Minority Groups and Sicker Patients May Suffer Under Medicaid’s Shift from Nursing Facilities to Home and Community Settings

CHICAGO (July 1, 2019) – New research led by a University of Chicago Harris School of Public Policy scholar provides compelling evidence that Medicaid’s push to shift long-term care from nursing homes and other medical institutions to home and community-based services (HCBS) may be detrimental to patients, particularly those from racial and ethnic minority groups and sicker patients.

The research, published today in the July issue of Health Affairs, underscores that little is known about the outcomes of home and community services, especially for racial and ethnic minority groups, whose members tend to use the services more than whites do, and for people with dementia who may need high-intensity care. 

The research was conducted by Rebecca Gorges, a PhD candidate in the Harris School of Public Policy; Prachi Sanghavi, an assistant professor in the University of Chicago Department of Public Health Sciences; and R.Tamara Konetzka, a professor in the University of Chicago’s Department of Public Health Sciences and the Department of Medicine.

“While Medicaid’s trend to shift long-term care from institutions to the community is intuitively appealing, it is not clear that the health outcomes are better in home settings than in nursing facilities,” said Gorges, the lead author of the study. “Our findings suggest that home and community-based services need to be carefully targeted to avoid adverse outcomes and that the racial and ethnic disparities in access to high-quality institutional long-term care are also present in home and community settings.”

Using national Medicaid claims data on older adults enrolled in both Medicare and Medicaid, the authors found that:

• The challenges of HCBS may have particularly large implications for members of racial/ethnic minority groups, who are disproportionally represented among Medicaid long-term care users. Given these differences in use and quality, policies emphasizing HCBS may exacerbate differences in outcomes by race/ethnicity, especially if the intensity of care in home and community settings is lower than what is needed. 
• Among sicker people— those with dementia—home and community-based services had worse outcomes than nursing facility care.
• Blacks had the highest rates of hospitalizations, including potentially avoidable hospitalizations, followed by non-Hispanic whites and Hispanics, and finally Asians/Pacific Islanders. These patterns held across beneficiaries both with and without dementia. 

Because hospitalization costs among HCBS users are not insignificant, calculations of the cost-effectiveness of HCBS programs should consider Medicare hospital spending, rather than just Medicaid spending. Accounting for the full social costs of these programs must also include costs to caregivers and care recipients for adverse outcomes. 

Additionally, the high rates of nursing home use among elderly, dual-eligible beneficiaries with dementia suggest that institutional care may be required or preferred by some beneficiaries and their families because of high needs for intensive long-term care that might not be met in a home setting. Even as HCBS options are expanded, the need for access to high-quality nursing facilities should be on the agenda as policy makers consider ways to improve the long-term care options available to Medicaid beneficiaries. 

“Policy makers must consider the full cost and benefits of shifting care from nursing facilities to home and community settings and the potential implications for equity before passing legislation,” added Gorges.