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New York's Long-Term Health Care Challenge

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Governor-elect Andrew Cuomo will take office in January as a perfect storm of health care costs is brewing. Even as he braces for, and contends with, the immediate storm, it's crucial to focus on the long-term challenges, which are equally troubling. The good news in the long run is that community-based long-term care planning that integrates mental health shows real potential for controlling and even reducing costs, especially for our aging society.

The immediate storm comes from three directions:

• New York faces a projected budget deficit of $9 billion for next year and of $17 billion the following year. Rising health care costs contribute significantly, especially as they relate to Medicaid, which now costs New York taxpayers $50 billion annually, and to the health care of retirees from State government.

• New York's population is aging, which will add to health care costs. Currently, approximately 2.7 million New Yorkers are over the age of 65. By 2030, this age group will increase by half to 3.9 million.

• Spending on long-term care is a significant proportion (approximately 25%) of New York State's Medicaid budget. Half of that amount is spent on nursing homes and the other half on community-based care. Institutional care is often more expensive. According to a recent report on Medicaid services in New York State by the Citizens Budget Commission, the annual cost of nursing homes in 2008 averaged $50,563 per recipient vs. an average $25,195 for non-institutional care. Other studies have also shown that home-based care is less expensive over time.

In recent years, long-term care reform efforts have sought to contain Medicaid costs and improve the quality of life for people with disabilities by helping people live where they prefer -- most often in the community. Sadly, these planning efforts have neglected to address the vital impact of mental health disorders on overall health care costs and institutional placement.

Nearly half of individuals receiving long-term care have a mental disorder other than dementia, but which frequently co-occurs with dementia and/or physical disabilities. As individuals transition from community-based long-term care to institutional care, the prevalence of mental health problems increases. Over half of nursing home residents have mental disorders, and between 10 and 15% of people who are in nursing homes are there primarily because they have mental illnesses. In fact, mental disorders of older adults and/or their family caregivers are major reasons for premature and often unnecessary institutional placement.

Challenging behaviors that can accompany a mental illness are frequently difficult for providers and family caregivers to manage in the community. Those who provide services in the home are often not adequately trained to deal with mental and behavioral problems. Family members, who typically provide care for individuals with disabilities, often cannot tolerate the demands of caregiving, which places them at high risk of mental and/or physical health problems including "burn out."

With very little caregiver support available and a lack of knowledge about where to go for help, families are often forced to turn to institutional settings. This is unfortunate, because effective support models can reduce stress, depression, and physical illness in family caregivers and delay institutional placement, thus helping caregivers while maintaining the care recipient in the community and reducing the financial cost.

While little is known about how mental illness affects long-term care costs, mental illness has a terrible impact on overall costs of physical health care. Older adults with depression and chronic physical conditions, for instance, have roughly 50% higher health care costs than non-depressed older adults.

Thus, to reduce institutionalization and costs of care, we must address the mental health needs of people at risk of placement or already in institutions and of family caregivers who are often under tremendous stress and at high risk of mental health problems. While investing in mental health won't help close the near-term gaps, it can make a significant difference to health care costs, as well as the quality of life of older New Yorkers and their caregivers, in the years ahead.

Kimberly Williams is Director of the Center for Policy, Advocacy, and Education of the Mental Health Association of New York City.