Trends in Aging and Long-Term Care

August 17, 2007

LTC Expenditures Florida

Trends in Aging & Long-Term Care

1. Number of aged will continue to grow

2. Increases in retirement age and favorable dependency ratios

3. Favorable long-term care nursing home utilization trends expected to carry for another 25 years

• Improved health and lower disability rates

• Lower rates of widowhood

• Growth of Assisted Living Facility (ALF) and Continuing Care Retirement Community (CCRC) industries

• Well developed network of home care providers

4. Nursing home reimbursement rates growing five percent over inflation

5. Shortages of health care professionals and paraprofessionals

Trends in Aging & Long-Term Care

Growth in Aging

Growth in Retirees and Oldest OldFlorida

01,000,000

2,000,0003,000,000

4,000,0005,000,000

6,000,0007,000,000

1970 1990 2004 2010 2020 2030

Year

Persons 85 and Older Persons at Retirement Age

Growth in Aging

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

1990 1995 2000 2005 2010 2015 2020

Re

lati

ve

Gro

wth

60-84

85+

0-59

Share of Elder PopulationFlorida

0%

5%

10%

15%

20%

25%

30%

1970 1990 2004 2010 2020 2030

Year

85+ Share

Ret.Age Share

Dependency RatiosFlorida

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1970 1990 2004 2010 2020 2030

Year

Dep

end

ents

per

wo

rkin

g

age

adu

lt

Retirees Children <20

Disability Rates1. Since 1984 disability rates have been

declining at about one percent per year.

2. This trend is expected to continue. Between 2000 and 2050 the rate of severe disability among the elderly is projected to be cut by half.

3. Older Floridians are 45 percent less likely to require long-term nursing home care than elders from other states.

Source: AARP Public Policy Institute based on 1994 National Long Term Care Survey and U.S. Census Bureau population projection middle series.

Disability Rates (cont.)

6.4

7.07.1 7.0

7.1

6.4

7.5

8.3

9.3

9.8

6

6.5

7

7.5

8

8.5

9

9.5

10

1982 1989 1994 1999 2006

Actual Older Personswith Disability

Projected at 1984Disability Prevalence

Number of Americans 65 and Older with Any Chronic Disability(1982-2006)

Mill

ion

s

Shift to Assisted Living Facility (ALF) Care

18,543

75,671

77,928

76,10874,723

72,96070,624

68,84267,189

64,706

80,24381,21881,30579,550

39,473

44,181

51,064

56,918

66,29567,439

70,590

74,767

80,998

76,514

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Nursing Home Beds

ALF Beds

Stable marriage rates and declining disability imply that growth in the elderly population can actually lower demand for nursing home care because:

•As the elderly male population grows more rapidly than the population of elder females, the availability of spousal care rises.

• The supply of healthy caregivers rises.

Informal Care Trends

Informal Long-Term Care

Publically Funded Long-Term Care14.5%

Non-Publically ProvidedLong-Term Care85.5%

Florida Long-Term Care Resources

Nursing Home Use Growth Florida

10.18%

7.58%

3.00%

2.15%

1.44%

0.54%

1.04%

3.34%

2.12%

1.32%

1.63%

0.25%

-0.55%

0.07%

-0.75%

-2.02%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Trends in Demand Nursing Home Care

LTC Demand Factors (U.S.=100)

70 75 80 85 90 95 100

65+ Self Care orMobility Disability

65+ Self CareDisability

65+ Live Alone

Medicaid 65+

Summary Demand Factors

FL O R U S

A ll Lon g-Term Ca reExpenditures Per 65+

N ursing H om e Expenditures Per 65+

FL O R U S

Percen t of 65+ Popu la tionin N ursing Fa cilities

FL O R U S

Florida’s Long-Term Care Costs Are Lower Than Other States

$99.87

$112.98

$137.58

$149.61

$150.10

$127.92

$107.31

$95.18

$90.00

$100.00

$110.00

$120.00

$130.00

$140.00

$150.00

$160.00

1997 1998 1999 2000 2001 2002 2003 2004

Growth Rate 6.7 Percent Yearly

Negative Trend:Nursing Home Per Diem Growth

1.00

1.25

1.50

1.75

2.00

2.25

1991 1993 1995 1997 1999 2001

Re

lative

Gro

wth

Medicaid Bed Utilization

Nursing Home Budget Growth

Costs: Nursing Home Budgets Growth

Trends in Nursing Home Costs

Policies to Control the Growth in the Public Cost of Long-Term Care

Support and encourage family and personal responsibility Education Support and foster development of

affordable long-term care options Aging Resource Centers as local contact

for education, information and referral

Policies to Control the Growth in the Public Cost of Long-Term Care (cont.)

Support health promotion and wellness Social Intellectual Physical

Policies to Control the Growth in the Public Cost of Long-Term Care (Cont.)Support a public long term care system that Favors community based care

Promotes deinstitutionalization Removes any institutional bias

Is customer centric Has flexibility

Funding follows the consumer across care settings Service dollars can be used to supplement rather than

substitute for personal/family resources Services can be used on a preventive basis

Support a public long-term care system that Prioritizes and targets services based on risk Maximizes return on investment

Integration/maximization of federal funding streams

Integration of care Risk transfers/sharing Administrative efficiencies

Policies to Control the Growth in the Public Cost of Long-Term Care (Cont.)

Comments & Suggestions

Horacio Soberon-Ferrer, Ph.D.

Florida Department of Elder Affairs

850-414-2089

ferrerh@elderaffairs.org

Comparison of Annual Cost Per Customer of Programs Serving Florida's Elders State Fiscal Year 2005 - 2006

$1,891

$2,329

$4,680

$7,933

$8,323

$8,740

$21,063

$44,836

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000

Older Americans Act

Home Carefor the Elderly

Community Carefor the Elderly

Medicaid Aged/Disabled Waiver

Alzheimer's DiseaseInitiative

Medicaid Assisted Livingfor the Elderly Waiver

Medicaid Nursing Home Diversion Program

Nursing Home

Incr

easi

ng

Fra

ilty

Annual Cost Per Person