Sunday, 16 January 2005 - 8:45 AM

This presentation is part of: Community Health Care of Older Adults

Economic Evaluation of 1915c Medicaid Waiver for Older Adults Program in Maryland

Purpose:

The social welfare system is faced with the challenge of controlling rapidly growing medical care expenditures at the same time that the senior population is experiencing a dramatic expansion. While evidence suggests that disability rates are declining (Freedman, Martin, & Schoeni, 2002), cost analyses have predicted that present dollar public expenditures for medical care could grow by 146% over the next 50 years (Cutler, 1999). Numerous states have implemented 1915c Medical Assistance Waiver programs for Older Adults (OAW) that provide extensive in-home supports to attempt to attempt to individuals from nursing home placement. The goal of these programs is to control medical care costs while allowing individuals to remain in the least restrictive environment. Cost-effectiveness analysis is an important tool for policymakers faced with limited resources and large unmet need for services.

Method:

This study utilized economic evaluation techniques to examine the OAW program in the largest jurisdiction in Maryland (population 910,156). Phase one of the evaluation explored the effectiveness of the OAW program in preventing adverse outcomes (i.e. death or institutionalization). Survival analysis using Cox regression was used to compare outcomes for individuals in the OAW program (n = 113) with comparably disabled elders in a standard home and community based services (HCBS) program (n = 173). Phase two examined the entire population of individuals approved for OAW since its inception in July 2001 (n = 442) to evaluate the cost effectiveness of OAW in relation to achieving the statutory mandate of cost neutrality.

Results:

Phase one results indicated that OAW was highly successful in delaying adverse outcome, after controlling for group differences. OAW clients admitted in calendar year 2002 were less likely to experience an adverse outcome as of March 1, 2004, by an odds ratio of 5.63 (p < .005) compared to those in the HCBS program. Phase two results indicated that cost effectiveness had not been achieved. Anticipated savings statewide of over $42 million per year were not achieved. Instead the OAW program produced significant cost increases, due to a woodwork effect (i.e. people applied for the new program who would not otherwise have applied for benefits) and inefficient targeting of services.

Implications:

Future viability of OAW programs depends on improving cost effectiveness. Improved targeting of services is essential, along with consideration of level of service (i.e. dosage) needed to achieve an effective intervention. Consideration should also be given to non-monetary outcomes of OAW programs, such as quality of life (QoL). Opportunity costs associated with OAW programs need to be examined in light of evidence regarding prevention initiatives that target large groups of individuals before they present with severe disabling conditions.

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