United States General Accounting Office

GAO Report to the Chairman, Special

Committee on Aging, U.S. Senate

April 1995 LONG-TERM CARE

Current Issues and

Future Directions

GAO/HEHS-95-109

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-260713 

April 13, 1995

The Honorable William S. Cohen

Chairman, Special Committee on Aging

United States Senate

Dear Senator Cohen:

Today, an increasing number of Americans need long-term care.

Unprecedented growth in the elderly population is projected for the 21st

century, and the population age 85 and older—those most in need of

long-term care services—is expected to outpace the rate of growth for the

entire elderly population. In addition to the dramatic increase in the

elderly population, a substantial portion of the long-term care population

consists of younger people with disabilities.

For all ages, most people who need long-term care receive their care at

home or in a community setting, rather than in an institution. Yet, most

public and private spending for long-term care still pays for institutional

care, primarily for the elderly. Because expenditures for long-term care

are substantial and growing, long-term care issues have been highlighted

at both the state and national levels of government, with policymakers

deliberating how best to respond given budget constraints.

In addition to long-term care purchased with public and private funds, a

significant burden falls on family members who provide unpaid long-term

care to spouses, children, parents, and other relatives. Congressional

deliberations on health care reform last year and, more recently, the

“Contract with America” underscored the importance of long-term care

through proposing assistance such as tax deductions for long-term care

insurance and tax credits for family caregiving.

You asked us to provide information on long term-care. As requested, this

report addresses

• what is meant by “long-term care,” the conditions that give rise to

long-term care need, and how such need is measured;

• which groups, young and old, need long-term care;

• what long-term care costs are for the federal and state governments as

well as for families;

• what strategies some states and other countries are pursuing to contain

public long-term care costs; and

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• what experts predict about the future demand for long-term care.

To develop this information, we drew upon our existing body of work on

long-term care, updated the information on private long-term care

insurance, and developed long-term care cost information using data from

the Health Care Financing Administration (HCFA) and the Assistant

Secretary for Planning and Evaluation (ASPE), both of the Department of

Health and Human Services (HHS). A list of selected GAO products issued

over the past 2 years appears in appendix I.

Results in Brief Long-term care consists of many different services aimed at helping people

with chronic conditions compensate for limitations in their ability to

function independently. Many different physical and mental conditions can

give rise to a need for long-term care. However, this need cannot easily be

determined on the basis of a diagnosis or illness alone. Thus, other

measures of a person’s ability to function independently, such as activities

of daily living (ADLs), have been developed.

More than 12 million Americans—young and old—report some long-term

care need, and more than 5 million are estimated to be severely disabled.

While most of the 12 million are elderly, 40 percent are not, and, regardless

of age, most of the care that they need is nonmedical assistance with the

routines of daily living.

Expenditures for long-term care, particularly institutional care, are high. In

1993, of nearly $108 billion spent, about 70 percent paid for institutional

care. Government—both federal and states—provides most of the money

for long-term care through dozens of categorical funding streams.

Medicaid is the largest government payer for long-term care

services—with the federal government spending $24.7 billion and states

spending $19.0 billion in 1993—predominately for nursing home care.

Home health services reimbursed by Medicare have experienced rapid

growth over recent years—from $2.3 billion in 1989 to $9.5 billion in 1993.

The financial burden on families, who pay over a third of the long-term

care bill out of pocket, is also high. To guard against financial loss, a small

but growing number of individuals are purchasing private long-term care

insurance policies. Families also bear a considerable nonmonetary burden

by caring for relatives. Recognizing this, some employers have begun to

offer more flexible schedules and other assistance to help employees

balance work and caregiving.

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Faced with rising expenditures for long-term care, some states and other

countries are experimenting with new ways to control costs, including

service delivery models that increasingly emphasize home and

community-based care rather than institutional care. Other strategies

involve capping budgets and provider fees, consolidating program

administration, and using case management more often. Whether these

approaches will contain costs remains to be seen.

The number of people needing long-term care is expected to increase.

However, the extent of the nation’s future long-term care needs is clouded

by uncertainty about medical and technological advances. For example,

breakthroughs could result in longer, healthier lives for baby boomers as

well as an increase in the number of younger disabled people who survive

low birth weight or accidents. Further developments in the private

long-term care insurance market and the availability of unpaid caregivers

are also likely to affect future demand for publicly funded long-term care.

Continued experimentation in public program administration and

continued evolution of long-term care service delivery models will be

important in determining if more flexible, cost-effective responses to

providing public and private assistance may be achieved both now and in

the future.

Long-Term Care Helps

People With Chronic

Conditions Function

as Independently as

Possible

Long-term care essentially involves many diverse services for people with

chronic conditions. These conditions include both physical and mental

disabilities requiring different types of care. Various measures are used to

identify an individual’s need for long-term care.

Most Long-Term Care Is

Assistance With the

Routines of Daily Living

Long-term care is not one service but many different services aimed at

helping people with chronic conditions compensate for limitations in their

ability to function independently. People needing long-term care have

many different types of physical and mental disabilities that require

different kinds of care. Typically, long-term care does not involve

high-tech medical care but basic assistance from others. For example,

people with physical disabilities are likely to need hands-on assistance,

and those with mental disabilities need supervision, protection, or verbal

reminders to accomplish everyday activities. A person with a physical

condition like quadriplegia might need hands-on help to get in and out of

bed. In contrast, someone with a mental condition, such as Alzheimer’s

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disease, might need constant supervision for his or her own safety. Types

of long-term care services therefore vary widely—from helping a frail

elderly person dress, eat, and use the bathroom to skills training and

medication management for a mentally ill person to technology and

nursing care for a ventilator-dependent child.

The largest proportion of elderly persons with severe disabilities need

nonmedical services, according to a recent survey that we conducted of

directors of state agencies on aging and Medicaid.1

 The directors most

often cited (1) personal care; (2) housekeeping, meal preparation, and

other home chore services; and (3) case/care management as the services

needed by the largest proportion of elderly persons with severe

disabilities. (See table 1.)

Table 1: Examples of Home and

Community-Based Services Service Description

Case management Assists beneficiaries in getting medical, social, educational, and

other services.

Personal care Includes bathing, dressing, ambulation, feeding, grooming, and

some household services such as meal preparation and shopping.

Adult day care Includes personal care and supervision and may include physical,

occupational, and speech therapies. Also provides socialization

and recreational activities adapted to compensate for any physical

or mental impairments.

Respite care Provides relief to the primary caregiver of a chronically ill or

disabled beneficiary. By providing services in the beneficiary’s or

provider’s home or in other settings, respite care allows the

primary caregiver to be absent for a time.

Homemaker Assists beneficiaries with general household activities and may

include cleaning, laundry, meal planning, grocery shopping, meal

preparation, transportation to medical services, and bill paying.

Both Physical and Mental

Conditions Can Cause

Long-Term Care Need

Many different types of physical and mental conditions can give rise to a

need for long-term care. Physical conditions include paraplegia, heart

disease, asthma, arthritis, and many others. Mental conditions include

severe and persistent mental illness, dementia, traumatic brain injuries,

and mental retardation and other developmental disabilities. Among the

elderly, arthritis and heart disease are the two most common causes of

long-term care for individuals. For nonelderly adults, the most common

causes of long-term care need are arthritis, heart disease, and mental

retardation. In children, the most common chronic conditions limiting

1

We received responses to our survey from all 51 state agencies on aging and from 50 of 51 state

Medicaid agencies. For additional information, see Long-Term Care Reform: States’ Views on Key

Elements of Well-Designed Programs for the Elderly (GAO/HEHS-94-227, Sept. 6, 1994).

Page 4 GAO/HEHS-95-109 Long-Term Care Issues
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activity are respiratory disorders, such as asthma; mental retardation; and

other mental or nervous system conditions, such as cerebral palsy.

Long-Term Care Need Is

Difficult to Measure

The need for long-term care cannot easily be determined on the basis of a

diagnosis or illness alone. For example, a person who has arthritis or

mental retardation does not necessarily need long-term care. Furthermore,

not all those with the same impairment need the same type and level of

assistance, and a single individual’s needs can vary over time.

Because a person’s long-term care needs cannot be simply determined

from his or her medical diagnosis, other ways to measure a person’s ability

to function independently have been developed. One set of measures

gauges a person’s ability to perform basic self-care tasks such as eating,

bathing, dressing, getting to and using the bathroom, and getting in or out

of a bed or chair. These measures are known as activities of daily living or

ADLs. (See fig. 1.) ADLs, however, do not describe all types of functional

limitations. Many people with Alzheimer’s disease and other mental

impairments, for example, may not have serious ADL limitations.

Figure 1: Definitions for ADL and IADL

Generally include eating, bathing,

dressing, getting to and using the

bathroom, getting in or out of a bed or

chair, and mobility.

Generally include going outside the

home, keeping track of money or bills,

preparing meals, doing light housework,

using the telephone, and taking

medicine.

Activities of Daily Living

Instrumental Activities

of Daily Living

ADL IADL

Another measure of impairment examines other functional abilities that

involve performing household chores and social tasks. These are known as

instrumental activities of daily living or IADLs. They include the ability to

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keep track of money, prepare meals, do light housework, take medicine,

and go outside the home. In addition, other criteria—such as the ability to

attend school or to behave in an age-appropriate manner—are sometimes

used for children or adults with mental illness whose age or condition

means that ADLs and IADLs may not be adequate to assess need.

Directors of state agencies on aging and Medicaid agencies reported to us

that an elderly person’s ability to perform ADLs was the best indicator to

determine need for publicly funded home and community-based services.2

They did not, however, have a uniform definition of ADLs. And most of the

state agencies’ assessment instruments used ADLs in combination with

other indicators to determine need.

Long-Term Care Is

Not Just for the

Elderly or the

Institutionalized

While the phrase “long-term care” may evoke images of the elderly in

nursing homes, many Americans today who say they need long-term care

services are not elderly. Moreover, across all ages, most people with

long-term care needs live in the community, not an institution.

More Than 12 Million

People Report Some

Long-Term Care Need

More than 12 million Americans say they need assistance with everyday

activities. Of these, about 60 percent are elderly; however, about 5 million

are working-age adults, and approximately 400,000 are children under age

18. (See fig. 2.)

2

Long-Term Care Reform: States’ Views on Key Elements of Well-Designed Programs for the Elderly.

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Figure 2: Both Young and Old Report

Long-Term Care Need

• 3%

Children

40% • Working-Age Adults

57%•

Elderly

Note: Includes people needing long-term care in institutions or in the community. Children are

those under 18 years old, working-age adults are those 18 to 64 years old, and the elderly are

those 65 years old and older.

Source: Based on our analysis of information from HHS and the Institute for Health Policy Studies

at the University of California, San Francisco.

We estimate that about 5.1 million people of the more than 12 million

needing long-term care are severely disabled due to a mental or physical

impairment. That is, about 5.1 million people need substantial assistance

from others in basic self-care activities or significant supervision for their

own protection.

While most of those needing long-term care are elderly, 40 percent are not,

and the number of nonelderly disabled has grown consistently in recent

years. Possible explanations for the growth in the nonelderly disabled

population include better medical technology and improved access to

acute care, both of which may enable people to survive previously fatal

conditions while sustaining permanent disabilities.

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Most People Reporting

Long-Term Care Need Are

Not Institutionalized

In contrast to the traditional notions of long-term care, the vast majority of

all those who say they need long-term care services do not live in nursing

homes or other institutions. About 2.4 million people live in institutions,

and most of these individuals are over 65 years old. The remaining

10.4 million individuals live at home or in small community residential

settings, such as group homes or supervised apartments.3

 (See table 2.)

Table 2: Most Needing Long-Term Care

Are Not Institutionalized Numbers in thousands

Age group

In

institutions

At home or

in

community

settings

Total

population

Children 90 330 420

Working-age adults 710 4,380 5,090

Elderly 1,640 5,690 7,330

Total 2,440 10,400 12,840

Sources: Based on our analysis of information from HHS and the Institute for Health Policy Studies

at the University of California, San Francisco.

Government Is the

Primary Payer of

Long-Term Care

Long term-care is expensive. Nationwide, an estimated $107.8 billion was

spent on long-term care in 1993.4

 The bulk of these costs—$69.1

billion—were paid for with public dollars, $43.1 billion from the federal

government and $26 billion from state governments. Private sources paid

the rest—about $38.5 billion—mostly as out-of-pocket spending by

individuals and families. Private long-term care insurance contributed

$200 million to this total. (See fig. 3.) In addition, family and friends,

mostly women, provide the overwhelming majority of care for disabled

persons on an unpaid basis.

3

These statistics are explained in more detail in Long-Term Care: Diverse, Growing Population

Includes Millions of Americans of All Ages (GAO/HEHS-95-26, Nov. 7, 1994).

4

The HHS Assistant Secretary for Planning and Evaluation (ASPE) estimate for 1993 spending on

long-term care. This estimate includes most long-term care spending by Medicare, Medicaid, the Older

Americans Act, and the Department of Veterans Affairs. However, it does not include long-term care

spending from such programs as the Social Services Block Grant, the Rehabilitation Act, state

vocational rehabilitation, or the Maternal and Child Health Block Grant.

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Figure 3: Government Pays the

Largest Share of Long-Term Care

Costs, 1993

40.0% • Federal Government

24.1%•

State Governments

•35.7%

Private (Out-of-Pocket and Other)

0.2%

Long-Term Care Insurance

Source: Office of the Assistant Secretary for Planning and Evaluation, HHS.

Dozens of Government

Programs Provide Most of

the Long-Term Care

Dollars

Literally dozens of categorical funding streams provide long-term care to

specific populations such as chronically ill children, persons with

developmental disabilities, and the frail elderly. The National Academy for

State Health Policy estimates that more than 100 federal

programs—including Medicaid and Medicare—specifically target people

with disabilities of all ages.5

 Other federal programs that provide

significant support for long-term care include the Social Services Block

Grant, the Older Americans Act, and the Rehabilitation Act. (See table 3.)

Each program has its own unique rules governing eligibility and what

services it will provide. Nearly three-fourths of state long-term care

spending consists of the state share of Medicaid. The rest of state spending

is for the state share of other federal matching programs or programs

funded solely by state dollars.

5

A Guide to Federal Programs for People With Disabilities, National Academy for State Health Policy

(Portland, Me.: Dec. 1994).

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Table 3: Major Federal Programs Supporting Long-Term Care Services for the Elderly and Persons With Disabilities

Program Objectives

Fiscal year 1993 federal

spending (billions)a Administration Long-term care services

Medicaid/Title XIX of the

Social Security Act

To pay for medical

assistance for certain

low-income persons

Total: $77.4

Long-term care: $24.7

(estimated)

Federal: HCFA/HHS

State: State Medicaid

Agency

Nursing home care,

home and

community-based health

and social services,

facilities for persons with

mental retardation,

chronic care hospitals

Medicare/Title XVIII of the

Social Security Act

To pay for acute medical

care for the aged and

selected disabled

Total: $138.8

Long-term care: $15.8

(estimated)

Federal: HCFA/HHS

State: none

Home health visits,

limited skilled nursing

facility care

Older Americans Act To foster development of

a comprehensive and

coordinated service

system to serve the

elderly

Total: $1.4

Long-term care: $.8

Federal: Administration

on Aging/Office of

Human Development,

HHS

State: State Agency on

Aging

Nutrition services, home

and community-based

social services,

protective services,

and long-term care

ombudsman

Rehabilitation Act To promote and support

vocational rehabilitation

and independent living

services for the disabled

Total: $2.2

Long-term care: $.1

Federal: Office of Special

Education and

Rehabilitative

Services/Department of

Education

State: State Vocational

Rehabilitation Agencies

Rehabilitation services,

attendant and personal

care, centers for

independent living

Social Services Block

Grant/Title XX of the

Social Security Act

To assist families and

individuals in maintaining

self-sufficiency and

independence

Total: $2.8

Long-term care:

(not available)

Federal: Office of Human

Development Services,

HHS

State: State Social

Services or Human

Resources Agency; other

state agencies may

administer part of Title

XX funds for certain

groups; for example,

State Agency on Aging

Services provided at the

states’ discretion, may

include long-term care

aData represent total fiscal year 1993 obligations as reported in the Budget of the United States

Government, Appendix, Fiscal Year 1995, except for estimates of Medicare and Medicaid

long-term care spending. These figures are estimates for 1993 from the Assistant Secretary for

Planning and Evaluation, HHS. Under the Medicaid program, states contributed an estimated

$19.0 billion in support of long-term care in addition to the federal share of $24.7 billion.

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Medicaid, a federal-state health program for people with certain low

income and limited assets, is the largest government payer for long-term

care services. In 1993, federal and state Medicaid spending accounted for a

total of $43.7 billion in long-term care expenditures with $36.3 billion for

institutional care and $7.4 billion for home and community-based services.6

Medicare, a federal health insurance program for those age 65 and older

and certain persons with disabilities, is the second largest government

payer of long-term care costs.7

 In 1993, Medicare accounted for an

estimated $15.8 billion in long-term care expenditures, with $5.7 billion for

institutional care and $10.1 billion for home health services.8

Private Long-Term Care

Burden Is Also Substantial

The remainder of long-term care costs—both dollars spent and in-kind

services—is borne privately, mostly by families and individuals. Despite

the high cost of long-term care, most long-term care services are provided

on an unpaid basis. In 1993, an estimated $38.7 billion, or nearly 36 percent

of all long-term care expenditures, was paid privately, mostly as

out-of-pocket expenditures by families and individuals for nursing home

and home care. Much of the nonfinancial burden of long-term caregiving

falls on families and individuals as well, often on women

and—increasingly—on family members who are employed. Currently,

about 2 million working Americans provide significant levels of unpaid

care to elderly relatives living in the community who need assistance with

everyday activities.

In response to the needs of employees who care for elderly relatives, some

private companies and public-sector employers provide

assistance—known as “elder care”—to help resolve conflicts between

work and caregiving. Among other things, this assistance may include

providing information about long-term care services and aging or allowing

flexible work schedules to accommodate employees’ family

responsibilities. In a recent survey of private companies, we found that at

least 23 million Americans work for medium and large companies that

6

Estimates from the Office of the Assistant Secretary for Planning and Evaluation, Office of Disability,

Aging, and Long-Term Care Policy, March 1994.

7

Medicare Part A Home Health Services include post-hospital services and long-term care services for

persons with qualifying chronic conditions. Medicare Part A Skilled Nursing Facility Services are

post-hospital services but have often been counted as long-term care because they are provided

primarily by nursing homes, traditional long-term care providers.

8

Estimates from the Office of the Assistant Secretary for Planning and Evaluation, Office of Disability,

Aging, and Long-Term Care Policy, March 1994.

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offer at least one flexible schedule option.9 In another recent study, we

found that the federal government, state governments, and city

governments with the largest work forces offer flexible schedule options

and elder care information.10

Private Insurance for

Future Long-Term Care

Costs Holds Potential

Only a small share of long-term care costs—0.2 percent—is currently paid

for by private long-term care insurance. (See fig. 3.) However, long-term

care insurance may play a larger role in the future. In response to a 1994

GAO survey, directors of state Medicaid agencies and state agencies on

aging most often cited long-term care insurance as one private-sector

approach whose increased use they believed could be effective in reducing

government spending.11 The insurance industry has approached this

market with caution, though, concerned that only those more likely to

need care would purchase insurance. Insurance companies must compete

in this complex and evolving market with limited experience in estimating

the number of policyholders who will claim benefits.

Long-term care insurance can help people defray the considerable costs of

long-term care. Further, the general quality of policies and the standards

that govern them have improved significantly since the first generation of

policies sold in the 1980s. Yet, some problems remain that consumers

should be aware of to help ensure that they purchase policies that meet

their needs. In particular, states and insurance companies have adopted to

varying degrees minimum standards for long-term care insurance

suggested by the National Association of Insurance Commissioners

(NAIC).12 These standards include such key consumer protection features

as inflation protection against the increasing costs of long-term care and

disclosure standards that protect consumers from unfair or deceptive

marketing practices. Analysts of long-term care policies continue to

emphasize that potential purchasers of long-term care insurance should

carefully examine and compare policies, considering the differences

9

Long-Term Care: Private Sector Elder Care Could Yield Multiple Benefits (GAO/HEHS-94-60, Jan. 31,

1994).

10Long-Term Care: Support for Elder Care Could Benefit the Government Workplace and the Elderly

(GAO/HEHS-94-64, Mar. 4, 1994).

11Long-Term Care Reform: States’ Views on Key Elements of Well-Designed Programs for the Elderly.

12Legislation introduced in the 104th Congress, including the Private Long-Term Care Family

Protection Act of 1995, promotes national standards for long-term care insurance based on standards

developed by NAIC.

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among policies in premium costs, benefits, definitions, and eligibility

requirements.13

The continued upward spiral of public and private long-term care costs

has renewed interest in private long-term care insurance. Some people

purchase such insurance to protect their assets against possible future

long-term care expenses. Other people purchase it because they are

uncertain about the quality and availability of long-term care funded by

Medicaid. However, whether long-term care insurance will play a greater

role in financing long-term care costs depends greatly on the extent to

which people consider such insurance a viable and attractive option

relative to their needs.

Institutional Bias Still

Drives Long-Term Care

Spending, but Medicare

Home Health Now

Increasing Rapidly

Despite people’s preference for home and community-based services,

long-term care dollars are overwhelmingly spent on institutional care. In

1993, total public and private expenditures were an estimated $75.2 billion

for institutional care and $32.6 billion for home and community-based

care. Overall, about 70 percent of all public and private long-term care

dollars are currently spent for institutional care.

In recent years, long-term care spending in both the Medicaid and

Medicare programs has grown dramatically. Long-term care spending

under Medicaid grew at an average rate of 13.2 percent per year from fiscal

years 1989 to 1993, with expenditures for home and community-based

services growing faster than expenditures for persons in institutions.14 And

Medicare long-term care spending has been growing at a rate of

33.8 percent per year during the same period, although it represents a

smaller share of total public long-term care spending than Medicaid.15 (See

fig. 4.)

13GAO’s 1991 review of long-term care policies found that they often did not meet existing NAIC

standards and contained inconsistent and vague policy terms, definitions, and eligibility requirements.

We also found that policies that offered similar benefits could differ substantially in price. Long-Term

Care Insurance: Risks to Consumers Should Be Reduced (GAO/HRD-92-14, Dec. 26, 1991).

14Systemetrics (MEDSTAT, using data from HCFA-64).

151994 Green Book, Overview of Entitlement Programs, Committee on Ways and Means, U.S. House of

Representatives (Washington, D.C., July 15, 1994).

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Figure 4: Medicaid and Medicare

Long-Term Care Expenditures, Fiscal

Years 1989-1993

Dollars in billions

1989 1990 1991 1992 1993

Medicare Part A Skilled Nursing Facility Services

Medicare Part A Home Health Services 

Medicaid Home and Community-Based Services

Medicaid Institutional Care Services

40

35

30

25

20

10

9

8

7

6

5

4

3

2

1

Note: Medicare Part A Home Health Services include post-hospital services and long-term care

services for persons with qualifying chronic conditions. Medicare Part A Skilled Nursing Facility

Services are post-hospital services but have often been counted as long-term care because they

are provided primarily by nursing homes, traditional long-term care providers.

Sources: Medicare Expenditure Data from 1994 Green Book, Overview of Entitlement Programs.

Medicaid Expenditure Data from Systemetrics (MEDSTAT, using data from HCFA-64).

Medicaid long-term care spending, while growing less rapidly than

Medicare’s, is still increasing at about twice the rate of inflation. Interest in

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controlling this growth and aligning services more with citizens’

preferences has led states to experiment more with innovative approaches

to long-term care delivery. Certain states are increasingly emphasizing

home and community-based services and constraining costly institutional

care as they seek more efficient or cost-effective ways to organize and

prioritize services.

Growing especially quickly are Medicare home health care expenditures,

which have grown from $2.3 billion in 1989 to $9.5 billion in 1993 and are

estimated to increase to $15.1 billion in 1995.16 Part of this growth is

attributed to a 1989 revision of the Medicare home health coverage

guidelines in response to litigation.17 The development of complex medical

technologies that can be provided in the home, the implementation of

Medicare hospital prospective payment in 1984, and the aging of the

population have also contributed to this growth.

States and Other

Countries Are

Experimenting With

Cost-Control

Strategies, but Impact

Yet to Be Determined

In the United States and some other countries, concerns about costs are a

key factor driving changes in long-term care financing and service

delivery. The attempted substitution of home and community-based

services for institutional care is the most visible response to cost

concerns. Other cost-control strategies include limits on nursing home

beds, “capping” budgets, controls on provider fees, and case management.

States are taking the lead in this shift, hoping to contain costs while

responding to the desire of disabled people to avoid institutionalization.

Other countries faced with high and rising public demand and costs for

long-term care are pursuing similar strategies. Whether increased reliance

on home and community-based services and limitations on institutional

care will reduce the rate of spending growth, however, is not yet clear.

Experimentation in controlling costs and using different long-term care

service delivery models will likely continue.

161994 Green Book, Overview of Entitlement Programs.

17Interim Analysis of Payment Reform for Home Health Services, Prospective Payment Assessment

Commission, Congressional Report C-94-02 (Mar. 1, 1994).

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States Are Trying Budget

Caps and More Reliance on

Home and

Community-Based Services

but Cost Impact of

Changes Unclear

The emerging models of long-term care service delivery now being

developed emphasize (1) greater reliance on home and community-based

services, (2) consolidation and decentralization of administrative

responsibility for long-term care, and (3) stronger limits on the supply of

institutional care. Together, these changes constitute a paradigm shift that

emphasizes different models of home care, rather than care provided in an

institution. Many of these models aim to incorporate individualized

planning to provide services that consider a person’s specific needs,

preferences, and availability of community supports, including informal,

unpaid caregiving rather than a standard package of services. In so doing,

the models reflect the desire of many disabled people to be as independent

as possible in their homes and communities.

While the bulk of public long-term care funding is from federal sources,

state governments have taken the lead in developing and administering

public long-term care programs. Some of the state innovations were

pioneered under the Medicaid waiver program.18 Since 1981, states have

had the option of applying for Medicaid waivers to fund home and

community-based services for people who meet Medicaid eligibility

requirements and would otherwise require expensive institutional care. All

states now provide some home and community-based services in their

Medicaid programs, primarily to elderly persons and persons with physical

disabilities.

In 1994, we reported on the experience of three states with long-standing

Medicaid waiver programs—Oregon, Washington, and Wisconsin.19

Although these states used various strategies to control program growth,

all three placed additional restrictions beyond federal limits on program

size, prompted in part by state budget limitations. These restrictions

involve financial eligibility criteria; functional eligibility criteria; and a

variety of program management techniques. These techniques include

(1) controls on provider fees, (2) capped individual service budgets,

(3) case management, and (4) limits on new nursing home beds. Some

states also set up a consolidated administrative authority within the state

over both institutional and community-based services to help shift

18The changes made by the Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35) authorize the

Secretary of HHS through HCFA, the federal agency in charge of Medicaid, to approve exceptions or

waivers to Medicaid program rules. These waivers allow the states to offer packages of services,

including nonmedical services, that may not be covered by the states’ regular Medicaid programs.

Moreover, the states may choose to provide specific services only to defined groups, instead of to all

eligible beneficiaries, as would be required under Medicaid absent a waiver.

19Medicaid Long-Term Care: Successful State Efforts to Expand Home Services While Limiting Costs

(GAO/HEHS-94-167, Aug. 11, 1994).

Page 16 GAO/HEHS-95-109 Long-Term Care Issues
B-260713 

individuals from institutional care and to home and community-based

care. State officials singled out case management as especially useful in

controlling costs by authorizing and monitoring services and by ensuring

that beneficiaries receive the support services that they need to stay out of

institutions. State Medicaid directors as well as directors of state agencies

on aging surveyed by us also cited case management as an important

technique for cost control.

As a result of the shift from institutional care to home and

community-based care, the states we studied—Oregon, Washington, and

Wisconsin—have been able to provide services to more people with

available funds. (See fig. 5.) In addition, the states have accommodated all

or most of the growth in their long-term care programs in home and

community-based care. Some state officials believe that their ability to

provide home and community-based care through state-funded and

Medicaid waiver programs has allowed their states to successfully contain

growth in overall state long-term care spending. In these states, the

combined number of nursing facility beds declined 1.3 percent between

1982 and 1992 while the total number of nursing facility beds operated in

the United States in the same period increased by 20.5 percent. Controls

on program growth, however, have at times resulted in waiting lists for

some programs, particularly the state-funded ones.

Page 17 GAO/HEHS-95-109 Long-Term Care Issues
B-260713 

Figure 5: Aged and Physically

Disabled Users of Nursing Facility and

Home and Community-Based Care in

Oregon and Washington, 1983 and

1993

Users

0

10000

20000

30000

40000

50000

1983 1993 1983 1993

Year

Oregon Washington

Home and Community-Based Care

Nursing Facility Care

Note: Wisconsin is not included in the figure because comparable data were not available.

Sources: Senior and Disabled Services Division, Oregon Department of Human Resources; and

Aging and Adult Services Administration, Washington Department of Social and Health Services.

Accordingly, the success of the new service delivery models in containing

costs nationwide is not yet clear. The passage of Medicaid waivers was

based in part on the theory that providing certain nonmedical services

(such as housekeeping, personal care, and adult day care) in the home or

community could delay or eliminate institutionalization. Research has

shown that while home and community-based programs were less costly

on a per person basis, they generally raised total long-term care costs.

Limited reductions in institutional use were more than offset by increased

demand for home and community-based care—often referred to as “the

woodwork effect.” However, states are no longer relying on the availability

of home and community-based services to reduce demand for nursing

home care. Rather, savings are expected to result from restricting the

Page 18 GAO/HEHS-95-109 Long-Term Care Issues
B-260713 

numbers of nursing home beds, thereby preventing additional nursing

home use.

Other Countries Also

Implementing Long-Term

Care Cost-Control

Strategies, but Impact Not

Yet Known

In 1994, we reported that some other countries—Germany, Sweden, the

United Kingdom, and several Canadian provinces —are establishing

similar initiatives to contain long-term care costs, though it is too early to

tell what effect the changes will have.20 (See table 4.) While their health

care systems differ significantly from ours, they face similar pressures

associated with aging populations and rising government spending for

long-term care. To contain spending growth, these countries are applying

global or capped budgets to long-term care expenditures and have

strengthened other controls, such as cost sharing, fee negotiation and rate

setting, and management of nursing home bed supply. For example,

Germany is in the process of developing a budget expressly for long-term

care spending, while certain Canadian provinces, the United Kingdom, and

Sweden have recently given local governments fixed budgets to fund

nursing home care or home and community-based services.

Table 4: Key Long-Term Care Reform,

by Country Country Reform

Canada 1978 to present: Most provinces, using incremental reforms, have

developed long-term care as a universal benefit program.

Germany 1995-96: Reforms will make long-term care services standard

benefits to be provided through national health insurance.

Sweden 1992 Adel Reform: The legislation shifts resources and taxing

authority to municipalities, making them fully responsible for

administering long-term care services.

United Kingdom 1990 Community Care Act: Implemented in 1993, the act grants

local authorities strict global budgets for long-term care services.

The United Kingdom, Sweden, and certain Canadian provinces’ reforms

have sought to simplify access to care and target public resources more

efficiently by consolidating the administration of services into single

agencies and locating these agencies within local governments. As a result,

an individual can obtain initial access to services at a single local public

agency. Agencies in other countries are also increasingly relying on case

management to assess needs, coordinate health and social services’

components of care, and allocate resources. Last, to encourage informal

caregiving, several countries are providing various financial incentives,

such as cash payments and credits toward public pensions for caregivers.

20Long-Term Care: Other Countries Tighten Budgets While Seeking Better Access (GAO/HEHS-94-154,

Aug. 30, 1994).

Page 19 GAO/HEHS-95-109 Long-Term Care Issues
B-260713 

Demand for

Long-Term Care

Expected to Increase

The number of Americans needing long-term care will continue to grow,

but predicting the magnitude and composition of that growth is

complicated by several factors. Experts agree that population aging will

increase the number of disabled elderly needing long-term care in the next

several decades, but no consensus exists on the size of that increase. In

addition, estimates of future long-term care need among the nonelderly

disabled are difficult to project. Several factors, such as medical advances

or changes in death rates, could increase or decrease need among elderly

and nonelderly persons alike. Finally, the availability of informal, unpaid

caregivers and workplace policies will also affect future demand for public

long-term care services.

Number of People Needing

Long-Term Care Will

Increase, but Extent of

Size Is Uncertain

Because long-term care need increases with age, especially after age 85,

we can expect significant demand for long-term care well into the next

century as the baby boom generation ages. (See fig. 6.) Current predictions

of the numbers of disabled elderly vary widely, with predictions at the

upper end of the range estimating that the number of elderly needing

long-term care may as much as double in the next 25 years. Some

researchers argue that medical advances that yield longer life

expectancies may actually increase long-term care need as more people

live longer and develop age-related disabilities, such as Alzheimer’s

disease, or live longer with disabilities they already have. Other

researchers maintain that better treatments for common problems among

the elderly, such as strokes and heart disease, or the prevention of

disabilities could mitigate long-term care need.

Page 20 GAO/HEHS-95-109 Long-Term Care Issues
B-260713 

Figure 6: Population Aging Will

Increase Long-Term Care Need Disabled Elderly (Millions)

0

5

10

15

20

25

1994 2020 2060

Year

Low Estimate

High Estimate

Source: These projections are from K. Manton, “Epidemiological, Demographic, and Social

Correlates of Disability among the Elderly,” The Milbank Quarterly, Vol. 67 (1989), tables 1, 3,

and 4.

Even more controversial are estimates of the future numbers of nonelderly

disabled people who will need long-term care. Less information is

available on which to base predictions about disability among the

nonelderly, and small changes in how frequently certain disabling

conditions, such as cerebral palsy, occur among the nonelderly can

significantly affect the numbers needing long-term care. But most

researchers believe that the increase in recent years in the nonelderly

disabled population is likely to continue.

Demand for Publicly

Funded Long-Term Care

Subject to Several Factors

While limitations in the ability to function independently affect a person’s

need for long-term care, the demand for publicly funded long-term care

services is influenced by several other factors. For example, some people

Page 21 GAO/HEHS-95-109 Long-Term Care Issues
B-260713 

with severe disabilities may not want assistance from others. Among those

who want assistance, many people receive most of their care for free from

family or friends and may prefer this kind of care to a public program.

Some people may be able to afford private long-term care insurance or

services. Also, community resources, such as public transportation, can

make it easier for a person with a disability to function without help from

others.

The availability of informal, unpaid caregivers will also affect future

demand for public long-term care services. Greater geographic dispersion

of families, smaller family sizes, and the large percentage of women who

work outside the home may continue to strain the capacity of informal

caregiving. In the short term, large numbers of potential caregivers in the

baby boom generation may ease the strain. But as baby boomers grow old,

they may have fewer family members to care for them.

The capacity of families to provide care in the future may also be

influenced by workplace policies. Workplace support for informal

caregiving, for example, through elder care policies, could help employed

caregivers in providing unpaid care. However, growth in elder care options

among private companies is unclear. Many companies have concerns

about the perceived costs of offering elder care assistance as well as about

maintaining equitable benefits for employees who do not have elder care

responsibilities. In the public sector, the federal government, as well as

some state and city governments, plan to make additional support

available to their employees or to expand availability of existing elder care

programs. Many of these employers, however, are uncertain of their future

plans.

Because our work was a summary of previous GAO reports, we did not

obtain agency comments.

As arranged with your office, unless you publicly announce the contents of

this report earlier, we plan no further distribution until 30 days after its

issue date. At that time, we will send copies of this report to other

congressional committees and members with an interest in this matter; the

Secretary of Health and Human Services; the Assistant Secretary for Aging;

the Administrator, Health Care Financing Administration; the Assistant

Secretary for Planning and Evaluation; and others upon request.

Page 22 GAO/HEHS-95-109 Long-Term Care Issues
B-260713 

This work was done under the direction of Cynthia A. Bascetta, Assistant

Director. If you or your staff have any questions about this report, please

call me on (202) 512-7215 or Cynthia Bascetta on (202) 512-7207. Other

major contributors are listed in appendix II.

Sincerely yours,

Jane L. Ross

Director, Income Security Issues

Page 23 GAO/HEHS-95-109 Long-Term Care Issues
Contents

Letter 1

Appendix I 

Selected GAO

Products on

Long-Term Care

26

Appendix II 

GAO Contacts and

Staff

Acknowledgments

33

Tables Table 1: Examples of Home and Community-Based Services 4

Table 2: Most Needing Long-Term Care Are Not Institutionalized 8

Table 3: Major Federal Programs Supporting Long-Term Care

Services for the Elderly and Persons With Disabilities

10

Table 4: Key Long-Term Care Reform, by Country 19

Figures Figure 1: Definitions for ADL and IADL 5

Figure 2: Both Young and Old Report Long-Term Care Need 7

Figure 3: Government Pays the Largest Share of Long-Term Care

Costs, 1993

9

Figure 4: Medicaid and Medicare Long-Term Care Expenditures,

Fiscal Years 1989-1993

14

Figure 5: Aged and Physically Disabled Users of Nursing Facility

and Home and Community-Based Care in Oregon and

Washington, 1983 and 1993

18

Figure 6: Population Aging Will Increase Long-Term Care Need 21

Abbreviations

ADL activities of daily living

ASPE Assistant Secretary for Planning and Evaluation

HCFA Health Care Financing Administration

HHS Department of Health and Human Services

IADL instrumental activities of daily living

NAIC National Association of Insurance Commissioners

Page 24 GAO/HEHS-95-109 Long-Term Care Issues
Page 25 GAO/HEHS-95-109 Long-Term Care Issues
Appendix I 

Selected GAO Products on Long-Term Care

Aging Issues: Related GAO Reports and Activities in Fiscal Year 1994

(GAO/HEHS-95-44, Dec. 29, 1994). This report compiles GAO’s fiscal year 1994

products and ongoing work on older Americans and their families.

Because the elderly are one of the fastest growing segments of today’s

society, the Congress faces a host of issues—ranging from demographic

changes in the structure and role of the family to financing and providing

health care, Social Security, and pensions—in which the federal

government will play an important role. This report summarizes 30 issued

reports on policies and programs directed mainly at older Americans.

Included are reviews of health, income security, social services, and other

topics. We also summarize 59 reports in which older Americans were one

of several groups targeted by federal policies. For example, Medicaid

finances nursing homes and other types of long-term care, along with

medical care for poor persons of all ages. In addition, this report describes

testimonies delivered in fiscal year 1994 on subjects affecting older

Americans and lists 55 ongoing GAO jobs on older Americans.

Long-Term Care: Diverse, Growing Population Includes Millions of

Americans of All Ages (GAO/HEHS-95-26, Nov. 7, 1994). Contrary to popular

perception, not all Americans needing long-term care are elderly or

institutionalized. Of the 12 million Americans requiring such care, 5 million

are working-age adults and about half a million are children; the vast

majority—10 million—live at home or in community residential facilities.

The long-term care needs of this population vary considerably, from

around-the-clock nursing care to occasional assistance with household

chores, such as cooking and housecleaning. The aging of the baby boom

generation means that long-term care needs will increase well into the

next century, as much as doubling among the elderly population in the

next 25 years. Meaningful projections of the nation’s future long-term care

needs, however, are clouded by uncertainty about whether baby boomers

will live longer, healthier lives than preceding generations and by a lack of

reliable estimates on the future size of the nonelderly disabled population.

Further, researchers believe that the number of younger disabled has

grown in recent decades and will continue to do so, in part as a result of

changing medical technology and other factors that may allow more low

birth weight infants to reach childhood, for example, or more young adults

to survive disabling accidents. The diverse ages, needs, and conditions of

the long-term care population mean that greater flexibility is needed in the

design and administration of programs to match the range of individual

needs.

Page 26 GAO/HEHS-95-109 Long-Term Care Issues
Appendix I 

Selected GAO Products on Long-Term Care

Long-Term Care Reform: States’ Views on Key Elements of Well-Designed

Programs for the Elderly (GAO/HEHS-94-227, Sept. 6, 1994). The state agencies

agree widely on the key components of well-designed programs for the

elderly. State agencies believe that an elderly person’s ability to perform

activities of daily living is the best way to identify persons with the

greatest need for services, although states do not uniformly define such

activities. To determine service needs, state agencies generally agree that

case/care management, a standard assessment instrument, and

involvement of the elderly person in the process are most useful. State

agencies report that the largest number of severely disabled elderly

persons need nonmedical services, such as personal care. State agencies

agree that a variety of cost control methods are effective, although less

consensus exists about which specific methods work best. Regarding the

private-sector role in long-term care, state agencies believe that the

private-sector role could probably reduce government costs, and

government interventions might spur private-sector activity.

Long-Term Care: Other Countries Tighten Budgets While Seeking Better

Access (GAO/HEHS-94-154, Aug. 30, 1994). In the United States, the number of

people age 65 and older will exceed 20 percent of the total population by

the year 2030, up from 12.5 percent in 1990. Public and private spending

for long-term care has risen dramatically during the past decade—

exceeding $100 billion in fiscal year 1993—and is projected to continue

this upward trend. At the same time, considerable consumer

dissatisfaction exists with the cost of and access to this care. To varying

degrees, other countries also face aging populations, cost pressures, and

service delivery problems. This report reviews the provision of long-term

care in Canada, Germany, Sweden, and the United Kingdom. It examines

(1) the financing and cost-containment measures these countries use to

control public spending for long-term care and (2) administrative and

delivery approaches the countries use to expand the range of and access

to services.

Medicaid Long-Term Care: Successful State Efforts to Expand Home

Services While Limiting Costs (GAO/HEHS-94-167, Aug. 11, 1994). Because

nearly one-third of the nation’s Medicaid expenditures are now spent on

long-term care ($42 billion in 1993), we were asked to review the

experience of states in expanding government-funded home and

community-based services. Our review focused on Oregon, Washington,

and Wisconsin. These three states have expanded home and

community-based long-term care in part as a strategy to help control

rapidly increasing Medicaid expenditures for institutional care. As they

Page 27 GAO/HEHS-95-109 Long-Term Care Issues
Appendix I 

Selected GAO Products on Long-Term Care

expanded home and community-based care, the three states restricted

how large most of the programs could grow. Some restrictions were

mandated by the federal government, which approves capacity limits on

programs operated under Medicaid waivers. Other restrictions result from

constrained state budgets. Despite these deliberate limits on program size,

one impact of the shift to home and community-based care is that the

three states have been able to provide services to more people with the

dollars available, primarily because home and community-based care is

less expensive per person than institutional care.

Long-Term Care: The Need for Geriatric Assessment in Publicly Funded

Home and Community-Based Programs (GAO/T-PEMD-94-20, Apr. 14, 1994).

Because of advances in medicine and public health, Americans are living

longer than ever before. Nearly 1 in every 8 Americans was 65 years of age

or older in 1990; by 2020, this ratio is expected to rise to 1 in 5. To

maintain their independence, many elderly people need daily help with

routine activities, such as bathing, dressing, shopping, and meal

preparation. Home and community-based long-term care for the elderly is

today financed and run through a host of federal and state programs. This

fragmentation can result in elderly persons being reevaluated every time

they apply for a new program or pass a particular milestone, such as being

discharged from a hospital. Despite this potential for redundancy, geriatric

assessment is a potentially useful part of any program with frail elderly

clients seeking home and community-based long-term care. This testimony

discusses (1) what geriatric evaluation is and how it is used, (2) the extent

to which it is available in public programs, (3) the professional

requirements for persons who administer it, and (4) the pros and cons of

standardizing the evaluation process.

Long-Term Care Reform: Program Eligibility, States’ Service Capacity, and

Federal Role in Reform Need More Consideration (GAO/T-HEHS-94-144,

Apr. 14, 1994). Passage of any long-term care reform legislation is merely

the first step in a long journey toward meeting the nation’s long-term care

needs. Knowledge about determining long-term care needs and services,

derived largely from the experience of innovative states, suggests that

state flexibility is the best way to meet the diverse needs of individuals and

communities. This flexibility requires a new, different federal role, largely

one of partnership with the states in the design and management of

programs. The administration’s proposal would give states $38 billion in

federal funding each year for a new federal-state program of home and

community-based services to be phased in from 1996 to 2003. States will

be given wide latitude to design and run programs to serve persons of all

Page 28 GAO/HEHS-95-109 Long-Term Care Issues
Appendix I 

Selected GAO Products on Long-Term Care

income ranges. The proposal would also liberalize Medicaid nursing home

eligibility, provide tax credits to defray the costs of personal assistance for

working persons with disabilities, and encourage and regulate private

long-term care insurance. If the administration’s proposal is to be the

blueprint for long-term care reform, the new federal role should be defined

more clearly. More thought should also be given to developing state

guidance on determining eligibility and to helping states with less capacity

to use program funds wisely.

Long-Term Care: Demography, Dollars, and Dissatisfaction Drive Reform

(GAO/T-HEHS, 94-140, Apr. 12, 1994). The long-term care system has evolved

in a patchwork fashion and today comprises multiple programs that

individuals find hard to access. Despite millions of dollars in outlays, the

system often fails to meet the diverse needs of the disabled, and many

believe that access to services could be improved with the same level of

funding. This testimony focuses on three trends underlying the quest for

reform. First, demographic changes make rising demand for long-term

care inevitable across all ages, not just for the elderly. Second, spending

will escalate sharply across all ages, not just for the elderly. Third, despite

high costs, disabled persons are increasingly unhappy with available

services and their ability to obtain them.

Long-Term Care: Support for Elder Care Could Benefit the Government

Workplace and the Elderly (GAO/HEHS-94-64, Mar. 4, 1994). Today, about six

million older Americans living at home need help with day-to-day

activities, such as eating, bathing, shopping, and housecleaning. Most

disabled elderly get all their care informally, from family members and

friends, mainly women. Greater geographic dispersion of families, small

families, and more women working outside the home are straining the

ability of informal caregiving. Some private- and public-sector employers

are now providing assistance known as “elder care” to alleviate work and

caregiving conflicts. This assistance may include leave policies, alternative

work schedules, and referral services to help employees care for their

elderly relatives. Little is known nationwide about the extent and content

of elder care generally—and even less is known about elder care in

government, which employs 18 million people or 15 percent of the

workforce. This report evaluates (1) the extent and nature of government

practices facilitating elder care; (2) planned changes in these practices;

and (3) their potential to further support informal caregivers.

Long-Term Care: Private Sector Elder Care Could Yield Multiple Benefits

(GAO/HEHS-94-60, Jan. 31, 1994). Today, about 6 million older Americans need

Page 29 GAO/HEHS-95-109 Long-Term Care Issues
Appendix I 

Selected GAO Products on Long-Term Care

help living at home because of their disabilities. The demand for this kind

of assistance is expected to increase significantly in the future, with

upwards of 10 million persons needing help by 2020. Most disabled elderly

receive this care from family members and friends, primarily women. Yet

greater geographic dispersion of families, smaller family size, and the large

number of women who work outside the home are straining the ability of

caregivers. Some companies are responding to the needs of their workers

with policies and programs, known as “elder care,” to help ease work and

caregiving conflicts. This report evaluates (1) the extent and nature of

company practices now offered to help employees who look after the

elderly, (2) planned changes in these practices, and (3) the potential of

company practices to further support informal caregivers.

Health Care Reform: Supplemental and Long-Term Care Insurance

(GAO/T-HRD-94-58, Nov. 9, 1993). Provisions of the Clinton administration’s

Health Security Act that deal with private long-term care insurance and

supplemental health insurance address many of the problems that we have

pointed out in the past. The act has detailed sections governing the

content and marketing of such insurance, including disclosure standards

that protect consumers from deceptive marketing practices, grievance

procedures that allow policyholders to contest insurance company

decisions, and sales commission standards that discourage questionable

sales practices. In general, we believe that the administration’s proposal

contains the kinds of consumer protections that we have long advocated.

Some problems, however, are not addressed. Specifically, the act will not

protect consumers from the sale of duplicate policies or high-pressure

sales techniques. It also does not address other kinds of supplemental

insurance that cover specific diseases or conditions requiring

hospitalization. Because of their limited, narrow coverage, such insurance

may be unnecessary for many consumers.

Long-Term Care Insurance: High Percentage of Policyholders Drop

Policies (GAO/HRD-93-129, Aug. 25, 1993). From 1988 until the early 1990s,

sales of long-term care insurance grew at about 32 percent annually.

Although greater consumer protections are built into the long-term care

policies being sold today, many Members of Congress are concerned about

continuing abuses in this area and the need for more protections. This

report provides information on (1) the percentage of policyholders that

are expected to allow their policies to lapse and (2) the percentage of

policyholders’ premiums that are paid as sales commissions. It also

discusses the adoption of consumer protection standards, such as benefits

Page 30 GAO/HEHS-95-109 Long-Term Care Issues
Appendix I 

Selected GAO Products on Long-Term Care

that provide a return of a portion of premiums paid on long-term care

insurance policies that are terminated.

Medicaid Estate Planning (GAO/HRD-93-29R, July 20, 1993). Pursuant to

congressional requests, we determined the (1) prevalence of Medicaid

estate planning for becoming Medicaid-eligible, (2) value of assets

sheltered through Medicaid estate planning, and (3) extent to which states

are enforcing Medicaid requirements concerning Medicaid estate planning.

We found that (1) half of the Medicaid applicants converted assets from

one form to another or transferred assets to another party, (2) asset

conversions averaged $5,600 and typically involved setting aside money

for burial arrangements, (3) other types of conversions included home

repairs and automobile purchases, (4) asset transfers were far less

frequent but involved larger amounts of money, and (5) half of the

applicants that transferred assets were denied eligibility.

Long-Term Care Forum: Rethinking Service Delivery, Accountability, and

Cost Control (GAO/HRD-93-1SP, July 13, 1993). Public dissatisfaction with the

long-term care system is mounting. Long-term care is seen widely as both

expensive and failing to meet the needs of the disabled of all ages. In

particular, many people take issue with long-term care’s bias in favor of

institutional rather than home- and community-based services. This

discussion paper was prepared for a GAO forum on long-term care issues.

The views presented, although not necessarily the official position of GAO,

are an attempt to pull together a wide variety of evidence and expert

opinion on the key issues in long-term care reform. The paper touches on

the key elements of innovative long-term care programs in the United

States and abroad that have developed a wider range of home- and

community-based services for the elderly as well as younger disabled

persons. These key elements include (1) service flexibility to meet the

unique needs of individuals, (2) high standards of organizational

accountability to taxpayers for money spent and the quality of services

delivered, and (3) effective cost controls to stay within the budgets

decided upon by elected officials.

Long-Term Care Case Management: State Experiences and Implications

for Federal Policy (GAO/HRD-93-52, Apr. 6, 1993). The number of Americans

age 65 and older is rising steadily and could exceed 52 million by 2020.

Older people require more health and social services but are often

confused about how to obtain them. Case management helps people

define their service needs, locates and arranges for services, and

coordinates the services of multiple providers. The Congress has recently

Page 31 GAO/HEHS-95-109 Long-Term Care Issues
Appendix I 

Selected GAO Products on Long-Term Care

considered several bills dealing with long-term care; some of this

legislation has proposed establishing a network of case managers to

integrate long-term care services and ensure that beneficiaries receive

necessary care and support. This report discusses (1) what, in practice,

constitutes case management; what roles case managers play; and what

barriers they face in doing their jobs and (2) whether standards for case

managers would best be defined in terms of professional qualifications,

the functions of case management, or performance measures based on the

experience of state officials and outstanding case managers.

Long-Term Care: Projected Needs of the Aging Baby Boom Generation

(GAO/HRD-91-86, June 14, 1991). By virtue of its numbers, the baby boom

generation—about 76 million people born between 1946 and 1964—has

already had a profound impact on the American education system and, in

more recent years, the workforce. As the baby boom generation ages,

rapid growth in the number of elderly people who need nursing home care

or care at home will increase long-term care resource requirements. This

report provides information on projections of (1) the disabled elderly

population and its use of long-term care services, (2) the number of home

health aides required, (3) the costs of future long-term care services, and

(4) the base of taxpayers or employed workforce available to pay for the

elderly needing care.

Page 32 GAO/HEHS-95-109 Long-Term Care Issues
Appendix II 

GAO Contacts and Staff Acknowledgments

GAO Contacts Cynthia Bascetta, Assistant Director, (202) 512-7207

Linda Baker

Connie Peebles

Acknowledgments The following staff also contributed to this report: Eric Anderson, George

Bogart, Patricia Davis, Joel Hamilton, Richard Jensen, James Musselwhite,

and William Scanlon.

(105599) Page 33 GAO/HEHS-95-109 Long-Term Care Issues
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