17

Understanding Long-Term Care Policy

RICHARD H. FORTINSKY

NOREEN A. SHUGRUE

INTRODUCTION

“Politics is the art of the possible,” according to the remark most often attributed to Otto von Bismarck (Shapiro & Epstein, 2006). His observation is an apt description of the political process by which long-term care policy is made. By this point in the book, it should be quite apparent that there is no unifying long-term care policy in the United States. Instead, public policies at the federal, state, and local levels have developed in an incremental and fragmented fashion, influenced in large part by the interests and persuasive powers of the many constituents of the long-term care system. There are many theories of policy process, but most recognize that policy development is accomplished through the gradual accumulation of knowledge by groups variously known as “issue networks” or “policy subsystems” (Miller, Mor, & Clark, 2010). In the case of long-term care, these constituent groups include long-term care recipients and their families, caregivers and advocates, providers of all types, taxpayers, academic researchers, and public officials in both executive and legislative branches of government responsible for providing, financing, and regulating long-term care services. The judicial branch, too, has influenced policy through court decisions in cases brought by other actors in the long-term care arena.

At times, long-term care policy has focused on financing specific services in the continuum of care discussed in Chapter 1, at other times the focus has been specifically on one population group needing long-term care, and at still other times on regulatory oversight of services financed by public funds. The purpose of this chapter is to examine the politics and dynamics underlying public policy formulation and implementation in relation to individuals with long-term care needs. In an effort to complement rather than duplicate contributions of other authors in this book, this chapter presents and elaborates on a framework for understanding where public policy originates, what and who influences its development in the long-term care arena, and how major public policies concerning long-term care have been shaped to date. This framework is intended to illuminate the complex interplay among policy makers, interest groups, and the political climates and sensibilities that have influenced long-term care policy development to date. Figure 17.1 illustrates this framework as a three-dimensional “cube” of long-term care policy development for the early 21st century, adapting the original complex cube of long-term care introduced by Oriol (1985). As Figure 17.1 shows, the three domains of long-term care policy development include the types of policies developed, levels of policy development, and the various constituencies who influence policy development. Dynamics underlying long-term care policy development can be characterized as the interplay among one or more components of each of these three domains or dimensions of the cube. Most of the remainder of this chapter elaborates on these three dimensions of long-term care policy development. Populations needing long-term care are discussed in greater detail throughout this book; therefore, the following section briefly summarizes these populations in order to retain the focus of long-term care policy development on those who require services.

FIGURE 17.1 Framework illustrating three domains comprising the cube of long-term care policy development.

Source: Adapted from Fortinsky (2005).

POPULATIONS NEEDING LONG-TERM CARE

The population with long-term care needs has much in common. Nevertheless, in policy discussions, this population has often been categorized according to age and type of disability, in part to target services more precisely, but also because advocates historically were concerned with advancing the interests of one population while failing to recognize parallels with other groups. Examples of populations for which separate policies have been developed include persons with developmental disabilities, persons with chronic mental illness (see Chapter 13), older adults with physical disabilities, younger persons with physical disabilities, and adults with cognitive impairments. Other groups with long-term care needs who have been segregated in policy discussions include people with brain injuries, HIV/AIDS, neurological conditions, and end-stage kidney disease. Public policies have been developed to provide a range of home- and community-based services (HCBS) for individuals in each of these classified groups and, as shown in the following text, many states operate parallel programs for these different populations due to the incremental way in which public policies were formulated and implemented. One heartening trend in the development of long-term care policy in the 21st century has been the recognition by many advocates and policy makers of similar needs among various groups and the willingness to shape policy that treats individuals according to their level of need rather than solely by their age or type of disability.

Veterans of the American armed forces comprise another important population with long-term care needs. Indeed, because of their importance, an entire set of public policies has been developed and implemented to finance, organize, and deliver health care services to veterans via the Department of Veterans Affairs (DVA). Although it is beyond the scope of this chapter to address details of DVA long-term care policy, DVA programs will be used to illustrate broader points about types of public policies affecting long-term care.

TYPES OF LONG-TERM CARE POLICIES

Public policies in the health arena can be grouped into four major types, depending on the aspect of health care with which they are primarily concerned—financing, service organization and delivery, regulation to ensure service quality, and health resources availability. Some legislation includes more than one type of policy.

FINANCING POLICY

Financing long-term care services has given rise to some of the most heated debates as well as some of the most progressive thinking and creative solutions in the long-term care arena. Medicare, Medicaid, and the Veterans Administration are examples of public financing policies in that they specify funding mechanisms to pay for health-related services, the types of services that are eligible to receive funding, and the target populations eligible for funded services. But financing policy goes well beyond public payment systems to include private financing of needed services (both paid and unpaid). Private financing of long-term care needs may come from long-term care insurance, personal assets, reverse mortgages, and unpaid care from family members or others. Chapter 16 provides an in-depth look at the costs of long-term care and the many public and private mechanisms used to finance it. In this chapter, we discuss how financing policy involves the interplay between various schemes of public and private financing in the health sphere, and how they have contributed to the development of a continuum of care for persons with long-term care needs. Questions that arise in the financing policy debate include: Is long-term care a public or private responsibility? How can public and private resources complement each other to achieve equitable outcomes (Stevenson, Cohen, Tell, & Burwell, 2010; see Exhibit 17.1)?

EXHIBIT 17.1 Policy illustration—the CLASS Act

SERVICE ORGANIZATION AND DELIVERY POLICY

Public policies may also authorize the development of direct health care services and mandate how these services will be organized and delivered. At the federal level, for example, the Veterans Administration Medical Centers, nursing homes, and associated inpatient and outpatient health services were established pursuant to these types of public policies. At the state level, these types of policies created hospitals and group homes for persons with chronic mental illnesses (see Chapter 13 for more details about chronic mental illness).

Most of these public policies have limited their service organization and delivery authority to specific settings of care, such as acute care and outpatient care, and do not focus on how care might be coordinated between these settings and settings outside their authority. For example, the question of how services within and outside the DVA should be coordinated for veterans who use services in both systems has attracted intermittent attention in the health policy arena over the past several decades, but to date there are no public policy resolutions or program directives to enhance such service coordination for our nation’s veterans, including those with long-term care needs.

For the broader long-term care population in the United States, service organization and delivery has been most hampered by the lack of effective public policy directives regarding how Medicare-funded and Medicaid-funded services might be organized and delivered to achieve greater coordination from the viewpoint of a continuum of care. This so-called “dually eligible” population of over 9 million individuals utilizes a disproportionate share of both Medicare and Medicaid resources, in part because they are more likely to be in fair or poor health and have multiple chronic conditions (Neuman, Lyons, Rentas, & Rowland, 2012). Policy changes intended to better coordinate care are difficult to enact because the same dually eligible individuals often receive similar Medicare-reimbursed and Medicaid-reimbursed services over the same time period (Fortinsky, Fenster, & Judge, 2004), and the two programs operate independently, with separate administrative and service limitations that do not address complex needs in an integrated fashion (Gold, Jacobson, & Garfield, 2012).

Efforts to improve service coordination for the dually eligible population began in earnest with passage of the Balanced Budget Act of 1997 (BBA 97; Pub. L. 105-33, 111 Stat. 251). BBA 97 legislation facilitated the development of integrated delivery models incorporating acute and long-term care services for persons aged 55 and older eligible for long-stay nursing facility care. These were based on the original On Lok model founded in San Francisco in the early 1970s to provide comprehensive services in the community to keep frail seniors in their homes and on subsequent demonstration sites for the Program of All-Inclusive Care for the Elderly (PACE). The BBA 97 also enabled Medicare and Medicaid funds to be pooled in order to improve service organization and delivery at PACE provider sites. Health and long-term care providers and insurers who partner to form PACE sites must be willing to accept the negotiated financing terms set by federal Medicare and state Medicaid programs in order to participate as a PACE site. These terms are usually expressed as per enrollee per month capitated rates. According to the National PACE Association’s website (www.npaonline.org; accessed June 1, 2015), in 2015 there were a total of 114 operational PACE sites in 32 states, including demonstration sites established before the 1997 BBA authorized the PACE model as a permanently recognized provider type under both the Medicare and Medicaid programs. The 1997 BBA legislation related to PACE site replication represented the most progressive move to date toward health service organization and delivery for the dually eligible population on a national level and helped set the stage for future advances in public policy that would improve further the continuum of care for persons with long-term care needs. Nevertheless, PACE replication sites are limited in number and in geographic scope compared to the size and needs of the growing dually eligible national population.

More than a decade would pass until additional federal legislation was enacted to help stimulate state-level creativity in organizing and delivering care to the dually eligible population. As a direct result of the 2010 Patient Protection and Affordable Care Act (ACA; Pub. L. 111-148, 124 Stat. 119), in early 2011 the Center for Medicare and Medicaid Innovation (also created by ACA) at the Centers for Medicare & Medicaid Services (CMS) issued a call for proposals from state Medicaid programs and their designated partners to begin integrating health and long-term care services for this costly population. As of August of 2013, as the 3-year “State Demonstration Proposals to Integrate Care and Align Financing for Dual Eligible Beneficiaries” were beginning, seven state proposals had been approved, 14 were pending with CMS, and several others were considering seeking federal approval. This shift marks an important step forward in the policy-making process because the evidence generated by these state-level social experiments or demonstration programs will be able to further inform policy development for all states as the dually eligible population continues to grow in size.

For Medicare beneficiaries more broadly, there is a modest history of using Medicare financing options to influence changes in the organization and delivery of health care services. Under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA; Pub. L. 97-248, 96 Stat. 324), health maintenance organizations (HMOs) and other health care providers were encouraged to assume risk for Medicare beneficiaries by providing mandatory and, optionally, additional services for a capitated rate. TEFRA initiated a voluntary movement of HMOs and other health care providers into the Medicare managed care market. This 1982 TEFRA initiative stamped the imprint of the private sector on Medicare; depending on one’s political viewpoint, federal Medicare policy formulation since then has been viewed as either the “privatization” of Medicare or as offering consumers more choices for Medicare coverage.

The movement toward private sector involvement in Medicare accelerated with passage of the 1997 BBA, which codified these private sector Medicare plans as Medicare + Choice, or Medicare Part C plans. Between 1997 and 2001, many Medicare managed care providers left the market primarily due to insufficient Medicare reimbursement rates (Brown & Sparer, 2003). In an effort to stimulate private sector interest in Medicare participation, in 2003 Congress passed into law the Medicare Prescription Drug, Improvement, and Modernization Act (Pub. L. 108-173, 117 Stat. 2066) which re-branded Medicare + Choice as “Medicare Advantage” (MA). More important, this new law offered health care providers and insurers financial incentives to sponsor an MA plan by providing surplus reimbursement rates as high as 14% above traditional Medicare reimbursement rates. In response, the MA marketplace expanded rapidly, and plan providers offered expanded benefits to traditional Medicare enrollees, including participation at reduced rates in the Medicare prescription drug program that began in 2006 under the same 2003 legislation. These new policy-driven incentives led to a rapid rise in the enrollment of Medicare beneficiaries into MA plans; the number of MA enrollees almost tripled between 2005 and 2013, growing from 5.3 million to 14.8 million, the latter figure representing 29% of the entire Medicare population (Mathematica Policy Research, 2013).

In yet another policy decision made by Congress in response to concerns about surplus MA plan payments in times of fiscal austerity, under the 2010 PPAC Act, surplus payments to MA plans will be gradually reduced over a 10-year period. It remains to be seen whether this policy decision will result in MA plans pulling out of the market and a reduction in the number or proportion of Medicare beneficiaries enrolled in MA plans.

From the viewpoint of Medicare beneficiaries with long-term care needs, MA plans were also expected to offer or improve service coordination for their enrollees, which could theoretically help link acute and postacute care with long-term care services. However, recent evidence has shown that MA enrollees with disabilities, some of whom might require long-term care services, were disenrolling disproportionately from MA plans due to lack of satisfaction with MA services given their needs (Riley, 2012). Therefore, it remains unclear whether the trajectory of MA plan growth will be matched by noticeable and helpful changes in the organization and delivery of services to those individuals in the Medicare population with long-term care needs.

REGULATORY POLICY

An important example of public policy in the area of regulation is the Omnibus Budget Reconciliation Act of 1987 (OBRA ‘87; Pub. L. 100-203, 101 Stat. 1330), which significantly strengthened the capacity of federal and state agencies to monitor the quality of care provided in long-stay nursing facilities. OBRA ’87 was implemented following a highly influential report from the Institute of Medicine (IOM) that demonstrated the delivery of relatively poor quality of care in America’s long-stay nursing facilities and proposed a comprehensive set of recommendations designed to improve nursing facility quality (Institute of Medicine, 1986). As a result of OBRA ’87, a uniform resident assessment and care planning system, called the Minimum Data Set (MDS), was implemented nationwide in 1991. Though designed to create individual care plans and improve quality, the MDS data was also envisioned to be used for regulatory functions (Institute of Medicine, 1986).

Riding on the momentum created by OBRA ’87, CMS has continued to engage in efforts to initiate regulatory policy to improve quality throughout all sectors of health care. In 2002, CMS implemented the Nursing Home Quality Initiative as a matter of public policy. This initiative involves the publication and wide dissemination of quality-of-care “report cards” for all nursing facilities, using data from the MDS form developed as a result of OBRA ’87. A similar effort in home health care followed in 2003 when CMS introduced the Home Health Quality Initiative (HHQI) policy initiative, with quality “report cards” based on data from the federally mandated Outcome and Assessment Information Set (OASIS). Though these initiatives are not necessarily aimed at coordinating services, they mark important advances in quality monitoring because they focus on health-related outcomes (e.g., whether or not the service recipient improved in level of functioning or experienced a decrease in the severity of symptoms).

Despite many improvements in quality of care that accompanied implementation of the MDS, there have been persistent criticisms that introduction of this measure did not deal with quality-of-life issues, did not require residents to be interviewed directly, and that state and federal regulatory systems remained too limited (Rahman & Applebaum, 2009). A new version of the MDS, version 3.0, was implemented in 2010 and featured additional quality-of-life measures, resident interviews, and more standardized assessment procedures. It remains to be seen how effectively the revised MDS will address regulatory concerns.

HEALTH RESOURCES POLICY

The Public Health Service Act of 1944 (Pub. L. 78-410, 58 Stat. 682) was amended in 1973 to authorize the establishment of the Health Resources and Services Administration (HRSA), located within the U.S. Department of Health and Human Services. Just as CMS is responsible for implementing policies formulated by Congress in the realm of health financing policies, HRSA is responsible for implementing policies formulated by Congress in the realm of health resources policies. HRSA includes a Bureau of Health Professions, which is responsible for helping to assure access to quality health care professionals in all geographic areas and to all segments of society through appropriate preparation, composition, and distribution of the health professions workforce. This bureau also has the responsibility to improve access to a diverse and culturally competent and sensitive health professions workforce.

Over the past decade, pressing health resource policy issues affecting the population with long-term care needs have included a shortage of nurses, a shortage of paraprofessionals such as home health aides and personal care providers, and a shortage of health care providers with expertise in geriatrics (Kovner, Mezey, & Harrington, 2002; Sochalski, 2002; Ward & Berkowitz, 2002). In addition to initiatives implemented by the health professions themselves, HRSA has responsibility for implementing training programs to attract individuals to work in these professions. This personnel shortage may also be viewed as a crisis in the recruitment and retention of a qualified long-term care workforce (Lehning & Austin, 2010). A highly publicized and potentially influential 2008 report from the IOM warned that the nation faces an impending workforce crisis as the number of older patients with complex medical needs outstrips the ability of health care providers to care for them (Institute of Medicine, 2008). Although not limited to long-term care needs, this report made numerous recommendations about expanding both the number of workers and training opportunities of the health care workforce.

The workforce shortage is particularly acute in long-term home care. The Bureau of Labor Statistics projects that personal care aides and home health aides will be the first- and second-fastest growing professions between 2010 and 2020. Their ranks are projected to grow by about 70% during those years, a rate much faster than the anticipated growth for most occupations (U.S. Department of Labor, 2013). Total direct care workers in long-term care, both in-home and nursing home workers, are projected to reach nearly 5 million by the year 2020, more than all teachers from kindergarten through 12th grade (3.9 million) or law enforcement and public safety workers (3.7 million) (Paraprofessional Healthcare Institute, 2013).

Projected openings do not necessarily mean that there will be enough workers to fill the jobs. Policy makers and health care employers at all levels are struggling to fill openings, particularly in the lower paid long-term care occupations, typically staffed by people who are less likely to have health insurance and benefits and more likely to live below the poverty line than the typical worker (Institute for the Future of Aging Services, 2007).

Finally, it is important to note that health resources policy also pertains to building construction to support the delivery of health care services. For example, the Hill–Burton Act passed shortly after World War II funded the construction of acute care hospitals and nursing homes. The National Housing Act and its amendments in the 1950s created apartment-style living quarters for persons with disabilities and older adults, with design features intended to support their independent living (see Chapters 9 and 10). These policies were concerned with the “bricks and mortar,” or “hardware” aspects of health resources, and offered little guidance about the types and organization of services to be provided within the walls of the facilities (i.e., the “software”).

LEVELS OF LONG-TERM CARE POLICY DEVELOPMENT

Long-term care policy formation occurs primarily in four places: federal, state, and local (including county and municipal) governments and nongovernmental entities, such as foundations and insurance companies that sell long-term care insurance. Within each of the three levels of government, policy may be made in any of the three branches: the executive branch (including the governor and agency heads), the legislative body, and the judicial system. Interactions among levels and branches of government can be both complex and overlapping, with lines between policy formation and implementation often blurred. In particular, the federal/state interplay on the most consequential policy issues deserves further exploration.

At the federal level, although Congress formulates much public policy, responsibility for policy implementation and oversight is in the hands of federal and state agencies. Jurisdictional responsibility for implementing and monitoring legislation varies considerably, with federal responsibility for Medicare; joint federal/state responsibility for Medicaid; and federal, state, and local responsibility for the Older Americans Act.

In addition to federal legislation, players at the federal level influence policy through funding (e.g., the Older Americans Act) and regulation (e.g., quality standards for nursing homes and approval of state Medicaid Waivers for HCBS). However, states are generally recognized to be the primary drivers of long-term care policy, providing not only 50 “laboratories” for testing public policy that may result in creative approaches, but also substantial variation from state to state (Kane, 2008).

At the state level, legislatures formulate policies regarding how certain federal monies, such as Medicaid, will be expended and how state revenues might be used to fund new initiatives. Over the past 25 years, a large number of state legislatures have enacted policies to expand HCBS for persons with long-term care needs. In some cases, financial and medical eligibility criteria for state-funded programs created by these policies are less stringent than eligibility criteria for Medicaid-funded HCBS, although the range of services available under these programs may be identical. State legislatures also formulate policies specifying sources of revenue that could be used to pay for new programs. For example, in Pennsylvania, state lottery revenues are earmarked for social and health-related services available to the older population.

Public policies at the state level are also formulated by executive branch agency administrators to modify the ways that Medicaid funds are used to make services available to the state’s population. For example, all Medicaid Waiver programs originate at the state level by agency administrators who must formulate evidence that expanded HCBS will be cost-effective in relation to long-stay nursing facility or other institutional services for the projected population served. State applications are submitted to federal administrators at CMS for approval, but state-level policy makers are responsible for introducing these initiatives.

State executive branch organizations vary considerably, and policy making for different target populations often occurs in different agencies, such as those for aging, developmental disabilities, mental health disabilities, and visual disabilities, with inconsistent results. Since the year 2000, many states, such as Texas, Vermont, and Washington, have undergone consolidation and reorganization of executive branch agencies to establish better budget and policy controls over long-term care policy making and implementation. States with greater consolidation of policy, financing, quality, and service delivery functions have reaped the benefits of more flexibility, including the ability to manage institutional services and HCBS within the same agency, and better cross-fertilization of ideas and practices across disability groups (Kane, 2008).

To illustrate the extent to which state agency administrators have formulated public policy for persons with long-term care needs, Table 17.1 shows the number of states that had operational Medicaid HCBS Waiver programs in federal fiscal year (FFY) 2010 for different populations with long-term care needs, total Medicaid expenditures for all states combined for each HCBS Waiver program in FFY 2010, and the compound annual growth rate in Medicaid expenditures from FFY 2005 through FFY 2010 for each of these HCBS Waiver programs for all states combined. In FFY 2010, nearly every state had a Medicaid Waiver program for people with intellectual or developmental disabilities (ID/DD). Most states (n = 42) had a combined Medicaid Waiver program for older people and younger adults with disabilities (A/D); 27 states had a separate Medicaid Waiver program for younger adults with disabilities. Fewer states had separate Medicaid Waiver programs solely for older people (n = 12), people with HIV/AIDS (n = 14), medically fragile children (n = 13), and people with brain injuries (n = 19). In states with multiple Medicaid Waiver programs, each program has its own administrative structure within state government (Eiken, Burwell, Gold, & Sredl, 2011). A few states, including Vermont, Rhode Island, and Arizona, have moved from separate population-based waivers to “comprehensive” waivers providing similar services for all populations regardless of type of disability.

Table 17.1 also shows that in FFY 2010 the largest amount of HCBS Medicaid Waiver program expenditures by a wide margin were for programs for the population with ID/DD (more than $25 billion), followed by A/D waiver programs (more than $6 billion). Nearly every type of Medicaid Waiver program experienced significant growth in expenditures between FFY 2005 and FFY 2010, especially programs for older people, people with brain injuries, and medically fragile children. In contrast, during this period the Medicaid Waiver program for people with HIV/AIDS experienced a substantial decline in expenditures. Taken together, trends in these Medicaid HCBS Waiver programs stand as the most visible and pervasive examples of how persons with long-term care needs have benefited from public policy formulation and implementation at the state level designed to maintain individuals in their own homes or other community settings outside of nursing facilities.

A related area of state public policy formulation is the appropriate balance between long-stay nursing facility and home- and community-based care, because Medicaid spending on nursing facility care nationwide accounts for more than 60% of all Medicaid long-term care spending for older adults and people with physical disabilities. That percentage varies dramatically by state, with states as low as 35% (Minnesota) and others as high as 86% (North Dakota) in 2011 (Eiken, Sredl, Gold, Kasten, Burwell, & Saucier, 2013). Most states have attempted to redress this imbalance by crafting public policies to limit the supply of nursing facility beds and to expand home- and community-based care programs for different long-term care populations, as shown in Table 17.1. A few states have taken more dramatic measures to reduce nursing facility service, especially Oregon, which for many years has aggressively moved to discharge nursing facility residents and serve them in a variety of community-based settings, including adult foster care and assisted living (Hernandez, 2007).

There are numerous examples of joint federal/state policy initiatives in the long-term care arena. In many cases, the federal government sets strategic policy and offers opportunities through grant funding for pilot or demonstration projects in the states. One early example is the Cash and Counseling demonstration of the 1990s, which tested the efficacy of offering cash allowances or personally controlled budgets to long-term care consumers in place of agency-provided services. With initial funds from the Robert Wood Johnson Foundation, Medicaid consumers were allowed to choose the type and amount of services that best met their needs, emphasizing consumer choice and control over a more bureaucratic model (Doty, Mahoney, & Simon-Rusinowitz, 2007). The successful results of the demonstration in four states (Arkansas, Florida, New Jersey, and New York) have led to replication of the cash and counseling practice in many other states over the past decade.

TABLE 17.1 Number of States With Medicaid Home and Community-Based Services (HCBS) Waiver Programs for Different Targeted Long-Term Care Populations, Total Expenditures for Each Program, Federal Fiscal Year (FY) 2010, and Compound Annual Growth Rate for Each Program from FY 2005 to FY 2010

Another prominent example of a federal/state program designed to increase the use of HCBS and reduce the use of institutional services is the Money Follows the Person (MFP) demonstration, initiated in 2005 with funding through CMS. MFP increases state Medicaid-matching funds to support nursing home residents who wish to return to the community and to strengthen states’ capacity for serving community long-term care needs (Mathematica Policy Research, 2012). As of 2011, forty-four states and the District of Columbia had implemented MFP demonstration programs, with three new states awarded planning grants in 2012.

A third example of joint federal/state long-term care policy making is the collaborative effort between CMS and the federal Administration for Community Living (ACL), formerly the Administration on Aging, to streamline access to long-term care services through state-level Aging and Disability Resource Centers (ADRCs). CMS and ACL set the national vision of streamlined access to information and support for community-based living in 2003 by providing start-up funds to 12 states to implement the vision, adding additional states in succeeding years. With continued federal support, including $50 million in funding through the 2010 Affordable Care Act, there are now ADRCs in every state. States, in turn, have implemented the consumer-driven system of long-term supports in a variety of ways through cooperation among state and local organizations and are expected to sustain the initiatives with state funding (O’Shaughnessy, 2011).

Public policy at all levels of government can also be formulated in the judicial branch through litigation and court decisions. In 1999, the U.S. Supreme Court decided the landmark case Olmstead v. L.C., 527 U.S. 581 (1999), which held that the retention of persons with disabilities in institutional settings in Georgia was discriminatory and a violation of the Americans with Disabilities Act of 1990 (Pub. L. 101-336, 104 Stat. 327). The Olmstead decision exemplifies a federal-level public policy that has had far-reaching effects for the population with long-term care needs. Mentioned in earlier chapters, Olmstead directed states to discharge from institutional settings individuals with developmental and mental health disabilities who were determined to be candidates for residence in community-based settings, provided that the placement could be reasonably accommodated and taking into account resources available to the state and the needs of others with similar disabilities.

The Olmstead ruling has had implications far beyond the population with mental health disabilities that was the subject of the original litigation. It stimulated more than 60 “Olmstead lawsuits” in at least 28 states raising similar issues on behalf of people who are institutionalized or at risk of institutionalization because of a lack of community-based services (Ng, Wong, & Harrington, 2009). It has also set in motion formal state-level initiatives across the country, frequently known as state “Olmstead plans” to transition eligible individuals with a wide range of disabilities from long-stay nursing facilities and other institutional facilities into community settings, as well as to make communities more accessible to persons with disabilities. And it has set the stage for meaningful change in the organization and delivery of services to persons with long-term care needs, particularly in states where movement in this direction has been incremental at best.

At the local level, elected officials with legislative authority include county commissioners and city and town officials. Examples of policy initiatives that can help address persons with long-term care needs are integration of Older Americans Act funds with county-level funds to help coordinate long-term care services and local referenda that propose to fund long-term care services from new local tax revenues (see Chapter 16 for more information about local tax levy financing programs for long-term care services). Agencies that typically make policy on a local level include Area Agencies on Aging and Centers for Independent Living, each of which serves constituents with long-term care needs. Local housing policy also has a significant effect on the ability of persons with long-term care needs to live in the community (see Chapter 9). In the judicial arena, local probate or surrogate courts make policy about conservatorships and other means of meeting the long-term care needs of people deemed unable to make those decisions for themselves. It is beyond the scope of this chapter to elaborate fully on county and local levels of policy making, but these efforts are increasing with the aging of the baby boom cohort, as their health-related needs and those of their parents are replacing concerns related to educating their children in local schools.

Although most long-term care policy is made in the governmental arena, private interests also play a role, by themselves or in partnership with government policy. For example, insurance companies that sell long-term care insurance make policies about underwriting, coverage, benefit levels, and cost that in turn affect the propensity of customers to provide for their own future needs through insurance. The question is often asked to what extent long-term care financing should be a private responsibility versus a public one (Stevenson et al., 2010)? Government policy makers may encourage certain marketplace arrangements through regulation or through public–private partnerships, such as the Partnership for Long-Term Care, a joint effort by many state governments and private insurers that encourages citizens to protect their assets through long-term care insurance while saving the state Medicaid long-term care costs. To date, over 40 states have set up Partnership programs in the hopes of relieving pressure on overburdened Medicaid programs (Andrews, 2009). Some private foundations, such as the Robert Wood Johnson Foundation, aim to improve health policy and practice, including long-term care policy, through philanthropy and grant-making activities.

WHO INFLUENCES PUBLIC POLICY DEVELOPMENT?

Public policy unfolds in a highly interactive political process, regardless of the level of policy formulation. In fact, by its very nature, the entire legislative process often begins with ideas or proposals submitted to policy makers by citizens or by leaders of interest groups representing specific constituencies. As legislative policy makers and their staff members disseminate drafts of bills, interest groups with opposing views insert themselves into the political policy-making process. The same is true for policy making in the executive branch, as constituents and advocates press their cases in the regulation and rule-making process, and at the judicial level, where legal briefs are filed and arguments made by opposing sides. Thus, public policy development is influenced first and foremost by interest group politics, with many groups operating from a position of enlightened self-interest.

Although the players in the long-term care political process are many, four of the most prominent categories include (a) long-term care recipients and their families; (b) advocacy groups for older adults or people with various disabilities; (c) long-term care providers of all types, including institutions or facilities such as nursing homes as well as the long-term care workforce, which may or may not be unionized; and (d) taxpayers who pay the cost of publicly financed long-term care.

The number of interest groups influencing the long-term care public policy development process has grown dramatically over the past two decades. In addition to numerous national and local organizations focused on issues pertaining to older adults, there are also scores of interest groups representing other populations needing long-term care (e.g., persons with developmental disabilities or mental illness), and they have focused their lobbying efforts primarily on maximizing independent living, assuring equal access to employment and educational opportunities, and optimizing community inclusion of persons with disabilities. The efforts of these interest groups were rewarded with the passage of the Americans with Disabilities Act of 1990, a landmark piece of federal legislation for persons with disabilities (although not exclusively addressing long-term care needs of this population).

From the viewpoint of elected or appointed officials charged with formulating public policy, it is welcome when many or most such interest groups support a similar position on a policy topic. In the past, this rarely occurred in practice; however, during the 1960s sufficient consensus was reached, so that major federal legislation was passed affecting the vast majority of individuals with long-term care needs. Three of the most influential public policies that directly affect most individuals with long-term care needs to this day—Medicare, Medicaid, and the Older Americans Act—were born at the same time in 1965. At that time, the national political climate was highly oriented toward addressing the needs of the population, in areas of life as wide ranging as civil rights and health-related needs. In the health arena, federal policy makers responded to calls from a broad spectrum of interest groups, ranging from consumer advocacy organizations to physician and hospital professional associations, to craft public policy that would offer health insurance coverage (Medicare) and a wide range of community-based supportive services (Older Americans Act) to older Americans, as well as health insurance coverage for poor Americans and people with disabilities of all ages (Medicaid). At that time, costs associated with implementing these new public policies were not viewed as insurmountable barriers, blunting potential opposition from taxpayer interest groups.

Since that time, however, taxpayer interests have become much more prominent in long-term care policy debate at all levels, as the affordability of public benefits has decreased. Cost containment has become a major feature of the political climate surrounding public policy development, while the population requiring long-term care has grown dramatically and the range and expertise of interest groups have grown in size and political effectiveness. Medicare and Medicaid grew rapidly, straining federal and state budgets, and the Older Americans Act has not fully achieved its initial goals due to insufficient financing. Consequently, there has been a much less unified view in recent years, compared to the situation in 1965, that the needs of vulnerable populations should be an overriding priority in fashioning public policy.

At the state level, interest groups representing different populations requiring long-term care influence elected officials and state agency administrators responsible for formulating public policy. Advocacy groups representing persons with developmental disabilities and younger adults with physical disabilities are particularly influential in promoting policy options that lead to independent living. Medicaid HCBS Waiver programs have served as important instruments of public policy in this regard, and Table 17.1 provides evidence in terms of expenditures about the relative success different interest groups have had in helping grow these programs for their constituents requiring long-term care.

Providers of long-term care are not only a crucial link between those who receive long-term care services and those who pay for them, but also constitute interest groups in their own right, with a significant impact on long-term care policy decision making. Within the provider community there are a wide range of diverse interests. Providers include both institutions (such as nursing homes, assisted living facilities, group homes, and home health agencies) and individual paid providers. Individual members of the long-term care workforce include professionals, such as nurses, social workers, occupational and physical therapists, and direct care workers, who provide most of the “hands-on” care, including certified nursing aides, home health aides, and personal care workers (Stone & Harahan, 2010).

There is no one “provider” voice in the long-term care policy debate. Institutions, such as nursing homes, have a strong interest in preserving the viability of their business model and receiving adequate compensation for their services. Home health agencies have a stronger interest in supporting rebalancing efforts that support more long-term care users in community living settings. Unionized workforce members have a difficult time preserving wage and benefit progress when Medicare and Medicaid are slashing reimbursements to their employers. And the direct care workforce, who form the centerpiece of the long-term care workforce, often experience the most low-wage, low-benefit, high turnover, physically and emotionally demanding work (Stone & Harahan, 2010; U.S. Department of Labor, 2013). They struggle to affect policy in ways that allow them to achieve parity with hospital or other institutional workers.

From the viewpoint of the continuum of care framework, a critical lesson from this brief review of interest groups is that as long as different constituency groups act only in their own interests and influence policy development accordingly, the promise of more unified long-term care policies and a true continuum of care for the entire population with long-term care needs may continue to be elusive. As such groups work together and find a common voice in the policy debates, the prospect of more comprehensive and effective policy making grows brighter.

EMERGING TRENDS IN LONG-TERM CARE POLICY

This chapter began with the admonition that there is no unifying long-term care policy in the United States. The encouraging news is that consensus is steadily building at every level of policy making, and among numerous public policy stakeholders, regarding a core set of guiding principles and practices for long-term care organization, delivery, and financing. These principles and practices hold promise for the establishment of more consistent long-term care policies across the states and ultimately for the achievement of better outcomes for individuals and families needing and receiving long-term care services.”

“REBALANCING” OR “BALANCING” THE SYSTEM

Much of the policy debate over long-term care is now framed in terms of its effect on the institutional/HCBS balance, with policy aimed at serving more people in and providing more funds for community-based settings. Federal and state governments and advocacy groups are setting goals for “rebalancing,” that is, shifting long-term care utilization and expenditures toward community settings where most people prefer to receive services, and creating a more equitable system that is largely oriented away from institutions while assuring quality in all components of the system (Robison, Shugrue, Porter, Fortinsky, & Curry, 2012; see Case Study 17.1).

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