The IHSS is a social services program that provides care for 430,000 low-income elderly and disabled recipients in their own home at an annual total cost of roughly $5.5 billion. Of those patients, the hours of care range widely. The basis of the program is to prevent – or at least delay – the move of individuals to a nursing home, saving money for the state.
The LAO’s report examined the fiscal impact of the IHSS program on the public sector, concluding that the state maximizes its net fiscal impact by targeting IHSS services to those who are most likely to enter a nursing home in the absence of the program.
Overall the program would be considered cost-effective if the amount the state spends on IHSS is equal to or less than amount spent on institutional places or other services in the absence of IHSS.
The LAO created a fiscal model to compare the estimated cost of the world without IHSS and to our estimated cost of IHSS.
Over time, in the absence of IHSS, patients would enter into a skilled nursing facility, rely on resources of family and friends (no government cost) or rely on increased developmental disability services.
In conclusion, the LAO reports:
“The IHSS program is the fastest–growing major social services program. Evaluating the cost–effectiveness of IHSS is a complicated task that raises many issues. As we have pointed out in this report, whether IHSS may result in a net fiscal benefit to the state depends on which cost and benefit perspective is being considered—the state and counties combined or the state General Fund alone. Additionally, there are other non–fiscal benefits that are not captured in this fiscal cost–effectiveness analysis.
Although our model demonstrates that the program may well be cost–effective to the state General Fund in the aggregate, there are some IHSS recipients for whom the investment in IHSS may have no effect on the state’s SNF costs. In this report, we have identified some ways that the Legislature could target IHSS services to those most likely to enter a SNF in the absence of the program. Given the state’s severe fiscal difficulties, we recommend that the Legislature consider targeting IHSS program services to those with the highest risk of SNF placement in order to achieve significant additional state savings.”
To read the full report, click here.
You can also see an overview on the report in the YouTube clip below.