NEW ORLEANS (AP) - Louisiana may be facing a crisis as its elderly population grows.
The state’s ability to care for older residents is already stretched: there are 40,000 people on the state’s waiting list for home care services funded by Medicaid, according to the state Department of Health and Hospitals.
The number is expected to grow as more baby boomers retire and the nursing home industry and home health care providers work in a climate that presents challenges for expanding their business.
The U.S. Census Bureau estimates that by 2030, one-quarter of Louisiana’s population will be over the age of 60. That’s an increase of more than 25 percent from 2012, the most recent numbers available.
Like elsewhere across the country, home care in Louisiana has expanded while nursing homes are near capacity. But there is only so much room for home care growth: many providers take only clients who can pay through private insurance, out of pocket, or through Medicare, because Medicaid funds are limited.
Nursing homes are facing competition from the home care industry as well as stricter national standards. In February, the Centers for Medicare & Medicaid Services announced stricter ratings standards that dropped scores for many Louisiana nursing homes.
Occupancy rates at nursing homes across the state are high. Seventy-nine percent of the beds are full in Orleans Parish, and the statewide average is at 75 percent, according to the Louisiana Nursing Home Public Report, a DHH database.
Incoming DHH deputy secretary Hugh Eley said that’s not alarmingly close to capacity, but with the estimated growth in demand it’s unclear whether the nursing home industry will be suited to serve the growing population of seniors in the state.
Joe Donchess, Executive Director of the Louisiana Nursing Home Association, which represents more than 250 nursing homes, said average statewide capacity was up four percent from just five years ago.
Bob Laster, administrator at Our Lady of Wisdom Healthcare Center in New Orleans, said state policy can make the expensive business of running a nursing home even more so. A state bed tax of $10 per bed, per resident, goes into general Medicaid funds.
Laster receives Medicaid reimbursement of about $162 per day per resident, but that amount can vary. The statewide average is $165. Rates are based on a complicated cost-based methodology that takes annuities and other factors into account and varies among homes.
Donchess said the growth of home care providers has also forced nursing homes to provide more specialized care and to consolidate through federal bed buy-back programs.
DHH data show the number of people choosing to direct their Medicaid dollars toward more specialized care in their homes rather than living in a nursing home has made significant gains over the past four years.
In 2011, roughly 20,000 individuals received home care through Medicaid and roughly 29,000 chose private nursing homes. In 2014, the number of people in nursing homes remained the same while the number of people choosing home care rose to 25,600.
“Absolutely, there’s a rise in demand,” Eley said.
The current wait list of 40,000 has “grown tremendously over the past few years,” he added.
Nationally, home health care business is booming. Lafayette-based LHC Group, the largest provider of home care in Louisiana, shows gains as well, reporting $21.8 million in profits for 2014 in its recent fourth quarter earnings report. LHC averaged about 7,000 clients a day in Louisiana from 2010 to 2014.
The company has acquired a number of smaller providers over the past year, including Deaconess HomeCare, Elk Valley Health and Life Care Home Health Inc.
But LHC Group CEO Keith Myers said most of the company’s increase in profits was attributable to growth outside Louisiana, and the company doesn’t plan any in-state expansion. The state’s Medicaid program reimburses only about half the cost of care, he said.
“LHC is based here and this is our home.but we’ve given up on Medicaid in the state and we’ve moved on,” said Myers.
Myers said the industries will become more specialized. People who need less daily care will gravitate toward home care, if possible, while the more elderly and infirm would end up in homes.
That means nursing homes would need to be equipped to deal with an influx of high-need clients, but Donchess said they are already providing more rehabilitative and acute care due to more clients choosing assisted living over nursing homes.
LHC Group’s 56 locations in Louisiana rely on insurance companies including Humana, Blue Cross and Blue Shield, Myers said.
Eley said ultimately the market will have to figure it out. He said the DHH had made home care a priority in the past to start addressing the issue of elderly population growth, and he added that he’s pleased to see the near 50-50 mix of nursing homes and home care today. But he said the current Medicaid structure is making it hard.
“There are just so many different funding sources and so many different rules,” Eley said.
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Information from: New Orleans CityBusiness, https://www.neworleanscitybusiness.com
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