Coping with Changes in Long Term Care

Long term care in Pennsylvania and across the nation is in a state of flux. New providers are entering the market while other facilities are closing their doors. Changes in reimbursement have rippled through the industry. The need for services is growing due to an aging population. There is a severe shortage of direct care workers, such as nurse aides. What does all this mean for providers, consumers and policy makers?

Dennis Shea

Researchers at Penn State have examined the perceived problems for home health agencies, assisted living facilities and nursing homes across Pennsylvania to see how facilities in rural and urban areas are responding to these changes. For their efforts, Dr. Dennis Shea, professor of health policy and administration, Kristine Pringle, a doctoral candidate in health policy and administration, and Dr. Robert Weech-Maldonado, associate professor in the Department of Health Services Administration, University of Florida, were recognized for their outstanding work by the Gerontological Health Section of the American Public Health Association. They were presented with the 2002 Excellence in Research on Aging and Rural Health Award.

"Major changes for long term care providers include 1997's Budget Balanced Act, the growth of managed care, increased competition between long term care providers, and nurse staffing shortages," explains Shea. "These changes can have a negative impact on providers and can affect the quality of care in long term care organizations."

The team mailed surveys to 2,793 long term care providers in Pennsylvania and obtained a response rate of 42%. They asked each provider to describe the economic and policy stressors affecting their organization.

"What set this study apart is that it took into account the full spectrum of long term care facilities," says Weech-Maldonado. "We surveyed nursing homes, home health agencies, and assisted living facilities."

"We were surprised how little emphasis there was on changes to the payment structure," adds Shea. "Work force was the top factor and the biggest area of concern. Having trouble with staffing was something they were hit with every day."

"Rural nursing homes were the most affected by environmental changes, such as changes to reimbursement policy," explains Weech-Maldonado. "But the difference between urban and rural homes was not as big as we expected. Hospital based units were the hardest hit."

"If rural nursing homes close down it can be really damaging for the community," he adds.

The growth of assisted living facilities, in which providers may help fairly independent residents with activities of daily living such as bathing and grooming, has also placed significant stress on nursing facilities by competing for residents.

"The number of elderly people is increasing, but their health is improving at the same time," says Shea. "They're able to live more independently. In assisted living facilities there are different levels of care. It's a balance of quality and cost of care. Assisted living facilities have a lower cost, but they also provide a lower, less intensive, level of care."

Home health agencies and assisted living facilities reported the least stress from market and policy changes.

"Assisted living facilities are not as regulated as nursing homes, so they also have more flexibility when it comes to dealing with stressors. However some assisted living facilities feel the burden associated with not receiving funds from the largest long term care payer, Medicaid. In some cases home health agencies can cope a little better because they have more flexibility in selecting patients, changing the way care is given, or relocating their organization. Still, home health agencies face significant regulation, and are often smaller and have less capital to weather problems," Shea explains.

"In response to the environmental changes, long term care providers are increasingly forming formal and informal ties with hospitals and other long term care providers," says Weech-Maldonado. "The current long term care system is highly fragmented. These interorganizational relationships can facilitate care coordination for patients along the continuum of long term care, as patients move between varying intensities of service."

While their research has focused mainly on the consequences of policy changes on providers, future research will examine how changes in long term care affect consumers and communities, and the future of long term care in Pennsylvania.

"For the consumer, long term-care is in a dynamic state," Shea comments. "Facilities are merging and contracting with one another, and it's becoming much more confusing. There are lots of different organizations from which to choose. Part of this research is to make sense of the industry for people, so that down the road we can help them understand their choices."

The researchers emphasize that consumers should be sure to ask many questions when they shop for long term care.

"People should ask about staffing," says Shea. "Staffing has been closely linked to quality of care. Nursing homes are responding very differently to personnel shortages. Look at the number of RNs, LPNs, and aides that the facility has per resident."

"With the changes in organizations, customers should also be asking what services they get for what costs," Weech-Maldonado adds. "Assisted living means a lot of different things. People should ask whether a facility offers tiered payments for increasing service, or if they have a flat rate. Be sure to ask about additional charges as more services are needed."

"An informed consumer can make better choices. Finding the right level of care with the right provider is important. We hope that our research will help to educate consumers, providers and policy makers alike," remarks Shea.