Elderly Caught in Middle of Dispute Over Centers’ Funds

White-haired men and women clutched the speaker’s lectern for support as they pleaded, often with eyes welling with tears, for the Orange County Board of Supervisors to restore the $36,505 that its staff had recommended be cut from the budget of the Buena Park Senior Day Care Center.

At this public hearing last May in the supervisors’ chambers in Santa Ana, these seniors argued that closing the Buena Park center might force them or their loved ones into nursing homes.

Swayed by these emotional pleas and protests by Buena Park politicians, the supervisors voted to restore all but $6,505 of the $36,505 that the Buena Park center sought.

As a consequence of this change of heart, the Garden Grove Adult Day Care Center will be unable to undertake a much-needed expansion. Nor will the new center planned for Westminster come into existence.

The controversy over the Buena Park center is a harbinger of even more bitter disputes over money for adult day-care centers, said Marilyn Ditty, director of the South Orange County Adult Day Health Care Center and former president of the California Assn. for Adult Day Services. “The county wants to serve all the communities that need centers. The question is: Who’s going to pay for them?”

To help resolve the growing financial woes faced by the county’s 14 adult day-care centers, county supervisors last September adopted a controversial plan that seeks to establish the future direction of these centers. The supervisors unanimously agreed to authorize its Adult Day Health Care Planning Council to study the feasibility of establishing up to three health centers, either by setting up entirely new facilities or converting existing social centers.

The supervisors also authorized spending up to $75,000 to help set up such health centers on a trial basis if the study determines that they are financially and operationally feasible.

Rationale for Switch

The supervisors’ rationale for deciding whether the county should switch its emphasis from social to health centers stems from the fact that these two types of centers are funded in different ways, said Russ Barrios, executive assistant for human services to Ralph B. Clark, chairman of the Board of Supervisors.

Through its Medi-Cal program for low-income people, the state provides reimbursement for qualified seniors to attend health centers. No such reimbursement system exists for social centers, Barrios said.

The supervisors’ effort to determine whether adult day-care centers can be largely funded by the state’s Medi-Cal program was prompted because the recently passed Gramm-Rudman-Hollings deficit reduction act calls for severe cutbacks in federal funds, which traditionally have provided much of the money to operate these centers.

“The Board of Supervisors this year came up with $30,000 (in federal funds) to keep the Buena Park Adult Day Care Center going,” said Peggy Weatherspoon, director of the Area Agency on Aging, which administers the county government’s adult day-care center program. “Next year, that $30,000 won’t be there.”

Earlier this year, county government allocated more than $210,000 in federal funds under the Older Americans Act to four of the county’s nine nonprofit social centers then in operation, according to Jim Dukette, special programs manager for the county’s senior services office.

Moreover, most centers receive federal revenue-sharing grants from county government or the cities they serve. This program is scheduled to end next year, Weatherspoon said.

‘Shortfall of Federal Funds’

“In (the fiscal year beginning next July 1) there’s going to be a shortfall of federal funds available for adult day-care centers,” she said. “As things now stand, we face a crisis starting next July 1.

“I don’t see how we can avoid eliminating funding some of these centers unless we come up with alternatives to the federal funds that won’t be there next year. These centers are operating on a shoestring now, and any funding cutback would mean the end of many of them.”

Opponents of the supervisors’ plan don’t dispute Weatherspoon on this point, but they argue that the plan won’t provide sufficient money to keep the centers operating.

Although money remains the key, the budget crisis is heightened by the fact that oversight, funding and operation of adult day-care centers fall into the disparate provinces of state, county and volunteer agencies with obtuse bureaucratic names and often overlapping functions.

While the supervisors sit atop this system of adult day-care centers, it has delegated daily operational functions to the Area Agency on Aging. The 14-year-old agency, headed by Weatherspoon, is responsible for planning and assessment of elderly needs, along with channeling state and federal funds to centers.

The agency in turn receives input from a Senior Citizens Advisory Council (composed of 20 voting and 20 alternate members), which issues recommendations on social centers and other issues of general interest to the county’s 229,000 residents age 60 or older, Weatherspoon said.

Recommendations on health centers is provided by the Adult Day Health Care/Long-Term Care Planning Council, a 23-member body composed mostly of volunteers, with a few members from county agencies that deal with senior issues. County supervisors appoint members to both groups.

Most Run by Nonprofit Groups

While these government bodies set policies and allocate funds, they don’t operate any of the county’s 14 adult day-care centers. Most are run by nonprofit groups whose daily operations are coordinated by administrators, who have formed a lobbying organization, the Orange County Adult Day Services Network.

The supervisors’ proposal to study the feasibility of increasing the number of health centers was drafted by the Area Agency on Aging, with input from the Senior Citizens Advisory Council and, to a greater extent, from the the Adult Day Health Care Planning Council. Ditty of the South Orange County Adult Day Health Care Center is one of the few administrators to serve on the latter group, or any other county government-affiliated body.

Given this lack of coordination between county government and center operators--in addition to the adversary role the county plays because of its control over funding, it’s not surprising that the supervisors’ plan has been met with protests by most center operators, said Beverly Calton-Hoffman, chairwoman of the Adult Day Health Care Council.

Only Ditty said she generally agrees with the supervisors’ position. Declining to offer an opinion were Julie Schon, director of the Laguna-Irvine Adult Day Care Center, and Sue Kaiser, director of the Southwest Fullerton Community Center.

The administrators of the county’s other 11 day-care centers said they opposed the proposed increase in health centers because they believe that it will be done at the expense of social centers.

“The medical model, where you have to staff your facility with various health professionals, is very expensive to operate,” said Shirleen Jones, administrator of the VIP (Very Independent Persons) Adult Day Health Care Center in Santa Ana.

Although Jones heads the county’s second oldest health center, she nonetheless opposes increasing the number of such centers along the lines proposed by the supervisors. She questions whether turning to a system of Medi-Cal reimbursed health centers is the answer to the financial dilemma faced by adult day-care centers.

“A social center costs less to operate, and therefore, you can charge lower fees to the elderly,” explained Jones, a public health nurse who has had extensive experience working in both social and health centers.

Echoing this view, Don Sands of the South Coast Institute for Applied Gerontology, which operates two social centers, said: “Like most nonprofit social centers, we’re able to operate our facilities in Costa Mesa and Fountain Valley by charging seniors $23 to $25 a day.

“To operate a health center, we’d have to charge participants about $38 a day. And what would seniors be getting by paying this extra $12 to $15 a day? They wouldn’t be paying for things clients in social centers actually need; they’re just not sick enough to benefit from the extra medical care they’d get at a health center.”

Last July, the Board of Supervisors received a letter from the Adult Day Services Network summarizing the reasons for the opposition.

The letter, drafted by Sands, asked why it was necessary for the supervisors to set aside $75,000 in start-up funds for health centers, since state funds already existed for this purpose. The county’s existing social centers, which are not eligible for such state funds, according to Sands, desperately needed this $75,000 to pay for services that they were already offering to seniors.

Interest Questioned

Another issue raised in the letter was whether there actually is any interest in Orange County in establishing more adult day-care health centers using government funds. The letter noted that last year, no organization from the county had applied for the $1.5 million in state funds available for this purpose; such a grant could have been easily obtained since all proposals from the rest of the state were funded.

Ditty said there were no applications because the state issued information erroneously indicating that centers “had to have signed building leases in order to apply for start-up funds.

“There were organizations in Orange County that wanted to apply for these funds, but they didn’t want to sign a lease obligating them to pay $30,000 in rent for a year not knowing if the state was going to approve their grant application,” Ditty said.

Sands said the complex application process for state funds kept grant requests from being made by St. Joseph Hospital in Orange and St. Jude Hospital and Rehabilitation Center in Fullerton. St. Jude opened its health center last month and St. Joseph is scheduled to open its health center next month.

Spokesmen for these hospitals acknowledged in interviews that they decided to establish their health centers without relying on state money because the strings attached to those funds were time-consuming and prohibitively expensive.

Mark Headland, director of human development at St. Joseph who is overseeing the opening of the hospital’s health center in Laguna Hills, said the facility had opted to open a center without using state start-up funds because the medical staff required to qualify for such funds far exceeds the size and health disciplines St. Joseph felt were necessary.

“You could almost operate a nursing home with the medical and health staff the state requires,” Headland said. “Yet, the state won’t reimburse you for anywhere near the cost of these large expenditures on professional staff and medical equipment.

‘Low Level of Reimbursement’

“The (Medi-Cal) reimbursement is so inadequate that the study I did on whether it was possible for St. Joseph to open its own center shows that no health center breaks even during its first three years.

“Mainly because of the low level of Medi-Cal reimbursement, we expect during our first year of operation to have revenues of only $105,000, while our $250,000 in expenses will be more than double what we take in. St. Joseph will have to make up the shortfall from other sources.

“And when we start breaking even in three years, it won’t be because of Medi-Cal reimbursements,” Headland said. “It will be because we’ve beaten the bushes for privately insured patients, gotten grants from businesses and foundations and obtained donations from individuals through very active fund raising.”

However, Ditty, who has operated a San Clemente health center for the past five years, maintains that the level of Medi-Cal reimbursement provides more financial support than Headland contends.

“I know it’s more expensive to operate a health center than a social center because while South Orange County today is based on the medical model, it started out on the social model,” she said. “But it’s been our experience in San Clemente that the way the system works, money can be found to pay for this more costly operation.”

Ditty noted that since Medi-Cal provides reimbursement of roughly $38 a day per participant, this is the daily fee charged by South Orange County. For those unable to come up with this sum, they are charged on a sliding scale based on their ability to pay.

‘Write Off $13 a Day’

“Some can only pay $25 a day, which is about what it costs to pay for the services received by someone enrolled in a social center. So, this means that we have to write off $13 a day. You make up this $13 shortfall with tighter budgets and doing a lot of fund raising.

“During the past year, we raised $15,000 to make up the difference between our revenues and our costs. And nobody was turned away because of inability to pay.”

As to the supervisors’ suggestion that some existing social centers could be converted to health centers, Sands and other operators argue that this is impractical because existing social centers have neither the physical facilities nor funds for such costly transformations.

Even if such conversions were possible, operators insist that such conversions would be unnecessary because participants in social centers don’t need the costly and extensive medical care provided by health centers. They also argue that such participants would go without any care at all because their health has not deteriorated enough, nor are they poor enough, to qualify for Medi-Cal coverage.

While the 1980 census shows that 13,000 of the county’s elderly residents are below the poverty level, with annual incomes under $3,479 for individuals and $4,389 for couples, center operators note that this is only 6% of the county’s senior population.

Affordable to Only 10%

“If we were to raise our daily fees to the $38 a day it’d cost to operate a health center, no more than 10% of our participants could afford to pay the full load out of their own pockets,” Sands said.

“And most of the others couldn’t qualify for Medi-Cal,” he added, echoing the views of other operators who say that only about a quarter to a third of their participants are eligible for Medi-Cal.

A senior may qualify for Medi-Cal even though he has a home, up to $2,000 in personal and household goods, a car valued at $4,500 or less, a burial plot, and a separate bank account for other funeral expenses or a life insurance policy having a face value that together are worth less than $1,500, according to Emma Gunterman, head of the Senior Program of the California Rural Legal Assistance Foundation and a noted expert in this field.

However, a senior cannot have more than $1,700 in cash and $533 in monthly income, Gunterman said in a telephone interview from her Sacramento office. This income limitation is the greatest barrier to qualifying for Medi-Cal.

“People with middle-class values really get messed up under this system,” she said. “Some older people will have $3,000 in the bank for a rainy day. And they’ll be getting $450 a month from their pension or Social Security. As long as they’re in good health, they’re doing fine because they can live on $400 a month.”

But should their health deteriorate, elderly people like this just above the income eligibility line for Medi-Cal face a dilemma, Gunterman said. “Some are too proud to apply for Medi-Cal; others emotionally aren’t able to touch that $3,000 they’ve got in the bank because doing so undermines their sense of security.”

To be sure, Medi-Cal has a so-called “share of costs program,” which Ditty and other proponents of increasing the number of health centers contend would lessen the financial strain on many of these borderline cases. A person with a monthly income of $600, for example, would pay the $67 difference between this sum and the $533 Medi-Cal monthly income cap out of pocket as his “share” of medical costs. Additional medical costs would be picked up by Medi-Cal.

‘Painful Reduction’

However, Gunterman notes that even under this program, a senior would still have to have less than $1,700 in cash. “If you’ve got less than $1,700 in the bank, obviously you depend more on the $600 or $700 a month you’re getting from Social Security and your pension. Seniors in this income category suffer a painful reduction in their standard of living by participating in this Medi-Cal share of costs program.”

Said Sands: “Most seniors in Orange County are middle class, and the Board of Supervisors--or its staff--seems to have forgotten that for these people to qualify for Medi-Cal, they’ll have to give up the financial security they’ve spent a lifetime working to achieve. They’re telling the elderly to spend themselves into poverty so they can qualify for Medi-Cal.”

The Area Agency on Aging drew up the health center expansion proposal. Although the reason for moving to an expanded health center system is based on the premise that Medi-Cal would largely pay for these centers, Weatherspoon could not say how many of the county’s elderly to be enrolled in these facilities would qualify for Medi-Cal. She said this question would be answered by the study being done by the Board of Supervisors’ Adult Day Health Care Planning Council.

Weatherspoon insisted that it would be relatively easy for these seniors to meet the Medi-Cal medical disability requirement. “There’s not a whole lot of difference between the health of people in (medical centers) and those in social centers.”

Echoing this view, California Department of Aging spokesman Gerald Wenker, in a telephone interview from his Sacramento office, said: “You don’t have to be at death’s door to qualify for Medi-Cal.”

But Ditty disagrees.

“To qualify for Medi-Cal coverage on health-related grounds, you’ve got to have some chronic illness that’s amenable to physical therapy, rehabilitation or the regular administration of medication. Many people don’t qualify because all they need is socialization.”

Attempts have been made to resolve the dispute between the Board of Supervisors and center operators. Barrios, the aide to Supervisor Clark, recalled a phone conversation he had last summer with Sands in which he attempted to smooth over differences.

Barrios remembers emphasizing that the supervisors’ action had been misinterpreted in that they hadn’t set in motion a process in which funds for social centers eventually would be cut off to pay for an increased number of health centers.

“If the board had said that it was going to de-fund the social day-care centers, then that would be a valid fear,” Barrios acknowledged. “But the county (government) has not said it is going to convert all the adult day-care centers to the medical model. It’s Sands who’s saying that, and I’m baffled by the misinformation that’s being spread.”

Added Barrios: “There is evidence--which this study is seeking to prove or disprove--that the county (using Medi-Cal reimbursements) can operate three medical adult day-care health centers for what it costs to operate one social center.

“Despite this possible financial saving, the board is also aware that the medical model is not appropriate for all--that social centers will continue to play a role in the care of the frail elderly. There is a need for both types of services to continue to grow; that’s all the board is attempting to do.”