Adult Day Care

My husband sometimes tosses around the idea of opening an adult day care business. He works in health law and his practice involves companies that provide long term care. I also have a background that includes long term care policy and programs, so it would be an endeavor to which we would both bring some relevant experience. There is certainly a growing market for adult day care. This article cites a 5-15% annual increase in demand.

But the equally, if not more, important harbinger for the future of that industry is that Medicare is conducting a three-year pilot program in which beneficiaries can use part of their home health benefit to pay for adult day care. That is important. Medicare has not previously paid for adult day care because it is a long term rather than acute care service. So the only coverage for that benefit for people over 65 (the population most likely to need the service) has come either through long term care insurance, which very few people have, or through Medicaid, which only low-income people qualify for.

Once there is a more reliable payor source available to a larger population (the entire Medicare population rather than the subset which has LTC insurance or qualifies for Medicaid), it is reasonable to expect even more demand. Many people forgo long term care services because they can’t pay for them. They rely on a patched-together system of family and friends – or they go without and have inadequate informal supports and end up in the hospital or nursing facility where payment from some source is virtually assured.

So I would expect, if Medicare expands the adult day care option after the pilot concludes, that the adult day care industry will really take off.

In Texas, Medicaid covers adult day care services primarily through the Day Activity and Health Services (DAHS) program. Some people get the services through a managed care organization and others through a comprehensive model called PACE (Program for All-Inclusive Care for the Elderly). In State Fiscal Year 2005, Texas spent about $10 million on DAHS, serving a monthly average of about 18,000 people. Adult day care is more prevalent in the Valley than other parts of the state, which is commonly attributed to cultural attitudes regarding keeping elderly family members at home rather than put them into nursing facilities.

Adult day care can really be a godsend for families trying to avoid nursing facility placement. The person goes to a community-based location (in Texas, the DAHS center offers transportation to and from), but it is more than just a place where they are supervised and get some socialization. Adult day cares provide nursing services, rehab and other services plus lunch and snack. It helps the family keep them at home by making it possible for other adults in the family to work or by providing regular respite to the family member(s) who provides most of the caregiving.

Because it delays or prevents the need for nursing facility placement (and is much, much cheaper than nursing facility care) it saves money. It can also produce savings because the nurse on premises potentially is able to catch health problems earlier and direct the person to appropriate treatment – exacerbated conditions tend to result in higher costs.