Report Title:

Program for All-Inclusive Care for the Elderly; Study

Description:

Appropriates funds to have the Hawaii health systems corporation study the feasibility of establishing the Program for All-Inclusive Care for the Elderly (PACE) statewide. (HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

558

TWENTY-SECOND LEGISLATURE, 2004

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to health.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

Section 1. The legislature finds that, with the aging of Hawaii’s population and its changing social, economic, and health condition, the need for more long term care alternatives that are accessible, affordable, and comprehensive is persistent. The existing long term care infrastructure already does not adequately support current needs, and with the aging of the State's baby boomer population, the need to establish additional long term care resources is upon us.

The legislature believes that the State is already lagging behind in support systems that can accommodate the State's frail elders. Geographic, social, economic, and cultural barriers leave a large number of elder and disabled persons without adequate supports. It is imperative that the State develop and test new ways to bring care to the frailest citizens through direct care and support in innovative programs.

The legislature finds that, since 1986, the Program of All-Inclusive Care for the Elderly has been serving the frail elderly in the community by providing comprehensive health care and support services, which keep the elderly healthy and independent at home and avoid the need for costly nursing home care. The Program of All-Inclusive Care for the Elderly model was founded by the renowned On Lok organization in San Francisco, California as an effort to help families avoid placing their elderly in nursing homes. The model not only offered a comprehensive range of services such as adult day care, home care, medical care, nursing, rehabilitation therapies, nutrition, prescription drugs, and transportation, but it was able to demonstrate that these services can be provided at less cost than the traditional institutional care.

The Program of All-Inclusive Care for the Elderly uses a capitated payment system, which pools medicare, medicaid, and private pay funds. This payment system allows the Program of All-Inclusive Care for the Elderly to receive a flat, per-person monthly rate from these sources, without restrictions on services delivery and fee-for-service services limitation. This means that the Program of All-Inclusive Care for the Elderly's interdisciplinary team of health care professionals has the authority and flexibility to provide the services based on the individual person’s health and supportive care needs.

Recognizing the Program of All-Inclusive Care for the Elderly’s cost-effectiveness and its success in keeping the rate of hospitalization and nursing home placements to a minimum, the United States Congress authorized a national demonstration program in 1986 and, in 1997, authorized a "permanent provider" status for Program of All-Inclusive Care for the Elderly-based programs.

Faced with a rapidly growing elder population in Hawaii, an acute shortage of nursing home beds, and the rising cost of long term care, the legislature, in 1991, recognized the need for an alternative community based program that would be comprehensive, prevent institutionalization, and contain long term care cost. Out of this recognition of need, the legislature appropriated start-up funds to establish the Program of All-Inclusive Care for the Elderly in Hawaii through Maluhia hospital, which was formerly under the state department of health, but now under the jurisdiction of the Hawaii health systems corporation. Hawaii's program of all-inclusive care for the elderly provides a complete package of services that enhances the quality of life for the elderly participant and offers the potential to reduce and cap the costs of their medical needs.

The legislature further finds that the services provided by Hawaii's program of all-inclusive care for the elderly costs less than what medicare, medicaid, and private individuals currently pay for long-term institutional care. Since its establishment in the State, Hawaii's program of all-inclusive care for the elderly has served the elderly primarily in metropolitan Honolulu and recently began to serve all eligible seniors on Oahu.

Throughout the country, Program of All-Inclusive Care for the Elderly sites have been established in a predominantly urban community. However, the elderly in the rural communities in the United States are greatly underserved, and do not receive adequate health care and other services that could maintain their independence. The need for programs like the Program of All-Inclusive Care for the Elderly in rural America is great. Compared to their urban counterparts, the rural elderly:

(1) Report worse health status;

(2) Are generally older;

(3) Have more functional limitations;

(4) Are more likely to live alone at age seventy-five and older;

(5) Are more likely to be poor or near poor; and

(6) Are at greater risk of being placed in a nursing home.

The legislature finds that this is also true for the outlying areas of Honolulu, Oahu, as well as throughout the neighbor islands of the State. To establish Programs of All-Inclusive Care for the Elderly in rural areas, however, will require greater creativity, flexibility, and collaboration among providers, regulators, and policy makers. Because there are fewer health care providers and a smaller population of eligible seniors who live in sparsely populated areas and often alone, there are more challenges and obstacles that will face a rural Program of All-Inclusive Care for the Elderly than its urban counterpart.

The legislature also finds that there is a national effort to establish a more flexible Program of All-Inclusive Care for the Elderly model that can be molded for the diverse and unique characteristics of the rural communities. The National Program of All-Inclusive Care for the Elderly Association (Association) is composed of all Program of All-Inclusive Care for the Elderly-based programs and developing sites in the United States. The Association, in cooperation with the National Rural Health Association, has received a contract to provide technical assistance to rural providers in developing Program of All-Inclusive Care for the Elderly-based programs from the United States Department of Health and Human Services’ Health Resources and Services Administration.

In addition, the Association is introducing federal legislation that will give rural Program of All-Inclusive Care for the Elderly-based programs more flexibility from the current provider requirements and is requesting start-up funds for interested providers in these rural communities.

SECTION 2. The Hawaii health systems corporation shall study the feasibility of establishing rural program of all-inclusive care for the elderly-based programs for the outlying areas on Oahu and the neighbor islands. Building on the experience and expertise of the established program of all-inclusive care for the elderly-based program at Maluhia hospital, under the Hawaii health systems corporation, this study shall include:

(1) An assessment of the existing health care resources in the target rural areas;

(2) A market analysis to determine population size, need, and financial viability;

(3) Technical assistance from the National Program of All-Inclusive Care for the Elderly Association or its affiliates, or both, as made available to the Hawaii health systems corporation; and

(4) Processes by which to establish collaborative relationships with other health care providers and health care systems in rural communities.

The Hawaii health systems corporation shall submit a report of its findings and recommendations to the legislature not later than twenty days prior to the convening of the 2005 regular session.

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $50,000, or so much thereof as may be necessary to study the feasibility of establishing Program of All-Inclusive Care for the Elderly-based programs in rural communities within the State.

The sum appropriated shall be expended by the Hawaii health systems corporation for the purposes of this Act.

SECTION 4. This Act shall take effect on July 1, 2004.