“Missionaries, Not Mercenaries”: What Happens When PACE Moves into the For-Profit World?

September 9, 2016 | Aging Services Risk Management


​A year after the government expanded the Program of All-Inclusive Care for the Elderly (PACE) to allow for-profit companies to participate, questions remain about whether the companies are suited for the work, according to an article published August 24, 2016, in Kaiser Health News. The business of elder care is already marred by abuse, say critics, and the potential for new profit opportunities has caused Silicon Valley to take an interest in pushing technology programs that may lower costs but have questionable benefits for older adults. PACE was designed to help older Americans live longer and more happily at home by "providing comprehensive medical care and intensive social support," promising to save Medicare and Medicaid millions of dollars by keeping more older adults out of nursing homes. In exchange for a capped monthly payment from Medicare and Medicaid, PACE facilities arrange and pay for all of a participant's doctor visits, medications, rehabilitation care, and hospitalizations, while attending to his or her daily needs and preventing cognitive decline caused by isolation and lack of socialization. Before the program was opened up to the for-profit world, it grew slowly. As of January 2016, only 40,000 people were enrolled. "For years we were pariahs, and no one wanted anything to do with us," said the executive director of a nonprofit group that advocates for people with disabilities quoted in the piece. "Now that there's money involved, everyone is all interested." The aging of the baby boomers and the fact that PACE programs can produce profit margins as high as 15% (as opposed to an average 2% for nursing homes) are enticing for investors.

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