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Stuff to know about . . .
The Woodwork Effect

 

  • The Scare Tactics
  • The Answers

    "The problem with serving people in their homes is that
    they live longer."

    Comment made by a state official, overheard
    by a Freedom Clearinghouse advocate.

    If states make it easy for people to get Medicaid to help pay for services for them in their home, a lot of people will want those services. Now, people rely on unpaid help from family and friends in order to stay out of the dreaded nursing home. This doesn't cost the state or the federal government any money. But once states offer decent in-home services, people will "come out of the woodwork" and start asking for them.

    This is called The Woodwork Effect.

     

     


    The scare tactics

    According to current estimates by the Congressional Research Service, nearly a quarter of the nation's elderly population--over 7 million elderly people--have some form of disability for which they require assistance, such as help with bathing, dressing, eating, preparing meals, or taking medicine. As the 76-million-strong baby boom generation ages, so too will its demand for long-term care increase. Long-range predictions of the magnitude of the baby boomers' long-term care needs, however, vary, with estimates of the disabled elderly ranging from 2 to 4 times the current disabled elderly."

    "Long Term Care: Baby Boom Generation Presents Financing Challenges," Report of the General Accounting Office published March, 1998 (T-HEHS-98-107). Download from http://www.gao.gov/.

    Estimates of cost are even more imprecise due to the uncertain impact of several important factors, including who will be needing care, the types of care they will need, and who will fund it.

    The passage of Medicaid waivers was based in part on the theory that providing certain nonmedical services (such as housekeeping, personal care, and adult day care) in the home or community could delay or eliminate institutionalization. Research has shown that while home and community-based programs were less costly on a per person basis, they generally raised total long-term care costs. Limited reductions in institutional use were more than offset by increased demand for home and community-based care--often referred to as "the woodwork effect."

    However, states are no longer relying on the availability of home and community-based services to reduce demand for nursing home care. Rather, savings are expected to result from restricting the numbers of nursing home beds, thereby preventing additional nursing home use.

    From Long-term Care: Current Issues and Future Directions A report from the General Accounting Office, 1995

    Some policy makers have been leery about expanding funding for HCBS for fear of the "woodwork effect," a theory that many more older and disabled people will come forward to claim these attractive HCBS benefits. Over the years, some experts have also questioned whether states can actually save money by expanding Medicaid funding for HCBS.

    Long-Term Care Reform in the States: A Task Force Report from the National Conference of State Legislatures, July 1997


    The answers

     

  • from Oregon
  • from Kansas

    Recent studies--including a November 1996 Lewin Group study commissioned by the American Association of Retired Persons--attempt to put that debate to rest, concluding that home- and community-based services can be more cost-effective than nursing homes and that states with expanded home- and community-based services have saved money.

    Long-Term Care Reform in the States: A Task Force Report from the National Conference of State Legislatures, July 1997


    In 1996, institutional care cost an average of $94,348 per person, compared with $14,902 per person for community-based services. . . . States across the country have realized significant savings by offering services that allow people with disabilitties to live in the community. . .

    State Legislative Report of the National Conference of State Legislatures, Vo1 24, no. 2 ("Personal Assistance Services . . . ) January 1999


    Wisconsin's Community Options Program, which offers personal assistance and other services to keep people in the community, has saved the state as much as 25 percent of the cost of nursing home placement for people at risk of institutionalization.

    State Legislative Report of the National Conference of State Legislatures, Vo1 24, no. 2 ("Personal Assistance Services . . . ) January 1999


    "As watchdogs over the state's coffers, legislators should understand the costs of institutional care vs. home- and community-based care. The annual average cost of institutional care for people with disabilities is more than double the annual average cost of providing home- and community-based services.
    State Legislative Report of the National Conference of State Legislatures, Vo1 24, no. 2 ("Personal Assistance Services . . . ) January 1999


    Oregon

     

    Oregon serves 73 percent of eligible elderly people and those with disabilites in the coummunity rather than in institutions, saving at least $27.8 million between 1981 and 1996

    From Estimated Cost Savings from The Use of Home- and Community-Based Alternatives to Nursing Facility Care in Three States, The Lewin Group/AARP Public Policy Institute, Nov. 1996

    Susan Dietsche, Assistant Administrator at Senior and Disabled Services Division of Oregon's Department of Human Resources, says the Woodwork Effect simply points to the unmet need.

    "When a state makes a commitment to community-based care and creates desirable services, naturally people come forward."

    People coming forward to ask for services did not overwhelm Oregon's system, said Dietsche. "If the money saved by diverting a person from an institution is reinvested, you take care of your 'woodwork effect,' and then some," explains Dietsche. "Although there were some start-up costs involved in the beginning, for many years now our statistics back the 3:1 ratio. This means we serve three people in the community for every one person in a nursing home."

    Information provided by ADAPT's Jennifer Burnett, for "Roadblocks May Rise," in the May, 1997 issue of Mouth magazine.

     

     


    Kansas

     

    Personal attendant services that Kansas offers under Medicaid waivers have saved the state $2,000 per person per year.

    State Legislative Report of the National Conference of State Legislatures, Vo1 24, no. 2 ("Personal Assistance Services . . . ) January 1999

    Based on a Nursing Facility (NF) expenditures model, Kansas has successfully demonstrated cost- effectiveness for fourteen years for individuals with physical disabilities. In Kansas, this past year, the HCBS alternative saved the state $24,579,932. This savings includes a "woodwork" factor of 25%. "

    March 12, 1999 statement to the U.S. House of Representatives Committee on Commerce Subcommittee on Health and Environment by Ann E. Koci, Kansas Commissioner of Adult and Medical Services

     


    Do you have other statistics to fight the Woodwork argument? If you do, be sure to e-mail them to us.

     

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