PACE: Enhancing the Quality of Care for the Elderly

Policymakers need accurate information on models for coordinating care and managing chronic illness for elderly Medicare and Medicaid recipients in order to make well-informed decisions. Mathematica is evaluating the Program of All-Inclusive Care for the Elderly (PACE), a unique, capitated managed care benefit for the frail elderly that seeks to provide better care and cost savings by integrating preventive, acute, and long-term care into one package. For most participants, the program provides needed services through an adult day care center to enable them to live at home, rather than in a nursing home or other institution.

Mathematica's evaluation is estimating the program's impact on beneficiaries in their first through fourth years of enrollment, as well as understanding how the program has changed now that it is a permanent component of the Medicare program. In particular, the evaluation is answering these four questions:

• What are the effects of PACE on quality of care, as measured by mortality, self-reported health, and physical functioning of enrollees after their first full year of enrollment?
• How do Medicare and Medicaid outlays for PACE enrollees compare with outlays that would have been made in the absence of the PACE program?
• How did the Balanced Budget Act, which made PACE a permanent part of the Medicare program, affect PACE operations?
• How well does a community-based physician model operate in two current PACE sites, and at a non-PACE site that serves a similar population?

The analysis includes two parts, based on different data sources. A study of effects on quality of care relies on a telephone and in-person survey of Medicare beneficiaries who entered PACE and home-and-community-based waiver programs in seven states between 2001 and 2003. A study of the effects on Medicare and Medicaid expenditures analyzes a cohort who entered PACE in 1999, using Medicare and Medicaid claims supplemented by data from PACE sites on hospital and nursing home utilization by enrollees. The four-year evaluation is funded by the Centers for Medicare & Medicaid Services.

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