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State hopes more elderly can be cared for at home

A move that would "de-institutionalize" some of Maryland's frail elderly residents - providing them with care at home, managed by HMOs, rather than at nursing homes - is expected to be proposed by health Secretary Nelson J. Sabatini today.

"We've got to go to families and say, 'What services do you need to bring grandma home?'" the secretary of the Department of Health and Mental Hygiene said in an interview yesterday.

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He said he hoped to devise a plan that wouldn't move any patients against their will but would offer added support so the elderly could be cared for in the community at a lower cost.

Mounting budget pressures make such a radical change an urgent priority, Sabatini said. Medicare costs have been soaring in recent years and now consume about a fifth of the state budget.

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The sweeping revision in the way the state provides care for the elderly would require federal approval.

Sabatini said he planned to work out the details after talking with senior and industry groups beginning today. He hopes to win legislative support this spring and apply for federal approval by late summer.

Advocates for the elderly said they liked the concept but wanted to be sure the plan would include adequate protections.

"We'd like to see adults remain in the community and be as independent as possible," said Donna DeLeno, advocacy representative for AARP-Maryland. However, she said, she was concerned that "there aren't enough services in the community" to support the frail elderly at home.

"Since there's so much pressure on the budget, we have to be sure you don't lose the quality of care," said Charles Culbertson, president of the Baltimore County Association of Senior Citizen Organizations.

With no changes in the way it is managed, Sabatini said, the state's $4.5 billion Medicaid budget would increase by 11 percent - about a half-billion dollars - in the budget year beginning in July.

Over the past six years, the amount the state Medicaid program pays out for care has increased 62.6 percent - without counting an expanded program that provides coverage for about 150,000 middle-income children.

Sabatini declined to discuss the state budget that Gov. Robert L. Ehrlich Jr. will unveil next week, beyond saying the health budget "will not be as Draconian as some people are anticipating - but that's not to say it's going to be pleasant."

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He said it would do as much as possible to shift costs to federal programs and look for administrative savings. In the current year, the health department also trimmed costs by cutting back on inflation adjustments to care providers

"We have one more year to try to find these Band-Aid approaches," he said, "and by the [fiscal] '06 budget, we'll need extensive restructuring."

Groups representing Medicaid recipients, and trade groups for providers such as hospitals and nursing homes, agree that "Band-Aid approaches" are reaching their limits.

For example, Lori Doyle, public policy director for the Community Behavioral Health Association of Maryland, a group of mental health programs, praised Sabatini for consulting with them but said cuts over the past few years have resulted in waiting lists for services. About 90,000 people receive community mental health services through Medicaid and related programs, she said.

"People talk about cutting to the bone, but we're well into the marrow at this point," she said.

All states have grappled with sharply rising costs for Medicaid, which provides health coverage for low-income people. An aging population and soft economy have brought more people into government health programs, while care costs have seen double-digit inflation.

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Like Maryland, most states have frozen or cut payments to providers (doctors, hospitals, nursing homes) and changed the rules for prescriptions. Some have cut back benefits such as dental care and eyeglasses, and some have tightened eligibility standards.

Now, they're starting to turn to reshaping care for the elderly and disabled because "that's where the money is," said Victoria Wachino, associate director of the Kaiser Commission on Medicaid and the Uninsured.

Nationally, she said, Medicaid programs spend $13,099 per person per year to care for the elderly and $11,770 for the blind and disabled, compared with $1,514 for children and $1,999 for other adults.

Maryland's Medicaid program pays for about 24,000 low-income people in nursing homes, but their costs represent about a third of the Medicaid budget - almost as much as the state spends to cover about 400,000 low-income parents and children - Sabatini said.

But controlling costs for the elderly and disabled is extremely difficult, Wachino said: "That's why states don't start with that first."

While a few states are beginning to experiment with new ways to manage care of the elderly, most programs are so new that it's hard to measure the impact on costs and on care, experts said.

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Sabatini said he was not aware of any state that had sought a waiver quite like the one he's suggesting for Maryland. He said he wasn't sure how long it would take federal officials to review the waiver request or what the chances were of approval.

The waiver would allow Maryland flexibility to combine and spend money from two different programs: Medicare, the federal program that pays for doctors and hospital care for the elderly and long-term disabled, and Medicaid, a state-designed program for the low-income, in which the costs are shared equally between state and federal governments.

Sabatini said HMOs could decide where patients could get the best care at the lowest cost and bring in help, such as home nursing care, to support the elderly and disabled at home or in assisted-living facilities.

Also, he said, in many cases elderly might be cared for in nursing homes rather than hospitals.

The potential savings - he didn't estimate an amount - would come from providing care in less expensive settings. Sabatini is to outline his concept today at a meeting for industry and advocacy representatives.

John Holahan, director of the Health Policy Center at the Urban Institute, a Washington think tank, said nursing homes have "a number of nurses and aides in close proximity," and providing care in the community could add to costs and result in "shifting the burden to families."

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However, he said, most families prefer having elderly relatives at home if they can get enough support services.

DeLeno, of AARP, said she worried that many in nursing homes, "the sickest and the poorest and the frailest" would be "too sick to go into the community." However, over the long run, she said, alternatives need to be developed, because as baby boomers age, "We can't all be in nursing homes."

Stephen J. Allen, president of the Health Facilities Association of Maryland, a nursing home trade group, said Medicaid pays for about 70 percent of nursing home patients in the state, with 20 percent paid by Medicare (generally for patients recovering after hospital stays) and 10 percent paid out-of-pocket by patients and families.

Allen, who is chief executive officer of Xavier Health Care Services Inc., which owns six nursing homes in Maryland, said his group doesn't object to the concept but is anxious to work with Sabatini on the details.

"The secretary has a tough job," Allen said, "but we have a lot of faith in him."


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