Testimony to
The Commission on Affordable Housing and Health Facility
Needs for Seniors in the 21st Century
September 24, 2001
by
Peter A. Kaprielyan
Vice President, Planning and Marketing
Friends Life Care at Home
1777 Sentry Parkway West, 210 Dublin Hall
Blue Bell, Pennsylvania 19422
telephone 215-628-8964 - fax 215-628-9089
Friends Lifecare at Home

Introduction
Friends Life Care at Home (Friends) is pleased to provide this testimony to The Commission on Affordable Housing and Health Facility Needs for Seniors in the 21st Century. As the first continuing care program in the nation, Friends continues to look at methods and opportunities for program improvement and growth. We appreciate this occasion to provide information and input for consideration by The Commission, and welcome your questions and comments regarding our program.

Mission Statement
As the nation's first and largest continuing care at home provider, it is the mission of Friends Life Care at Home to operate and to promote an exceptional, affordable life care program for older people who wish to remain in their own homes. The ideals, values and principles of the Religious Society of Friends (Quakers), upon which Friends Life Care at Home was founded and operates, lead us to seek to serve an increasingly diverse population.

Vision Statement
The vision of Friends Life Care at Home is to have its name become synonymous with quality life care for older individuals who wish to remain in their own homes. We desire to be widely known and accepted by the general population because of our reputation for an unfailing commitment to quality and a variety of payment plans and programs which meet the needs of a broad segment of the population.

Program Overview
Friends Life Care at Home is a nonprofit corporation formed in 1985. The Friends program is an outgrowth of the traditional continuing care retirement communities, in which members pay a one-time entrance fee and an ongoing monthly fee. Individuals must be independent and in good health to qualify for enrollment. Instead of moving into a residential facility upon enrollment in the program, members of Friends Life Care at Home continue to live in their homes for as long as they are able and receive services in their homes. As there are no residential facilities with the Friends program, entrance fees and monthly fees are considerably lower than a retirement community, and are more affordable to a broader segment of the population. The minimum age for membership is 50.

Friends Life Care at Home offers an enrollment choice of six plans that provide different levels of copayments for coverage of care. The array of services includes: proactive wellness and care coordination, home health care, homemaker services, emergency response system, home inspection, nutritional support and adult day care. Depending on the plan selected, the Friends program also provides for care in an assisted living facility and skilled nursing facility.

In addition, the program provides a referral service for other services that are provided at the members' expense, as well as ongoing communication with members through quarterly meetings, continuous quality improvement surveys, a member advisory committee, and planned social events.

The program has close to 1500 members in the southeastern Pennsylvania region, New Castle County, Delaware and central New Jersey. Approximately 17% of the membership is currently receiving some level of care services, with 40 members residing in assisted living or skilled nursing facilities. It is important to note that facility utilization by members is far below actuarial projections. The average age at the time of enrollment is 74.

Recommendation #1 - Consumer Education
It has been the experience of Friends Life Care at Home that there continues to be a great deal of confusion by the general public about the expectation of the Medicare program to provide for long term care needs. With the limits of Medicare on long term care coverage, the reliance on personal financing of custodial or personal care services becomes even greater. Consumers must continue to be educated on the importance of planning for senior years, especially with increasing life span, and the risk of outliving assets. Without preparing and investing in a plan for the future, many consumers will have no choice but to resort to spending down assets to be eligible for Medicaid, and thus further reliance on government assistance for long term care.

Recommendation #2 - Standardization of Regulatory Oversight
Friends Life Care at Home recognizes the importance of regulatory oversight. It is vital that the public, especially the potentially vulnerable senior population, is protected against the harmful and fraudulent activities of individuals and organizations. One of the greatest challenges facing the affordability, and the potential for replication and expansion of the Friends program, however, is the current regulatory environment.

Recognizing that the Friends Life Care at Home program is a unique and relatively new concept and organization, there is, justifiably, a lack of continuity among state regulations regarding this model of care. In general, as a non-traditional program, there is a lack of understanding of where continuing care at home should fit in the regulatory authority. Listed below are the highlights of the regulatory experience of Friends:

Pennsylvania - Friends Life Care at Home received a Certificate of Authority in 1987 under the Continuing Care Provider Registration and Disclosure Act of the Pennsylvania Department of Insurance.

Delaware - Friends determined that regulations regarding continuing care programs in the State of Delaware did not pertain to the Friends program. A Certificate of Operations was filed with the State of Delaware in 1998 and operations began. Subsequent discussions with the State of Delaware Department of Insurance confirmed the absence of regulations for the program offered by Friends.

Maryland - In 1995, Friends began working with the Maryland Department of Aging to develop Continuing Care at Home Legislation that would permit the Department to enact regulations and oversee CCAH programs. Friends staff met with Maryland legislators to educate them regarding the Bill and testified before the Senate Finance Committee. Act 70-B, Continuing Care at Home Providers, was signed into law in April 1996.

Following legislative approval, Friends continued to work with the Department of Aging to develop regulations. In April 2000, regulations were approved. In July 2000, Friends initiated the application process with the Department. Following submission of the application, Friends has continued to work with the Department and hopes for the necessary regulatory approvals in the near future.

New Jersey - Friends Life Care at Home received a Certificate of Authority from the State of New Jersey Department of Community Affairs in 1998. In 2000, the Department of Community Affairs revised its interpretation of applicable regulations and Friends was forced to discontinue marketing efforts. Friends was granted the authority to fulfill its contractual obligations to its New Jersey members.

Impact on Affordability
An integral part in the mission of Friends Life Care at Home is the growth of the program into other geographical regions. To this extent, Friends explored the contiguous states of Pennsylvania to evaluate the prospect and environment for growth. The regulatory environment of each state is the first step that Friends Life Care at Home must evaluate prior to moving forward to replication and expansion in other regions. It is the recommendation of Friends that there is the proper balance between consumer advocacy and protection, and allowing for the development of a cost structure that is necessary for an organization to offer more affordable options. The potentially high cost of legal and related expenses, and lengthy lead time as a result of the regulatory approval process adds additional overhead expenses, making the program out of reach for many organizations.

Recommendation #3 - Public and Private Partnership
Friends Life Care at Home recommends the consideration of establishing test programs that provide for a partnership between private organizations and state government. Under such an arrangement, in which the states pay for entrance fees, the partnership could provide for larger and more diverse socioeconomic membership base and could facilitate the study on a broader scale, with implications for a national program.

Addendum

• Sample Fees
• 2001 Programs
• History