Testimony to
The Commission on Affordable Housing and Health Facility
Needs for Seniors in the 21st Century
November 7, 2001
by
David Fuks
Chief Executive Officer
Cedar Sinai Park
Portland, Oregon

Introduction Good afternoon. My name is David Fuks. I am Chief Executive Officer at Cedar Sinai Park in Portland, Oregon. Our organization provides a full continuum of services to elders including day services, residential care, independent housing, assisted living and skilled nursing. We serve both private pay and Medicaid clients. It is also my privilege to serve as the Legislative Chairperson for the Oregon Alliance of Senior and Health Services (the Alliance), an affiliate of the American Association of Homes and Services for the Aging (AAHSA). In this capacity, I've also recently been appointed as a member of Oregon's Task Force on the Future of Services to Seniors and People with Disabilities.

For more than twenty years the Alliance has been the voice for quality long-term care in the State, representing not-for-profit nursing homes, residential care/assisted living facilities, continuing care retirement communities and senior housing. Together our members serve more than 16,000 older Oregonians with a commitment to meeting their total needs: social, physical, emotional, spiritual, and environmental.

Alliance members represent the continuum of long term care in this state. Our program and policy agenda reflects this broad approach as well. As an organization, we are committed to public policy that supports and enhances the continuum of care for the State's elderly residents. Specifically, we believe:

• Adequate affordable housing options are essential. Seniors must be supported in their desire to maintain an "independent" lifestyle in a home of their choosing. The availability of housing for seniors must be enhanced. This housing must be affordable and diverse in location so it is accessible to all Oregon's seniors in their communities.



• Appropriate services and support in a variety of housing and community-based settings must be made available. As individuals find themselves in need of assistance with daily living, adequate service options and living arrangements must be made available where the senior wishes to receive them. These options include independent housing with services, assisted living, and other community-based care arrangements. In addition, we must continue to support the inevitable need for nursing homes, where other options and service levels are not appropriate.



• Resources for providers must be maintained and enhanced to ensure quality of care and adequate service for residents. These resources include adequate funding for the services provided, the development and retention of a qualified workforce, and the maintenance of existing facilities.

Oregon's History with Long Term Care and Community-Based Options
Twenty years ago, our state leadership adopted a plan founded on a commitment to creating a more diversified community-based care system for older adults. This plan recognized that in many cases nursing homes were being used to provide housing for adults who could successfully live in other supported settings in the community. The funding of that system was accomplished through a Federal Medicaid waiver that allowed the State to keep rates for nursing homes relatively low and to divert funds in order to create a variety of alternatives. The result of this work: the assisted living industry was born in Oregon and has since spread throughout the country.

In addition to pioneering work in the development of assisted living facilities, the State has worked proactively to foster other community-based options for care, specifically residential care, adult foster homes, and in-home services. In the latter category, Oregon Project Independence as garnered special attention and appreciation among the elderly. This publicly funded program provides home care and social support services to approximately 6,000 seniors, allowing them to live independently.

Clearly we have a lot to be proud of in Oregon.

The System Today: Current Challenges
Ours is a state that has a history of pioneering and we take pride in our willingness to innovate. However, we recognize that every silver lining also has a cloud. In the interest of intellectual honesty, I feel it is necessary to share the clouds with you as we struggle to respond to changing needs in our state and a growing senior population.

Maintaining Nursing Homes
We are proud that our State's elders have a diverse range of housing and service offerings available to them. This diversity and emphasis on consumer choice has built in challenges. Providers often find themselves caught between the consumer's right to choose and desire to live independently and their own limitations regarding a resident's increasingly complex medical needs and heavier care requirements--the natural accompaniments to aging. The use of nursing facilities and short-term hospitalization is necessary in order to provide community-based providers with a safety net when care limitations are beyond them.

This safety net, particularly with regard to nursing homes, is in danger. In the last two years, 20 nursing homes in Oregon were forced to close their doors as a result of the inability to survive under current conditions. Our nursing homes are experiencing a confluence of difficulties including residents' rising acuity levels, reimbursement rates that do not keep pace with care needs and requirements, softening demand for services as a result of the highly attractive community-based care alternatives, and increasing costs related to the shortage of available nursing and other care staff. Although it is tempting to look at this simply as the marketplace doing its job, we must recognize that some level of safety net must be available to meet the needs of seniors whose care needs and health conditions no longer allow them to remain in community-based housing and service options. At this time, we are struggling to shore up this safety net as we seek to maintain the gains made through the diversification of our community-based care and housing system.

Regulatory Oversight
Having over 20 years of experience in assisted living has allowed our State regulatory agencies to develop a clear understanding of the assisted living model and their expectations of it. Oregonians have one of the more highly regulated assisted living systems in the Nation. As a result, our facilities are generally of a very high quality. These regulations, however, are of such strength that they present challenges when providers look to innovate and/or respond to the changing needs of the State's elderly. For instance, conversion of existing HUD 202 housing to assisted living is cost prohibitive. This is a result, largely, of State requirements rather than Federal criteria. As a result, our providers rarely, if ever, apply for conversion assistance funding. Elders who live in our HUD 202 projects find themselves in naturally occurring retirement communities where either they independently or with the help of Resident Services Coordinators receive brokered home care services to assist them with activities of daily living. This piece-meal approach, while helpful, is not adequate to meet the full range of resident needs.

Funding the System
One additional challenge must be acknowledged as we examine the effectiveness of the past policy to diversify Oregon's community-based care system. There have been a number of builders who have come up the Oregon Trail. Our desire to create and expand assisted living and residential care resources has resulted in a system, which by many perspectives, is thought of as overbuilt. As demand fluctuates and Medicaid reimbursement is threatened, many providers of assisted living and residential care to low-income elders struggle to survive. The future of a Medicaid-funded assisted living system raises many questions in our state.

Lessons Learned
What lessons can other states learn from the Oregon experience? First, it is possible to use the Medicaid waiver and diversify and create options for elders. It is clearly worthwhile to eliminate income as a barrier to access to community-based services such as residential care and assisted living. We are enormously proud of our state's leadership in this area.

Second, most providers are able to live and work effectively within the highly regulated Oregon environment. However, we believe that states should be urged to look at existing HUD 202 housing stock and other naturally occurring retirement communities as they develop community-based care regulations. Being mindful of the cost of conversion would certainly make this process easier to accomplish.

Third, although much of the provision of services to elders is accomplished through the work of private sector providers, this system is, in reality, a public-private partnership. State and Federal leadership is needed to assure that the system of care is developed in a strategic manner that promotes the development of a balanced continuum of services--the "right" mix of various types of housing and care providers--a work force capable of providing care, and well reasoned regulation that promotes quality, flexibility and consumer confidence.

Looking Forward
Our Governor has by executive order recently appointed the Task Force on the Future of Services for Seniors and People with Disabilities. This group brings together legislative leaders, business professionals, long-term care providers, medical staff, consumer advocates and agency personnel. Our charge is to look twenty years into the future at developing a system of care that will be responsive to the coming needs of elders in our State. I am certain that our history for innovation and our desire to pioneer will once again serve us well. We look forward to sharing with this body and with others the outcomes of that work.

Thank you for your attention and consideration.