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Private Pay Clients In Adult Day Services.

ADULT DAY SERVICES are community-based, long-term care programs that have developed in tandem with federal and state initiatives for containing the rising costs of long-term care (Travis, 1997). Because clients who are dependent on public reimbursement sources for their long-term care were one of the principal groups targeted for placement in these programs, adult day services have survived with strong funding roots in "welfare" reimbursement sources (Feder, Lambrew, & Huckaby, 1997; Wolf-Klein, Maar, & Foley, 1988; Zelman, Elston, & Weissert, 1991). In fact, over time researchers have found that the characteristics and needs of clients in these programs tend to mirror entitlement eligibility (for example, low income or impoverished) and service screening criteria (few social supports, low functioning) (Weissert & Hedrick, 1994). In other words, programs and services that are tightly bound to certain types of public reimbursement become unavoidably influenced and defined by their funding sources.

Though they still remain in the minority, an increasing number of private pay clients have started to be more common in adult day programs around the country (Zawadski, Outwater, & Stuart, 1991). The problem is that to date there is virtually no information comparing the characteristics and service needs of private versus public payer groups. Are these two groups of clients similar or very different? If private pay clients are different, important implications may exist for new marketing strategies, different staffing patterns, and modifications in traditional center programming efforts. Therefore, the purpose of this study was to learn more about factors that differentiate between private and public payer status for a large, statewide group of current users of adult day services.

Review of the Literature

With some exceptions among innovative managed care demonstration projects (Cameron & Nadash, 1996; Eng, Pedulla, Eleazer, McCann, & Fox, 1997), two broad payment types are represented by clients of adult day services. These groups include: (a) publicly supported individuals who meet established criteria for financial eligibility, and functional deficits and/or special care needs, and (b) private pay individuals who either do not yet meet the financial, functional, or special care need criteria (for example, those in Medicaid spend-down, those in early functional decline), or who are not likely to ever meet existing financial eligibility requirements and/or to seek publicly supported care (Staff, 1996; Zawadski et al., 1991; Zelman et al., 1991).

With no prior research on payer status to guide us, we identified a group of variables that were associated with the use of community-based care by long-term care populations. The variables were then organized into four variable categories to include: (a) client characteristics (for example, age, race) (O'Shea & Blackwell, 1993; Skinner, 1995; Temkin-Greener & Meiners, 1995), (b) functional capacity (for example, basic activities of daily living, short and long-term memory, communication ability) (Chapko, Ehreth, Hedrick, & Rothman, 1993; Smith & Longino, 1995; Smyth, 1995; Weissert & Hedrick, 1994; Weissert et al., 1990), (c) care requirements (for example, special treatments, ambulatory assistance) (Chapko et al., 1993; Conrad, Hughes, Hanrahan, & Wang, 1993; National Council on the Aging/National Institute on Adult Day Care, 1995), and (d) social support circumstances (for example, living arrangements, marital status) (Reschovsky, 1996; Tennstedt, Harrow, & Crawford, 1996). Because most of the research from which these variables were drawn studied entitlement populations (for example, Medicaid recipients), we felt that this was the most appropriate place to start to look for significant associations between payer status and these classic long-term care variables. In the absence of prior research or convincing conceptual guidance, we did not create hypotheses for these comparisons.

To the above list we added a fifth category, the referral mechanisms clients employed to obtain care. Private pay clients and their families, by definition, use their personal resources, albeit sometimes limited, to support a variety of long-term care options and arrangements (Stone, Cafferata, & Sangl, 1987; Topolnicki, 1996) including adult day services (Conrad, Hanrahan, & Hughes, 1990; Guttman, 1991; Kirwin, 1991; Scharlach & Boyd, 1989). Although they may seek lay and professional input, advice, and guidance, private pay clients are not dependent on others to initiate service arrangements when they want and can find them (Barker, Mitteness, & Heller, 1991; McAuley, Travis, & Safewright, 1997). Therefore, we hypothesized that an association would exist between (private) payer status and self-referrals to day services.


Data collection. Data for this study were generated from a statewide census of every person (n=3,992) who was a participant in Maryland day care programs as of 12:00 midnight on December 31, 1993, and who was enrolled in an adult day care slot. Census data were also collected for each participant admitted to an acute care hospital or temporarily absent for other reasons who returned or was expected to return to a program after December 31, 1993, and for whom a slot was being held on December 31, 1993. Adult day care administrators were given standardized instructions for completing the census. Assessments were based on interactions with clients and their families and direct observations of clients in the day care settings.

This is a valuable data set from an important state because Maryland has a large (approximately 90 adult day care centers) and mature adult day services network; the state's catchment area includes rural and urban clients from parts of Delaware, the District of Columbia, Pennsylvania, Virginia, West Virginia, and Maryland; and the census is one of the most comprehensive assessments of adult day services clients currently available.

Variables and statistical tests used in the analyses. The five categories of variables used in the analyses are listed in Tables 1 and 2 with frequencies and percentages for each of the variable response categories. Unless otherwise noted, all assessment data reflect the client's status at the time of admission to day services. Clients were considered public pay if Medicaid or any other state or local service program paid their care. Clients were considered private payers if they paid out-of-pocket for their care, including those clients whose incomes qualified them for a sliding-scale fee structure. Descriptive statistics and chi-square tests of association were used to answer the study question.

Table 1. Client Characteristics, Social Support and Referral Source by Payer Status(n = 3,992)
Variables Used            % (n)         % (n)
In the Analyses        Private Pay    Public Pay     Chi-Square

Age                                                 457.87, df=2,

[is less than or
  equal to] 49          4.3 (36)     31.5 (987)
50-74                  33.8 (286)    42.5 (1,331)
75+                    61.9 (523)    26.1 (817)

Married                                             373.55, df=1,

Yes                    29.7 (251)     6.1 (193)
All Other Categories   70.3 (595)    93.9 (2,953)

Race                                                228.83, df=1,

White                  85.4 (722)    57.2 (1,792)
Nonwhite               14.6 (123)    42.8 (1,343)

Lives With Spouse                                   385.52, df=1,

Yes                    28.0 (237)     5.2 (163)
All Other              72.0 (609)    94.8 (2,983)

Lives With Adult                                    198.97, df=1,
Child                                                  p=.001

Yes                    41.0 (347)    18.1 (568)
All Other              59.0 (499)    81.9 (2,578)

Referral Source                                     120.36, df=1,

Self/Family            38.3 (324)    20.2 (634)
Health/Social          61.7 (522)    79.8 (2,512)

Table 2. Functional Capacity and Care Requirements by Payer Status (n = 3,992)
Variables Used             % (n)          % (n)
In the Analyses         Private Pay     Public Pay     Chi-Square

# of ADL                                              23.60, df=4,
Dependencies                                             p=.001

None                     49.2 (409)    49.1 (1,456)
One                      13.4 (111)    14.7 (437)
Two                      15.3 (127)    11.6 (344)
Three                    15.3 (127)    13.1 (388)
Four                      6.9 (57)     11.5 (341)

Short-Term Memory                                     59.01, df=1,
Loss                                                     p=.001

Yes                      72.4 (607)    57.7 (1,695)
No                       27.7 (232)    42.3 (1,244)

Long-Term Memory                                      19.40, df=1,
Loss                                                     p=.001

Yes                      64.3 (536)    55.7 (1,626)
No                       35.7 (298)    44.3 (1,292)

Can Be Understood                                     42.79, df=3,

Understood              44.5 (376)     43.7 (1,346)
Usually Understood      34.1 (1,150)   28.0 (862)
Sometimes Understood    15.6 (132)     14.7 (451)
Rarely/Never             5.8 (49)      13.6 (419)

Ability to                                            20.35, df=3,
Understand Others                                        p=.001

Understands             41.5 (348)     39.7 (1,218)
Usually Understands     35.4 (297)     34.1 (1,046)
Sometimes Understands   19.7 (165)     18.3 (562)
Rarely/Never             3.4 (29)       7.9 (243)

Loss of Cognitive
Function In Previous                                  122.43, df=1,
90 Days                                                  p=.001

Yes                     24.9 (211)     10.3 (325)
No                      75.1 (635)     89.7 (2,821)

Wheeled by Others                                     17.88, df=1,

Yes                     11.9 (101)     18.1 (568)
No                      88.1 (745)     82.0 (2,578)

Requires Manual or
Mechanical Lift                                       11.52, df=1,

Yes                      6.6 (56)      10.5 (330)
No                      93.4 (790)     89.5 (2,811)

# of Special                                          49.39, df=3,
Treatments                                               p=.001

None                    89.6 (758)     80.0 (2,516)
One                      7.4 (63)      16.3 (513)
Two                      1.9 (16)       3.0 (96)
Three                    1.1 (9)         .7 (21)


Client characteristics, social support, and referral source. As shown in Table 1, 36% of the adult day services clients were over the age of 75. They were predominately unmarried (70%), and white (64%).

Approximately 36% of the clients lived with a spouse or adult child, 62% lived in a private home, and 25% were self or family referrals to day services. Twenty-three percent of the clients were private pay.

Functional capacity and care requirements. Table 2 shows that 36% of the clients required assistance in two to four basic activities of daily living (ADLs) at the day services center (toileting, transferring, continence, feeding), 61% had short-term memory deficits, and 57% had long-term memory deficits. Communication was a problem for a sizable number of clients. Approximately 54% had some difficulty making themselves understood, and 58% had some difficulty understanding others. Approximately 15% of the clients had deterioration in cognitive functioning in the 90 days prior to admission. Though most of the clients were ambulatory, 17% were wheeled by others in a wheelchair. Almost 10% required manual or mechanical lifting. Slightly less than one-fifth of the clients (18%) received any type of special treatments (for example, Foley catheter, suctioning, tube feeding, wound care, therapy). When they did require special care, it was usually some type of therapy (physical therapy, speech/language therapy, and occupational therapy).

Chi-square tests of association with payer status. As can be seen across both tables, every comparison resulted in statistically significant associations with payer status. Private pay clients were more likely than publicly supported clients to be older and to be white. In terms of physical functioning, private pay clients were less likely than publicly supported clients to be in the most dependent category of ADL impairment; however, diminished cognitive functioning was evident. In particular private pay clients were more likely to have short-term and long-term memory loss, but less likely to experience continuous problems with being understood or understanding others. Private pay clients were more than twice as likely to have experienced loss of cognitive functioning in the 90 days prior to admission than publicly supported clients.

Differences were evident in both the care requirements and the social support circumstances of the two groups. Private pay clients were less likely to require special treatments, to be wheeled by others, or to require manual or mechanical lifting; all of which continues to suggest a less physically frail group of clients.

Private pay clients were more likely than publicly supported clients to be living with a spouse or an adult child at the time of admission to adult day services. The private payers were also almost twice as likely as their public payer counterparts to be self or family referrals to day services.


Even with problems of generalizing information about one state's client group to other states and regions of the country, this study offers an important starting point for teasing apart the characteristics and needs of a private paying public from those whose care is primarily reimbursed by Medicaid programs and other local and state funds. Several of these findings have important implications for providers who are interested in attracting a private pay population to their centers or who are considering the addition of an adult day services center to an existing long-term care organization.

First, the nuclear families of private pay clients (spouses and adult children) appear to be critical marketing targets because these are the individuals with whom the potential clients are most likely to live and who will probably make the decision (self-referral) to explore adult day services. Adult day services may be particularly attractive to nuclear families who want the opportunity to share the care of a loved one with a formal provider (Hamilton, Braun, Kerber, Thurlow, & Schwieterman, 1996; Quadagno, Meyer, & Turner, 1991; Travis, 1995). As providers seek to understand how American families think about and make decisions to purchase long-term care services, further exploration of these associations will be important areas of research. In the meantime, it seems pretty clear that going where these family caregivers work, shop, worship, and receive care for the dependent family member; providing accessible "after hours" services for busy family caregivers who work; creating contemporary accesses to information (for example, via the Internet, video cassettes); and offering convenient enrollment procedures (for example, filling out forms via the World Wide Web) will be essential good business practices.

Second, the private pay clients in this study had very different care issues. Most interesting in these findings were the significant associations between payer status and clients' short-term and long-term memory losses, communication ability (being understood and understanding), and cognitive decline in the 90 days preceding admission. The dilemma that families caring for demented members face is that there are no forms of public reimbursement for community-based care that is often classified as social care (Conrad et al., 1993; Guttman, 1991). These "dementia funding and eligibility gaps" are a widespread and persistent problem for individuals with dementia (Hudson, 1996; Smyth, 1995). It may be the case that some of the private pay families in the study are casualties of these funding and eligibility gaps. Regardless of the reasons why, the association between private pay status and the apparent need for dementia-related care suggests that families who are caring for cognitively impaired elders are important private pay markets for adult day services.

In addition, centers that are searching for a service niche may be well advised to develop dementia-specific programs that are truly designed to care for dependent persons with significant cognitive deficits. Among other features, these programs will need staff with specialized training in dementia care, higher than usual staff to participant ratios, and activity programs tailored to the needs and abilities of clients with dementia (National Council on the Aging/National Adult Day Services Association, 1997).

Finally, the significant association between race and payer status is noteworthy. While nonwhites are historically under-represented in long-term care programs and services relative to need (Skinner, 1995), our results suggest that utilization problems also exist for the private pay market. Perceived or real prejudices against minority groups, a different set of values and expectations for family care-giving by extended families, and limited access to programs that may be located in a different part of town or another county are among the commonly cited contributing factors for low utilization rates of long-term care programs and services by nonwhites (Skinner, 1995). Further exploration of these issues for private paying nonwhite clients in adult day services seems to be in order.

Study limitations. Three limitations of this study should be addressed in future research. First, due to the constraints of the data set, we included families that were paying on a sliding scale in the private payer category. This means that some of these client families may be very similar to families in the public payer categories with regard to available resources. Without question, some financial hardship existed for many of these caregivers. More refined definitions of the ability to pay for care are needed.

Second, we focused only on users of day services and do not have any data about those who are unaware of adult day services, choose not to use the service, or who started and dropped out of care. Thus, these results tell us about families who know about and were attracted by day services and for whom day services work well enough to continue.

Third, limitations in measuring the variables posed the same dilemmas for this research that they do for any study using administrative data. The advantage of using the Maryland statewide census data set is that it offers information about a large number of day care clients at approximately the same time in one place. The most obvious disadvantage is that measurement choice, precision, and data reliability are reduced. For example, memory and cognition are complex constructs that were reduced to subjective assessments by day care staff for the census.


The dependent care crisis in the United States is heating up for the aging baby boomers as they move from concerns about child care to elder care needs (Shellenbarger, 1994; Stone et al., 1987). One of the needs often cited for many families is a place where dependent elders can receive care and supervision during the day while caregivers work, take care of other demands on the time (such as simultaneous child rearing), or simply rest from the rigors of long-term caregiving (Conrad et al., 1990; Guttman, 1991; Kirwin, 1991; Scharlach & Boyd, 1989). Contemporary families need help, and their employers are increasingly aware of the need to support them in their caregiving duties (Shellenbarger, 1994). Given this scenario and the parallel restrictions on many entitlement programs, the private pay market is likely to be of increasing interest to the providers of successful adult day services programs.

ACKNOWLEDGMENT: The authors wish to thank the Maryland Health Resources Planning Commission for providing access to the data.


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SHIRLEY S. TRAVIS, PhD, RN, CS, is the Dean W. Colvard Distinguished Professor of Nursing, College of Nursing and Health Professions, University of North Carolina at Charlotte, Charlotte, NC.

WILLIAM J. McAULEY, PhD, is Associate Dean for Research, College of Nursing and Health Professions, University of North Carolina at Charlotte, Charlotte, NC.
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Author:Travis, Shirley S.; McAuley, William J.
Publication:Nursing Economics
Geographic Code:1USA
Date:Jan 1, 2000
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