MEDICARE EXPENDITURES FOR RESIDENTS IN ASSISTED LIVING: DATA FROM A NATIONAL STUDY

1. MEDICARE EXPENDITURES FOR RESIDENTS IN ASSISTED LIVING: DATA FROM A NATIONAL STUDY Phillips C1, Holan S2, Sherman M2, Spector W3, Hawes C1. Texas A&M University System Health Science Center1 Texas A&M University2 Agency for Healthcare Research and Quality3 ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

2. ACKNOWLEDGEMENTS Grant RO1-HS-10606 (C. Phillips, PI) from the Agency for Healthcare Research and Quality supported this research. Collection of the resident and facility data was supported by contracts HHS-100-94-0024 and HHS-100-98-0013 from the Office of Disability, Aging, and Long-Term Care Policy, Office of the Assistant Secretary for Planning and Evaluation (ASPE), U.S. Department of Health and Human Services. Claims data were provided by the Centers for Medicare and Medicaid Services. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

3. RESEARCH OBJECTIVES • To investigate Medicare expenditures for assisted living facility (ALF) residents and • To investigate whether ALF characteristics were related to Medicare expenditures for ALF residents. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

4. ASSISTED LIVING IN UNITED STATES, 1998 ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

5. DEFINING ASSISTED LIVING • “A congregate residential setting that provides or coordinates personal services, 24-hour supervision, and assistance (scheduled and unscheduled), activities, and health related services....” (ALQC, 1998) ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

6. ALF “PHILOSOPHY” • “…to minimize the need to move; …. to accommodate residents’ changing needs and preferences; …. to maximize residents’ dignity, autonomy, privacy, independence, and safety; and …. to encourage family and community involvement.” (ALQC, 1998) ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

7. Hypothesized Relationship Between Assisted Living and • Other Types of Residential Long-Term Care • ACUITY • High • Low • low $ AVERAGE MONTHLY CHARGE High $ Nursing Homes B&C Homes Assisted Living Congregate Living ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

8. AL INDUSTRY IN USA – 1998* • CALLED ALFs, OR PROVIDE PERSONAL CARE, 24 HR. SUPERVISION, MORE THAN 10 BEDS • 11,459 ALFs operated nationwide • 611, 000 beds • 521,000 residents. • $1,600 most common monthly charge • Almost exclusively private-pay • 77% in metropolitan areas • Avg. number of units is 53 • <50% of total units are apartments • 1/3 of ALF offer minimal service or privacy *Estimates based on national sample of 1,500 facilities ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

9. ALF RESIDENTS AND CLAIMS DATA • On-site data collection in facilities with either high services or high privacy --, those consistent with ALF philosophy (40% of 1,500; sample of 300 facilities; 1,500 residents) • Analyzed Medicare claims data for six months after baseline ($ paid) • Only for residents still in ALF at 7 month follow-up (n= 1,202) • Only 545 (46%) supplied HIC number that could be matched with claims data • Compared 545 with 1202 on 17 characteristics with only one significant difference (% w/ hospitalization in 12 months prior to baseline) ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

10. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

11. MEDICARE EXPENDITURES FOR INDIVIDUALS RESIDING IN ALFs ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

12. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

13. MEDICARE EXPENDITURES • On an annualized basis, average Medicare expenditures for an ALF resident were $4,782. • 1996 average Medicare expenditures for community-dwelling beneficiaries adjusted for two years of inflation are $4,465. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

14. MEDICARE EXPENDITURES • In 1997, the 15% of beneficiaries • incurred annual Medicare costs of $10,000 or greater, • received over 75% of total Medicare expenditures • Among AL residents, in six months of data, 14.8% of the residents • had Medicare claims that totaled $5,000 or more. • represented 78% of Medicare expenditures for the sample. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

15. MEDICARE EXPENDITURES • For those beneficiaries using services, the annual average is approximately $5,800. • The average Medicare program payment for aged beneficiaries served in calendar year 1999 was $5,635 ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

16. FACTORS ASSOCIATED WITH MEDICARE EXPENDITURESFOR ALF RESIDENTS ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

17. TWO-PART UTILIZATION MODEL • Logistic regression • Inpatient $, outpatient $, total $ • Individual characteristics • Facility characteristics • OLS regression • Inpatient $, outpatient $, total $ (logged) • Individual characteristics • Facility characteristics ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

18. RESULTS FOR LOGISTIC REGRESSION FOR ALL RESIDENTS • INDIVIDUAL CHARACTERISTICS • Variables with significant effects (p<.05) -- age, ADL status, incontinence • Variables without significant effects (p>.05) – gender, cognitive function, marital status, length of stay, hospitalization in prior year, ER visit in prior year ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

19. RESULTS FOR LOGISTIC REGRESSION FOR ALL RESIDENTS • FACILITY CHARACTERISTICS • Variables with significant effects (p<.05) – none • Variables without significant effects (p>.05) – ownership, size, occupancy, multi-level campus, privacy level, service level, price, and location ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

20. OLS RESULTS FOR RESIDENTS UTILIZING SERVICES • INDIVIDUAL CHARACTERISTICS • Variables with significant effects (p<.05) – cognitive status, ADL status, length of stay • Variables without significant effects (p>.05) – gender, age, marital status, incontinence, hospitalization in prior year, ER visit in prior year ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

21. OLS RESULTS FOR RESIDENTS UTILIZING SERVICES • FACILITY CHARACTERISTICS • Variables with significant effects (p<.05) – size, occupancy • Variables without significant effects (p>.05) – ownership, multi-level campus, privacy level, service level, price, and location ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

22. CONCLUSIONS ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION

23. Medicare expenditures for individuals in assisted living are very similar to those of other community-dwelling elderly • Medicare expenditures for ALF residents are largely driven by individuals characteristics • Facility size may affect the level of Medicare expenditures for those using services -- lower expenditures for residents in smaller facilities ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION