Problem Assessment
The affordability of long-term care for low-income seniors and disabled individuals is a serious issue. The demand for such care continues to surpass available resources, a trend exacerbated by ongoing healthcare consolidation, which disproportionately harms rural states like Indiana (Hicks, 2024) in part due to the regulatory framework of the Affordable Care Act (Pipes), and an aging population, which further increases the cost of Medicaid services.
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Indiana, for its part, ranks 35th (Indiana University School of Medicine) in overall health, and according to other measures, it ranks in the bottom ten (Haughn) for health care cost and outcomes. These costs ultimately fall on taxpayers, making it essential for lawmakers to find ways to address this issue.
The population in need are those who require long-term care due to a severe disability. There are approximately 123,000 low-income seniors in the state requiring long-term care (Indiana Capital Chronicle, 2024; WFYI, 2023). There are also 67,000 long-term care residents in Indiana, further indicating the widespread need for effective, affordable long-term care services (Indiana Long-Term Care Ombudsman Office, 2024).
There are several key stakeholders in this issue.
Service providers include family members or other at-home caregivers of seniors and disabled individuals. These stakeholders are primarily concerned with ensuring consistent, high compensation for their caregiving roles.
Legislators are elected officials responsible for managing the state budget, who are focused on maintaining fiscal responsibility and minimizing Medicaid expenditures.
Program evaluators likely include the Family and Social Services Administration, which is responsible for the health and welfare of Hoosiers.
Program administrators likely include managed care organizations such as Anthem, Humana, and United Healthcare, who manage the disbursement of Medicaid services and are focused on operational efficiency and profit.
Long-term care organizations likely include the business entities indirectly benefit from the program through a reduction of low-income individuals seeking institutional care.
Program Description
The Aged and Disabled Waiver Program, along with the newer Health and Wellness Waiver and Pathways for Aging Waiver, aims to reduce the demand for institutional long-term care among low-income seniors and disabled individuals in Indiana. The program’s objectives are to decrease Medicaid costs by preventing the need for institutional care and to increase flexibility for recipients, allowing them to receive care in more accessible, home-based settings, with increased social support and better health outcomes.
The program is highly targeted in that only seniors requiring chronic, at-home care or families of children with severe disabilities requiring similar care are eligible.
The program currently has capacity for 55,000 individuals, though there are approximately 123,000 eligible low-income seniors in the state (Indiana Capital Chronicle, 2024; WFYI, 2023). As of July 2024, there were 9,015 individuals on the waitlist for the Pathways waiver, which serves seniors, and 3,762 people on the waitlist for the Health and Wellness Waiver, which serves younger disabled individuals (Current, 2024). These figures reflect the significant gap between demand and program availability, highlighting the urgency of addressing the issue. Additionally, there are 67,000 long-term care residents in Indiana, further indicating the widespread need for effective chronic care services (Indiana Long-Term Care Ombudsman Office, 2024).
The total cost of Medicaid for the state is estimated at $8.2 billion (Indiana General Assembly, 2024). By analyzing this program’s impact, planners will better understand whether the program yields sufficient health benefits for the costs involved.
Service providers are most concerned with compensation, while legislators seek to ensure that the program remains within budget and reduces unnecessary spending. FSSA balances these interests with that of increasing health and welfare outcomes, influenced by both program evaluators and managed care entities, which have a vested interest in maximizing profit.
The primary goal of these Medicaid waivers is to support at-home caregiving by providing payments to incentivize Medicaid recipients to be cared for by their loved ones at home, rather than going into a long-term care facility. This model aims to reduce the administrative and facility-related costs typically associated with institutional care. By diverting individuals from institutional care, the program should not only lower Medicaid expenditures but also reduce the overall demand for long-term care facilities, potentially decreasing costs for non-Medicaid patients as well.
Furthermore, the program provides increased social support to recipients through family caregivers, which is expected to result in better health outcomes for the individuals receiving care. Inputs into the program include legislative funding, Medicaid administrative resources, and participation from eligible family and at-home caregivers, while outputs include the payments disbursed to 55,000 caregivers under the waiver program. Expected outcomes of the program as a result include reduced Medicaid costs, improved health outcomes for participants, and a decreased demand for long-term care facilities.
The program implementation is based on several key assumptions, including that at-home care is more cost-effective than institutional care, recipients have sufficient social support for at-home care to result in better health outcomes, the program will not result in a significant increase in fraud, at-home care would benefit all eligible Medicaid recipients relatively similarly, and the program will not lead to a substantial increase in demand for long-term care through Medicaid, and the program primarily diverts individuals with eligible needs from institutional care rather than non-enrolled individuals. Participants interact with the program by using their Medicaid coverage to pay for at-home care.
The program offers a variety of waiver services, including Adult Day Services, Assisted Living, Attendant Care, Caregiving Coaching, Community Transition, Home Modifications, Nutritional Supplements, and more (Indiana Medicaid). The primary focus of this evaluation will be on Participant-Directed Home Care Services, which directly empower caregivers to manage and provide the care needed by recipients in their homes.
To implement the program, several resources are necessary, including funding from the state or federal government, caregivers or service providers, managed care entities responsible for operating the program, and program evaluators and managers, including the Family and Social Services Administration. .
Evaluation Strategy
The main evaluation question is whether the Aged and Disabled Waiver delivers cost-effective health outcome improvements to eligible participants compared to nursing home care. The evaluation would need to be a quasi-experiment due to ethical concerns with randomly assigning participants in essential medical programs to either nursing home care or at-home care, meaning it would also have to utilize a differences-in-differences approach to analyze data. It is the best option for the program due to ethical concerns and will still guarantee a valid result as the data collection and analysis plan will ensure the treatment and control group remain extremely similar, accounting for any variation.
To consider both actual cost to the patient and health outcomes, this evaluation of the Aged and Disabled Waiver program will utilize the Quality-Adjusted Life Year (QALY) metric to determine whether or not the program cost-effectively improves health outcomes compared traditional Medicaid paying for long-term care in a nursing home facility.
The same criteria are used for those put on the waitlist as those allowed into the program. The only difference between the two should be scarcity, i.e. all spots in the program become filled, meaning that the groups will likely be relatively similar, despite not being completely randomly assigned. It is reasonable to assume, then, that absent the program, that the groups would differ little in QALYs changes over time.
There are some potential confounders that must be considered using this evaluation model. Firstly, while the criteria for those put on the waitlist for receiving Waiver benefits and those accepted into the program is the same, those accepted into the program or who applied earlier may have an increased sense of urgency, social support, or attention to their own care which may confound the results. It is unlikely that there is a significant increase in urgency or social support between those accepted into the program and those placed on the waitlist, but this concern could be mitigated entirely by selecting individuals who either signed up for the program around the same time, or who were placed either into the waitlist or in the program around the same time.
Data Collection and Analysis Plan
The evaluation will utilize stratified sampling to randomly sample 50 nursing home residents in Indiana placed on the waitlist for the Aged and Disabled Waiver and 50 nursing home residents that were recently accepted into the Aged and Disabled Waiver program to establish a baseline. The participants will be sampled again at the end of the first year of the evaluation.
To measures QALYS, the program evaluators will distribute the EuroQol-5 Dimensions (EQ-5D) survey to each participant from both the nursing homes and those receiving at-home care (EuroQol Group). Additionally, program evaluators will request program participants to self-report their annual costs, and also request health services utilization (or payment) data per individual from Medicaid or managed care providers.
Self-reported costs to the patient would then be divided by the QALYs determined for the program, utilizing a discount rate of 3.5% per year, and a differences-in-differences approach will compare the change at the beginning and end of the program evaluation, after the test group has received at-home care for one year. This measurement would determine the cost-effectiveness of the health outcome improvements of at-home care for the patient. A positive DiD would suggest Waiver participants experienced a greater improvement in QALYs compared to those on the waitlist, suggesting that the program has a beneficial impact on health outcomes compared to institutional care.
The cost-effectiveness threshold should be $50,000 per QALY, as is standard in the U.S.
Medicaid payment data could also be utilized instead of self-reported costs, which would determine the cost-effectiveness of the health outcome improvements for the state under the Aged and Disabled Waiver program. Again, a positive DiD would suggest the Waiver program is more cost-effective.
The DiD equation in this case would be QALY (for individual i at time t)=(Baseline QALYs for comparison group)+(Baseline difference in QALYs)(Treatment for individual)+(Change over time for the comparison group)(indicates whether baseline or end-of-year measurement)+(Treatment Effect)(Interaction of treatment and time, or causal effect of the program)+(unobserved factors affecting QALYs).
It is expected that home-based services, being less resource-intensive, are cost-effective compared to institutional care.
The model assumes eligibility for either the Waiver or traditional Medicaid does not change over time, and participants are able to finish the year in the program they started in. If participants are removed from their program, the evaluation would likely need to remove their data from the program along with a similar individual in the test group to address the risk of biasing the results of the evaluation due to eligibility changes, which could be based on income or another variable.
Potential bias could arise from overrepresentation of urban areas in the nursing home sample, where most facilities are located. However, random sampling should mitigate this risk. It is also possible that a larger sample size may be necessary for the evaluation to be sufficiently sensitive to program impact.
The evaluation is expected to take approximately one year, aligning with the budget reporting cycle.
This quasi-experimental design will provide a comprehensive evaluation of the cost-effectiveness of the Aged and Disabled Waiver program, contributing valuable insights into the financial impact of home-based care compared to institutional long-term care.
Communication Plan
The communication plan for this program evaluation focuses on engaging key stakeholders, primarily the Indiana Family and Social Services Administration (FSSA), state lawmakers, and the public, with a special emphasis on how the findings impact budgetary considerations, health outcomes, and social welfare.
FSSA is the primary agency responsible for administering the Medicaid Aged and Disabled Waiver program, making it essential to share evaluation findings that focus on health outcomes. FSSA is likely more concerned with how the program impacts the well-being of its participants, including health, quality of life, and social support. Therefore, the first communication would involve a detailed report to FSSA highlighting cost-effectiveness of home-based services compared to nursing home care, health outcomes for recipients of both types of care, utilizing survey data, and impact on the broader social welfare system.
The report could also include actionable recommendations based on the findings, such as program adjustments to improve health outcomes or further cost savings.
Following the submission to FSSA, a public hearing could be held to present the findings of the evaluation to state lawmakers. Since budgetary concerns are of primary importance to legislators, the report to lawmakers would emphasize cost savings and the financial impact of expanding or maintaining the Medicaid Aged and Disabled Waiver program. The hearing should focus on savings from home-based care compared to institutional care, potential long-term fiscal benefits of the program’s expansion, and a discussion of potential policy changes based on the evaluation.
The public hearing will also serve as a feedback mechanism, where stakeholders—such as service providers, advocacy groups, and patients’ representatives—can offer their input. This could help lawmakers understand the broader societal and human aspects of the program, beyond just financial considerations.
After the report to lawmakers, the findings will likely be picked up by the media, especially if there are significant changes to the program based on the evaluation. Media outlets are crucial for spreading awareness of the program’s effectiveness and the potential cost savings. To ensure broad outreach, press releases could be issued summarizing the findings and potential implications. News stories and interviews could also be arranged with key stakeholders, such as lawmakers and recipients of home-based care, to highlight both personal stories and quantitative findings from the evaluation.
The media will play a critical role in raising public awareness and ensuring that the stakeholders (patients, caregivers, and health service providers) are informed about the changes to the program.
Direct communication with home caregivers, service providers, and program recipients will also be critical. Once the evaluation findings are shared with lawmakers and the media, the FSSA can use various channels—such as newsletters, emails, or dedicated online portals—to disseminate information to caregivers about any changes in program requirements or new opportunities for support, to program recipients to ensure they are aware of any adjustments to service delivery that may affect them, and to service providers to help them prepare for any shifts in the demand for home-based care or long-term institutional care.
By targeting these groups, the communication plan aims to ensure that all parties affected by the program are well-informed and can adjust accordingly.
Finally, it is essential to create an ongoing dialogue to track how stakeholders are responding to the program’s results. Regular feedback from caregivers, patients, and service providers will ensure that adjustments to the program can be made based on real-world experiences. This could include periodic follow-up surveys or feedback mechanisms for patients and caregivers to assess their satisfaction with the program and continued public comment periods at subsequent hearings or through online platforms.
Through this multi-layered communication plan, the evaluation results will be effectively communicated to key stakeholders, ensuring that the findings contribute to informed decision-making while allowing for community involvement and ongoing feedback on the program’s potential value to the state of Indiana.
References
Aged and Disabled Waiver. Indiana Medicaid. Retrieved November 25, 2024, from https://www.in.gov/medicaid/members/home-and-community-based-services/aged-and-disabled-waiver/2022
CHOICE Annual Report. (2022). Indiana Family and Social Services Administration. Retrieved November 25, 2024, from https://www.in.gov/fssa/da/files/2022-CHOICE-Annual-Report.pdf
2023 CHOICE Annual Report. (2023). Indiana Family and Social Services Administration. Retrieved November 25, 2024, from https://www.in.gov/fssa/da/files/2023-CHOICE-Annual-Report.pdf
EuroQol Group. EQ-5D-5L. EuroQol. Retrieved November 26, 2024, from https://euroqol.org/information-and-support/euroqol-instruments/eq-5d-5l/
Haughn, Tyler. “Indiana Ranked 10th-Worst State for Health Care Due to High Costs, Poor Outcomes.” Fox 59, 1 Nov. 2023, https://fox59.com/news/indiana-ranked-10th-worst-state-for-health-care-due-to-high-costs-poor-outcomes/.
Health Economics Resource Center. Cost-effectiveness analysis. U.S. Department of Veterans Affairs. Retrieved November 26, 2024, From https://www.herc.research.va.gov/include/page.asp?id=cost-effectiveness-analysis#:~:text=The%20%2450%2C000%20threshold%20is%20the,systems%20and%20in%20different%20countries.
Hicks, Michael. “Indiana’s Hospital Monopolies Are Worsening.” The Star Press, https://www.thestarpress.com/story/news/local/indiana/2023/08/27/hicks-indianas-hospital-monopolies-are-worsening/70679589007/. Accessed 29 Sept. 2024.
“Indiana Health | Areas of Expertise | IU School of Medicine.” Indiana University School of Medicine, https://medicine.iu.edu/expertise/indiana-health. Accessed 29 Sept. 2024.
Indiana launches Pathways for Aging program. (2024, July 30). Current. Retrieved November 25, 2024, from https://youarecurrent.com/2024/07/30/indiana-launches-pathways-for-aging-program/#:~:text=1.,slots%20for%20newly%20eligible%20individuals
Lack of data fuels concerns as new slots for Medicaid waivers are set to open July 1. (2024, June 25). WFYI. Retrieved November 25, 2024, from https://www.wfyi.org/news/articles/lack-of-data-fuels-concerns-as-new-slots-for-medicaid-waivers-are-set-to-open-july-1
Pathways for Aging launches for 123,000 eligible senior Hoosiers. (2024, July 2). Indiana Capital Chronicle. Retrieved November 25, 2024, from https://indianacapitalchronicle.com/2024/07/02/pathways-for-aging-launches-for-123000-eligible-senior-hoosiers/
Pipes, Sally. “Obamacare Drives Hospital Consolidation, Raising Prices For Patients.” Forbes, 16 Sept. 2019, https://www.forbes.com/sites/sallypipes/2019/09/16/obamacare-drives-hospital-consolidation-raising-prices-for-patients/.
Indiana General Assembly Ombudsman Office. (2024). 2024 Annual Report. Indiana General Assembly. Retrieved November 25, 2024, from https://iga.in.gov/publications/agency_report/2024%20Annual%20Report%20-%20Long-Term%20Care%20Ombudsman%20Office.pdf
Smith, J. (2020). Understanding the evolution of community-based care in the elderly population. Murray State University. Retrieved November 25, 2024, fromhttps://digitalcommons.murraystate.edu/cgi/viewcontent.cgi?article=1035&context=crsw
State of Indiana. (2024). FY 24-25 Budget Overview of HB 1001-CCR. Retrieved November 25, 2024, from https://cdn.zephyrcms.com/060c7889-39bf-4005-8986-8ba6f0852853/-/inline/yes/fy-24-25-budget-overview-of-hb-1001-ccr.pdf
Wright, S. (2024). Understanding the evolution of community-based care in the elderly population. Murray State University. Retrieved November 25, 2024, from https://digitalcommons.murraystate.edu/cgi/viewcontent.cgi?article=1035&context=crsw