the challenges of LTC and make the
required changes in the current system.
䡲 Consider seriously the development and implementation of a univer-
sal LTC insurance system, especially one that incorporates public–private
partnerships.

National Long-Term Care Debate

To prompt significant change in LTC, a national debate is needed on the subject.
Certain elements must be part of the discussion, including demographics; eco-
nomics and financing; politics and policy; social and cultural issues; LTC needs,
services, and caregivers; and health status and medical technology. These are issues
that have the potential to influence LTC significantly.

Demographics
The future impact of shifting demographics on LTC has been detailed in the pre-
ceding chapters. Key changes are summarized as follows:

䡲 Between 2000 and 2040, disability rates for people aged 65 and older are
expected to decline from 30 to 28 percent.
䡲 Owing to the rapid growth in this age group, however, the number of older
individuals with disabilities will more than double.
䡲 There will be fewer working age adults in relation to retired individuals
because the numbers of older people will increase at a faster rate than those
of their younger cohorts.
䡲 The number of individuals aged 65 and above needing formal or paid care at
home will grow by more than 100 percent.
䡲 The number of people in this age group requiring nursing home care will
increase from 1.2 to 2.7 million.
䡲 Because of ongoing societal changes, fewer and fewer people, especially
adult daughters, will be available to provide informal care (Johnson et al.,
2007).

The LTC system is not equipped for these changes. Yet no adequate preparation is
underway.

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Economics and Financing

The economic environment of LTC has a particularly important impact on
policymaking. Ignoring the issue of LTC may appear less problematic when the
economy is growing, tax revenues are increasing, and the ratio of workers to non-
workers is high. However, when economic indictors fall, political leaders take
action to slow the rate of the increase in LTC expenditures, especially with regard
to Medicaid. States are particularly vulnerable. Unlike the federal government,
most states must balance their operating budgets. During hard times, when states
can least afford it, Medicaid budgets tend to rise. At the same time, LTC costs are
taking an increasing share of the Medicaid pie. A number of studies show that, in
the absence of policy changes, many states will encounter insurmountable fiscal
challenges in the foreseeable future (Czerwinski and McCool, 2007; Rossiter and
Neice, 2006).
There will be a wide income disparity among future members of the older popu-
lation. Baby boomers are reportedly anticipating an extended work life. For these
individuals, postponed retirement can result in greater personal savings, Social
Security payments, and pension benefits. The extra funds can make later retirees
better positioned financially and prepared if LTC needs should arise. However,
poverty will be the fate of a significant percentage of boomers, particularly single
women (widowed, divorced, and never married) and minorities. African Americans,
for example, are at a particularly high risk. At age 67, approximately 12 percent of
white but 22 percent of African-American boomers are expected to have incomes
less than double the poverty level (Murphy et al., 2007).
Misconceptions among the public about LTC financing must be overcome if
we are to achieve better personal decisions. A related goal is increased awareness of
the financial risks, both public and private, associated with LTC. Past educational
efforts, however, have not prompted significant responses; denial about disability
and aging serves as a potent barrier. Regardless of the difficulties, we must place a
discussion about LTC on our national political agenda.

Politics and Policy

As noted earlier in the text, no real LTC system exists in the United States, but
rather a set of uncoordinated policies. As a result, various programs with different
eligibility requirements, funding mechanisms, and covered services have emerged,
making the nonsystem difficult to navigate. Policy changes must include not only a
more coherent LTC system but also a restructuring of its financing.
Many contradictions in policy alternatives exist and need to be addressed. For
instance, state governments want to be relieved of at least some of their growing
financial commitment; individuals who face catastrophic financial losses and
impoverishment due to LTC expenses would like the government to assume a
greater share. A public debate is needed and political leadership is essential for

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 Focal Points of Change 䡲 419

that discussion to take place. One means toward this end is “Divided We Fail,”* a
national bipartisan organization that is attempting to stimulate presidential leader-
ship in this policy area (Rother, 2007).

Social and Cultural Issues

Social and cultural factors must also be taken into consideration; restructuring
our LTC system is hindered, not only by limited resources but also by attitudes
of the past† that continue to shape its direction. Enduring shifts in LTC seem
possible only if there is a fundamental change in the way aging and disability
are regarded in society. The history of LTC reveals a tendency to gather people
with certain characteristics, assign a label, and treat everyone in that category
alike. Viewing people with LTC requirements as a homogenous cohort has led
to cookie-cutter programs in which individuals must fit the program offerings
rather than have their actual needs met. Because people with disabilities are
becoming even more diverse, it is imperative that we avoid this oversimplifica-
tion in any ongoing debate about the future of LTC. For instance, one relatively
new challenge is the provision of LTC to growing numbers of older prisoners.
Corrections systems across the United States, indeed around the globe, are
searching for ways to address the needs of their aging inmate population (Mara,
2002, 2003, 2004).
Perceptions of aging and disability are linked to the frameworks or theories
adopted by society. As long as the biological deficiency model or dependency theory
is given priority, the role of the consumer will be given less weight. From this out-
moded perspective, people with a need for assistance are assumed inevitably to
follow a downward trajectory (Allert et al., 1994). A newer concept regarding aging
provides a different viewpoint. The “successful aging” approach examines factors
that enhance life as people age. It is assumed that by applying prevention approaches
and behavior modification techniques, a person can postpone the decline often
associated with old age.
Martha Holstein and Meredith Minkler caution, however, that such models
can lead to “blaming the victims” for their own poor health. According to these
authors, the successful aging concept, while contributing heightened awareness
of actions to prevent disability, may minimize factors over which the person
lacks control. As a result, the individual’s struggle to accept and deal with dis-
abilities can be undervalued (Holstein and Minkler, 2003). Balance is needed
between perspectives that see individuals as having little or no control over their

* This organization consists of AARP (formerly the American Association of Retired Persons),
the State Employees International Union (SEIU), and the Business Roundtable. For additional
information, see www.aarp.org/issues/dividedwefail/.
†
More details about past attitudes toward LTC can be found in Chapter 1.

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 420 䡲 Handbook of Long-Term Care Administration and Policy

disabilities and unrealistic ones that imply that people should have more control
than is possible.
Changing perceptions of aging and disability, however, are evident and are
reflected even in comic strips. In the past, such characters typically did not age or
experience disease or death. More recently, “Funky Winkerbean”* (Batiuk, 2007)
featured a young couple in which the woman was dying of cancer, allowing straight-
forward discussions of illness, chemotherapy, and death. “For Better or For Worse”†
( Johnson, 2007), another comic strip, frequently deals with issues of aging, disability,
death and dying, and bereavement.
The growing acceptance of hospice care is another example of changing atti-
tudes. Since the opening of the first U.S. hospice in 1974, these organizations
have provided care to hundreds of thousands of individuals. Care of the dying,
which normally occurred in a person’s home in colonial times, has, at least for some
people, returned to the home.
There is also a new language used to denote disability, reflecting increased
awareness of prior derogatory terms. The Disability Movement‡ has been instru-
mental in promoting the phrase “people with disabilities” in lieu of terms such as
“the handicapped” or “crippled.” Increasingly, the public has been encouraged to
expand its idea of disability beyond the functional impairments of individuals to
focus instead on the restrictions that they encounter in their social and physical
environments.

Long-Term Care Needs, Services, and Caregivers

In our national dialogue on the future of LTC, we need to emphasize the specific
requirements of the various LTC populations, most of which have been presented
in earlier chapters. At the same time, more discussion about alternatives to nurs-
ing homes is imperative if we are to respond more effectively to the preferences
of individuals with functional limitations. Critical dialogue must be devoted to
quality of care, the concerns of paid caregivers, support for individuals who provide
assistance informally, and ways to integrate acute care and LTC. We must also seek
approaches that will transform the LTC environment to one in which people want
to live and work. For instance, since the 1990s, the Pioneer Network (2007) has
championed such changes; its underlying philosophy involves:

person-directed care [that] offers a relationship-based, values-driven

alternative to the out of sight, out of mind institutional model that

* Additional information about this comic strip can be found at funkywinkerbean.com.

†
Further information about “For Better or For Worse” can be found at http://www.fborfw.
com/strip_fi x/.
‡
Additional information on the Disability Movement can be found in Chapter 6.

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 Focal Points of Change 䡲 421

has plagued the system for decades. The movement is about promot-
ing household living environments—in congregate settings as well as
in home and community-based services—where elders and direct care
workers are able to express choice in meaningful ways.

Health Status and Medical Technology

The health status of the nation will have a definite impact on the need for LTC.
As addressed in previous chapters, the disability rate among the older population
has been declining. There are differing predictions, however, as to whether or not
that decrease will continue. Even so, the incidence rates of certain chronic illnesses
that often underlie the need for LTC are expected to rise. As an example, approxi-
mately four million people currently have Alzheimer’s disease, with an estimated
annual cost of care being over $100 billion. Because of the sheer number of
aging baby boomers, without effective methods to prevent or delay onset of the
illness, the number of people with Alzheimer’s disease could double by 2050
(Hodes, 2003; Hebert et al., 2001). One result will be a substantial increase in
the need for LTC services.
However, medical and technological advances could result in significantly
decreased need for LTC; they could also change the way care is provided.
Research, for instance, is underway to search for ways to prevent Alzheimer’s
disease and other chronic illnesses. As Pomidor and Pomidor (2006) write in
The Lancet:

the pace of scientific progress has been steadily accelerating, and the
recent introduction of such transformative tools as genetic engineering,
advanced imaging techniques, and the internet may yet breed a “perfect
storm” of medical innovation rivalling that spawned by the advent of
antibiotics and immunisation [sic].

Genomic medicine uses an individual’s genetic information to tailor health care

to that person’s needs. Such testing can identify gene variants that accompany
certain diseases, especially those that underlie the need for LTC services. Accord-
ing to the National Human Genome Research Institute (NHGRI; 2007), the
findings can be used “to confirm a suspected diagnosis, to predict the possibility
of future illness, to detect the presence of a carrier state in unaff ected individuals
(whose children may be at risk), and to predict response to therapy” (Topol et al.,
2007).
Genetic testing, of course, raises ethical and policy concerns. Without ade-
quate protections, individuals whose tests reveal the likelihood of medical problems
in the future could have great difficulty in acquiring health, life, disability, and

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 422 䡲 Handbook of Long-Term Care Administration and Policy

LTC insurance. In response, Congress is considering genetic nondiscrimination

legislation.*
Health-related efforts that are less complex than genetic testing also have the
potential to lessen the demand for LTC and would need to be part of the debate.
Programs that promote healthful lifestyles constitute one example. Compression-
of-morbidity endeavors that aim at delaying the onset of LTC-related conditions
comprise another approach.
The business community, certainly, will be part of any technological devel-
opment and change. In the article “Electronics giant seeks a cure in health care:
Fleeing chips and TVs, Philips makes big bet on aging consumers” in The Wall
Street Journal, Abboud (2007) reported that Philips and other corporations such as
Siemens AG and General Electric Co. are responding to the aging of the popula-
tion, the increasing incidence of chronic illnesses, and people’s strong preference
to remain at home even in the face of increasing functional limitations. Lifeline,
which enables a person to call for help at the touch of a button that is embedded in
a necklace or bracelet, was an early product line. Other equipment enables distance
monitoring of a patient’s vital signs. The development of technology that detects
balance and motion with the aim of reducing the estimated 350,000 falls per year
that result in hip fractures is another example.
Corporate America is involved in LTC in other ways, for example, when elder
care is found to affect worker productivity. According to a survey conducted by the
National Alliance for Caregiving and AARP, almost six out of ten informal care-
givers work full- or part time or have been employed at some point while providing
care. Of these workers, 62 percent say that caregiving has affected their work in
some way, with 54 percent reporting that it has caused them to arrive late at work,
leave work for periods of time, or go home early (Barrett, 2005).

Conclusion
The United States must move toward a coherent LTC system, rather than a collec-
tion of disparate policies. A national debate is essential in rendering long-needed
changes in LTC administration and policy. Although LTC is an often avoided topic
of discussion, it is one that must be addressed, especially because forces in the exter-
nal environment are pushing it toward a crisis situation. A debate would surface
issues that seldom receive sufficient attention due, at least in part, to the denial sur-
rounding aging and physical and cognitive decline. Administrators, policymakers,

* The Genetic Nondiscrimination in Health Insurance Act would amend the Employee Retire-
ment Income Security Act (ERISA) and the Public Health Service Act (PHSA) and would
“prohibit discrimination on the basis of genetic information with respect to health insurance
and employment” (The Library of Congress [LOC], 2007).

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 Focal Points of Change 䡲 423

and the public will increasingly be challenged to enter into a real and full dialogue
from which new ways of approaching LTC can emerge.

References
Abboud, L. (2007). New treatment: electronics giant seeks a cure in health care: Fleeing chips
and TVs, Philips makes big bet on aging consumers. The Wall Street Journal. A.1.
Allert, G., Sponholz, G., and Baitsch, H. (1994). Chronic Disease and the Meaning of
Old Age. The Hastings Center Report.
Barrett, L. L. (2005). Caregiving in the U.S. Bethesda, MD: National Alliance for Caregiv-
ing and Washington: AARP.
Batiuk, T. (2007). Funky Winkerbean. http://www.funkywinkerbean.com (accessed May
27, 2007).
Czerwinski, S. J. and McCool, T. J. (2007). State and Local Governments: Persistent Fiscal
Challenges Will Likely Emerge within the Next Decade. Washington: Government
Accountability Office. GAO-07-1080SP.
Feder, J., Komisar, H. L., and Niefeld, M. (2000). Long-term care in the United States: An
overview. Health Aff airs. 19(3): 40–56.
Hebert, L. E., Beckett, L. A., Scherr, P. A., and Evans, D. A. (2001). Annual incidence of
Alzheimer disease in the United States projected to the years 2000 through 2050.
Alzheimer Disease and Associated Disorders. 15: 169–173.
Hodes, R. J. (2003). Witness (Director, National Institute of Aging) Appearing Before the
Senate Committee on Appropriations, Subcommitee on Labor, Health and Human
Services, Education, and Related Agencies, Washington. http://www.nia.nih.gov/
AboutNIA/BudgetRequests/HearingADResearch.htm.
Holstein, M. and Minkler, M. (2003). Self, society, and the “new gerontology.” The Geron-
tologist. 43(6): 787–797.
Johnson, L. (2007). For Better or For Worse. http://www.fborfw.com (accessed May 27,
2007).
Johnson, R. W., Toohey, D., and Wiener, J. M. (2007). How Changing Families Will Aff ect
Paid Helpers and Institutions. Washington: Urban Institute. http://www.urban.org/
url.cfm?ID=311451 (accessed May 2, 2007).
Mara, C. M. (2002). Expansion of long-term care in the prison system: an aging inmate
population poses policy and programmatic questions. Journal of Aging and Social
Policy. 14(2): 43–61.
Mara, C. M. (2003). A comparison of long-term care in prisons and in the free population.
Long-Term Care Interface. 4(11): 22–26.
Mara, C. M. (2004). Chronic illness, disability and long-term care in the prison setting.
In Katz, P., Mezey, M. D., and Kapp, M. (Eds.), Advances in Long-Term Care Vol. 5:
Vulnerable Populations in the Long-Term-Care Continuum. New York: Springer.
Murphy, D., Johnson, R. W., and Mermin, G. (2007). Racial Diff erences in Baby Boomers’
Retirement Expectations. Washington: Urban Institute.
National Human Genome Research Institute (NHGRI). (2007). Overview of Genetic
Testing. Washington: Author. http://www.genome.gov/10002335/Overview (last
reviewed May 15, 2007).

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Pioneer Network. (2007). Pioneer Network: Our Vision. http://www.pioneernetwork.net/

who-we-are/ (accessed May 14, 2007).
Pomidor, B. and Pomidor, A. K. (2006). With great power. . . . The relevance of science
fiction to the practice and progress of medicine. The Lancet. 368: S13–S15.
Rossiter, L. F. and Neice, R. F. (2006). Medicaid, state finances, and the bottom line for
businesses. Business Economics. 41(3): 49–54.
Rother, J. (2007). Who will pay for boomers’ long-term care? Presentation by the AARP
Group Executive Officer of Policy and Strategy at the Urban Institute, Washington.
The Library of Congress (LOC). (2007). THOMAS: CRS Summary of S.358, The Genetic
Nondiscrimination in Health Insurance Act. Washington: Author. http://thomas.loc.
gov/cgi-bin/bdquery/z?d110:SN00358:@@@D&summ2=m& (accessed June 28,
2007).
Topol, E. J., Murray, S. S., and Frazer, K. A. (2007). The genomics gold rush. Journal of the
American Medical Association. 298(2): 218–221.

CRC_AU5327_CH020.indd 424 1/2/2008 10:40:27 PM

 Index

A adult foster homes, 181, 303–4

adult group homes, 181
abuse, see elder abuse advance care planning, 192
accelerated life insurance, 383 advance directives, 49, 166, 199, 203–4
access to care, 179 advance practice nurses, 139
accountability, 244 adverse selection, 366, 390
accreditation, 250 advocacy, 191, 329–30, 333–6, 351–2
active seniors, 174 Advocate Inc., 325
activities of daily living (ADLs), 8–10, 41, 78, age-based differences, 95–6
80–1, 88, 106–7, 179, 181, 187, 273, age discrimination, 89, 325
294, 297, 389, 406 age-restricted housing, 300
activity limitations, types of, 77–8 aging in place, 231, 314
acute care delivery systems, 53, 89, 175, 400–2 aging parents, family caregivers, 109, 112
acute care facilities, 303 aging, perceptions of, 419–20
acute care hospitals, 54, 180, 306 aging population
acute disease, 5 coordinated care issues, 174–92
acute illness, 6, 61, 175 demographics, 51–2
administration growth of, 73, 179
business partners, 261 housing for, 230
constituent groups, 260 statistics, 10, 81, 93, 388
financial community, 261–2 AIA-B141 contract, 308
leadership culture, 264–5 Aid to Families with Dependent Children
participants in, 258–9 (AFDC), 26–7, 392
regulatory agencies, 261 Alabama Nursing Home Association, 325
residents involvement, 259–60 Alliance for Quality Nursing Home Care, 325
roles of, 10 almshouses, 5–6, 53, 55, 57, 222–3, 225, 227
staff, 259 alternative residential settings, 79–80
transparency, 257–8, 260–2, 265, 278 Alzheimer’s disease, 116, 199, 234–5, 356–7,
Administration on Aging (AOA), 121–2 396, 421
administrative costs, 188 ambulatory care, 188, 302
admissions, 165, 174, 192, 246, 281 American Academy for Geriatric Psychiatry
adult children (AAGP), 347–8, 355
as caregiver for parents, 20–2, 62–3, 109, American Academy of Pediatrics, 175
112, 114–9 American Assocation of Colleges of
disabled, aging adults caring for, 119 Nursing, 148
multigenerational households, 51–2 American Association of Homes and Services
adult day centers, 11, 179, 188, 297–8, 396 for the Aging (AAHSA), 254, 325

425

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 426 䡲 Index

American Association of Nursing Homes, 7

American Association of People with
B
Disabilities (ADAPT), 98, 101 baby boomer generation, 81, 90, 112, 236,
American Association of Retired Persons 306, 322–3, 334, 340, 415, 418
(AARP), 26–7, 88, 125, 306, 325–6, 422 back braces, 81
American Community Survey (ACS), 91 Balanced Budget Act (1997), 228, 298, 402
American Health Care Association, 325 Balanced Budget Refinement Act (1999), 397
American Health Security Act (1993), 398 barber shops, 231
American Medical Association, 148 bath seats, 81
American Medical Directors Association Bazelon Center, 97
(AMDA), 158–9, 161 beauty salons, 231
American Nursing Association, 58 bed-blockers, 53, 58
American Psychological Association (APA), bedsores, 401
346–8, 352, 354–5 beneficiaries, defined, 28
American Public Health Association, 325 Benefits Improvement and Protection Act
Americans with Disabilities Act (ADA), 88, (2000), 397
96–9, 309 bidding, building process, 310–1
ancillary services, 165 bladder incontinence, 120
anesthesia, 6 blindness, 6, 60
annual reports, 192 blood transfusions, 203
annuities, 210, 215, 217 Bluestone, E. M., 54
antibiotics, 6, 203, 228 board-and-care facilities, 79, 181, 229, 304
antisepsis, 6 boarding houses, 7, 56
Ararat Nursing Home, Performance board of directors
Improvement and Quality asset protection, 250
Improvement program, 147 current expectations and trends, 253–4
Arc, The, 97–8 functions of, 247–9, 254, 258–9
architect, building design governance activities, 249
functions of, 308–9 leadership development, 252–3
selection factors, 311 legal requirements of, 250
Area Agencies on Aging (AAA), 174, 178–9, resident involvement, 256–7
218, 297, 355–6 risk-reward assessments, 251
asepsis, 6 strategic planning, 250–1
asset protection planning bottom-up approach to LTC, 97
case study, 208–9 bowel incontinence, 120
jurisdiction issues, 212 brain disorders, 335
opposition to, 211–2 building design, phases of, 308–10
protection from nursing home costs, 208 building process, roles and responsibilities,
asset transfer, 25, 209–10, 213 307–8
assisted living facilities, 11, 79–80, 114, 180–1, building program, 313
184, 255, 303–5 bureaucratic organizations, 224, 408
assistive community services, 174 Bureau of Labor Statistics, 243
assistive devices, 81, 112, 301, 417 bylaws, 255
assistive technology, 101–2
Association of Homes and Services for the
Aging, 150
attained age premiums, 370–1
attending physician, roles of, 160–4
C
attorney general, functions of, 218–9 cafeteria plans, 381
autonomy, 96–7 canes, 81
average length of stay (ALOS), 397 capitation payment systems, 402

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cardiac resuscitation, 202 certified nurse assistants (CNAs), 136, 138–9,

Care Coordination Coalition, 192 141, 144–7, 149, 151
care coordination models charitable contributions, 260
case management, 182–3 charitable hospitals, 226
chronic care model, 182, 186 charitable organizations, 243–4, 248–9
disease management, 186–7 chief executive officer (CEO), 248
healthcare coordination, 183–4 children, see adult children
transitional care, 184–6 disabled, 174
care coordination programs family caregivers, 109
Coordination and Advocacy for Rural state-funded insurance program for, 392
Elders (CARE) program, 191 chore services, 297, 335, 371
health maintenance organization Chronically Ill, The (Fox), 64–5
(HMO), 190 chronic care, 182, 186, 189
models of, see care coordination models chronic disabilities, 81, 110, 174
Program of All-Inclusive Care for the chronic disease, 175
Elderly (PACE), 188–9, 369–70, chronic illness, 5–7, 22, 49, 53–5, 58, 61–2,
375, 409 106–7, 110, 417, 421–2
rural elders, coordination and advocacy, claims processing, 188
191–2 client-centered care coordination/home-
social health maintenance organization, telehealth program (CC/HT), 189–90
190–1 clinical care, 271
web-based, 189–90 clinical nurse specialists, 165
care coordinators, 175 cognitive abilities, 81
care disruption, 184 cognitive disabilities, 119
Caregiver Bill of Rights, 126 cognitive impairment, 24, 106, 255
caregiver, see informal caregivers collaborative care, 183–4
burden, 64, 115–20, 178 commercial mortgages, 377
relationship with patient, 37–8 community-based care, 61, 64, 94, 99, 178–9,
stress, 64, 115–20 229, 389
support, 179, 183 community-based funding, 298
training, 371 community-based services, 89–90, 178–9, 184,
care patterns, 274 190–1
care plans/planning, 37, 43, 165, 178, 184, 191 community care, 22, 32
Care Transitions Intervention model, 185 community mental health center (CMHC),
carrier medical director, 353 341, 345, 355–6
case management, 43, 122, 180, 371 Community Service Block Grants, 298
cash allowance programs, 100 comorbidities, 183, 270
Cash and Counseling Program, 100, 123, 126 compassion, 44–5
catastrophic financial loss, 418 compression-of-morbidity, 422
Catastrophic Health Insurance Act (1988), concierge services, 231
331, 333 congregate homes, 37
catheterization, 203 congregate housing, 114, 230, 297, 300–1
Center for Mental Health Services, 347 Congregate Housing Services Act, 230
Center for Personal Assistance Service, 92 congregate meal programs, 179
Center for Self-Determination, 97 Congressional Budget Office (CBO), 125, 398
Centers for Medicare and Medicaid Services Congressional structure, 328–9
(CMS), 123–4, 136–7, 158, 270–1, conservatorship, 204–5
273–4, 278–9, 281, 333, 342, 344, constituent groups, 260
349, 352–5, 397 construction, building process, 310
Certificate of Need, 229 consumer activism, 254–7
certification, 63, 330–1. See also licensure consumer-directed at-home services, 326

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 428 䡲 Index

consumer-directed care, 86, 89, 97, 123, demographic studies

191, 335 aging population, 51–2
consumer-driven market, 230–1 caretakers, 50–1
consumer protection agencies, 219 future trends, 415
continuing care retirement communities importance of, 10
(CCRCs), 11, 181–2, 225–6, 230, workforce trends, 135, 139
254–6, 298, 300, 303, 305–6, 369–70, denial, as coping mechanism, 9
372–3, 375, 379, 383 Department of Health, Education, and
continuity of care, 246 Welfare (DHEW), 330–1
continuum of care developmental disabilities, 119, 174, 229, 335
components of, 175–6 diagnoses, 272–3
development of, 174–5 diagnosis-related groups (DRGs), 397
ideal vs. current reality, 176–7 Diagnostic and Statistical Manual for Primary
control, loss of, 48, 51 Care (DSM-PC) Child and Adolescent
convalescent homes, historical perspectives, Version, 356
56, 58 Diagnostic and Statistical Manual of Mental
Cooperative Home Care Associates Disorders, 4E, 356
(CHCA), 147 diagnostic tests, 203
co-op models, 255 dieticians, 165
coordinated care, 175 direct mail solicitation scams, 217
Coordination and Advocacy for Rural Elders Direct Marketing Association, 219
(CARE) program, 191 Directors of Nursing (DON), 138
copayments, 39, 343 direct payment, 7
cost containment, 324, 397–400 disability
cost of care, 9, 23–5, 30, 39 rates, 10–1, 31
cost-sharing mechanisms, 402 rights movement, 86–7, 92, 95,
county homes, 227 97–100, 420
cross-disability, 101 trends in, 80–1
curative care, 49, 175, 321, 389 disability insurance, 30
Current Procedure Terminology (CPT), 349 Disability Statistics Center, University of
Curtis, Lois, 98 California, 92
custodial care, 54 disabled elderly, 110–2, 124, 126
discharge plan/planning, 162, 180, 185,
280–1
disease cycles, 4
D disease management, 186–7
divorce, 24, 211
day-care centers, 122, 302. See also adult documentation, standardized electronic
day centers records, 192
deafness, 6 “Do Not Call Registry,” 219
Death Houses, 6 duration of care, 280
death, in hospital, 47–8. See also estate
planning
decision-making process, 49, 178, 184, 201,
248, 254, 256, 261, 263, 280
Deficit Reduction Act (2005), 25, 86, 99–100,
E
126, 211–5, 334–6, 382, 397–8 economic power, 102
deinstitutionalization, 96–8, 229 economic theory, 39
delivery of care, 179, 183 educational status, implications of, 95
demand and supply of services, 10–1 elder abuse, 23, 115, 228
dementia, 93, 116, 118, 187, 235, 349, 396 electronic client care records, standardized, 192

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electronic health records (EHRs), 186, 189 fitness centers, 231

electronic information systems, 186 flexible spending accounts, 381
Elizabethan Poor Law, 5, 41 follow-up care, 178, 184
employer-provided benefits, 30 formal care, 81
employer-sponsored LTC insurance, 371 for-profit organizations, 7, 57, 249
employment status, 102, 110–1, 117–8 foster care, 115, 124, 181, 335
empty-nest syndrome, 51 fragmented care system, 64, 184, 349, 355,
end-of-life care, 65, 166, 174, 201–2, 204 396, 406
entry fee models, 255–6 frail elderly, 20–1, 25, 28, 31, 48, 58, 62–3,
Epidemiological Catchment Area (ECA) 90, 98, 124, 126, 151, 192, 294,
program, 340 326, 402
estate planning, 25, 217–8, 397, 399 fraud, 23, 218–20, 228
estate recovery program, 213–4, 398 Freedom of Choice, 100
estate taxes, 205–6 free riders, 326
ethnic differences friends, as caregivers, 8
family caregivers, 113 full-time equivalent employees (FTEs), 135
private insurance, 379 functional deficits, 78
evidence-based medical outcome models, 186 functional impairment, 10, 24, 175, 183, 420
expenditures, quality and quantity of, 101–2 functional independence, 271
functional limitations, 8–9, 11, 78, 87, 422
funding
historical perspectives, 7–8
F streams, 176–7, 183
Future of Aging Services, 263
fair housing legislation, 300
fair market value, 213
family
as caregivers, 8, 20–1, 36, 61–5, 93. See also
informal caregivers
G
as funding source, 80 gender differences
consumer activism roles, 255 aging population, 51
satisfaction with care, 271 in caregiving, 20, 63, 109–11, 113, 117–8
systems, types of, 115 institutional placement, 22, 24, 31
Family and Medical Leave Act, 121 General Accounting Office (GAO), 330,
Family Caregiver Support Act (2000), 121 333, 355
family care homes, 181 genetic testing, 421
family housing, standard, 299–300 genomic medicine, 421
Fannie Mae, 376 Genworth Financial National (GFN), 20, 28
Federal Bureau of Investigation, 219 Georgetown University Long-Term Care
Federal Employees Health Benefit Financing Project, 93
program, 392 Geriatric Depression Scale, 345
Federal Housing Administration (FHA), 376 Geriatric Education Centers (GECs), 148
federalism, 323–4 geriatric nurse aides (GNAs), 147
Federal Register, 354 Geriatric Nursing Education Project, 148
fee-for-service systems, 402 geriatric patient aide (GPA), 147
fi lial bonds, 112–3 geropsychiatry, 354. See also mental health
fi lial piety, 120 services
financial management, 168 geropsychology, 340, 342
financial mismanagement, 115 gifts, 25, 209–10, 213
Financial Power of Attorney, 199, 201 Ginsburg, Ruth Bader, Justice, 98
financial scams, 217 Gold, Steve, 92

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 430 䡲 Index

governance Health Security Act, 398

administration, 257–62 health status, 421–2
board of directors, 247–54 hearing aids, 81
consumer activism on LTC facilities, 255–7 hemodialysis, 203
development of, 243–6 high-income population, 26
essential components of, 262–5 Hill-Burton Act, 7, 58, 228
professional leadership, development of, historical perspectives, 5–8, 55
246–7 holistic care, 186, 232
government agency misrepresentation, 216–7 Holly Patterson Geriatric Center (New York
government-run institutions, 89 City), 94
Graduate Geropsychology Education Program home adaptations, 112
(GGEP), 348 home- and community-based services (HCBS)
Graduate Psychological Education (GPE) future directions for, 191
program, 348 types of services, 64, 89, 99–100, 124, 126,
grandparents, caregivers of grandchildren, 135, 178–9, 184, 190–1, 365, 389, 393,
114–6 398, 401, 403, 409
“Granny Goes to Jail” law, 214 waiver, 334–5
“Granny’s Attorney Goes to Jail” law, 214 home care, see home healthcare
Grassroots Action Information Network home-delivered meal programs, 179, 396
(GAIN), 351 home equity, as funding resource, 25
Gray Panthers, 101 Home Equity Conversion Mortgage (HECM),
Great Depression, 55, 227, 243 376–7
group homes, 37, 79, 89 home equity conversions (HECs), 369–70,
Growing Strong Roots, 145–6 375–6, 383
guardianship, 204–5 home health agencies (HHAs)
certified Medicare, 395
characteristics of, 9, 100, 268
quality measures, 270–3, 276–7, 280–5
H home health aides
handrails, 81 compensation, 42
HCR Manor Care, 325 employment concerns, 139, 141
Health Care Financing Administration functions of, 29, 42–3, 145, 149
(HCFA), 342, 345, 354 relationship with patients, 43–4
Healthcare Power of Attorney, 199, 201–2, home healthcare
204, 220 decision–making process, 49
healthcare reform, 398–9 expenditures, 80
health insurance, 325 funding for, 30
Health Insurance for the Aged and Disabled historical perspectives, 7
Act, 393 home assessments, 127
Health Insurance Plans, 377–8 medically necessary services, 394
Health Insurance Portability and multigenerational families, 50–3, 61–5,
Accountability Act (HIPAA), 30, 185, 112–3, 115
214, 381 need for, 298
health maintenance organizations (HMOs), overutilization of, 39
401. See also Medicare, health prevalence of, 107
maintenance organizations; social public policy, 39–40
health maintenance organizations quality of, 32
(S/HMOs) resource utilization, 35–48
health promotion, 186 services provided, generally, 11, 65, 89–90,
Health Resources and Services Administration 174, 177–9
(HRSA), 139 staffing issues, 137–8

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standard, 96
visits, 335
I
Home Health Compare, 279–81, 284 ICF-MRs, expenditures, 90
home health nurses IDentify Alzheimer’s Disease (ID.A.D)
functions of, 40 Resource Kit, 356–7
relationship with patients, 43–4 impairments, disability distinguished from, 88.
home improvement/household repair See also specific types of impairments
scams, 216 in-home care, 29. See also home healthcare
Home Keeper Mortgage, 376–7 In-Home Supportive Services (IHSS)
home-like environment, 49–50, 64–5 system, 89
homemaker assistance, 178, 371 in-home therapies, 297
home modification 297–8, 396 independent living, 49–50, 62, 64–5, 96–8,
hospice care, 48–9, 174, 177, 305, 371, 394, 420 174, 256, 297, 300
hospital care Indian Health Service (IHS), 388, 392,
cost of, 226 396, 409
environment, 65 individual medical accouts (IMAs), 369–70,
overutilization of, 53–4 375, 383
utilization, 53, 187 individual retirement accounts (IRAs), 375
hospitalization rates, 174, 274 infirmaries, 4
hospital within hospital (HWH), 397 informal care, 81, 91, 93, 177–8. See also home
housecleaning services, 297 healthcare
housekeeping services, 180, 231, 396 informal caregivers
housing caregiver stress and burden, 115–20, 126
arrangements, 113–4 compensation for, 122, 126
building process, 306–10 contemporary challenges for, 112
government-assisted, 299 coping strategies, 118, 120–1
hybrid models, 303–6, 314–5 economic value of, 107–8, 178
medical model, 301–3 employment status, 110–1, 117–8
options, types of, 11 future directions for, 125–7
overview of, 294–5, 313–4 housing arrangements, 113–4
quality issues, 310–3 multigenerational families, 112–3, 115
referrals, 97 physical work, 116–7
residential model, 296–301 policy innovations in support of, 121–5
site selection, 311–3 profi le of, 108–12, 126
traditions, see housing traditions resource centers for, 121–2
twentieth-century paradigms, 295–6 roles of, 106–8
housing traditions satisfactions and rewards of, 120–1
almshouses, 53, 55, 57, 222–3, 225, 227 supportive interventions, 122–6, 183
future directions for, 231–6 training programs for, 122–3, 126
medical models, 223–5 types of fmily systems, 115
residential model, 225–31 Informal Caregiver Supplement, 110
specialized groups, 223 information systems, types of, 186, 188
Humane Impartial Society, 243 inheritance taxes, 26
human resources, 262–4 initiation of care, 185
Hurricane Katrina, 320 Institute of Medicine (IOM), 269, 279
hybrid-model housing institutional bias, 86, 96, 416
adult foster homes, 303–4 institutional care, historical perspectives, 55–6
assisted living facilities, 303–5 institutionalization, 6, 57, 115–6, 416
characteristics of, 303–4 instrumental activities of daily living (IADLs),
continuing care retirement communities 9–10, 78–81, 88, 110–1
(CCRCs), 303, 305–6 integrated care, 65, 86, 98–9, 101, 165, 416

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 432 䡲 Index

intellectual/developmental disabilities Learn, Empower, Achieve, and Produce

(ID/DD), 97 (LEAP) program, 145–7
Inter-Association of Health (IAH), 58 legal documents
interdisciplinary care teams, 183–4 capacity issues, 199–200
interdisciplinary coordination team, 186–7 conservatorship, 204–5
interest groups, 324–7, 352, 398 estate planning, 199
intergenerational family living, 50–3 guardianship, 204–5
intermediate care facilities (ICF), 301–2, inheritance taxes, 205–6
330–1, 392 intervivo’s trust, 207–8
Internet-based care management, 189 last will and testament, 205–7
interrater reliability, 275 living wills, 202–4
intervivo’s trust, 207 powers of attorney, 200–2
intestate laws, 205 probate, 206–7
isolation, in caregivers, 115, 118 revocable living trusts, 207–8
issue age premiums, 370 legal issues
It Shouldn’t Be This Way: The Failure of asset protection planning, 208–12
Long-Term Care (Kane/West), 48 legal documents, see legal documents
scams, 215–20
legislation
asset planning, 212, 214–5
J caregiving, 121
disability rights, 86
job satisfaction, 263 housing issues, 298
John A. Hartford Foundation, 148 Medicaid eligibility, 25
Johns Hopkins Geriatric Center, 147 medical vendor payments, 57–9, 62
quality of care, 269
specialized care, 7
workforce training, 150
K length of stay, 180
Kaiser Family Foundation, 21, 25, 27, 31, 140 licensure, 181, 247, 295
Kaiser Health Poll, 27–30 life-care facilities, 225–7
Kappa statistic, 275 life expectancy, 52, 81, 114, 209, 340
Kennedy, Edward, Senator, 333 life insurance, 377
Kennedy, Patrick, Representative, 346 Lifeline, 422
Kerr-Mills Act, 7, 59–60 life satisfaction, 182
kidney dialysis, 203 life span, 5
Kindred Healthcare, 325 life-support treatment, 204
limited actuarial experience, 366
living alone, 113–5
living arrangements, 52, 65. See also housing
Living Trust
L characteristics of, 207
labeling, 6 revocable, 207–8
labor unions, 150–1 scams, 217–8
Ladies Sheltering Aid Society, 225 Living Will, 199, 202–4, 220
Last Will and Testament, 199, 205–7, loan programs, 7
217, 220 lobbying strategies, 7, 31, 57, 325–7
laundry services, 180, 231 local medical review policies (LMRPs),
Law of Demand, 39 342–4, 353
lead-by-example strategy, 381 location of care, 11
leadership culture, 264–5 longevity, 112–3, 388

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 Index 䡲 433

long-term care hospitals (LTCHs), 396–7, 409 perceptions of, 22–3

Long-Term Care Security Act (2000), 30 personal care services, 92
long-term care services, see specific types program expansion, 335
of services public support for, 28
Long-Term Care Trust Account Act public view on, 20, 26–8
(2006), 334 reimbursement by, 90, 321, 325, 402
long-term disability insurance, 30 spending constraints, 326
lookback period, 212–5 spending down, 25–6
lottery scams, 216 waivers, 90, 99–100, 124, 178
low-income elderly, 28 Medicaid Community Attendant Services and
LTC crisis, 99–100 Supports Act (MiCASSA), 100–1
lump sum payments, 377 Medical Assistance Act (MAA), 60
Medical Assistance program, see Medicaid
medical directors
accountability, 158
M coordination of medical care, 166–7
critical investments in, 167–8
majoritarian issues, 327 regulation of, 158–61
malnutrition, 115 resident care policies and procedures,
managed care organizations, 191–2, 403 165–6
managed care plans, 140 roles, 151–61, 165
Massachusetts Extended Care Career Ladder medical equipment and supplies, 29
Initiative, 148 Medical Facilities Survey and Construction
Mathematica Policy Research, 92 Act, 229
McClellan, Mark, 335 medical home model, 175
meal programs, 180, 297, 396. See also specific medical hospital, 222
meal programs medicalization
meals-on-wheels programs, 179 chronic illness, 53–5
means-tested programs, 59, 62, 322 death in hospital, 47–8
mechanic respiration, 202–3 loss of control, 48
Medicaid public policy, 48–9, 55–65
abusive practices, 63 medically indigent, 59–60
as asset shelter, 25–6 medically necessary services, 90, 394
as funding source, 27, 60, 80, 143, 209, medically needy, defined, 393
243, 246, 253, 375, 378–9, 392–3, 402, medical model, hospital facility layout
408–9 acute care, 224–5
budget for, 26, 322–3 architectural developments, 223–4
cost containment, 324, 397–8 medical-model housing
crossover restrictions, 343 acute care facilities, 303
development of, 7 ambulatory care, 302
eligibility for, 9, 31, 60, 176–7, 211–2, 215, characteristics of, 301
382, 393, 395, 399, 403 nursing facilities, 301–2
Estate Recovery program, 213–4, 398 subacute care facilities, 303
expenditures, 23–4, 60–1, 90, 99, 363–4, medical training, 321
389, 392, 400, 418 medical vendor payments, 57–9, 62
family caregiving, 63 Medicare
fraudulent practices, 63 acute care, 394–5
home services, 333 beneficiaries, 110–2
housing policies, 295–6 crossover restrictions, 343
LTC services, 28, 99, 396–7 development of, 7
nursing homes, 39, 229, 268, 323 eligibility for, 9, 40, 89, 177, 395

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 434 䡲 Index

Medicare (contd.) mental health services

expenditures, 298, 364, 389, 391, 394 barriers to, 341–2
Extended Care Facility (ECF), 330 demented patients, restriction of
family caregiving, 63 psychological services, 343–4
funding for, 27, 213, 243, 246, 253, 375, future directions for, 350–7
393–5, 402, 404, 408–9 legislation, 346–50
health maintenance organizations Medicare-Medicaid crossover
(HMOs), 190, 401 restrictions, 343
homebound requirement, 41 psychotherapy, nursing home quality-
home health services, 37, 178 indicator exclusion of, 343
housing policies, 295 restrictive local medical review policies,
LTC coverage, 396–7 342–3
mental health services, 342, 344–5, schism, 344
349, 355 underuse of, 340–1
nursing home care, 229, 268, 394 mental health therapy, 297
OASIS, see OASIS mental illness, 5–6, 53, 118, 229, 335. See also
Part A, 60, 394, 397 mental health services
Part B, 60, 394 middle-class population
Part D, 209 cost of care, 25–6
payments by, 80 elderly, 366
perceptions/misperceptions of, 20, 29 perceptions of LTC, 20
personal care services, 92 minimum data set (MDS), 92, 269–70,
prospective payment system (PPS), 270–1 273–6, 278, 282–3, 343, 356
psychological services, 351, 353 mobility care, 6, 78, 276
reimbursement by, 402 mobility impairments, 179
specialized care, 183 “Money Follows the Person” programs, 100
taxes, 332 moral hazard, 366, 405
Medicare Catastrophic Coverage Act mortgage insurance, 376
(MCCA), 214 Moss, Frank, Senator, 329–31
Medicare Mental Health Copayment Equity multidisciplinary team services, 174, 187, 192
Act, 351 multifamily housing, 299
Medicare Mental Health Modernization Act multigenerational families, 112–3, 115
(2000), 346, 351 multiunit residences, 313
Medicare Mental Illness Nondiscrimination My Mother’s Hip (Margolies), 48
Act (2000), 346
Medicare Modernization Act of 2003, 190
Medicare Prescription Drug, Improvement,
and Modernization Act (2003), 394
N
Medicare Wellness Act (2003), 347 Nader, Ralph, 63
medication National Alliance for Caregiving, 422
care coordination issues, 183–4 National Association of Area Agencies on
dispensation rules, 63 Aging, 101
management, 181, 185 National Association of Geriatric Nursing
Medigap, 344 Assistants, 150
Medstat, 92 National Association of Insurance
memory loss, 235 Commissioners (NAIC) guidelines, 377
Mendelsohn, Mary Adelaide, 63 National Citizens’ Coalition for Nursing
mental disabilities, 6, 20 Home Reform, 255
mental health centers, 302 National Conference of State Legislatures
Mental Health Copayment Equity Act (NCSL), 335
(2003), 346 National Council on Disability, 101

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 Index 䡲 435

National Council on the Aging, 95, 101 certification and licensure requirements, 165
National Family Caregivers Association, 357 licensed practical (LPNs), 134–6, 138–9,
National Governors Association (NGA), 334–5 147, 149, 151
National Health Interview Survey (NHIS) registered (RNs), 134–9, 143–4, 147, 151
components of, 91 visiting, 36–7
Disability Supplement (NHIS-D), 91 Nursing Education Loan Repayment
National Health Planning and Resource programs, 149
Development Act (1974), 229 nursing facilities, 90, 301–2
National Home Genome Research Institute Nursing Home Compare, 284
(NHGRI), 421 Nursing Home Reform Act (NHRA), 269
National Hospice and Palliative Care nursing home residents
Organization, 325 age statistics, 93–4
National Institute of Mental Health (NIMH), characteristics of, 80
354–5 quality measurement, 269–70, 273, 280,
National Labor Relations Board, 151 282–5
national long-term care debate nursing homes
caregivers, 420–1 affordability of, 208
cultural issues, 419–20 construction funding, 58
demographics, 417 cost of, 9, 56, 59, 208, 390, 398
economics and financing, 418 expenditures, 80
health status, 421–2 funding, 7, 30, 55–6, 58, 89, 389–90
politics and policy, 418–9 government regulation of, 7, 23, 327
quality of care, 420 growth of, 56–7, 59
social issues, 419–20 historical perspectives, 37, 56
technological advances, 421–2 industry development, 7–8
National Long–Term Care Survey (NLTCS), management strategies, 140–1
89, 92, 110–1, 118 mental health care, 140, 345–6
National Nursing Home Association, 325 ombudsman programs, 336
National Nursing Home Survey (NNHS), perceptions of, 21
91–2, 94 placement, reasons for, 62–5
National Organization of Home Care, 325 proprietary, 7, 23, 31, 56–8
National Organization on Disability (NOD), quality measures, 271–2, 276–7, 284
91, 93 relocation to, 114
National PACE Association, 402 residents, see nursing home residents
national policy, 227 rise and decline of, 228–30
National Quality Forum (NQF), 273, 279 services provided by, generally, 179–81
Naturally Occurring Retirement Communities skilled, 29
(NORCs), 299, 373 staffing, 143–4, 320
needs assessment, 8, 78–80 standards of care, 63
negotiations, building process, 310 transitional care, 184
neighborhood health centers, 302 utilization of, 49, 187, 230
New Courtland Elder Services, 147 nutrition programs, 174, 179
New Deal, 55
New Freedom Commission on Mental
Health, 350
New Freedom Initiative, 99
O
nonprofit hospitals, 222 OASDI, 55
not-for-profit charities, 227 OASIS (Outcome and Assessment Information
not-for-profit organizations, 243–5, 252–4, 301 Set), 35–6, 270–1, 273, 276, 278,
nurses aides, 147 282–3
nurses, see staff/staffing; workforce obesity, 10

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 436 䡲 Index

occupational therapy, 29, 297 Pepper, Claude, Congressman, 331–2

Office of Inspector General (OIG), 343, 345–6 Pepper Commission, 332
Old-Age Assistance (OAA), 55–7, 62 perceptions
Old-Age Survivors Insurance (OASI), 55 caregivers, 20–1
Older American Comprehensive Services of Medicaid, 20, 26–8
Amendments, 355 of Medicare, 20, 26–9
Older Americans Act, 88, 122, 178, 218, 298, older population, 20–2
332, 396 private insurance, 20, 29
older-old, defined, 52 public policy, 20, 22–3, 32
older population per diem services, 382
characteristics of, 74–7 performance reviews, 259
growth of, 77 peritoneal dialysis, 203
needs assessment, 78–80 permanent disability, 60
“old folks” home, 53 person-directed care, 420–1
old-old population, 81, 340 personal care
Olmstead v. L.C. and E.W., 98–9, 123 assistance services, 90–2, 97, 174, 178–9,
Omnibus Budget Reconciliation Act (OBRA), 181, 298, 305, 335
213–4, 334, 341, 398 assistants, 151
Online Survey, Certification, and Reporting contract, 210
(OSCAR), 135, 137–8 facilities, 11
open-door policy/forum, mental health settings, 181
services, 352–3 personal choice, 96
Outcome-Based Quality Improvement personal LTC needs, 28–31
(OBQI), 270, 278 Pew Research Center, 28
outdoor relief, historical perspectives, 5 Pflegeversicherung, 405
out-of-pocket costs, 24 pharmacies, 302. See also prescription drug
outpatient services, 174, 230, 302 coverage
outreach programs, 230, 355–6 pharmacists, 165
overhead costs, 186 pharmacotherapy, 356
physical disabilities, 6, 20, 53, 106
physical impairment, 255
P physical therapy, 29, 38, 42–3, 297
physician assistants, 165
palliative care, 174 physician office visits, 302
partner care, 118 Pioneer Network, 420
partnerships, 261, 417 place recognition, 235
path dependency, 323–4 planned retirement communities, 297, 300
patient care technician (PCT), 147 policy changes, 10
payments, sources of, 23–5. See also Medicaid; policymakers, 10
Medicare political action committees (PACs), 326–7
pensions, 62, 325 political leadership, impact of, 418–9
People First, 97 political power, 102
people with disabilities (PWDs) pool facilities, 231
home care, 89 poorhouse, 4
information resources, 90–2 population aging, 114. See also aging population
labeling, 88 population-based care, 186
LTC policies, 86–7 portable toilets, 81
LTC resources, 89–90 Positive Aging Act (2002/2003), 347–8, 355
unemployment rates, 90 positive autonomy, 97
younger, see younger people with postacute care, Medicare coverage, 61
disabilities (YPDs) postacute nursing services, 184

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 Index 䡲 437

poverty, 4–5, 9, 25, 53, 55, 57, 94, 115 private LTC coverage, promotion of,
Power of Attorney, 199–202, 220 388, 399
premiums, private long-term care insurance, regulatory approaches, 400
30, 399 social insurance, 388, 403–6
Presbyterian Homes, Inc. (PHI), 242, 246, Veterans Health Administration, 388, 392,
251, 256, 258–61, 263–4 395–6, 409
prescription drug coverage, 177, 325, 398 public insurance, 37
pressure ulcers, 273, 276–7 publicly-assisted nursing homes, 22
PRIDE program, 147 public policy
primary care physician, 190 barriers to agenda setting, 321–2, 336
privacy, 233 congressional structure, 328
private financing, see private long-term care constituents,322–3
insurance family care, 61–5
care insurance market, 380–2 federalism, 323–4
individual asset accumulation strategies, informal caregivers, 108, 121–5
375–8 interest groups, 324–8
overhead costs, 371 path dependency, 323–4
overview of, 363–4 policy entrepreneurs, 328–3
risk pooling, 367–75 rise of nursing homes, 55–61
summary of, 370 significance of, 20, 22–3, 32,
trends and developments in, 380 39–40, 48–9
utilization of, 372–3 public reporting, 279–81, 283–4
private long-term care insurance
barriers to coverage, 378
characteristics of, 30, 37, 80, 177
economic principles of, 365–7
government interventions, 380
Q
perceptions/misperceptions of, 29 qualified independent contractors
premiums, 390–1 (QICs), 350
problems with, 371–2 quality assurance, 188, 383
profitability, 249 quality improvement organizations (QIOs),
Program of All-Inclusive Care for the Elderly 279–81
(PACE), 187–8, 369–70, 375, quality improvement (QI), 268, 271, 285
402–3, 409 quality indicator (QI 5), mental health
Proposition D, 96 services, 343–4, 356
psychological dependency, 87 quality measurement
psychopathology, underdetection of, 342 aggregated, 272
psychotherapy, 342 benchmarks, 272, 274, 282
psychotropic medication, 356 care vs. outcome, 272–3
public caregiving, 44 comparison of quality, 272
public education campaigns, mental illness, composite, 277
356–7 importance of, 271–2, 284–5
public financing, see Medicaid; Medicare improvement efforts, 278–9
delivery system refrom, 400–3 minimum data set (MDS), 269–70,
expenditures, types of, 389 273–6, 282–3, 343, 356
Indian Health Service (IHS), 388, 392, public reporting, 279–81, 283–4
396, 409 reliability, 275–6, 283
long-term care hospitals (LTCHs), research knowledge, gaps in, 281–5
396–7, 409 statistical complexity, 283
long-term care reform, 398–403 technical issues of, 275–8
overview of, 388–91, 408–9 validity of, 273–4, 285

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 438 䡲 Index

quality of care, 4, 8, 21, 56, 62–4, 99, 136–9, reverse mortgages, 376–7
142, 158–9, 168–9, 182, 185, 188, revocable living trusts, 207–8
190–1, 263, 278, 282–3, 400–1, 416 risk pooling, 372, 404
quality of life, 114, 143, 180, 186, 188, 191, Robert Wood Johnson Foundation, 100, 270
232–4, 271, 281–3, 314 Rockefeller, Jay, Senator, 333
rural areas
home health services, 398
hospital beds, 180
R mental health services, 340
racial differences, family caregivers, 109, 113 PACE program, 188
readmissions, 166 senior populations, 177, 188, 191
recipients of long-term care, 10 types of housing, 232
reconsideration process, 353
recordkeeping guidelines, 184
recreational activities, 180, 231
referrals, 356 S
regulatory bodies, historical perspectives, 7
Rehabilitation Act (1973), 98 safety, significance of, 65
rehabilitation center, 65 Sarbanes-Oxley Act, 253
rehabilitation services, 49, 61, 64, 175, 177, scams
179, 297, 302 prevalence of, 215–6
rehabilitative programs, 246, 273 protection from, 218–20
reimbursement policies, 183. See also Medicaid; types of, 216–8
Medicare schematic design, in housing, 309–10
relocation, 114 Schiavo, Terri, 204
remarriage, 22 scholarships, 149–51
residence hotels, 299 Section 8 housing, 299
resident assessment protocols (RAPs), 278 Securities and Exchange Commission, 219
residential care (RC), 89, 181, 303–4 segregated care, 65, 98–9
resident involvement self-care management, 186
administration, 259–60 self-determination, 96–8
on board of directors, 256–7 self-directed consumers, 145
residential-model housing self-employed individuals, premiums for, 30
age-restricted housing, 300 self-management, 192
characteristics of, 296–8 self-neglect, 115
congregate housing, 300–1 senior centers, 174, 179
construction technologies, 226–7 senior health center, 186
consumer-driven market, 230–1 senior living, 297
cost concerns, 226 sensory impairments, 6
family housing, standard, 299–300 Service Employees International Union
national policy, 227 (SEIU), 150–1
nursing homes, rise and decline of, 228–30 service planners, 86–7
overview of, 225–6 services provided by long-term care, 10
resident satisfaction, 282 severity of disability, 101
resource utilization, 36–7 shopping programs, 297
resource utilization groups (RUGs), 270 Sierra Club, 325
respite care, 108, 119, 179 single-family housing, 299, 301
restorative services, 175 single parents, 115
restraints, use of, 272, 274 skilled nursing care, 393
restrictive environments, 86, 98 skilled nursing facilities (SNFs), 11, 54, 58–9,
retirement, 125 158, 180, 255, 302, 305, 330–1, 364, 394

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skin care, 273 stigmatization, 95, 341

Smith, Gordon, 333 strategic planning, 250–1
social environment, 234 subacute care facilities, 303
social health maintenance organizations subacute nursing services, 184
(S/HMOs), 190–1, 369–70, 373–4, substance abuse, 229, 302
383, 402 Substance Abuse and Mental Health Services
social health system, 396 Administration, 355
social insurance successful aging, 65, 419
characteristics of, 388, 403–5 Sun Healthcare Gruop, 325
compulsory, 404 Supplemental Security Income (SSI), 27, 117, 181
international perspectives, 405–6 support groups, 179
in United States, 403, 406–8 surgery, 203
social needs, 183 surgical day centers, 302
social power, 102 Survey of Income and Program Participation
Social Security, 27, 89, 117, 127, 209, 213, (SIPP), 24
325, 408 surviving spouse, 205
Social Security Act (1935) survivorship benefits, 371
Amendments to, 57, 60, 331, 333 sweepstake scams, 218
provisions of, 7, 57, 99, 227, 392–3 swing beds, 180
Social Security Trust Funds, 404 symbolic analysts, functions of, 42–3
Social Service Block Grants, 298 symptom management, 190
social services, 179–80
social support, 118–9
social welfare programs, 9, 27
social workers, 165
societal aging, 112
T
socioeconomic factors/trends, 5, 10, 135 Tandem Health Care, 325
socioeconomic status, 231 taxation
special care facilities (SCFs), 234–5, 302, 304–5 credits, 30–1
specializations of providers, 277 deductions, 30
specialized health services, 5–8, 65 influential factors, 201
specialty care units, 277 inheritance, 205–6
speech therapy, 29, 297 tax rates, 381
spend down, 211, 393, 399, 403 Taylorization of caregiving, 37
spiritual dependency, 87 Taylor, Winslow, 37
spirituality, 121 technological advances, 10–1, 263–4, 416,
spousal caregivers, 20–2, 38–9, 63, 109, 113, 118 421–2
spousal refusal, 210–1 telecommunication technologies, 190
staff/staffing telehealth programs, 11, 189–90
administrative roles, 23, 259 telemarketing fraud, protection against, 218–20
levels, 136–9 telephone scams, 216
requirements, 63 telescams, 216
shortages, 139, 148, 188 Temporary Assistance for Needy Families
support, 168 (TANF), 392
Standard Form of Agreement between Owner terminal illness, 5–7, 48
and Architect, 308 therapists, roles of, 165. See specific types of
standards of care, 63 therapists
State Children’s Health Insurance Program third-party payers, 255
(SCHIP), 392, 396 Thomas, Mark, 264
state-subsidized benefits, 30 Thompson, Tommy, Governor, 335
stewardship, 244, 253–4, 265 toilet seat height, 81

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 440 䡲 Index

top-down approach to LTC, 97 Wilson, Elaine, 98

Transformation of American Medicine, The “Win a Step Up” program, 146
(Starr), 5 Women’s Aid and Relief Society, 243
transitional care, 184–6 workforce
transparency, 257–8, 260–2, 265, 278 career ladders, 146–8, 151
transportation services, 102, 179–80, 297, 396 characterized, 134–6
traumatic brain injury, 93 compensation, 140–1, 143–4, 151
trusts, 25–6. See also specific types of trusts employee benefits, 141, 143–4
tube feeding, 203 future trends, 139–40, 416
loan forgiveness, 149–51
management structures, 142–3
managerial skills, 262–3
U online training, 148–9
uncertainty, 367, 376 peer mentoring, 145
U.S. Administration on Aging, 341 recruitment, 140–50
U.S. Bureau of Labor Statistics (USBLS), retention strategies, 140–50, 263
134–5, 139 scholarships for, 149–51
U.S. Department of Health and Human staffing levels, 136–9
Services (DHHS), 10, 29, 63, 123, 175, support for, 168
332, 335–6 training programs, 138, 144–6, 151
U.S. Department of Housing and Urban unions, 150–1
Development (HUD), 376–7 Workforce Retraining Initiative, 150
U.S. Senate Special Commission on Long-Term workhouse test, 41
Care (“Pepper Commission”), 123 Work Investment Act (WIA), 150
workplace injuries, 141
World Institute on Disability, 95, 101

V
ventilation, 202–3 Y
Veterans Health Administration, 388, 392, younger people with disabilities (YPDs)
395–6, 409 age classification, 88–9
Visiting Nurse Association (VNA), 39, 42 attitudes, 95
visiting nurses, 36–7 behavior, 95–6
vocational services, 97 causes of, 93
defined, 86, 88–9
demographics, 93–4
informal care, 91, 93
W LTC policy and, 86–7
wage pass-through programs, 143–4 milestones, 96–7
walkers, 81 parents as caregivers, 90
Waxman, Henry, Congressman, 332–3, 335 survival of, 101
Welfare Island, 4 young-old, 325–6, 340
well-being, 116, 179
wheelchairs, 81
When Our Parents Get Old (Metropolitan Life
Insurance Company), 52
Z
White House Conference on Aging Policy Zarit Burden Interview, 120
Committee, 192 zoning, building process, 312
widowhood, 24
wills, see Last Will and Testament; Living Will

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