Resident medical care utilization patterns in continuing care retirement communities

Health Care Financing Review, Summer, 1993 by Hirsch S. Ruchlin, Shirley Morris, John N. Morris

INTRODUCTION

CCRCs are an innovative attempt to integrate service delivery and financing. For an entry fee and a monthly maintenance fee, CCRCs provide housing, social services, and medical care. Although the scope of services covered by the monthly fee can vary both across and within facilities, depending on type of accommodation selected and the extensiveness of the health care contract that is offered, and although facilities are usually not restricted with regard to the frequency with which they raise their monthly fees, the unique feature of this financing system is that it places the service provider at some risk for the resident's health care costs.

The concept embodied by CCRCs is far f rom new. It can be traced back to the medieval guilds' attempts in Europe to insure against losses arising from death, injury, and old age, and to mutual aid societies established in the United States by 18th and 19th century immigrants (Winklevoss and Powell, 1984). Despite these roots, CCRCs as they are known today are a relatively new entity. The average CCRC has been in operation for fewer than 30 years, and the CCRC industry has experienced its most dramatic growth during the 1970s and 1980s. Because the industry is still evolving, there is no agreement as to the number of existing CCRCs. A widely used estimate is that there were about 700 such facilities in operation by 1987 (American Association of Homes for the Aging and Ernst and Young, 1989).

Despite the interest that social planners and policymakers have in the CCRC concept, very little empirical research exists on this service delivery mechanism. Much of the literature focuses either on describing the structure and evolution of the industry, or on regulatory issues (American Association of Homes for the Aging, 1987; Cohen, 1980; Netting and Wilson, 1987; Pies, 1984; Sherwood, Ruchlin, and Sherwood, 1989; Stearns et al., 1990; Tell, Wallack, and Cohen, 1987; Tell and Cohen, 1990; U.S. Senate, 1983; Williams, 1986; Winklevoss and Powell, 1984). A few studies have discussed considerations that must be recognized in establishing fees (Cole and Marr, 1984; Hartzler, 1984; Winklevoss and Powell, 1981), factors that explain variation in health center use across CCRCs (Bishop, 1988), and the financial viability of CCRCs (Ruchlin, 1987 and 1988). With the exception of nursing home use (Cohen, 1988; Cohen, Tell, and Bishop, 1988), no study has assessed the utilization of medical care services by CCRC residents in a typical year or in a resident's last year of life vis-a-vis service utilization by elderly living in more traditional community settings.

The major services provided directly by CCRCs in addition to housing and meals are household maintenance, personal care, and skilled and non-skilled nursing home care. CCRCs, as a rule, do not provide medical care services, but their residents have Medicare coverage. One could hypothesize that as a result of the availability of the CCRC service package, the use of Medicare-covered services may be reduced as social services and noncovered long-term care services provided by the CCRC are substituted for Medicare-covered services. Alternately, CCRCs may be able to cause reimbursable skilled medical services covered by Medicare to substitute for less intensive non-Medicare-covered services for which they are at risk, thereby increasing the use of Medicare-covered services. The research presented in this study seeks to clarify the impact of CCRC living on the use of Medicare-covered medical care services.

DATA AND METHODS

Selecting the Study Sample

A representative sample of 20 CCRCs drawn from the four geographic areas with the largest concentration of these facilities - Arizona, Florida, Pennsylvania, and Southern California - was recruited for this study. Recruitment of facilities was guided by a desire to include CCRCs that varied systematically on three key characteristics: age of facility (open prior to 1978 or not(1)), economic status of the residents (more than 30 percent or less than 30 percent of the residents could be classified as low income), and type of health care contract offered to the majority of the tenants (extensive versus limited). (The major difference between extensive and limited-care contracts is that the former include unlimited nursing home care at no extra cost to the resident, whereas the latter limit the amount of such care that can be received without additional payments.) One facility was dropped when it became clear that it did not assume any financial risk for the care of its residents. In 10 of these sites, the CCRC was at risk for all nursing home use, whereas in the other 9 sites, residents were only partially covered for nursing home use. Ten sites had special personal care units which provided special assistance with activity of daily living (ADL) tasks.

A stratified random sample of residents was selected from these 19 facilities for the main service utilization analysis. Stratification reflected the length of time a person resided in the CCRC (less than 1 year, and 1 year or more). Two residents living in the CCRC for 1 year or more were selected for each resident living in the CCRC for less than 1 year. Sample members were accepted into the study during a 15-month period (July 1985 to September 1986); medical service utilization and cost data were gathered for each sample member for a 1-year exposure period commencing with their entry into the study. individuals eligible for inclusion in the last-year-of-life analysis included the first 33 people in each facility who died during the 15-month intake period plus everyone in the stratified random sample who died during the study followup. The study period for the death sample consists of the 12 months prior to death.