Integrated Payment And Delivery Models Offer Opportunities And Challenges For Residential Care Facilities

Under health care reform, new financing and delivery models are being piloted to integrate health and long-term care services for older adults. Programs using these models generally have not included residential care facilities. Instead, most of them have focused on long-term care recipients in the community or the nursing home. Our analyses indicate that individuals living in residential care facilities have similarly high rates of chronic illness and Medicare utilization when compared with matched individuals in the community and nursing home, and rates of functional dependency that fall between those of their counterparts in the other two settings. These results suggest that the residential care facility population could benefit greatly from models that coordinated health and long-term care services. However, few providers have invested in the infrastructure needed to support integrated delivery models. Challenges to greater care integration include the private-pay basis for residential care facility services, which precludes shared savings from reduced Medicare costs, and residents' preference for living in a home-like, noninstitutional environment.