1. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION 1 MEDICARE EXPENDITURES FOR RESIDENTS IN ASSISTED LIVING: DATA FROM A NATIONAL STUDY Phillips C 1, Holan S 2, Sherman M 2, Spector W 3, Hawes C 1. Texas A&M University System Health Science Center 1 Texas A&M University System Health Science Center 1 Texas A&M University 2 Agency for Healthcare Research and Quality 3

2. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION 2ACKNOWLEDGEMENTS 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.

3. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION3 RESEARCH OBJECTIVES To investigate Medicare expenditures for assisted living facility (ALF) residents and To investigate Medicare expenditures for assisted living facility (ALF) residents and To investigate whether ALF characteristics were related to Medicare expenditures for ALF residents. To investigate whether ALF characteristics were related to Medicare expenditures for ALF residents.

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

5. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION5 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) “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)

6. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION6 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) “…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)

7. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION7 Hypothesized Relationship Between Assisted Living and Other Types of Residential Long-Term Care ACUITY High Low low $ AVERAGE MONTHLY CHARGEHigh $ Congregate Living Nursing Homes B&C Homes Assisted Living

8. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION8 AL INDUSTRY IN USA – 1998* CALLED ALFs, OR PROVIDE PERSONAL CARE, 24 HR. SUPERVISION, MORE THAN 10 BEDS CALLED ALFs, OR PROVIDE PERSONAL CARE, 24 HR. SUPERVISION, MORE THAN 10 BEDS 11,459 ALFs operated nationwide 11,459 ALFs operated nationwide 611, 000 beds 611, 000 beds 521,000 residents. 521,000 residents. $1,600 most common monthly charge $1,600 most common monthly charge Almost exclusively private-pay Almost exclusively private-pay 77% in metropolitan areas 77% in metropolitan areas Avg. number of units is 53 Avg. number of units is 53 <50% of total units are apartments <50% of total units are apartments 1/3 of ALF offer minimal service or privacy 1/3 of ALF offer minimal service or privacy *Estimates based on national sample of 1,500 facilities

9. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION9 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) 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) 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 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 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) Compared 545 with 1202 on 17 characteristics with only one significant difference (% w/ hospitalization in 12 months prior to baseline)

10. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION10 ALF RESIDENT CHARACTERISTICS AT BASELINE (N=66,092 ; n=545) Age84 Female76% Married13% Some ADL assistance18% Intact or Mild Cognitive Impairment82% Never Incontinent of urine67% Length of stay in facility2-3 ER visit in last year25% Hospital stay in last year38%* Multi-level campus64% Full-time nurse on staff71% High privacy66% Average Price$1,757

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

12. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION12 MEDICARE EXPENDITURES FOR ALF RESIDENTS, 1998 (N=66,092 ; n=545) Acute/post -acute OutpatientTotal Six Month Mean (Std. Error) $1,507 ($237) $883 ($99) $2,391 ($286) Annualized Mean$3,014$1,764$4,782 Residents With Claims22.12%84.42%84.62%

13. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION13 MEDICARE EXPENDITURES On an annualized basis, average Medicare expenditures for an ALF resident were $4,782. 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. 1996 average Medicare expenditures for community-dwelling beneficiaries adjusted for two years of inflation are $4,465.

14. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION14 MEDICARE EXPENDITURES In 1997, the 15% of beneficiaries In 1997, the 15% of beneficiaries incurred annual Medicare costs of $10,000 or greater, incurred annual Medicare costs of $10,000 or greater, received over 75% of total Medicare expenditures received over 75% of total Medicare expenditures Among AL residents, in six months of data, 14.8% of the residents Among AL residents, in six months of data, 14.8% of the residents had Medicare claims that totaled $5,000 or more. had Medicare claims that totaled $5,000 or more. represented 78% of Medicare expenditures for the sample. represented 78% of Medicare expenditures for the sample.

15. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION15 MEDICARE EXPENDITURES For those beneficiaries using services, the annual average is approximately $5,800. 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 The average Medicare program payment for aged beneficiaries served in calendar year 1999 was $5,635

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

17. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION17 TWO-PART UTILIZATION MODEL Logistic regression Logistic regression Inpatient $, outpatient $, total $ Inpatient $, outpatient $, total $ Individual characteristics Individual characteristics Facility characteristics Facility characteristics OLS regression OLS regression Inpatient $, outpatient $, total $ (logged) Inpatient $, outpatient $, total $ (logged) Individual characteristics Individual characteristics Facility characteristics Facility characteristics

18. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION18 RESULTS FOR LOGISTIC REGRESSION FOR ALL RESIDENTS INDIVIDUAL CHARACTERISTICS INDIVIDUAL CHARACTERISTICS Variables with significant effects (p<.05) -- age, ADL status, incontinence 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 Variables without significant effects (p>.05) – gender, cognitive function, marital status, length of stay, hospitalization in prior year, ER visit in prior year

19. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION19 RESULTS FOR LOGISTIC REGRESSION FOR ALL RESIDENTS FACILITY CHARACTERISTICS FACILITY CHARACTERISTICS Variables with significant effects (p<.05) – none 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 Variables without significant effects (p>.05) – ownership, size, occupancy, multi-level campus, privacy level, service level, price, and location

20. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION20 OLS RESULTS FOR RESIDENTS UTILIZING SERVICES INDIVIDUAL CHARACTERISTICS INDIVIDUAL CHARACTERISTICS Variables with significant effects (p<.05) – cognitive status, ADL status, length of stay 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 Variables without significant effects (p>.05) – gender, age, marital status, incontinence, hospitalization in prior year, ER visit in prior year

21. ALFs and Medicare---DRAFT, NO CITATION OR QUOTATION21 OLS RESULTS FOR RESIDENTS UTILIZING SERVICES FACILITY CHARACTERISTICS FACILITY CHARACTERISTICS Variables with significant effects (p<.05) – size, occupancy 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 Variables without significant effects (p>.05) – ownership, multi-level campus, privacy level, service level, price, and location

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

23. 23 Medicare expenditures for individuals in assisted living are very similar to those of other community-dwelling elderly 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 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 Facility size may affect the level of Medicare expenditures for those using services -- lower expenditures for residents in smaller facilities