A Plan For PACE: Program would provide comprehensive care for frail seniors outside of nursing homes

528803_302762043127336_81015731_nOptions for senior care in northwest lower Michigan have grown dramatically in recent years – from specialized in-home care focused on keeping seniors independent to residential facilities that take a new approach to “senior living.”

But here’s the rub: Nearly one-fifth of the U.S. population will be 65 or older by the year 2030.

“There is a gray tsunami coming,” said Russ Knopp, who owns the local Comfort Keepers franchise with wife Leslie. “How are we going to care for all of these seniors?”

Knopp believes PACE is one solution as health care costs, and the elderly population, continues to rise. PACE – an acronym for Program for All-Inclusive Care for the Elderly – is not a new model in health care. But if it comes to Traverse City, it will be the first program of its kind available north of Grand Rapids.

PACE is a Medicare/Medicaid benefit for individuals who are 55 and older and are nursing home-eligible – with a goal of keeping them functioning as independently as possible in their own homes and communities as they age.

The 40-year-old program has its origins in San Francisco, but didn’t start to gain in popularity until the late 1990s. Today, there are 116 providers operating 220 PACE centers in 32 states, serving approximately 37,000 individuals. There are 11 PACE locations in Michigan – with three more coming online. Overall, Michigan ranks in the top 5 for states with the highest number of PACE centers.

“The need for comprehensive and coordinated service delivery that is more cost effective and achieves better quality outcomes is the direction health care is moving,” said Grand Traverse Pavilions Administrator/CEO Kory Hansen.

The Pavilions, a $26 million operation with 240 licensed nursing beds, 78 assisted living apartments and 3 independent living apartments on its 28-acre campus adjacent to Munson Medical Center, has been approved as the provider for PACE in Traverse City.

The heartbeat of PACE is day health center designed to meet all of one’s social needs, as well as all of their medical ones, via an interdisciplinary approach of primary care physicians, specialists, rehabilitation and recreational therapists, social workers and others.

The Grand Traverse Pavilions Foundation, which oversees the fundraising initiatives of The Pavilions, is leading the charge to bring PACE here but ultimately it will be operated as its own entity.

“It serves all of the needs of these people,” said Knopp, who also serves as a director on the Foundation board. “I worry so much about isolation [of our seniors] in this community. The social aspect of PACE is one of the biggest pluses in my mind.”


The first PACE center opened in Detroit in 1995. Rod Auton, who now serves as executive director of the PACE Association of Michigan, was a social worker on the original team. He later went on to become the center’s manager and was also involved in the start of other centers in the southern part of the state.

“I love it,” said Auton. “I believe in the model.”

On average, a PACE enrollee is dealing with five chronic health conditions. A recent study by global research firm Abt Associates found PACE participants to have improved health status and quality of life, lower mortality rates, increased choice in how time is spent and greater confidence in dealing with life’s problems.

Auton said only between six and eight percent of program enrollees nationally end up having to go into a nursing home long term. But even in those situations, the individuals stay in the program and PACE coordinates the care with the nursing home.

A typical PACE enrollee attends the day center three times a week. If care is required in the hospital, at another medical office or at home, PACE is responsible for making sure that happens. It also provides preventative care, nutrition services, transportation, medical assistance on-call 24 hours a day, prescription drugs and health care-related equipment.

But even Auton acknowledged that PACE is not a good fit for everyone who may be eligible. PACE has its own physicians and provider networks, so in most cases it requires enrollees to change doctors, which will discourage some individuals from participating. Other individuals don’t want to have to leave their homes on such a regular basis, so the day center model wouldn’t be compatible for them. Still others may not care for the tightly coordinated care, he explained.

But in the rapidly changing health care landscape, Auton said PACE makes sense. “We’re seeing a push for more managed care and to get providers to take more risk,” Auton said. “PACE is 100 percent risk and fully capitated.”

The financing model means PACE receives one flat fee from Medicare and Medicaid. If an individual is not eligible for Medicaid, there is a private pay option at approximately $3,500 a month.

“Nationally, 92 percent of PACE participants are dual-eligible,” meaning they qualify for both Medicare and Medicaid, explained Jennifer Hutchinson, marketing communications and community outreach director for the Grand Traverse Pavilions.

Added Auton, “Medicare and Medicaid like PACE because the provider is at risk, it knows the population being served and knows the actual costs. It’s a predictive model from a long-term care budget perspective.”


A home has already been determined for the future Traverse City PACE: the former Grand Traverse County Health Department building on S. Garfield Road. The Pavilions Foundation recently launched “The Power of PACE” capital campaign to start raising funds for renovation and operations.

The Pavilions, which is owned by Grand Traverse County and operated by its Human Services board, has entered into a 20-year, low-cost lease with the county, which reduces the cost from $3 million for new construction on the Pavilions’ campus to $1.6 million to renovate the S. Garfield building. In addition to the renovation costs, the campaign is also looking to raise another $1.4 million on top of that for the first two years of operation until it becomes financially self-sustaining. The Pavilions Foundation has already committed $500,000 to the project.

Each program is responsible for developing its own center, hiring all the staff and building in all the supporting infrastructure (i.e. transportation) before even seeing its first patient. So the outlay of financial resources is substantial before any revenue starts coming in.

By design, the program grows slowly and consequently takes considerable time for a program to just break even, said Auton.

All enrollees must reside within one hour of the Traverse City PACE center. Projections have it serving 10 people in the first month and adding five to seven individuals each month until an anticipated capacity of 225 – generating more than $11 million of revenue annually based on reimbursement for services.

The program plans to employ 50 full-time individuals at the center, said Hutchinson, and establish contracts with 100 to 120 service providers already in the senior care field, such as Comfort Keepers.

Aside from the obvious benefits to the seniors, Hutchinson says one of the biggest benefits of the program is for the individual’s family. She adds that one woman, who was her mother’s primary caregiver before her mother enrolled in the program, told Hutchinson all she has to do for her mother now is “love her.”
The goal is to have the PACE center up and running in the first quarter of 2017.

How is PACE different?

– All care and services provided, or coordinated, by one team of professionals.

– The program is financially responsible for all emergency room, hospital and nursing home care, so there is a financial incentive to provide high quality preventative and primary care.

– PACE provides services that Medicare will not cover, including transportation, activities, occupation and physical therapy, and care and training for family caregivers.

– PACE provides all necessary medications.

Source: PACE Association of Michigan