Social HMOs: Moving Elderly Toward Home Care.

Based on an interview with Sam L. Ervin, President and CEO of SCAN Health Plan 

Long-term care is a complex issue. More seniors are living longer and healthier lives than ever before and are able to do many things for themselves. Many seniors, however, are living longer with chronic illnesses and disabilities. There is a growing concern for how we care for this population.

We're already seeing seniors who are developing chronic illnesses and disabilities but are not sick enough to need 24-hour supervision in a facility. There's an increasing demand for services that will help them stay at home as long as possible. People want the comforts of their own homes and, if given the choice, most people would decide to remain there if they could get home care services delivered. It's called assisted living at home. The federal government will be forced to find ways to support case management, homemaker and personal care services for these frail seniors.

This need can best be fulfilled through organizations such as Social HMOs. For example, SCAN's annual expenditures on home care services grew from a little more than $1 million in 1995 to nearly $7 million in 1998--a sevenfold increase in only three years. This increase in the provision of home care services followed an equal rate of growth in the number of members who might otherwise have been institutionalized prematurely. As seniors live longer, their home care needs are certain to increase. At SCAN we integrate the medical and social services--hospitals, physicians, prescription drugs, dental and vision care, as well as services that will help people stay home as long as it is safe and appropriate for them to do so. Of the 6,500 people in our program who meet nursing home eligibility criteria under state Medicaid rules, we maintain 95% at home. I think that policymakers in Washington, DC, will have to respond to a growing demand from consumers for more help to remain at home.

We did a survey of SCAN members who meet nursing home certifiability. It indicated that a tremendous amount of caregiving now is done by children, in particular daughters, many of whom belong to the Baby Boomer generation. Home care in upcoming years is going to be putting increased stress on the Baby Boomers, and they, too, are aging. In 2010, approximately 75 million Baby Boomers are going to start turning age 65. They will begin to need the same services that their own parents need now.

A number of surveys have underscored this. For example, a survey by CCH, Inc., reported that 26% of all unscheduled workplace absences were attributed to family issues, which have replaced personal illness as the top reason for missing work. The need for some level of caregiver assistance, varying dramatically from just a little help to a lot of help, is rising.

The services that people need most to keep them independent in their own homes are personal care, homemaking and meal preparation. SCAN offers additional services, including an emergency response unit as needed, transportation and escort services to a physician's office or to obtain prescription drugs, and adult day care. Caregiver relief is also among the services we provide.

I think the healthcare system will become much better at creating systems using technology for help in monitoring vital signs in people's own homes, along the same lines as telemedicine. For example, cameras will be placed in the home to permit face-to-face communication with physicians and other providers. The Internet is going to become so easy that even seniors with arthritic fingers or people who are wary of the technology will find it user friendly. They will be able to buy almost anything--including home care services--after online research of what's available and what the outcomes of different medical procedures are.

Social HMOs have been hidden under a bushel basket in away, but I think now they will become more visible. Fortunately for seniors, the passage by Congress and the signing by President Clinton of the Balanced Budget Refinement Act of 1999 legislation extended the social HMO program through at least 2001. It also removed the membership limitation per Social HMO site, currently at 36,000, until the aggregate Social HMO membership reaches 324,000. By then, it is hoped, more Social HMOs will be operating in other parts of the country.

As the Social HMO gets more attention, people will begin to see that long-term care benefits can be provided at no added cost to the government. The reason for this is that the payment formula for the Social HMO model includes a special risk-adjustment mechanism, which is budget-neutral to Medicare while giving providers the incentives to deliver quality care and appropriate services. The Social HMO also provides savings to Medicaid by reducing inappropriate institutionalization. Seniors also experience lower out-of-pocket costs for services that can be appropriately delivered to them at home.

As the population ages, the movement toward alternatives to institutionalization, such as the Social HMO, will pick up steam. Another example of this trend is the growing popularity of assisted living facilities, where seniors are willing to replace "home" with a form of congregate living that fulfills other needs. The demand for skilled nursing facilities also will grow as an appropriate transition following surgery or another traumatic, event that requires a period of recuperation.

The challenge for the government will be to create a regulatory framework and compensation structure that encourage innovative and effective care delivery systems. The American public wants choice in healthcare. They also want to be assured that when the time comes, someone will be there to care for them.

Sam L. Ervin is president and CEO of SCAN Health Plan, a California nonprofit health plan for seniors.