New elderly care program controls health costs

Edith Barrett
CBS News

(CBS News) Controlling health care costs, one way or another, is one key to reducing the federal deficit.

While Republicans and Democrats continue debating the big picture, there are smaller programs trying to make a difference.

Edith Barrett can barely walk. Osteoporosis has left her wheelchair-bound, unemployed, and, for years, depressed.

Barrett says if it weren't for the all-inclusive care center she joined, "I would be dead."

At 65, Barrett feared she'd have to live in a nursing home. Instead, she joined a Program of All-inclusive Care for the Elderly - or PACE - which allows her to live at home and get care and company at this day care center in the Bronx.

Barrett receives coordinated care from a team of doctors, nurses and social workers, in addition to activities from yoga to music.

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PACE is funded by the states through Medicaid and by the federal government though Medicare, but with billions in cuts looming to both programs, some see PACE as the new healthcare model.

"I think the program is a very strong alternative to nursing home based care," said Joe Healy, who heads New York's Centrelight Health System which has 3,000 patients - the biggest PACE program in the country.

With nursing home costs averaging nearly $90,000 per year for each patient, the number of PACE programs - at $60,000 dollars per year - has doubled in the last five years from 42 in 2007 to 89 so far In 2012.

"The PACE program is a terrific idea - (but) it currently provides benefits for only about 20,000 people and there are close to nine million people who are theoretically eligible for what it does. So it's very small, it's very limited and it has issues," said Howard Gleckman with The Urban Institute.

One of those issues - according to Gleckman - is that many states do not have enough money even for the PACE program.

"New York is a relatively generous state. Other states provide very small benefits," Gleckman said.

For Edith Barrett, PACE is priceless.

"It's the greatest joy for me that I have my own bed," Barrett said.

Barrett is one of a huge wave of 70 million Baby Boomers who will require some kind of personal care over the next 10 to 20 years, putting an even great strain on health care costs.