Hongdao Meng, MS¹, Brenda Wamsley, PhD², Gerald Eggert, PhD³, and Bruce Friedman, PhD¹. (1) Department of Community and Preventive Medicine, University of Rochester, Box 644, 601 Elmwood Ave., Rochester, NY 14642, 585-273-2548, hongdao_meng@urmc.rochester.edu, (2) Executive Director, Center for Aging & Healthcare in West Virginia, 517 Market Street, Dils Building, Parkersburg, WV 26101, (3) Executive Director, Monroe County Long Term Care Program, Inc, P.O. Box 429, East Rochester, NY 14445

Consumer-Directed Personal Assistance (CDPA) is a promising policy option for Medicare reform. Studies are beginning to assess the cost and outcomes of this approach in Medicaid populations under “Cash and Counseling”. Understanding the market for private personal assistance has important implications for Medicare reform (Sect. 648 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003). However, there is little research on the private demand for CDPA. This study utilized data from the “A Randomized Controlled Trial of Primary and Consumer-Directed Care for People with Chronic Illnesses” (CMS # 95-C-90467/2-01), to estimate a demand equation for private personal assistance among elderly Medicare beneficiaries. The sample was 1,220 elderly Medicare beneficiaries who were not on Medicaid and had no private long-term care insurance. I estimated a reduced-form demand equation to characterize the private demand for CDPA. Intervention group variables and a rural status indicator variable were used to predict annual private expenditures on CDPA while controlling for individual characteristics. Interactions between rural status and intervention group were examined to estimate the effect of CDPA on rural participants as compared to urban participants. Our results indicate that Medicare funded CDPA increased annual private spending on CDPA by 16%, with rural participants spending 20% more and urban participants spending 16% more. However, the differences were not statistically significant. Overall, participants who received the Medicare funded CDPA benefits are more likely to use private funded CDPA. When they do use CDPA, they tend to use more compared to participants in the control group.

Learning Objectives:

• 1. Evaluate the impact of a Medicare funded Consumer-Directed Personal Assistance benefit on private demand.
• 2. Compare the impact of a Medicare funded consumer-directed personal assistance benefit on private demand in rural area versus urban area.
• 3. Describe factors associated with the private demand for personal assistance among elderly Medicare beneficiaries in a rural area.

Keywords: Chronic Illness, Consumer Direction

Presenting author's disclosure statement:
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.