Preparing America for the Aging Society

ANNE TUMLINSON INNOVATIONS

The Demographics & Economics

of

Our Aging Society:

THE CASE FOR A NATIONAL MOVEMENT

MAY 2016

The country is

unprepared To meet the needs and desires of

an aging population and their families.


I. FRAILTY-ASSOCIATED NEED IS EXPENSIVE

II. OUR ABILITY TO FINANCE THIS NEED IS LIMITED

III. SERVICE DELIVERY SYSTEM & COMMUNITIES ARE

ILL-PREPARED

But there are unprecedented opportunities for

aging services organizations

and providers

Risk of Frailty-Associated Need is 50 Percent


> 5 years

2-5 years

1-2 years

< 1 year

0 years

47%

14%

12%

8%

Half of Older Americans Will Experience High Need

Favreault, Melissa and Judith Dey. Long-Term Services and Supports for Older Americans: Risks and Financing Research Brief. Office Of the Assistant Secretary of Planning and Evaluation, U.S. DHHS, Revised February 2015


48%

6%

10% 10%12%

15%

None $1-$9,999 $10,000-$49,999 $50,000-$99,999 $100,000-$249,999 $250,000 or more

A Quarter Face Costs of At Least $100,000

Favreault, Melissa, Gleckman, Howard and Richard W. Johnson How Much Could Financing Reforms for Long-Term Services and SupportsReduce Medicaid Costs? The Urban Institute. February 2016.

Personal Savings Finances Over Half of Spending


Individuals Turning 65 in the Next 5 Years

Will Pay Over ½ of the Average

Lifetime Cost Out of Savings

Favreault, Melissa and Judith Dey. Long-Term Services and Supports for Older Americans: Risks and Financing Research Brief. Office Of the Assistant Secretary of Planning and Evaluation, U.S. DHHS, Revised February 2015

Medicare Gap-Fills - Pays More for High Need


Annual Per Capita Medicare Spending in 2006,

by Number of Chronic Conditions & Presence of Frailty

Source: Data from Avalere Health, LLC analysis of 2006 Medicare Current Beneficiary Survey (MCBS) Cost andUse file. Prepared for: The SCAN Foundation. DataBrief No.22: Medicare spending by functional impairmentand chronic conditions.

Medicaid Moving to Constrain Per Capita LTSS


Taken From: Medicaid Expenditures for Long-Term Supports and Services in FFY 2012, by Steve Eiken et al., CMS and TruvenHealth Analytics, April 28, 2014

LTSS as a % of Total Medicaid Expenditures, FFY 1995-2012

Very Little $$ in System

to Reward Rapid Deployment of Capital

In the

Delivery System Innovation

We Need to Meet Demand

“We are fighting over crumbs”

Home is Where We Want to Be – Even When Frail


Source: Data from the 2011 National Health and Aging Trends Study, Accessed Through Freedman, Vicki A and Spillman, Brenda C. Disability and Care Needs Among Older Americans, The MilbankQ u a r t e r l y , V o l . 9 2 , N o . 3 , 2 0 1 4 ( p p . 5 0 9 - 5 4 1 )

14%1.1 m

13%.97 m

73%5.63 m

70 Percent of Individuals with High Need Live at Home

Living in a Nursing Home Living in Residential Care Living in the Community

Total: 7.7 million

But, It’s Dangerous to Live at Home if You’re Frail


60%3.38 million

Living in the Community

36%0.35 million

Living in Residential Care

Source: Data from the 2011 National Health and Aging Trends Study, Accessed Through Freedman, Vicki A and Spillman, Brenda C. Disability and Care Needs Among OlderAmericans, The Milbank Quarterly, Vol. 92, No. 3, 2014 (pp. 509-541)

Adverse Consequence Rate

Among Older Adults Who Pay for Some Help

And, More Expensive


$18,3082

$14,0012 $14,5942

$0

$3,000

$6,000

$9,000

$12,000

$15,000

$18,000

$21,000

Community

Residents with

Moderate or Severe

Disability

Residential Care

Residents with

Moderate or Severe

Disability

Nursing Home

Residents

CommunityMedicare Per Capita Spending

“I Can’t Believe I am Managing This!”


And Needs Go Unmet

Frail Older

Adult

Complex

Medical

Need

Long-Term

Services &

Support

Need

Home

Care

Senior

Housing

Nursing

Home

Doctors

Hospital

Post-

Acute

Care

FAMILY:

Management

Coordination

Unpaid

Caregiving

Legal

Financial

“I Can’t Find What I Need”


Information is too disperse and/or hard to trust

Most “finders” produce long lists

Many “Free” referral sources are biased sources of information

• A Place for Mom

“Home Care Is Challenging”


Commodity Service

• Delivered by “private duty agencies”

Business model design is around scheduling service,

not delivering service

Low paid workers

Service is too bundled

Highly variable quality

Too expensive

Seize the Opportunity

Connect to Customers Up and Downstream


Livable,

Connected

Communities

Medical Management

In-homeTechnology

Trusted Hands-on In-Home Care Providers

SupplementedWith Tech

Service Coordination and Management

Home Modifications/Renova

tions

FINANCING

Create Products that Revolve Around Client and Family

Needs


Individual

Consumer and

Family

Manage Complex

Medical Needs

Support Safety AND

Independent Living

through Assistance

with Daily Tasks

Life Management

INNOVATIVE

HOUSING

MODELS

Leverage Innovation and Technology


Aging 2.0 Supporting Innovation-Oriented Incubators

Attempts at New Home Care Business Models

(Honor, Hometeam)

• Take out overhead of massive scheduling operations in traditional home

care business model

Senior Housing with Lower Price Point, More Individual Design

Elements and Integration of Medical

Providers Operating Risk-Based Fully Integrated Models of

HealthCare Delivery for the Long-Term Care Population

$220 $256

$468

$624

$0

$10 0

$20 0

$30 0

$40 0

$50 0

$60 0

$70 0

20 30 20 40

Status Quo

Insurance

Advocate for Financing


Combined Out of Pocket and Insurance LTC Spending Increases

15 – 30 Percent When Everyone is Insured

Dollars in Billions

Favreault, Melissa, and Richard W. Johnson Microsimulation Analysis of Financing Options for Long-Term Services and Supports The Urban Institute Research Report November 2015

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Preparing America for the Aging Society

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