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Ohio fails to adapt to seniors' new needs

By: Susan Jaffe, The Plain Dealer

March 17, 2003

Ohio's approach to caring for the elderly is stuck in a time warp.

Growing old in America has radically changed. More elderly Ohioans are living healthier, longer lives than ever before. Fewer are entering nursing homes, where the resident population declined by about 100,000 in the past decade.

Yet the state still spends millions of dollars more every year for fewer people in nursing homes as if nothing has changed. Ohio even pays part of the cost to maintain an estimated 12,700 empty beds.

Around-the-clock nursing home care is the most expensive form of long-term care for the elderly, and Ohio spent $2.46 billion on it last year. Such care consumed more than a third of the state's Medicaid budget.

It's a habit the state can no longer afford, says Gov. Bob Taft, who wants to freeze payments to nursing homes that care for residents covered by Medicaid, the government's health insurance program for low-income families and individuals.

State officials as well as seniors' advocates argue that as long as nursing homes get nearly all of the state's long-term-care dollars, there will be little money left for cheaper alternatives, and no place else to go.

The issue of whether to curb nursing home costs comes at a time when the homes are changing their mission.

"The image used to be that a nursing home was the last home for the aged, where you went to die," says Suzanne Kunkel, director of the Scripps Gerontology Center at Miami University in Oxford, Ohio. "It was pretty much your last stop, but now people go there and leave."

About 30 percent of nursing home residents are discharged within three months, and 60 percent leave within six months, Kunkel said.

Many enter nursing homes to get back on their feet after a hospital stay, especially since Medicare, which provides health insurance for 40 million older Americans, pays for only a limited number of days in a hospital. Medicare also covers certain nursing home stays following hospitalization, but only up to 100 days. Medicaid covers longer periods for those poor residents who are eligible.

When patients aren't ready to go home, nursing homes can fill the gap in care.

"We're seeing better health practices, healthier older people, and it is now perfectly reasonable to expect that even someone in their 70s can recover fully from surgery," Kunkel said.

The number of elderly Ohioans has increased 7.6 percent to an estimated 1.51 million since 1990.

Ellieree Goff of Cleveland spent four weeks in physical therapy at Willow Park Skilled Nursing and Rehabilitation Center, a 209-bed facility in Warrensville Heights, after a week at University Hospitals. She was recovering from a mild heart attack. She returned home last month, a day after her 97th birthday.

When Steven Raichilson became administrator of Menorah Park Center for Senior Living in Beachwood in 1987, the average stay for a resident was four years. These days, they stay about half as long.

"Our average age is 86, and our oldest is 103," said Raichilson.

Now is not the time to freeze nursing home payments, nursing home operators argue. The people who eventually need nursing home care are coming in with more chronic ailments and need more expensive care.

At the Eliza Bryant Village nursing home in Cleveland, the cost of care already exceeds reimbursement by about $15 a day for each of their 100 residents.

"That's $1,500 a day. We're falling behind every year," at a time when it's tough to raise money, said executive director Harvey Shankman.

Eliza Bryant and Menorah Park are nonprofit facilities.

But even for-profit facilities such as Willow Park in Cleveland are having problems keeping up with operating expenses. Willow Park is part of an 800-bed chain of profit-making facilities in Northeast Ohio owned by Royal Manor Group.

"The governor should find other ways to balance the budget, instead of taking money from the elderly," said Willow Park administrator Chris Ayewoh.

Nursing home administrators argue that a freeze in payments simply isn't realistic.

"The people who sell us goods and services don't freeze their prices to us," said Raichilson. "If you don't have money to pay staff, people aren't going to work for you.

"People in Ohio nursing homes have worked in Ohio for 50 or 60 years, and they deserve adequate care. They are not a political ball to be thrown back and forth."

Since 1993, Ohio's payments for Medicaid residents in nursing homes jumped 75 percent - or 69 percent including federal matching money - while the number of residents dropped 4.5 percent.

Taft wants to change a formula enshrined in state law that has guaranteed annual raises in Medicaid reimbursements to the state's nearly 1,000 nursing homes.

The worst-rated nursing homes are paid the same as the best. For-profit institutions are paid the same as those that don't make a profit. The formula also covers "indirect costs" like advertising and lobbying. It even pays for building-wide expenses like utilities, regardless of the nursing home's occupancy rate or empty beds.

"Nursing homes don't have the same incentives [as hospitals] to re-examine costs," said Barbara Edwards, deputy director of the Ohio Department of Job & Family Services, which runs the state's Medicaid program.

State officials acknowledge the payment system is flawed.

"If we had to start from scratch, we would design a new system, where the money would follow people and challenge consumers," said Edwards. "We are creating an artificial market which has kept [nursing home] utilization as high as it is because we don't fund alternatives."

Jane Taylor, executive director of the Ohio Association of Area Agencies on Aging, said Ohio's system should be flipped around so that nursing homes are just one of several choices. That's what Oregon does.

"They invest in foster homes, assisted living and home care. They tried to put some balance in the system," she said.

But it's difficult to support alternatives, when most of the state's money is committed - by law - to nursing homes, said Taylor.

Even if the Taft administration persuades the General Assembly to support the governor's freeze, saving the state $223 million, the money won't be spent on other kinds of long-term care. It will go to close a $3 billion gap in next year's budget.

The most popular Medicaid-supported alternative is the state's Passport program, which provides home health care to 25,000 Ohioans a year. It is one-fifth the cost of institutional care and consumes about 1 percent of Medicaid spending.

Budget pressures forced Taft to cut $1.8 million from Passport almost two weeks ago, and even his proposed increase for the program in the next budget falls short of the demand.

The Department of Aging, which operates the program, estimates that 150 people a month will be turned away. "There is little question we will have waiting lists," said department spokesman Steve Proctor.

People who can't wait or make other arrangements can enter a nursing home. If 104 elderly Ohioans on Medicaid stay in a nursing home for a year, the cost to the state will consume the $1.8 million savings. If 1,000 people end up in nursing homes, that would cost the state as much as $17.2 million.

There is more at stake in the current debate than payments to nursing homes. Advocates for seniors say it is also about survival of alternatives like Passport or PACE, the Program for All-Inclusive Care, a Medicare HMO that provides adult day care for about 400 people in Cleveland Heights and Cincinnati.

There will always be a need for the intensive care that nursing homes provide, said Eric Fingerhut, a Cleveland Democrat who has advocated alternatives to nursing homes.

"The real reform is seeing to it that people only end up in nursing homes when they absolutely have to have that level of care and not a minute before," he said.

For Ellieree Goff, there's no place like home.

"I love to work in the yard," said Goff, who is already planning her garden. "If the good Lord gives me the strength, I will."