The state of New Jersey should establish a long-term-care planning and advisory board to oversee development of healthcare options for its growing elderly population, according to a study commissioned by the New Jersey Association of Health Care Facilities.
The study warned that if the state doesn't get on top of its senior health needs now, it will likely face budgetary and public health problems in the future.
The study was prepared by Muse & Associates, a Washington-based health policy consulting firm, on behalf of the association, which represents more than 250 long-term-care facilities in the state.
Researchers analyzed national Medi-care and Medicaid databases and interviewed 28 long-term-care regulators, administrators and chief financial officers in New Jersey during September and October 1996.
The study said the number of New Jersey residents age 75 and over will increase by 12%, or 60,000 people, and total more than 558,000 by 2001. By that year, the study said up to 61,000 people, or 10,000 to 12,000 more than in 1996, will need a nursing facility level of care.
In 1995, according to the study, 37% of New Jersey's $3.8 billion in Medicaid expenditures went to long-term institutional services, slightly higher than the national average (See chart). By 2001, the number of nursing facility residents on Medicaid will range between 34,400 and 41,400.
The study said a new state planning board is needed to look, in particular, at how the state should care for its aging Medicaid population and how it will face major changes in the traditional nursing home industry.
New Jersey long-term-care facilities, the study said, currently have annual 2.5% growth in their Medicaid occupancy rate. That growth rate could increase the number of nursing facilities with more than 75% Medicaid occupancy rates to 210 in 2001 from 140 in 1996.
The increase has occurred in part because private-pay residents have had access to other options, such as assisted living, that have not been geared to Medicaid recipients in the state, the study said.
It predicted that some nursing facilities will be forced to close in the future as a result of expected reductions in Medicaid spending and in private-pay dollars as more individuals divert their assets to become eligible for government assistance.
A potential explosion in the number of assisted-living facilities also threatens the status quo. Last fall, the study said, 126 assisted-living facilities received certificates of need and another 43 projects were under review. Since that time, another 3,000 beds have been approved, increasing the potential number of assisted-living beds in the state to 22,000.
"These facilities are, and will continue, competing for the nursing facility private-pay dollars and resident census," the report said. "As a result, we expect some nursing facilities will not survive if they end up with 100% Medicaid reimbursement."