Report Title:

Program for All-Inclusive Care for the Elderly; Study

Description:

Appropriates funds for a study of the feasibility of establishing rural Programs for All-Inclusive Care for the Elderly in outlying areas of Oahu and on the neighbor islands.

THE SENATE

S.B. NO.

1030

TWENTY-THIRD LEGISLATURE, 2005

 

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, the need for more long-term care alternatives that are accessible, affordable, and comprehensive continues to grow. The existing long-term care infrastructure does not adequately support current needs, let alone the projected demand for long-term care when the baby boom population ages.

The legislature believes that the State has not adequately developed support systems that can accommodate the State's frail elders. Geographic, social, economic, and cultural barriers leave a large number of elderly and disabled persons without adequate support. It is imperative that the State develop and test new ways to bring care to its most vulnerable citizens through innovative programs.

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

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

Recognizing PACE'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 PACE-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 costs. Out of this recognition of need, the legislature appropriated start-up funds to establish PACE in Hawaii through Maluhia hospital, which was formerly under the department of health, but now under the jurisdiction of the Hawaii health systems corporation. Hawaii's PACE program provides a complete package of services that enhances the quality of life for the elderly participant and offers the potential to cap the costs of the participant's medical needs.

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

Throughout the country, PACE sites have been established in predominantly urban communities. However, the elderly in rural communities within the United States are still generally underserved, and do not receive adequate health care and other services that could allow them to maintain their independence. The need in rural communities for PACE programs 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 true for the outlying areas of Oahu, as well as the neighbor islands. 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 for a rural PACE than its urban counterpart. To establish PACE in rural areas requires greater creativity, flexibility, and collaboration among providers, regulators, and policy makers.

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

In addition, the Association is introducing federal legislation that will give rural PACE-based programs more flexibility when compared to current provider requirements. The Association is also requesting start-up funds for interested providers in these rural communities.

The purpose of this Act is to improve health care for the elderly by appropriating funds for the Hawaii health systems corporation to conduct a study on the feasibility of establishing rural PACE-based programs in outlying areas of Oahu and on neighbor islands.

SECTION 2. The Hawaii health systems corporation shall study the feasibility of establishing rural PACE-based programs in outlying areas of Oahu and on the neighbor islands. The 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) Development of processes 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 no later than twenty days prior to the convening of the regular session of 2006.

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 for fiscal year 2005-2006 to study the feasibility of establishing rural PACE-based programs in outlying areas of Oahu and on the neighbor islands.

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, 2005.

INTRODUCED BY:

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