Channeling points to a basic question about care: What is the best way to provide long-term services and supports for an aging America?
Despite long-standing concerns about quality, by the early 1970s, nursing homes had become the dominant mode of publicly funded long-term-care service provision in the United States. In-home services were barely used in public sector financing for older people. In response to continued criticisms from homecare advocates and policy analysts about the institutional bias of the long-term-care system, more than twenty-five research and demonstration projects were initiated to test the benefits of expanded HCBS (Kemper, Applebaum, and Harrigan, 1987). Common sense would suggest that lower cost homecare would be more cost effective than more expensive institutional care, but most of these studies did not bear that out. The National Long-Term Care Channeling Demonstration was developed in 1980 to provide conclusive data on the topic (Kemper et al., 1988).
The Long-Term Care Channeling Demonstration Defined
The channeling demonstration was able to test, through a rigorous experimental design, the effectiveness of HCBS for nursing home–eligible participants. Channeling projects were conducted in ten states using the following two forms of an HCBS intervention:
All told, the channeling demonstration randomly assigned to the demonstration or comparison groups more than 6,000 older people with disabilities severe enough to qualify for Medicaid nursing homes. Demonstration participants received case management and either the basic or financial control levels of additional in-home services, and control group members received whatever was already available in their communities. The channeling results were meant to dispel any controversies about whether HCBS could be a cost-effective alternative to nursing homes; however, the results did not end the controversy.
Policy makers had hoped that the demonstration would show that an expanded array of case-managed, in-home services would dramatically reduce costs, reduce nursing home use, and improve quality of life for consumers and their caregivers. Although the demonstration reported small improvements in consumer quality of life, nursing home use was not affected, and overall costs were higher for the treatment group (Kemper et al., 1988). Even so, the United States has dramatically expanded the in-home care available to individuals with severe disability, and this has proven to be a good policy decision. This article examines channeling evaluation results in the context of twenty-five years of additional experience delivering in-home services.
Lessons from Channeling
The channeling demonstration provided important lessons about the delivery of in-home services and how to conduct largescale applied evaluation research. Program findings, both on process and impact, have proven useful to local, state, and federal staff working to refine the long-term services and supports (LTSS) delivery system.
The lessons learned from the demonstration include the following:
An added benefit was that the demonstration created a generation of program administrators, policy makers, and researchers that built on the channeling experience to generate new knowledge and experiences, which helped shape today’s HCBS delivery system.
To supplement the experimental design, an extensive process analysis component of the study provided insights into how the intervention was implemented, and helpful information to better interpret evaluation results. For example, in many communities, some control group members had access to similar asemanaged in-home services, weakening the potential impact of the intervention. Because the process analysis was primarily linked to the impact evaluation, the study was unable to test many critical elements of homecare operations. This was not a failure on the part of the study, as the research was designed to assess the effectiveness of case-managed in-home services. Unfortunately, even though the United States has seen a dramatic increase in HCBS since 1986, subsequent studies have not addressed many of the critical questions about how to best implement such a homecare intervention.
Study analysis produced the following findings:
Channeling Parsed Through the Lens of the Post-1985 Experience
Ironically, despite the extent and expense of the National Long-Term Care Channeling Demonstration, the channeling results had a limited impact on social policy. In fact, the Omnibus Reconciliation Act of 1981, which created the opportunity for states to apply for waivers to Medicaid to create HCBS programs, was passed during the first year of the demonstration and five years before evaluation results were released. Had channeling results been available and used, a much more limited waiver program might have been passed. For example, given the pressures on cost, based on the channeling results, the new waiver program might have limited participant access to those going through a nursing home pre-admission screening process as a way to better target homecare services. Instead, the Medicaid waiver, while requiring individuals to meet the state’s nursing home level of care criteria, was open to a wider target population. Using this broader strategy, in 2010, the United States spent more than $36 billion on home- and community-based waiver programs, demonstrating how these services have become a critical component of the system. In 2010, six states spent more Medicaid funds on home- and community-based services than on institutional care, a ratio that was practically unimaginable during the channeling era (Eiken et al., 2011).
In another interesting twist, although channeling and most of the other demonstrations of that period focused on serving older people outside nursing homes, less than onequarter of waiver funds today are actually allocated to individuals ages 60 and over, with the majority of funds (71 percent) used to serve individuals with developmental disabilities (Eiken et al., 2011). Demonstrations evaluating the expansion of waivers for individuals with developmental disabilities were rare, yet these programs now use the majority of in-home care resources. Today, I believe, along with many other long-term-care analysts, that the expansion of in-home services was good public policy.
Data from an eighteen-year longitudinal study conducted in Ohio (Mehdizadeh et al., 2011) can provide perspective for understanding the channeling conclusions twenty-five years later. Although these results represent the experience of only one state, they offer a detailed review of changes in long-term services and supports. Albeit somewhat more slowly than many states, Ohio has made considerable progress in transforming its LTSS system. In 1993, more than nine out of ten older Ohioans receiving Medicaid LTSS did so in an institutional setting. By 2009, that proportion had dropped to 58 percent. The primary reason for the proportional shift was a dramatic increase in two HCBS waiver programs providing in-home services and assisted living. For example, between 1997 and 2009, the state increased its daily waiver utilization rate for older Ohioans from about 14,000 individuals each day to more than 30,000. The critical policy question is: What impact did the homecare expansionhave on system costs?
The channeling results would suggest that this wide-scale expansion may have enhanced access to in-home care and could have improvedquality of life, but would ultimately increase use and system costs. Policy analysts examining channeling data have consistently used the pejorative term “the woodwork effect” to describe an expected increase in homecare recipients once a new homecare benefit becomes available.
In his 1821 evaluation of almshouses in Massachusetts, Josiah Quincy recommended that indoor relief, rather than outdoor relief, should be the public mode of assistance to meet individual needs (Axinn and Levin, 1975). He reasoned that although care in almshouses is more expensive, most individuals would do everything possible to avoid such care because conditions in almshouses were deplorable, thus making indoor relief less attractive, less likely to be used, and less costly in total expenditures.
Using the same logic as the Quincy evaluation, some policy analysts reason that an individual adverse to nursing home care, because of its negative qualities, would “come out of the woodwork” to use homecare. Although there has been considerable speculation about this potential outcome, little empirical data have been available to address this question.
The Ohio study, which examined total state activity, not the results for a particular timelimited and place-limited experimental group, indicates that the woodwork effect did not occur. Figure 1 illustrates long-term care Medicaid participation rates for older people in Ohio from 1997–2009. In 1997, Ohio’s 60-plus Medicaid nursing home use rate was 24.5/1,000 and its homecare rate was 7.3/1,000, for a total 60-plus use rate of 31.8/1,000 population. With the expansion of Medicaid waiver participants ages 60 and older, by 2009 the homecare use rate had increased to 13.9/1,000, and the nursing home use rate had dropped to 18.6/1,000. Despite the large increase in homecare use, the total utilization rate was 32.5/1,000 for a population ages 60 and older, quite similar to the 31.8/1,000 rate in 1997. These data indicate that Ohio was able to change how it delivers LTSS to its increasing older population without a woodwork effect that increased total Medicaid LTSS utilization. Similar transformations happened across the United States, with nursing home occupancy rates dropping despite an ever increasing older population.
The system of LTSS has changed dramatically in the twenty-five years since the completion of the channeling demonstration, and many of these changes have affected the results in the Ohio study. One important influential change was the Medicare hospital prospective-payment reimbursement
system, which resulted in a large influx of short-term Medicare nursing home admissions. For example, in 1992 Ohio had just over 30,000 Medicare admissions in a system with 92,000 total beds. By 2007, the number of Medicare admissions had increased to 126,500. Even with a drop to 109,300 in 2009, this means that nursing homes had shifted some of their business away from long-term care.
This data—combined with the expanded Medicaid HCBS waiver programs, including the expansion of new self-directed care options, the development and expansion of the private-pay assisted living and homecare industries, the expansion of other long-term living options, and an overall greater recognition of community-based alternatives—demonstrate that the LTSS landscape is significantly different now than in 1986. I contend that these combined changes created a strong enough push to alter the way we provide care. In the end, the channeling intervention, while a rigorous evaluation and demonstration, was just not powerful enough to impact long-term care in the manner that systemic changes would later accomplish.
Do results indicate that the channeling demonstration was a failure and it is time for us to retire evaluation? As an evaluator unready to retire, my answer is no. What the channeling lesson has taught us is that you have to ask the right question—which is not whether homecare is less costly than nursing home care, but rather, what is the best way to provide LTSS for an aging America? Under this framework, research would focus on making sure that the system is as effective and efficient as is possible.
The emphasis on both evidence-based practice and translational research indicates that now is the time for better evaluation research efforts. The channeling experience does reinforce an age-old challenge: the intervention tested must be strong enough to demonstrate an impact. As noted earlier, this is very difficult to do in real-life experiments, as there are many complicating factors. However, the National Cash and Counseling Demonstration, discussed by Doty and colleagues in this issue, provides powerful evaluation results, indicating that if the intervention is right, impacts can be achieved. Although figuring out the optimal intervention is not easy, it is indeed possible.
What channeling taught us twenty-five years ago was that the practice, evaluation, and policy communities could come together to conduct a large-scale program evaluation on a challenging topic. And that no evaluation result is ever the last word.
Robert Applebaum, Ph.D., is a professor and director of the Ohio LTC Research Project at Scripps Gerontology Center, Miami University, Oxford, Ohio.
Editor’s Note: This article is taken from the Spring 2012 issue of ASA’s quarterly journal, Generations, an issue devoted to the topic “30 Years of HCBS: Moving Care Closer to Home.” ASA members receive Generations as a membership benefit; non-members may purchase subscriptions or single copies of issues at our online store. Full digital access to current and back issues of Generations is also available to ASA members and Generations subscribers at MetaPress.
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