The theory behind In-Home Supportive Services is pretty simple. If low-income elderly and disabled people can be assisted in their homes with cooking, bathing, shopping, housecleaning or taking medications, they can be kept out of much more expensive nursing homes. Everybody wins. Quality of life improves, and the government saves money.
But as more and more people sign up for IHSS, costs have skyrocketed. Caseloads have doubled in the last decade, going from 208,000 to 430,000. In that same period, state spending on IHSS has tripled, rising to a projected $1.5 billion this fiscal year.
While many welfare experts are dubious, Gov. Arnold Schwarzenegger is convinced that fraud is driving up costs. To deal with fraud, the state now requires recipients and IHSS workers to be fingerprinted and has imposed more burdensome record-keeping on providers, recipients and counties.
County district attorneys have been given more money to investigate and prosecute fraud. Sacramento District Attorney Jan Scully, who received $3 million to set up an IHSS fraud task force, says in four months her office has turned up 19 felony cases that account for $315,000 in alleged IHSS overpayments. Considering Sacramento County has 42,000 caregivers and recipients, 19 instances of fraud isn’t really all that significant.
Critics argue persuasively that claims of fraud are overblown. A 2007 state audit found only 1 percent of IHSS cases involved fraud.
An admittedly harsh but more sensible and effective approach to reducing IHSS costs is to reduce eligibility across the board. A new report from the Legislative Analyst’s Office – “Considering the State Costs and Benefits: In-Home Supportive Services Program” – concludes that it costs the state and counties more to provide in-home services than they save in nursing home costs. Why? Because a certain unknown percentage of IHSS recipients would not go into nursing homes even if benefits were cut off completely.
The LAO’s report tests a basic assumption of the IHSS program – that without help in their homes all or even most IHSS recipients would go into very expensive skilled nursing facilities, in the end costing the state and counties more money.
The average cost of a skilled nursing facility is $55,000 a year. The average cost of in-home services in California is $10,000. Obviously, in-home services are cheaper.
But as the analyst’s report concludes, if in-home services are reduced or eliminated, most recipients will not go into nursing homes. Some won’t meet the criteria that would make them eligible for state-supported nursing home care. And others, who do, will choose voluntarily to stay in their homes. In some cases, family members who are IHSS providers will continue to care for their elderly or disabled relatives in their own homes even if they aren’t paid.
Rather than sending in cops and prosecutors to ferret out low levels of fraud, the state could save more, in these tough economic times, by reserving in-home services to individuals who are the most impaired and most likely to have to go to nursing homes or access other more expensive state support to remain in the community.
A harsh response? Yes, but better than sending in the cops.