The Program of All-Inclusive Care for the Elderly (PACE): an Innovative Long-term Care Model in the United States

This article examines the long-term care service system in the United States, its problems, and an improved long-term care model. Problematic quality of care in institutional settings and fragmentation of service coordination in community-based settings are two major issues in the traditional long-term care system. The Program of All-Inclusive Care for the Elderly (PACE) has been emerging since the 1970s to address these issues, particularly because most frail elders prefer community-based to institutional care. The Balanced Budget Act of 1997 made PACE a permanent provider type under Medicare and granted states the option of paying a capitation rate for PACE services under Medicaid. The PACE model is a managed long-term care system that provides frail elders alternatives to nursing home life. The PACE program's primary goals are to maximize each frail elderly participant's autonomy and continued community residence, and to provide quality care at a lower cost than Medicare, Medicaid, and private-pay participants, who pay in the traditional fee-for-service system. In exchange for Medicare and Medicaid fixed monthly payments for each participating frail elder, PACE service systems provide a continuum of long-term care services, including hospital and nursing home care, and bear full financial risk. Integration of acute and long-term care services in the PACE model allows care of frail elders with multiple problems by a single service organization that can provide a full range of services. PACE's range of services and organizational features are discussed.