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Trends in Developmental Disabilities Services

The closure of large state developmental disabilities facilities continues. Nearly 40 percent of state institutions designated for persons with developmental disabilities (DD) closed between 1962 and 1996, and by December 1998, 8 states will have closed all state DD institutions and units.1 There are six jurisdictions that do not operate a large residential facility of any kind today (Alaska, District of Colombia, New Hampshire, New Mexico, Rhode Island, Vermont). Hawaii and West Virginia each are planning to close their single large facility in 1998.2

Bar Chart, Large Public Residential Facility Closures per year 1960-1998

States report that an additional 20 large state developmental disabilities facilities are already projected to be closed by 2000.3 Between 1988 and 1997, the number of individuals served in large state residential facilities declined by nearly 70 percent nationwide, from 91,703 to 53,979.4

The nation has moved from large facility-centered services to small community-based residential services. In 1977, 83.7 percent of the estimated population of persons with developmental disabilities receiving residential services lived in residences of 16 or more people. By 1996, an estimated 70.5 percent lived in community settings of 15 or fewer people, and 53.0 percent lived in residential settings with six or fewer people. The number of people living in “family foster care” is slowly increasing. But only about 13 percent of residential service recipients lived in homes that they themselves owned or rented (12 percent counting persons with developmental disabilities living in nursing homes).5

The overall number of residential settings for persons with developmental disabilities is growing very rapidly. Since 1977 the number of settings in which people receive residential services has grown nearly eight-fold. On June 30, 1996 there were 86,225 residential settings in which persons with developmental disabilities received residential services from state-operated or state-licensed residential service providers (excluding psychiatric facilities, nursing homes and people receiving services while living with family members). Of all those residential service settings, 1,847 were operated by states, with the remaining 84,378 residential settings served by non-state agencies.


The overall number of residential settings for persons with developmental disabilities is growing very rapidly. Since 1977 the number of settings in which people receive residential services has grown nearly eight-fold.

The “Old” Economic Incentives for Developmental Disability Services

In order to encourage states to standardize and upgrade the care delivered to people in large state facilities for developmental disabilities, the federal Medicaid program created the “intermediate care facility for the mentally retarded” (ICF/MR) optional service. If states complied with federal requirements and were able to get their facilities certified under the ICF/MR program, they could use federal Medicaid dollars to pay for at least 50 percent of the costs of services provided in ICFs/MR. Almost all public facilities eventually received ICF/MR certification as a result.

Graph, ICF/MR Residents & HCB/CSLA Participants 1990-1996
What were once viewed as strengths of the ICF/MR program eventually came to be seen as weaknesses, however. By requiring active treatment, improving staff-to- resident ratios, and upgrading the physical structures of many state facilities, conditions for both residents and staff improved significantly. Unfortunately, the costs of operating ICFs/MR increased significantly as well. Between 1992 and 1996, the national average daily cost per resident served in public facilities rose from $210 to $258. After factoring in inflation, this represents a 10 percent increase over the five-year period.6 By the 1980s, advocates for the mentally disabled were voicing criticisms that ICFs/MR were overly regimented and inflexible, services were not individualized, residents didn’t have enough autonomy, and their lives remained cut off from the general community.

The “New” Incentives for Developmental Disabilities Services

The primary mechanism states use to fund community-based services and supports is the Medicaid Home and Community Based Waiver (HCBW). This program began in the early 1980s, and has grown enormously since then. Every state and the District of Columbia now operate HCBW programs, and the number of people receiving services funded by HCBW far exceeds the number of individuals who still reside in both public and private ICF/MR facilities.

In 1997, almost 236,000 individuals nationwide were receiving services under HCBW services; by contrast, the number of individuals residing in ICFs/MR had fallen to roughly 125,000, with fewer than 60,000 still residing in public facilities.7

HCBWs allow states to offer a range of services to persons with a range of disabilities. Examples of the types of services provided by HCBW include:

SERVICE
  • Case Management
  • Respite
  • Adult Day Care
  • Supported Living Arrangements
  • Habilitation
  • Chores
  • Supported Employment
  • Transportation
  • Homemaker
  • Personal Assistance

In addition to individuals with developmental disabilities, HCBW can be used to serve individuals with traumatic brain injuries, spinal cord injuries, severe mental illness, HIV, and frail elderly individuals.

Incentives to Privatization of Developmental Disabilities Services

The HCBW program has allowed states to deregulate and privatize service delivery. For individuals with developmental disabilities, this trend has been both positive and negative. On the positive side, HCBW services can provide more home-like residential settings, more tailored, individualized services, opportunities for recreation, supported employment, and interaction with family and friends. But the quality of services provided by private providers is often uneven and undependable. It can be difficult for clients to find appropriate medical services, clients may be overmedicated and experience high rates of injury and abuse, and the same regimented approach to service delivery that is subject to criticism in ICFs/MR may simply be replicated in community programs. In a review of California’s HCBW in 1997, the federal Health Care Financing Administration (HCFA), which oversees the Medicaid program, found numerous and serious problems with California’s system.

For workers, the impact of the HCBW program and the privatization that has resulted has been mostly negative. Relatively secure public sector jobs that provided benefits such as pensions and health insurance have been replaced by low-wage jobs that offer few benefits and few opportunities for training and upgrading. Moreover, workers are often isolated and given little support in dealing with difficult clients and situations. Studies that have compared the costs of community living programs with institutional services have found savings of approximately 15 percent in community programs, and these savings are primarily due to lower wages and lack of fringe benefits for private community workers compared to their public-sector counterparts.8 However, in states where AFSCME has helped to create publicly operated community-based services, workers report high levels of satisfaction with their new community-based jobs. In several states, AFSCME is actively organizing private, community-based workers to improve conditions for them and their clients. (See chapter VI on page 37.)

"Direct-service staff [in the community] must exercise considerable discretion each day to help the individuals whom they support learn to manage their own homes and to master a range of experiences in their local community. State agencies and support providers, however, are constrained by lower compensation and benefit levels for community support staff compared to institutional personnel, and by related difficulties such as recruitment, training, and retention of qualified staff."9
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