ALTERNATIVES TO FACILITY CARE

1. ALTERNATIVES TOFACILITY CARE Session 7: February 27, 2006 Session Producer: Steven Chies, Senior Vice President, Facility Operations, Benedictine Health Systems and Past Chair American Health Care Association

2. PANELISTS • Margaret Wylde, President and CEO, Promatura Group, LLC • David Kyllo, Executive Director, National Center for Assisted Living • Carole Wright, Vice President of Clinical Operations, CHCS Services, Inc. • Greg Gurlik, Director, LTC Product Development, Northwestern Mutual Life Insurance Company

3. Introductory Comments

4. The Changing Face of Long Term CareConsumer Driven Margaret Wylde, President and CEO, ProMatura Group, LLC

5. Cosmetic SurgeryConsumers are not aging.

6. What people want. • A sense of being in control. • A sense of belonging, of feeling at home. • To live life until there is no life left.

7. Percent Who Own Home by Age Time Series U.S. Census, 2002

8. Spread of Active Adult • Active adult communities will impact independent living • They are spreading rapidly • They provide a protective community • Network of services available • Support system among residents • Ownership

9. Condominiumswith services… Set in 16 acres right off River Road in Bethesda, Fox Hill will offer significantly more than one might expect. On-site, the community features a Performing Arts Center, spa, fitness center, heated swimming pool, walking trail, indoor driving range, recording studio, artists’ studio, and a delightful selection of dining options and venues. For more details about this extraordinary community, click the links on the left. And plan to visit us at www.foxhillseniorcondominium.com Fox Hill will also offer fine residential living with a location that keeps you connected to the very best of Washington. You’ll find Craftsman-style architecture and interiors with country club modern ease and elegance, along with 240 unusually spacious condominiums with either garden, fountain and golf course views. You’ll also discover a variety of quality healthcare services. It will all be found within a beautiful gated community that will offer the many investment advantages of condominium home ownership.

10. True “Aging in Place” Welcome to TigerPlace, an exciting new concept in community living for seniors (not the ones in college) that has been developed as collaboration with Americare, the University of Missouri and Sinclair School of Nursing. …. assortment of services allows you to receive any necessary health care in the comfort of your own residence. …Our goal remains clear - to help each and every person remain at TigerPlace for as long as they choose.

11. Nursing Care: A New Alternative, the Green House • Home like • Improved response of residents. • Immoral to continue building nursing homes they way they have been built. • Costs may even out because construction is less costly. • Significantly more appealing to consumers. Source: www.thegreenhouseproject.com

13. The food chain of age-qualified housing… • Ownership models will impact rental models. • Active adult will independent living. • Independent living will have significantly greater frailty among residents. • Assisted living properties will be more like independent living. • Nursing homes will be more like assisted living.

14. Boomers • Will create something better than the Green House for end of life care. • Technology will be an integral component of care management and delivery. • The institutions of care will be obsolete.

15. Alternatives to Facility Care David Kyllo

16. Assisted Living ResidentsPreliminary Data from 2006 ALFA, ASHA, AAHSA, NCAL & NIC Survey • Average Age = 85 • Average Age at Move-in = 83 • Average Length of Stay = 25.5 months • 75% Female; 25% Male • Average Price Residents Pay = $34,860 for one-bedroom units (Met Life 2005 Survey)

17. ADL DependencePreliminary ALF Data from 2006 ALFA, ASHA, AAHSA, NCAL & NIC Survey ADLALFNF Bathing 68.8% 95.4% Dressing 50.2% 88.5% Toileting 37.5% 81.7% Transfer 26.6% 77.3% Eating 23.2% 50.8%

18. DiagnosesPreliminary ALF Data from 2006 ALFA, ASHA, AAHSA, NCAL & NIC Survey Hypertension 66.6% Arthritis 45.6% Depression 37.5% Osteoporosis 35.9% Congestive Heart Failure 24.8% Diabetes 21.1%

19. DiagnosesPreliminary ALF Data from 2006 ALFA, ASHA, AAHSA, NCAL & NIC Survey Stroke 14.1% Emphysema/COPD 12.8% Cancer 12.2% Other Mental (Bipolar, Schizophrenia) 8.5% Parkinson’s 7.7% Multiple Sclerosis 0.6%

20. Assisted Living National ViewState Residential Care and Assisted Living Policy; April 2005; HHS ASPE • 36,451 residential care facilities in 2004 with 937,601 beds • 41 states & DC have statues or regs that use the term assisted living

21. State Approaches to Assisted Living State Residential Care and Assisted Living Policy; April 2005; HHS ASPE • Institutional Model • Housing with Services Model • Service Model • Umbrella Model • Multiple Levels of Licensing for a Single Category

22. Defining Assisted Living • 24-Hour awake staff • Oversight of personal care and service • Health-related services • Meals, housekeeping and laundry • Recreational activities • Transportation and social services • Assessments & service plans

23. State Approaches to Admission & DischargeState Residential Care and Assisted Living Policy; April 2005; HHS ASPE • Full Continuum – States allow facilities to serve a wide variety of resident needs • Discharge triggers – States list medical needs, treatments or conditions that trigger discharge • Levels of Licensure – State license facilities based on residents’ needs or services provided

25. Realities of Using the LTCI Policy for Facility Based-CareCarole Wright

26. Increase in the Senior Population • Requests for ALF and SNF claims are going to increase • Longer life spans, improved medical care and emergence of the Baby Boomer generation • Facility claims currently account for 80 % of all LTC claims Corliss, Gary L. April 2005. Fourth Intercompany LTC Report Published Society of Actuaries Long Term Care News, no. 14.

27. Challenges • What are the current challenges facing LTC claims departments? • Product language interpretation • Policy benefit utilization • Long-term duration of the claim • Requests for alternative plan of care considerations

28. Realities of the Future • In order to address future needs we need to align the expectations of the policyholder, marketplace and the insurance company with regard to facility-based care. • This can be accomplished through looking at: • Market research information • Trade association trends • LTC product design and development

29. Greg Gurlik, DirectorLTC Product DevelopmentNorthwestern Mutual

30. Non-comprehensive coverage Benefit flexibility Defining Alternate Living Facilities Room & Board vs. Cost of Services Will current alternatives be covered? The role of Alternative Plan of Care How do we keep coverage current? Current Product Design Issues

31. Will states expand ALF definitions? Will utilization increase for more desirable providers? What will be the impact of expanded employer marketing and younger issues ages? What new alternative providers will be develop? Future Product Design Issues

32. Are current premiums based on ADL/cognitive impairment status or current service utilization? How is salvage impacted by provider evolution? What is the impact of anticipated morbidity improvements? Regardless of the development of new providers, are we at risk for current providers becoming too desirable? How do these risks compare to “known” risks? Pricing Considerations

33. Questions and Reactions

34. Final Comments