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Connecticut College economics professor challenges California Legislative Analyst´s Office report; says plan to cut In-Home Supportive Services program could cost state more

Professor Candace Howes
Professor Candace Howes

NEW LONDON, Conn. - In a study released today by the Institute for Women´s Policy Research (IWPR) and PHI, Connecticut College Professor Candace Howes refutes the findings of a January 2010 report from the California Legislative Analyst´s Office (LAO) on the fiscal impact on the state and counties of the In-Home Supportive Services (IHSS) program for seniors and people with disabilities. Howes, an expert on long-term care and the long-term care workforce, shows the LAO significantly underestimated the increase in costs to the state of California of Governor Arnold Schwarzenegger´s proposals to reduce or eliminate IHSS services for seniors and people with disabilities. IHSS is part of California´s Medicaid long-term care program. "Governor Schwarzenegger´s proposal to terminate the In-Home Supportive Services (IHSS) program for 444,000 current recipients would force many people who want to live in their community to move into nursing facilities which would in the end cost the state more money than it expects to save," Howes said.

Howes´ study concludes that reducing cost-effective IHSS services will cost taxpayers more in the long run. For example, Howes´ study shows that California could save nearly $300 million per year if, instead of eliminating the IHSS program, it transitioned one-third of its nursing facility residents back into the community. "Across the board, California´s In-Home Supportive Services program has met its twin goals of reducing the high costs of long-term care and maintaining independence for seniors and people with disabilities," Howes said. In undertaking her comprehensive analysis of the LAO report, Howes said she wanted to correct the faulty assumptions because California´s experience with IHSS has important implications for other states. "States should use caution when they target Medicaid services to relieve their fiscal distress," Howes said. "The goal of balancing state budgets in a severe recession must be weighed against the longer term goals of providing adequate and cost-effective long-term care services to low-income residents." Most states have been trying to rebalance long-term care services toward the cost effective, home care services that consumers want, said Howes.

California currently ranks among the top five states in providing the best coverage, cost-effectiveness and balance between nursing homes and community care. That position would drop dramatically if the state were to eliminate or reduce its IHSS services, she said. "The Governor´s proposals to eliminate IHSS services for 444,000 home care consumers would immediately put California among the worst of all states when it comes to maintaining the well-being and dignity of frail seniors and people with disabilities," she said.

Howes´ study shows more than 65 percent of current IHSS consumers could wind up in nursing homes if the IHSS program were eliminated - more than twice the LAO estimates - at a significant increased cost to California. In sharp contrast to the LAO´s proposals to reduce IHSS services to seniors and people with disabilities whose independence relies on assistance with tasks such as bathing and getting dressed, Howes found that "The quality and cost-effectiveness of California´s already top-tier home care system could be improved if individuals currently inappropriately confined to nursing homes were instead relocated to home care." In a joint IWPR and PHI announcement about the study, Dorie Seavey, PHI director of policy research, said, "Howes´ California analysis brings to the forefront the ´anti-rebalancing´ consequences of cuts to in-home services for any state. Such cuts have become a trend over the last year, with more than half of the states cutting home care services programs in response to current budget deficits. States should take note of the costly consequences of sliding backwards down the rebalancing scale, and also the prospect of expensive litigation to defend the rights of consumers to live in their homes and other community-based settings." The study is available at the Institute for Women´s Policy Research and at PHI.

About Professor Candace Howes Howes is the Hogate-Ferrin ´43 Professor of Economics at Connecticut College. Recently, she conducted a study of the IHSS home-care workforce that was funded over a two-year period by the Robert Wood Johnson Foundation and Atlantic Philanthropies. Results of that study have appeared in Industrial Relations, The State of California Labor and The Gerontologist. She is currently a member of the Working Group on Care, funded by the Russell Sage Foundation in New York.

May 3, 2010