S3
Geriatric Rehabilitation. 1. Social and Economic Implications
of Aging
Gregory M. Worsowicz, MD, MBA, Deborah G. Stewart, MD, Edward M. Phillips, MD, David X. Cifu, MD
ABSTRACT. Worsowicz GM, Stewart DG, Phillips EM,
Cifu DX. Geriatric rehabilitation. 1. Social and economic
implications of aging. Arch Phys Med Rehabil 2004;85(Suppl
3):S3-6.
This self-directed learning module highlights the social and
economic implications of aging. It is part of the study guide on
geriatric rehabilitation in the Self-Directed Physiatric Educa-
tion Program for practitioners and trainees in physical medicine
and rehabilitation and geriatric medicine. This article specifi-
cally focuses on the epidemiology of aging, the economics of
aging, informal and formal social support systems, ageism and
societal issues, and care and treatment settings.
Overall Article Objective: To summarize the social and
economic implications of aging in the context of physical
medicine and rehabilitation.
Key Words: Ageism; Epidemiology; Geriatrics; Rehabilita-
tion; Social support.
© 2004 by the American Academy of Physical Medicine and
Rehabilitation
1.1 Educational Activity: To advise a medical student on
the demographics of the aging population for which
he/she will be providing care.
IwhileatN 1900, THERE WERE 3 million people in the United Sates
or over the age 65 years (4% of the total US population),
in 2000, 35 million (35%) people were age 65 or older.
As the baby boom generation ages, it is predicted that 1 in 5
Americans will be 65 or older by the year 2030. The 85-and-
older-age category is the most rapidly growing segment of the
US population. It is estimated that this group will increase from
2% to 5% over the next 50 years.1,2 In the United States, life
expectancy for a person reaching 65 years is 18 years; an
85-year-old person’s life expectancy is 6 to 7 years.3 The aging
of the US population presents challenging issues for govern-
ment, health care, and society.
There is no single universally recognized description, clas-
sification, or grouping of the older population. Although chro-
nologic, biologic, physiologic, and emotional descriptors are
often used, functional classifications, such as a person’s activ-
ities of daily (ADLs), his/her level of living dependency, num-
ber of concurrent medical morbidities, living arrangement, and
employment status, may be more relevant to clinicians.4
From the Department of Physical Medicine and Rehabilitation, University of
Missouri, Columbia, MO (Worsowicz); Brooks Health System Administration, Jack-
sonville, FL (Stewart); Department of Physical Medicine and Rehabilitation, Harvard
Medical School, Spaulding Rehabilitation Hospital, Boston, MA (Phillips); and
Department of Physical Medicine and Rehabilitation, Virginia Commonwealth Uni-
versity/Medical College of Virginia, Richmond, VA (Cifu).
No commercial party having a direct financial interest in the results of the research
supporting this article has or will confer a benefit upon the authors(s) or upon any
organization with which the author(s) is/are associated.
Reprint requests to Gregory M. Worsowicz, MD, MBA, Univ of Missouri, PM&R,
1 Hospital Dr DC046 00, Columbia, MO 65212, e-mail: worsowiczg@health.
missouri.edu.
0003-9993/04/8507-9214$30.00/0
doi:10.1016/j.apmr.2004.03.005
Chronologic age is probably the most universally accepted
and most frequently used system. Old age is often defined as 65
years and older, but this is an arbitrary figure that is based on
policy or societal norms. Terms that are used include aged,
elderly, young old (60⫹), old old (75⫹), oldest old (85⫹),
older adults (75⫹), and centenarians.5,6 Other descriptors of
“old age” include older workers (40⫹) and eligibility to join
the American Association of Retired People (AARP; 50y or
older).7
1.2 Educational Activity: To discuss the impact of the
changing aging demographics on rehabilitation ser-
vice needs with a resident in physical medicine and
rehabilitation.
In 2001, national health care expenditures exceeded $1.4
trillion or 14.1% of the gross domestic product.1 The aging
population is a high user of these health care services. In 1999,
25% of all physician office visits (192.2 million) in the United
States were by adults 65 and older.8 The hospitalization rate in
1999 for adults between the ages of 65 and 74 years was 1.9
times higher than that for the overall population, whereas for
people 75 and over, it was 2.7 times higher.8 Medicare is the
largest singular payer for these services, and two thirds of
Medicare spending is accounted for by 20% of its beneficiaries.
This 20% of high end-users have 5 or more chronic condi-
tions.9
Because Medicare is the largest single payer of health care
for the elderly US population, governmental policy plays a
critical role in eligibility and services provided. In 1997, Con-
gress passed the Balanced Budget Act (BBA), which has
produced changes in the reimbursement systems for home
health services, skilled nursing facilities (SNFs), and inpatient
rehabilitation facilities (IRFs). These changes are predicted to
produce $393.8 billion in Medicare savings between 1998 and
2007.10 The BBA (1997) changed the reimbursement pattern
for home health services, and the frequencies of home health
services dropped during 1997 and 1998 from 8277 to 5058 per
1000 enrollees. The Centers for Medicare and Medicaid Ser-
vices now reimburses IRF for services based on a prospective
payment system (PPS). The IRF-PPS11 is based on the assign-
ment of patients to specific case-mix groups (CMG). The CMG
assignment is determined by a patient’s primary diagnosis or
rehabilitation impairment category (RIC) and his/her FIM in-
strument motor score, FIM cognitive score, and age on admis-
sion. Specific categories for patients with short stays, death, or
early transfer to another Medicare rehabilitation facility, long-
term care hospital, inpatient hospital, or nursing home were
also developed. The IRF-PPS was developed in an attempt to
reimburse facilities according to a patient’s severity of disabil-
ity and his/her required use of resources. The more disabled
patients, who will have higher CMG scores within their RIC,
are predicted to require a greater use of resources and, there-
fore, are assigned higher reimbursement.12
In 1942, the American Geriatric Society (AGS) was devel-
oped. Their website13 offers important information and links.
In 1974, Congress approved the National Institute on Aging
(NIA) as 1 of the centers for the National Institutes of Health.
Arch Phys Med Rehabil Vol 85, Suppl 3, July 2004
S4 SOCIAL AND ECONOMIC IMPLICATIONS OF AGING, Worsowicz
The mission of NIA is to provide leadership in aging research,
training, health information, information dissemination, and
other programs for the older population.14 The Veterans Hos-
pital Administration initiated the funding for training geriatric
fellows in geriatric research and for clinical centers in 1980. In
1988, certification for added qualifications in geriatric medi-
cine was sponsored by both internal medicine and family
practice.13 In 1991, NIA developed an older Americans re-
search program of independence centers (Pepper Centers). As
these centers have developed, other agencies and advocacy
groups for the elderly have grown. The AARP offers a resource
book that contains research information provided by current
agencies and programs and laws that are pertinent to the
elderly.15
1.3 Clinical Activity: To evaluate the formal and informal
social support systems available for an 85-year-old
widow who is living alone in her childhood home and
has begun to develop functional decline.
Social support systems in the United States are comprised of
both formal and informal networks.4 Formal structures include
government-sponsored agencies and programs and services
covered by private insurance. Formal care or service is paid by
some third party, not by the user or the provider of the service.
Medicare, a program sponsored by the federal government,
pays for most of the health care provided to people 65 years or
older. Part A of the Medicare program covers hospital services,
whereas Part B covers physician services, durable medical
equipment (DME), and home health. Medicare sets allowable
charges and then reimburses providers 80% of those allowable
charges. Medicaid is a state-administered program that pays for
additional services if, because of his/her financial resources, a
person meets the program definitions of being “medically in-
digent.” Other formal supports can include agencies such as
Adult Protective Services and Area Agencies on Aging, which
are locally run and provide social services, advocacy, and
guardianship.
Informal resources, which include families, church communi-
ties, and service clubs, generally provide nonreimbursed assis-
tance. Most caregiving in the United States is informal, accounting
for about 75% of all care provided to the elderly. Seventy percent
of caregivers are women, either wives or daughters. Caregiving is
generally provided daily, for 4 to 8 hours on average, lasting
from weeks to a decade or more, and primarily involves “. . . emo-
tional support, followed by help with shopping, transportation,
household tasks, and personal care.”16 (p335)
Social dependency is more common in elderly women, who
are more likely to be widowed because their life expectancy is
longer than men’s. Only 40% of women 65 years or older are
married, compared with 80% of men in the same age group.
Elderly men are more likely to have the support of a wife who
is typically younger and in better health.17 The number of
social supports an individual has directly impacts happiness
and life satisfaction and is associated with better physical
health and lower mortality.18,19
Although gender influences social supports, race and ethnic-
ity may also affect caregiving. A review of racial, ethnic, and
cultural differences in caregiving of elders with dementia re-
vealed that black caregivers were more likely to be an “adult
child, friend, or other family member, while white caregivers
were more likely to be a spouse.”20 (p361)
Social support systems, both formal and informal, can pre-
vent institutionalization. Maintaining the integrity of support
networks, particularly the informal supports, can make the
difference between a person’s living in the community or not.4
Helping to reduce caregiver burden by providing psychologic
Arch Phys Med Rehabil Vol 85, Suppl 3, July 2004
support, education, and respite care can prolong a person’s
community living. Social supports are a complex network of
programs, services, funding, and people that serve the myriad
of needs of elderly persons.
1.4 Educational Activity: To criticize the influence of age-
ism on the care of an 85-year-old retired physician
with worsening arthritis who is being encouraged to
stop driving because of wrist pain.
Ageism21 is the pejorative belief system, generally not sup-
ported by the literature, that old age is synonymous with
dementia, depression, dependence, and debility. The negative
societal view that aging necessarily represents pain, isolation,
fear, and asexuality are ageist in their nature. Important issues
within ageism include how elders view themselves and the
larger societal expectations of people reaching their later years.
Ageism leads to discrimination against the elderly in the
workplace, in social settings, and in medical care. Health care
professionals must remain vigilant to combat negative attitudes
that become manifest in medical care provision—for example,
that pain in the elderly is not worth treating aggressively and
that decreased function is inevitable with aging.
The ageist, negative self-perception of some elders impacts
on their own health and function. People with positive self-
perceptions of aging experience benefit on their functional
health.22 Moreover, modifying negative stereotypes can benefit
older people: common age-related gait changes were shown to
be reversible with exposure of elders to positive images of
aging.23
Some aspects of ageism are generational. Societal expecta-
tions of aging will undoubtedly evolve with the aging and
oncoming retirement of 76 million baby boomers, persons born
between 1946 and 1964. The MacArthur Foundation studies
summarized in Rowe and Kahn’s Successful Aging24 present
extensive evidence refuting common ageist stereotypes. Be-
yond the goals of merely avoiding disease and disability and
prolonging longevity, appropriate lifestyle choices permit the
positive anticipation of maintained cognitive and physical ca-
pacity into late life.
Counteracting ageism in health care will require a broader
educational curriculum. Elderly persons should be involved in
the planning and teaching. Medical school coursework must
include issues of aging in all subjects. Clinical course work
should include working with older adults across the clinical
spectrum from acute care to nursing home to community set-
tings. Residents and practicing physicians can benefit from
readily available resources, including those from the AGS.25,26
The care that physiatrists and other health care professionals
provide for the growing population of elderly must include
proactive management of common sequelae of aging. In a
sense, we medical professionals are training the providers of
care for our own later years.
1.5 Clinical Activity: From the health care continuum,
recommend a level of care that will best address the
needs of an 85-year-old woman with a hip fracture
who needs postsurgical rehabilitation.
Medicare is a federally sponsored program, so its coverage is
uniform throughout the United States. Any person who has
paid into the federal tax system for 40 quarters (or was ever
married to someone who has) and meets any of the following
3 criteria is eligible for Medicare part A at no cost: (1) age 65
years or older, (2) disabled and on Social Security Disability
Insurance for more than 2 years, or (3) has end-stage renal
disease. Medicare reimburses inpatient and SNF rehabilitation
services. Medicare Part B, which, for a monthly fee, is avail-
 SOCIAL AND ECONOMIC IMPLICATIONS OF AGING, Worsowicz
able to people on Medicare part A reimburses for physician
services, home health services, and outpatient therapies.
As noted, Medicare Part A insurance provides payment for
acute medical and rehabilitation hospitalization and short-term
skilled nursing care. Acute medical hospitalization is reim-
bursed in lump sum amounts based on diagnosis-related
groups. Reimbursement for rehabilitation services in IRFs or
SNFs is reimbursed under the PPS, also in lump sum amounts,
based on the person’s CMG. People who receive care for the
same diagnosis at both an IRF and an SNF do not receive any
additional reimbursement for the subsequent SNF stay (thus
requiring the reimbursement to be shared). Beneficiaries are
responsible for a copayment in each setting, often approxi-
mately 20% of the Medicare-determined total. Importantly, on
average, 75% of Medicare patients admitted to an IRF must
meet 1 of 10 established diagnoses for the IRF to qualify for
payments. This “75% rule” unfortunately neglects many of the
current rehabilitation diagnoses (eg, post coronary artery by-
pass graft care, post total hip replacement) that were not
commonplace when it was instituted more than 20 years ago.
For people who need skilled nursing care (eg, wound care,
management of indwelling catheters), Medicare pays for 100
days of that care after the beneficiary has been discharged after
an acute hospital stay of at least 3 days and within 30 days of
the hospital discharge. Medicare Part A pays for the first 20
days of skilled care with a coinsurance amount paid by the
beneficiary on days 21 to 100. Coverage by Medicare is mea-
sured in benefit periods. A benefit period begins when the
beneficiary is admitted to the hospital and ends when the
beneficiary has been out of the hospital or skilled facility for 60
consecutive days. These individuals typically receive some
rehabilitation services (eg, physical therapy, occupational ther-
apy, speech and language pathology) in addition to ongoing
medical and nursing management. The condition requiring care
in the skilled facility must be the same as the reason for
hospitalization to qualify for Medicare coverage. The benefi-
ciary must be certified by a licensed physician as requiring the
care, at that level, to be eligible for coverage.
DME, such as gait aides or adaptive equipment, is also
reimbursed under Medicare, as long as it is ordered by a
licensed physician and is medically justified. Outpatient reha-
bilitation therapy, home health services, and inpatient and
outpatient physician care are reimbursed by Medicare but only
for beneficiaries who receive Part B. A physician must order
the services or equipment and must provide a detailed plan of
care. Home health services are limited to skilled care, such as
nursing or rehabilitation therapy. Home health aide provisions
are very limited. Guidelines for length and type of services and
equipment are available based on diagnoses, with some outlier
provisions. Hospice care and its associated services are also
covered by Medicare.17
Medicaid also provides reimbursement (that varies from
state to state) for inpatient (acute medical, rehabilitation), out-
patient, home health, skilled nursing home, DME, and physi-
cian benefits. However, Medicaid is typically not a primary
source of health insurance for older adults but, rather, may
serve as a copayment (as may commercial insurances). Re-
cently, many managed care Medicaid programs have become
available, further increasing the diversity of covered services,
in this case even within a state. Importantly, at present, Med-
icaid pays for more than 85% of all custodial nursing home
care (which is not reimbursed by Medicare) in the United
States. Older adults who continue to work or who were federal
and railroad employees typically have commercial or managed
care insurance as their primary funding source.
S5
Beyond financial considerations for levels of care, determin-
ing the level of services most appropriate for a given patient is
a primary function of a physiatrist. How to assign patients to
the most appropriate care delivery setting requires knowledge
of payer sources; community resources; and patient-specific
variables such as endurance, medical acuity, stability, and
disposition options. Each level of care in the rehabilitation
continuum has specific characteristics and efficacies.
Acute care is the most commonly used health care service
after physician office visits for persons age 65 years or older.
Although persons in this age group account for 13% of US
population, they use 47% of all inpatient days of care. Up to
35% of elderly patients admitted to acute care facilities will
lose independence in 1 or more areas of basic ADLs. Func-
tional decline is related to several factors including immobility,
poor nutritional status, sensory deprivation, altered sleep-wake
cycles, medication interactions, polypharmacy, environmental
change or altered routines, and iatrogenic illness. Several stud-
ies have identified risk factors for functional decline and nurs-
ing home placement. These risk factors include older age
(⬎70y), mental status changes, premorbid functional impair-
ment, low social activity before admission, and premorbid
depression or depressive symptoms. All of these factors predict
poor functional outcome.27,28 Assessing and managing these
issues along with the primary and secondary conditions are para-
mount to successful medical and rehabilitation management.
Rehabilitation interventions can be delivered in various set-
tings, each characterized by different intensity, outcome, and
relative cost. Allocation of services is currently based more on
payer tolerance than on best outcome. Outcome data for vari-
ous levels of care are often not available or are incomplete.
Great variability exists across the United States. One analysis
found that, in Florida, 10% of stroke survivors were admitted
to rehabilitation hospitals or units, in contrast to 31% in Hous-
ton, TX.29,30
Funding source also plays a role in rehabilitation setting. In
an analysis of traditional Medicare beneficiaries compared with
health maintenance organization Medicare beneficiaries, stroke
patients who had traditional Medicare reimbursement were
more likely to be admitted to acute rehabilitation settings than
to skilled or subacute settings. Costs in acute rehabilitation are
estimated to be twice as high as those for subacute rehabilita-
tion.31 In a study32 to evaluate whether better outcomes are
associated with higher costs of inpatient rehabilitation, analysis
showed that stroke patients admitted to acute rehabilitation
were 3.3 times more likely to be discharged home than patients
admitted to subacute settings. Other rehabilitation interventions
strongly associated with improved outcome after stroke include
early intervention of rehabilitation (within 72h poststroke) and
rehabilitation provided in an interdisciplinary versus a multi-
disciplinary inpatient setting.33
Data supporting acute rehabilitation services over subacute
rehabilitation services for hip fractures are less convincing,
suggesting that only certain patients may benefit from acute
rehabilitation.34 However, it is clear that outcomes are best
when careful attention is focused on avoiding medical prob-
lems. Identifying which patients require acute rehabilitation—
with its broad array of services, a minimum of 3 hours of
therapy a day, interdisciplinary approach, and intense medical
and nursing supervision—is multifactorial and is best deter-
mined by a physiatrist.
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