‘Are Nursing Homes Our Only Option?’

George Raines cracked jokes as physical therapist Brad Ellis led him through a series of exercises designed to strengthen his legs.

Raines, who is 79, pretended to be in pain, but his grin belied his tone of mock suffering. The men were in the therapy room at Ascension Living Alexian PACE in Chattanooga, Tennessee, where older clients spend the day getting medical care and other services.

“We have some spicy patients,” said Libba Llewellyn, an occupational therapist at the center. Raines had worn a hat with fake pigtail braids during the center’s Crazy Hat Day the week before, prompting everyone to say he looked like country singer Willie Nelson.

PACE (Program of All-Inclusive Care for the Elderly) centers provide government-funded medical care and social services to people older than 55 whose complex medical needs qualify them for nursing home care, but who can live at home with the right sort of help. Most PACE clients are enrolled in both Medicaid and Medicare, though a small percentage pay for the program through private insurance.

Nationally, PACE centers are owned by a variety of health care organizations, including nonprofits, for-profit companies, large health care systems and religious organizations. Once a state Medicaid program opts — either through legislation or a policy change — to cover PACE care, providers receive fixed monthly payments from Medicare and Medicaid (and in rare cases from private payers) for each enrolled client.

PACE has long flown under the national radar as an elder care option. But it’s recently attracted interest in even more states because it can keep people at home and may cost less than nursing home care.

More large companies and health care systems, armed with capital and attracted by growing consumer and state interest, are opening PACE centers or buying existing ones from smaller nonprofits. But the explosive growth has come with challenges: Three years ago, California and Colorado investigated and later sanctioned one of the country’s largest for-profit PACE providers after finding it failed to provide services that should have been covered. And some studies have shown mixed results on the centers’ effectiveness.

Many families are desperate for alternatives to nursing homes. By 2030, 1 in 5 Americans will be over age 65, and most older adults say they would prefer to remain living in their homes for as long as possible.

“One of the things about COVID is that it really focused attention on long-term care, because of the experience that nursing homes had,” said Robert Greenwood, senior vice president for communications and member engagement at the National PACE Association, a professional network of PACE providers.  

“I think a lot of people were asking, ‘Are nursing homes our only option?’ They started looking around and discovered the PACE program made a lot of sense.”

How it Works

Each day, the Alexian PACE center hosts about half of its 300 clients. Beginning at 6 a.m., the center’s bright purple buses pick up people like Raines from their homes in the surrounding county and bring them to the center for the day.

As Raines received his physical therapy on a rainy Tuesday in March, dozens of other older adults sat at small tables in the dining room, eating lunch and working on jigsaw puzzles. Down another hall, clients were visiting medical providers, getting fitted for orthotics or picking up prescriptions. The center provides dental and vision care, counseling and laboratory services. Social workers help clients obtain needed items such as walkers and at-home wheelchair ramps.

“I love the model,” said Vicki Guertin, the CEO at the Alexian PACE center. “I love that we can put in air conditioners [in clients’ homes] if we need to. We can buy people shoes. There’s just so much we can do that most medical insurances could never do.”

Medicaid and Medicare don’t require states to provide PACE centers. But in those states that have them, about 90% of enrollees qualify for both Medicaid and Medicare, a population that includes some of the most medically complex people in the nation. Medicaid is the federal-state insurance program for people with low incomes, and Medicare is the federal program for those 65 and older. Both programs cover some people with disabilities.

Greenwood said the fixed Medicaid and Medicare payment per client — which varies from state to state — incentivizes PACE providers to focus on preventive medicine and other support services that reduce hospitalization and keep participants as healthy as possible.

In 2022, researchers from the University of Arizona found that the few published studies comparing PACE outcomes with those of other elder care programs showed mixed results. A 2014 study found that PACE enrollees experienced lower rates of hospitalization than similar populations who weren’t in PACE programs, though the study’s authors noted “substantial” variation among different PACE plans.

Jasmine Travers, an assistant professor of nursing at New York University, found in her 2020 study of PACE enrollees that the health care disparities she was used to seeing for Black and Hispanic older adults in nursing homes weren’t as pronounced in minority PACE clients.

“A lot of things really affect health care access disparities, like transportation or copays or meals. Those kinds of things aren’t always accounted for in an external [health care] setting,” Travers told Stateline. “PACE accounts for those.”