Serving the Home Health Care Needs of the Elderly in the United States

January 1999

The home health-care industry has grown dramatically in the past decade, helping many of the disabled elderly remain in the community rather than in a nursing home. The home, however, has long been the primary site where most care for persons with long-term illnesses takes place. The care has been provided primarily by female members of the family receiving no remuneration for their services. Only the wealthy could rely on hired personnel for long-term custodial and health care services. Medicare reimbursements have expanded such care to a much larger segment of the population. For-profit home health care agencies and equipment manufacturers have proliferated to take advantage of new Medicare regulations and technological innovations.

The rapidity of the increase in Medicare costs since 1990 in turn gave rise to alarm about fraud and abuse, which culminated with cutbacks in home care expenditures mandated by the Balanced Budget Act of 1997. Since Medicare and Medicaid pay more than half of the home health care bills in the United States, the entire industry has subsequently been forced to make adjustments. As has been the case in other areas of health service delivery, the system is shifting from reimbursements for services rendered toward one with fixed payments based on the patient=s diagnosis or the case load assumed by the home health agency. Regulations in place now are in place temporarily until a full prospective payment system can be developed. The temporary regulations have been recognized to have a number of unfortunate and unintended consequences: Home health agencies that had very high charges in the recent past will face less hardship than will agencies that had a track record of trying to more strictly contain their costs. Smaller agencies may be especially likely to go out of business as a result of the added requirement of surety bonds of $50,000. Most troublesome is the strong disincentive for home health agencies to accept or continue with clients in need of the most care.

The recent developments raise very pressing issues, but there are deeper problems which cannot be understood without looking at longer-term trends. Broad societal changes have escalated the needs of the elderly and their families.

A GROWING POPULATION WITH CHRONIC ILLNESS

One especially important change has been the shift in the causes of death during the twentieth century. In 1900 acute and infectious diseases of childhood were of prime importance. Today the predominant killers are chronic, degenerative illnesses of old age. AIn the 1990s, heart disease, cancer, strokes are the major killers of Americans and account for more than two-thirds of deaths among persons age 65 and older@ (Treas 1995: 15). According to a Robert Wood Johnson Foundation Report on chronic illness, our society has failed to meet the challenges posed by this epidemiological transition: A[T]echnological improvements have not been matched by improvements in the overall organization of health care and service systems@ (Robert Wood 1999).

It is the aged who are most prone to chronic illnesses that interfere with performing everyday tasks. In 1992 such problems were faced by 39 percent of non-institutionalized persons over age 65 as compared with only 10 percent of the population aged 15 to 44 (Treas 1995: 32). The incidence of chronic disability among the aged has recently started to decline. ABased on the 1982 rates, 24.9 percent of older people were expected to be chronically disabled in 1994; instead, the observed proportion was only 21.3 percent.@ Though this seems like a small change, it actually amounted to 1.2 million fewer disabled older persons (Population Today September 1997, p. 3).

Even with these improved rates the size of the elderly population in need of medical assistance will continue to grow because of the increase in the total number in this age group. The fastest growing segment of the population over age 65 is among the Aoldest-old@ -- those aged 85 and over. In 1996 they numbered 3.8 million; by 2010 this is expected to climb to 6.8 million. If current rates remain constant, about 40 percent will spend some time in a nursing home, although this is clearly not viewed very favorably. According to data for 1989, even among elderly who had the most serious limitations in their activities of daily living, most were cared for at home (Cherlin 1999: 484).

For the more seriously disabled, remaining at home depends on the availability of caretakers. Because women have benefitted more than men from increased life expectancy during this century, the great majority of the elderly are women. Such change has been an important factor leading to the enormous growth in single-person households. During the 1980s, however, the trend shifted, as heart disease fell more among men than among women. As a result there is a growing number of couples among the population over age 65, and this has meant more households with one member to take care of the other. There is evidence that increased survivorship of old men has reduced the proportion of elderly that have had to go to nursing homes (Lakdawalla and Philipson 1998).

The supply of other caregivers, however, is falling sharply. AAbout four-fifths of the care of disabled elderly who are living in the community is provided by relatives, most of them women. . . . The informal care system has depended on the availability and goodwill of middle-aged women.@ The increase in employment of married women have made such women less available. Also important has been the decline in the number of children per elderly parent -- a consequence of the fall in birth rates since the 1950s (Cherlin 1999: 485). For every 1 person age 85 or older in 1990 there were 11 potential caregivers in the age group 50 to 64; by 2050 the ratio will be one to four. (HomeCare News, December 1996: 15). The baby boom has just been entering the age group of potential caregivers; by 2011 this huge cohort will be reaching age 65 and by the third decade of the 21st century the entire group will be over age 65. By 2030 the percentage of the total population over age 65 will grow to over 20 percent, up from about 13 percent at present and just 4 percent in 1900 (Treas 1995: 4-6).

The high level of family dissolution has also influenced intergenerational assistance. Older men are especially prone to find themselves estranged from children as a result of a divorce or separation. A growing number of women are squeezed between the demands of aging parents and the needs of their own children. A daughter may seek temporary residence in her mother=s home after a separation or divorce, and she may bring children with her. Conflicting demands can also arise as a result of some women postponing parenthood until age 30 or more (Cherlin 1999: 485; Karner 1998).

In sum, there has been and will continue to be an enormous growth in the number of older persons surviving with long-term disabilities. Families have always been important in helping to keep such persons at home, but this support is unlikely to keep pace with rising needs. With some form of assistance to carry out the tasks of everyday living, many more older persons could possibly remain in their home rather than face far more costly institutionalization. Furthermore, technological innovation has markedly enhanced the sophistication (though also the price) of medical care that can be delivered at home.

The problems of the elderly have recently been reconceived as failure to deal with an important segment of disabled persons. With proper home health-care, the more restrictive placement in a nursing home can in many cases be avoided, and the dangers of living at home can be greatly mitigated. The answer is not simply the provision of medical care in response to acute illness but rather an ongoing Aclient-directed care.@ Efforts to provide such care have been

aggressively promoted only over the past decade, mainly by the physically disabled community=s independent living movement. The philosophy of allowing and encouraging individuals with long-term needs, particularly nonmedical needs, to manage their own care has now permeated the long-term-care programs for the elderly as well as the younger disabled. In many instances, the frontline workers are selected, trained, supervised, and fired by the clients themselves (Stone and Yamada 1998).

This type of care had in the past been available only to individuals sufficiently wealthy to hire private aides. The Americans with Disabilities Act (ADA) passed in 1990 is helping to bring a change, as it requires the government to place disabled persons in Athe most integrated setting appropriate to the individual@: AIn Helen L. v Didario a federal appeals court ruled that ADA required Pennsylvania to provide home care services for a 43-year-old mother who had been institutionalized for several years.@ Following this case, other courts have been recognizing the claims of institutionalized persons who have sought home-based care (Bogart et al. 1997: 204).

Home health care agencies and suppliers of durable medical equipment for the home have proliferated in response to growing demand. Medicare funding has played an important role.

CHANGE IN MEDICARE HOME HEALTH CARE COVERAGE

Some limited home health services had been covered by Medicare since its inception in 1966; this funding immediately made the federal government Athe major payer for home health care.@ In the 1970s the population eligible for home care greatly expanded by making the benefit available to persons under age 65. These included some of the disabled and those terminally-ill who required kidney dialysis (Estes and Binney 1997: 5-6).

The growth of home health care was greatly fostered by changes in Medicare rules in 1980 and 1981. No longer was it necessary to have had a prior hospital stay in order to qualify for home health care; also dropped were the limit of 100 visits to the home and the deductible payment (under Part B). The entry of private for-profit agencies was facilitated with the removal Medicare=s certification restrictions for this type of agency in states that did not license home health agencies (Estes and Binney 1997: 6). The result was ultimately a critical shift in service providers. In the late 1960s visiting nurse associations (private, but nonprofit) and public agencies had supplied almost all home care. Today proprietary home health agencies (private and for-profit) comprise the majority of all agencies that are certified by Medicare. Another quarter of all agencies are directly affiliated with a hospital (Basic Statistics 1998).

The original preconditions for obtaining home health care under Medicare show that coverage was meant for short-term postacute care. This would soon change dramatically: AMedicare=s home health benefit gradually has been transformed from one that focused on patients needing short-term care after hospitalization to one that serves chronic, long-term-care patients as well@ (U.S. GAO 1998: 4). The Robert Wood Johnson Foundation found that 96 percent of all home health care dollars (both government and private) are spent on persons with chronic illness (Bogart et al. 1997: 20). One observer contends that this expansion of Medicare has been due to the fact that Amost recipients have no other means to pay for long-term care. Medicaid, the only other payer, is stingy and highly variable by state@ (Meyer 1998).

With an ongoing government Apolicy approach that has generously financed acute medical care and starved social and chronic care@ (Estes and Binney 1997: 15), the shift toward long-term care may have been largely unintentional. The result, however, is now widely recognized, and this shift in care may have further inflamed concern about rising Medicare home health-care expenditures. Home health care coverage remains restricted to individuals who Aare confined to the home, receiving services under a plan of care established and periodically reviewed by a physician, and ... in need of either physical therapy, speech-language pathology services, or intermittent skilled nursing care@ (Mauser 1996). Those only requiring custodial care are explicitly disqualified. This means that the one in ten Americans over the age of 65 suffering from Alzheimer=s disease are without any Medicare home health coverage, even though the disease Aoften leaves people as helpless as babies but physically robust@ (Alger 1997).

The changes to Medicare have permitted an explosion of growth in home health care. In 1967 1,753 agencies were certified to participate in the Medicare program. By 1985 the number of such agencies reached 5,983. A[I]ncreasing Medicare paperwork and unreliable payment policies@ then resulted in a fall in the number of agencies for several years (Basic Statistics 1998). This was reversed by a change in payment policy following a 1987 lawsuit against the Health Care Financing Administration. The number of certified agencies grew to over 10,000 by 1997. By 1989 the Medicare expenditures on home health care were $2.5 billion, up from a mere 46 million in 1965. The figure soared to about $20 billion by 1997 (Braus 1998; The CQ Research 1998: 157).

As one would expect from the shift toward treatment of chronic illness, much of the growth in cost was attributable to increased visits per beneficiary. The number of visits averaged 76 in 1996, up from 27 in 1989 (Kirchhof and Carey 1998: 2558). The home health care industry still has excellent growth prospects. The federal Bureau of Labor Statistics has rated Ahome health aide@ among occupations with the largest anticipated growth (Braus 1998).

CONSEQUENCES OF COMMODIFYING HOME HEALTH CARE

Making for-profit agencies eligible for reimbursements has had profound consequences. As noted above, such organizations have rapidly come to dominate service delivery. Intensified competition for patients has steadily eroded the number of small independent agencies. These have been consolidated into ever larger organizations with a hierarchy of staff for managing service delivery and controlling costs. Looking to maximize the bottom line has led to the increased use of part-time and contract labor and to more narrowly focussing time spent in the home on the delivery of required services. Treatment of the social and emotional needs of the patient may be further sacrificed with the Aunbundling and selling single procedures and services to increase reimbursement.@ For example, a separate and fast expanding industry provides the durable medical equipment; specially trained workers perform just infusion therapy or home renal dialysis (Estes and Binney 1997: 13-15).

Some services never before available outside an acute hospital setting can now be performed at home as a result of technological advancements and entrepreneurial zeal. This obviously represented a threat to hospitals, also having to deal with change in Medicare reimbursements leading to shorter hospital stays:

To control costs, the 1983 Social Security Amendments ended payments based on what a treatment actually cost a hospital to provide the service and substituted a fixed payment scale for each medical condition or diagnostically related group (DRG). . . . Patients are now discharged earlier from hospitals--a practice critics have termed >quicker and sicker.=

Hospitals clearly had strong incentive to move into the home health-care delivery in order to recapture lost business. The market grew in part because shorter stays often meant that patients needed much greater care after discharge from the hospital. Entering the new field has helped avert the layoff of personnel: AToday=s modern hospital system, which is as likely to be in the business of home health care as in emergency care, is able to redeploy their workers as never before.@ This has proved particularly important, as the Balanced Budget Act of 1997 cut back on the rate of increase in hospital reimbursements. The Boston Globe reports that AFor hospital employees [in Massachusetts], the news need not be so grim. That=s particularly true for those who work for hospital >systems= that offer a range of services, from nursing homes and home health, to rehabilitation and intensive care@ (Pham 1998).

But many hospitals are becoming dubious about the profitability of home health-care services (Meyer 1998). Many hospitals appear to have been particularly hard hit by new caps on home health care reimbursements, because their home care business fees were inflated to cover part of the overhead costs of the hospital (Hahn 1998). It is not surprising that Abeneficiaries receiving care from for-profit [home health agencies] receive on average 21 more visits than those receiving care from non-profit agencies, controlling for differences in health and functional status of beneficiary, as well as age, sex, and living situation@ (Mauser 1996).

Estes and Binney (1997: 15) see serious negative consequences of the growing dominance and competitiveness of for-profit organizations, of home care service providers guided by the market place rather than Anorms of charity:@

A cultural revolution in nonprofit service delivery has imposed a new set of values on community services: the conversion of health care from a >merit good= into a >market good=; winning in price competition; quick turnover in clientele; the provision of the highest number of reimbursable service units at the lowest cost; the unbundling of services; the elimination of unprofitable services (regardless of need); and attracting private-pay clients while avoiding the >adverse selection= of no-pay and low-pay clients. Simultaneously, increased care management and other control mechanisms have been imposed over both consumers and providers.

This is not to deny that the innovations and expansion of the home care service industry have made it more possible to receive treatment at home. The public very much welcomes this, given the widely shared negative sentiment toward nursing homes and the cost of such care. A recent study showed that seriously ill adults overwhelmingly contended that they would Arather die@ than live in a nursing home (Kuhn 1998). The profit incentive is there to encourage agencies to use lower skilled paraprofessional aides to undertake tasks that had previously been the sole domain of licenced nurses, but such economizing can be positive (Stone and Yamada 1998) :

[N]urse delegation has been critical, if not essential, to the development of new long-term care options like assisted living that allow significantly disabled people to remain in community settings. For example, allowing an aide to administer oral medication to an elderly resident with long-term care needs can make the difference between that person having to move to a nursing home or remaining in her own home or an assisted living residence.

FRAUD AND ABUSE BY AGENCIES

Another outcome of the orientation toward profits and the opportunities afforded by the Medicare system have been various forms of fraud and abuse: A[P]roviders generally earn more by increasing the number of procedures, tests or home health visits they perform. Because of loose program controls, they are also able to boost profits by >upbilling=--charging Medicare for more expensive services or products than are warranted.@ Higher costs are paid for equipment and supplies due to Alack of competitive bidding@ (Kirchhoff and Carey 1998: 2556-7). Given the regulatory environment, home health-care agency operators typically held the view Ahome health care visits should continually increase@ (Meyer 1998).

Adding to the problem of misplaced incentives has been inadequate auditing in the face of a massive rise in claims for payment. The Health Care Financing Administration, which oversees Medicare and Medicaid, clearly lacked the resources to handle the volume of business. In 1988 half of all home health care claims were audited, while only 2-3 percent are audited today (Kirchhoff and Carey 1998: 2557-9). The federal government has identified home health care Aas one of the high-risk areas for fraud and abuse.@ After two years of Operation Restore Trust, a federal program to investigate the home health care industry, $188 million dollars was recovered from the 5 states included in the program; this success led to the program=s extension to an additional 12 states. Representatives of the industry claim that much of what initially looks like fraud actually turns out to simply be a Alack of proper documentation@ (Wax 1997).

In part, agency submission of charges for unnecessary or inappropriate services might stem from their very efforts to economize on labor. Fran Hicks, an expert on health care policy issues from the University of Portland Oregon, argues that many problems could be solved by having more nurses on the front line directly managing care: A[N]urse clinicians could easily and effectively monitor home care, because they are the ones in touch with actual patient care, who see what is going on in the home.@ Such professional input may directly compete with the authority of the agency operator, likely to be far more oriented to assuring the profitability of the business. Moreover, Hicks notes,@nurses cost money.@ Unfortunately, she adds, Ait=s easier to get reimbursed for a wheelchair or other equipment than it is get reimbursed for a skilled nurse=@ (Wax 1997).

PROBLEMS OF FRONTLINE PERSONNEL

There clearly are circumstances in which patient care suffers as a result of the deskilling and associated reduced authority of home health-care workers. Aides may lack the experience needed to complete the increasingly complex tasks they are asked to perform. According to the Omnibus Budget Reconciliation Act of 1987, Anurse aides in nursing homes or homecare agencies that receive Medicare or Medicaid funds are required to received a minimum of 75 hours of training within four months of employment and to pass a competency evaluation program.@ The law specifies, however, only the length and not the content of training. There is rising concern about the quality of care being administered (Stone and Yamada 1998).

Stone and Yamada (1998) argue that Anursing home residents and community-dwelling care recipients can never be more empowered than the staff who care for them.@ The most common front line workers are nurse aides, a position with low pay, few benefits and little autonomy. Challenging a supervisor can mean losing the job. Many have no health care benefits, sick leave or annual vacation. They are in no position to defend the interests of those that are under their charge.

One most frequently reads newspaper accounts of quite the opposite: Home health care workers exploiting nearly totally dependent old women. A typical case was that of a 94-year-old woman whose late husband had been an executive of General Electric. Home health care workers conspired to further isolate her from friends and family, forge her signature on checks and sold off her property (Associated Press 1998). As in this case, the isolated location of services in the home may make supervision of aides more difficult than in a nursing home or hospital setting. The clientele can be quite helpless and at times have considerable liquid financial resources. In 1994 Medicare recipients receiving home health care benefits had an average age of 77. Due to Alzheimer=s disease or fear of retribution, the elderly may not provide evidence needed to prosecute crimes (Mauser 1996; Michel 1998). The economic deprivation of aides may increase their temptation to take advantage of the situation.

Such accounts appear more newsworthy than incidents, probably far more common, of highly altruistic aides who come to treat their clients as though they were valued members of their own family or at least with a high level of dedication (Babalis 1998; Karner 1998). Largely unrecognized as well is the fact that home health-care workers frequently may face the verbal and physical abuse by clients. Belligerent behavior is frequently manifested in cases of dementia. Ethnic and racial divisions add another problematic dimension (Stone and Yamada 1998):

Most long-term-care recipients are white, and most workers are people of color, often immigrants, sometimes without legal status. These workers are often targets for exploitation by the client and the client=s family. In addition, because long-term-care administrators and supervisors tend to be white, in institutions where racial tensions exist, the worker may be vulnerable to the employer as well as to the care recipient.

Other difficulties of working in homes include Aill-tempered pets, patients without caregivers, poor lighting, and unsafe access to homes@ plus the hardship of commuting (Babalis 1998).

With all the potential problems, it is certainly notable that Medicare recipients report very high satisfaction with the home health services they receive (Mauser 1996).

UNMET NEEDS AND FRAUD COMMITTED BY FAMILIES

Medicare=s home care health benefit has certainly been welcome to the growing number of disabled elderly and the family members struggling to serve their needs. But many have felt that despite enormous need, restrictions on Medicare benefit preclude their getting any help. The result, Phillip Longman (1997: 19) argues, has been a Apervasive pattern of small-scale cheating by millions of ordinary Americans and their health care providers.@ As revealed by federal government audits, the homecare for which agencies were improperly reimbursed was overwhelmingly for services rendered to persons not entitled to receive them. The situation is fostered, Longman (Ibid.) contends, from a combination of regulations that are Acomplex, poorly defined, and difficult to enforce@ and physicians who feel pressured to cooperate in deception:

Very few people facing chronic, long-term conditions wouldn=t benefit by having a skilled nurse attend them from time to time. In some cases, the patient may only need a maid or a cook, but since Medicare won=t pay for that but will pay for medical care, doctors might prescribe visits from a nurse. The doctor thereby enables the patient to receive fully subsidized care at home rather than in a nursing home.

Getting the benefit may still leave a family with heavy bills. Medicare will pay for home health aide=s assistance with bathing, dressing and eating, as long as you have that physician mandated licensed nurse coming to the home for such things as infusion therapy, injections, wound care, and physical assessments. Payment is available for up to 35 hours a week. There is additional funding for physical, speech or occupational therapy, although the usual total coverage appears to be about 20 to 25 hours a week. If more care is needed or the person suffers from Alzheimer=s disease, Ayou=re on your own, and at hourly costs that run $20 to $60 for a registered nurse or $7 or $15 for a home health aide with limited skills.@ Equipment is likely to be covered but not prescription drugs (Alger 1997).

Having the right medical condition may not be enough. Longman fails to mention that a great many applicants who do qualify for Medicare home care benefits are turned down for them. It is from court records that we know of their plight. AThe majority of the elderly who contest Medicare=s denial of coverage for home health care eventually receive coverage, but only after paying thousands of dollars out of pocket for the year or more it takes to complete the appeal process@ (The CQ Researcher 1998: 157; see also Bogart et al. 1997). Clearly at a disadvantage are elderly persons and/or family members who are not in a economic position to have recourse to lawyer or a cooperative private physician.

The latest legislation adds a new problem. Individuals who get approved for Medicare coverage may find it increasingly difficult or sometimes impossible to find an agency that will provide those benefits. Those in need of the most services will be in the worst situation. Constrained by new limits on reimbursements per beneficiary, home health agencies are being selective about the individuals they take on or permit to remain among their clientele. These have been people heavily served in the past: AThe highest users of home health care --the 10% with 200 or more visits during the year -- accounted for 43% of Medicare=s home health costs in 1994 and 60% of the growth in home health care spending over the 1991-94.@ Compared to all those receiving home care, these individuals were older, in worse health and had long-term health needs (AThe Balanced Budget@ 1998: 11).

In some cases the new regulations may be putting such severe financial strains on agencies that they are forced out of business. A government assessment of the situation as of this past summer, however, concluded that Aneither agency closures nor the interim payment system, with less than a year=s implementation experience, has significantly affected the capacity of the home health industry to provide services or beneficiary access to care@ (US GAO 1998: 2-3). Interviews with hospital discharge planners and representatives from organizations for the aged revealed that there were problems finding home health services for Apatients with intensive skilled nursing needs and patients needing a significant number of visits over a longer period of time.@ But the difficulties were attributed Ato coverage restrictions and shortages of nurses and other skilled professionals proficient in delivering high-technology services--problems very likely unrelated to the interim payment system=s implementation@ (Ibid.: 13). In other words, the difficulty in providing service for these patients appeared to be a long-standing problem, not one emerging simply from new disincentives.

There can be no doubt about the effectiveness of the measures to cut Medicare expenditures either by combating fraud or through the newly legislated reimbursement caps. Home health care spending had risen more than 25 percent each year from 1990 to 1995; between 1996 and 1997 it was up 5.4 percent, and it has just been reported that 1998 spending was lower than in 1997 (Vanchieri 1998; Pear 1999a). The savings seem most likely to come in large measure from Aavoiding higher-cost patients, chronically ill patients and those who need the most care.@ In some cases economic pressure may be leading to agencies reducing or eliminating service to their existing clientele.

The same situation arises in cases where profit-making managed care companies are used in an effort to contain rising medical care costs. According to Arnold Relman, the former editor-in-chief of the New England Journal of Medicine, the HMOs have had to confront the Acold reality@ that Asaving money for employers and making money comes at the expense of public access to doctors, hospitals and services@ (quoted in Abelson 1999). The sharp limits on Medicare payments scheduled for 1999 have contributed to HMOs cutting back on their business. About 400,000 Medicare patients have been forced to look elsewhere for coverage. The fundamental flaw is providing more rewards to companies that contain or reduce costs as opposed to treating illness (Abelson 1999):

Critics of the current system say it has never offered an economic incentive to care for sick people. Because the insurers do not spread the risk of caring for the sick over the entire population, and are not paid more when they provide more care, the companies can only thrive by covering those who are healthiest.

One reason for the original Medicare legislation is that private insurers clearly did not find it economically advantageous to cover most of the elderly. In 1965 half were without any health insurance (Ibid.). Families today seeking to purchase home health-care insurance find this very problem.

CONCLUSION

Home care has become Aamong the fastest growing sectors of the healthcare industry.@ The perceived potential for cost savings has been a major contributing factor. The National Association for Home Care has estimated that on average in 1996 a day in a hospital cost $1,965 and a day in a skilled nursing facility ran $414. A home care visit, by comparison, cost only $86. It seems ironic that it is not cost savings which are currently being hailed but rather sharply rising costs. The problem since 1990 has been seen as stemming from an excessive utilization of services and, not surprisingly, has corresponded with the shift to profit-oriented providers.

The major thrust of new legislation is to cut back reimbursements for most home health agencies to levels slightly below the charges reported for 1993-94. These are temporary adjustments that are supposed to eventually be replaced by a prospective payment system -- reimbursement based not on the amount of care that an agency decides to administer but rather on norms appropriate to the medically determined diagnosis of the beneficiaries. Some argue that such norms are very difficult or impossible to establish for a population that has chronic illnesses and often does not recover, and additional reform has been further delayed by need to deal with the computer problems associated with the year 2000.

It will be important to face the problems arising from growing needs of those with long-term chronic illnesses, a population for whom the Medicare home health care program was not initially targeted. There is likely to be ongoing political struggle regarding the population that should qualify for Medicare home health care. There are two very different groups that must be considered. First are the severely ill elderly requiring expensive home health equipment and skilled nursing. This group is threatened by incentives built into the new regulations. The second group are those requiring limited hours of assistance by a aide to safely accomplish the tasks of daily living necessary to remain in the community. This group currently does not qualify for benefits, yet is likely to grow very rapidly. Life expectancy is increasing and rates of disability among the elderly are falling. Now commonplace procedures like cataract removal and joint replacement probably serve to increase the number of elderly who could benefit from relatively limited assistance.

There is concern that substituting the services of hired employees for family caregivers could both vastly increase government spending and possibly undermine a source of family strength. Family members, especially female relatives, have always provided the bulk of home health care, but the burden may be becoming increasingly difficult to bear due the rise in the number of disabled elderly relative to available members of younger generations. African American families, more reticent about placing the elderly in nursing homes than white families, may face an especially heavy burden of care. Compared with their white counterparts, older blacks are more likely to be impoverished and in far worse health. Blacks in caretaker age groups also are poorer and more likely to have children to care for (Rimer 1998).

The need to support family members has not gone unrecognized. President Clinton recently proposed a $1000 tax credit to support those who care for elderly relatives or children with chronic illnesses or disabilities. Such support programs have been regarded far more favorably in Europe than in the United States (Stone and Yamada 1998). ARespite care@ is especially important for those who care for persons suffering from Alzheimer=s disease, as it Aenables family caregivers to have their elderly relatives taken care of for a short period at adult day-care centers@ (The CQ Researcher 1998: 157).

The literature on the abuse of the elderly by members of their own family shows how overly burdensome demands for caregiving can strain family bonds. If the caregiver is hired, this may give the client greater freedom to criticize the quality of care and have a role in deciding about what care they receive. Fear of antagonizing the relative that provides services free of charge may promote submissiveness.

For those with considerable financial resources, there is a growing range of institutional alternatives. Within the past 10 years there have emerged about 65,000 assisted-living facilities with a clientele consisting especially of Apeople with various forms of dementia who require full-time assistance but not necessarily full-time nursing care.@ A limited number have been able to get in with Medicaid from their state government; there is no federal program to cover the $1000 to $4000 per month fee. Anticipating the possibility that an illness may undermine one=s ability Ato negotiate stairs, shovel sidewalks or drive safely@ can make attractive the choice of a continuing-care retirement community. In the same location one can receive the level of care needed, ranging from housing suitable for independent living to a skilled-nursing facility@ (The CQ Researcher 1998: 157-58). These are obviously very expensive facilities that are not covered by any government programs. Private insurance coverage for either home care (including provisions for paying relatives) or institutional care for the disabled is made especially expensive because rates are negotiated for individuals rather than for whole segments of the population. AOnly about 5 percent of elderly persons have private long-term care insurance,@ and these policies usually cover only a part of the actually costs (Amaridio 1998). For most of the US population, there will be increasing difficulty assuring the quality of life keeps pace with the increased life expectancy.

Most people will rely very heavily on benefits that they can receive through for-profit agencies. It remains to be seen how well this system can be adjusted to more fully serve the needs of the elderly. Recent changes to deal with the crisis of Medicare recipients being dropped by HMOs reveals the latest form of the problem. HMOs who have engaged in a practice labeled Acherry picking@ -- selecting for enrollment only Medicare beneficiaries who are healthy. Because only 1 in 20 of those receiving Medicare benefits account for 50 percent of all spending, care in picking can quickly pay off. At the time this paper was being completed, Medicare announced a new program to deal with the practice. Additional payments for beneficiaries will be paid to those with recent hospitalization. HMO executives have admitted that the result could be a new incentive to Ahospitalize patients to gain the extra payments@ (Pear 1999b)!

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