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U.S. House of Representatives,
Subcommittee on Housing and Community Opportunity,
Committee on Banking and Financial Services,
Washington, DC.

    The subcommittee met, pursuant to call, at 11:00 a.m., in the James Hanley Federal Building, 12th floor, Judge Scullin's courtroom, 100 South Clinton Street, Syracuse, NY, Hon. Rick Lazio, [chairman of the subcommittee], presiding.

    Present: Chairman Lazio and Representative Walsh.

    Chairman LAZIO. The hearing will come to order. I want to welcome everyone here this morning, and thank you for attending this subcommittee field hearing.

    This is the beginning of a series of hearings to examine the affordable housing and health care facilities needs of senior citizens in the next century. I want to begin by saying how indebted I am to my friend and colleague, Congressman Jim Walsh, for extending an invitation to begin this discussion in his own community. I am delighted to have him as Chairman of the Appropriations Committee, who is a partner in developing some of the housing initiatives and supportive services for senior citizens.
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    Jim is one of the most respected Members of Congress on both sides of the aisle. People like him. He is one of the most decent, kind and thoughtful people I have had the pleasure to get to know in the Congress, and I am very happy to be here with him today. You can pass me the wallet later on.

    On the horizon, a gray dawn is approaching where more and more Americans will live longer, and enjoy more active, healthy lives. That's a great thing. More than 33 million people in the United States are 65 years and older. By the year 2020, that number will grow to almost 53 million people, or one in every six Americans. This new-found longevity should be celebrated, but we must also not take our future quality of life for granted. And that's what this hearing is all about.

    The shift of demographics is not news to us. Our current national debate on the future of Social Security and Medicare/Medicaid in Congress and in our communities is a recognition that we must plan for the future today.

    But in this environment, we must not overlook circumstances as critical as these other issues of national debate. In the next century, millions of senior citizens will suffer a crisis of safe, affordable housing if we fail to prepare.

    Even today, the United States General Accounting Office and the United States Department of Housing and Urban Development have determined that at least 1.4 million senior citizens are already experiencing worst-case housing needs. Seniors are more likely than any other adults to be poor. And nearly 40 percent of seniors not in nursing homes are limited by chronic conditions, unable to perform the simplest activities associated with independent living. New York itself is among the six States with the highest number of low-income senior households with housing difficulties.
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    How can we accept the possibility of a future where our grandparents, parents, and the generations to come are forced to live in crowded institutions, or worse, live isolated and without hope in dilapidated buildings as their homes crumble around them? We must fight the possibility of this dark reality. In short, we must prepare to go to battle.

    We must be prepared to fight for the resources and attention that will legitimately be spread very thin as America grows older. In this battle, our only enemy will be the fear that we are playing a zero-sum game, that the success and prosperity of one group will come at the expense of another. If we work together, we can preserve what we have built today and expand opportunities for Americans tomorrow.

    A great tool in this effort has been the HUD Section 202 housing for seniors. I will not dwell on the present Administration's consistent attempts to reduce Federal funding for this program. I will only say that over the last five years, Republicans and Democrats in Congress have led successful efforts to maintain the resources necessary to the program. My friend, Congressman Walsh, has been the key champion of our work to preserve funding levels for this important program.

    Looking forward, on the first day of this Congress, I introduced legislation that I hope will be the cornerstone of a new security of living and peace of mind for seniors in the 21st Century and beyond.

    Our proposal that we are talking about right now would preserve the existing affordable housing for more than 250,000 seniors, including almost 25,000 in New York State alone. Specifically, we would modernize the financing of senior developments built before 1990, by converting the debt held by non-profit housing providers into direct grants.
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    Relieved of such debt, much of which was serviced with portions of resident rental assistance, nonprofit providers would be better able to support the services so desperately needed, and moderninze the units to generate a greater degree of program self-sufficiency. From a Federal perspective, the need for monthly rental assistance would be reduced as the debt is forgiven, thus saving taxpayer dollars in the long run. Otherwise, the cost of fully renewing these rental assistance contracts would reach an annual level of $2.9 billion in 2021.

    The legislation also will increase the funding level for senior housing by $40 million, and funding for persons with disabilities housing by almost $30 million. It is my hope that we can move forward in the legislative process without delay to bring our bill to the House floor, the first session of this Congress.

    Before I return to my colleague, Congressman Walsh, I would also like to mention a proposal I intend to unveil in the months to come. Clearly, one of our greatest challenges in the next few years will be focusing public attention on the need for new ideas and creative solutions to the changing opportunities for senior citizen affordable housing. In this regard, I intend to lead an effort to create a bipartisan national commission on the affordable housing and health care facility needs of seniors in the next century.

    I expect to work with those inside and outside of Government, with State and local officials, and with Republicans and Democrats from Capitol Hill to Pennsylvania Avenue. The House leadership has enthusiastically endorsed the concept, and we have already received a number of requests from national figures to serve on the commission.
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    Today, none of us have all the right answers, but I promise you we will do our best to ask the right questions. In the weeks and months to come, I will be speaking more about our commission, and I look forward to working with all those interested in preserving and improving the quality of life for older Americans.

    It's my distinct privilege and honor to turn to my friend and colleague, the Chairman of the Subcommittee on VA, and HUD and Independent Agencies, Jim Walsh.


    Mr. WALSH. Chairman Lazio is one of the real leaders in Washington today on housing. He has come in with a very aggressive and unique approach to housing. His goals have been to improve our housing stock, to make it affordable and make public housing safe, and today we are talking about expanding senior housing options. These are all critical issues for our cities.

    As a former City Councilor here in Syracuse, I have been concerned about affordable housing for a long, long time. We are here today to talk about the future of affordable housing among the very important and vulnerable population in our society, the elderly.

    I have had the pleasure of working with some of the people who we will be presenting here today, Mr. Introne and Mr. White and others, to develop senior housing. I have a list of some of the Section 202 senior apartments in our community, and I will tick off the ones that have been developed since I went to Washington: Bishop Ludden, Malta House, Pompey North, Sacred Heart, Village Landing and a number of others were developed while I was on the City Council so I have been to most of those groundbreakings, and they are wonderful occasions.
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    Because what we have tried to do is develop the housing where the people live, where their kids are, where their grand kids are, so they don't have to travel across the State or country to visit with them. They want to stay in their communities and be comfortable with as little change as possible. They want security. These are the things Section 202 housing does.

    Chairman Lazio has made this a project. I am delighted he is here today in Syracuse to begin the series of hearings on Section 202 housing. It shows not only a commitment to the program nationally, but to New York State, our home State, something we are both very proud of. I don't know when the last time—and somebody could probably do the history on this—when the last time we had the person most responsible for authorizing new housing legislation in the House of Representatives and the Chairman of that Subcommittee that appropriates these funds.

    This is certainly a dynamic time for housing because we are both advocates for New York State, because we intend to get our fair share of affordable housing for our home State, and I think it's a great opportunity for us personally and for the State, and I intend over the next several weeks to announce a number of new initiatives, working with HUD and Fannie Mae and local housing activists to make a difference in the two years I chair this subcommittee.

    There are no guarantees in Washington. We are going to do the best we can with that. I anticipate being very agressive and very productive and very effective in advocating for improved housing conditions for all of my constituents here in Central New York. My focus, obviously, is very partial. I look forward to hearing the testimony from some of the experts in the development of this housing, but also some experts in living in this housing, and we have a panel coming up right now of individuals who know Section 202 housing as well as anyone does, and I am delighted to have you here.
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    Rick, please proceed.

    Chairman LAZIO. Let me tell you how happy I am to be here in Syracuse. It is a great area. I have been treated as if I was a hometown boy. I want to thank you, Jim. I am pleased to introduce the first panel of witnesses who I have just met previously.

    Ms. Rose Sylvester and Mr. Leonard Biscotti and Ms. Dorothy Phelps. Did I pronounce that correctly, Mr. Biscotti?

    Mr. BISCOTTI. Biscotti.

    Chairman LAZIO. All three witnesses are residents of Section 202 housing for senior citizens in Syracuse, New York. Both Ms. Sylvester and Mr. Biscotti are residents of Villa Scalabrini on East Willow Street, and Ms. Phelps lives in Independent Living Services on North Main Street.

    In Washington, the Federal Government spends hours debating the intricacies of the senior housing program, pertinent legislation, budget numbers and public policy strategy. However, it is your faces and the stories that you can tell us that mean the most when we ultimately decide how to shape the future of senior housing in America. I look forward to hearing from all of you about what the Section 202 housing program has meant to you and how it has affected your community in Syracuse.

    Let me first begin by asking Mr. Biscotti for his testimony.
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    Mr. BISCOTTI. I would like to thank Congressman Lazio and Congressman Walsh for the opportunity to speak today regarding our senior housing, the Villa Scalabrini, a 124-apartment facility, under the HUD Section 202 housing program for seniors and younger persons who are physically disabled.

    I am a resident of the Villa Scalabrini and was its first Superintendent. Since the Villa first opened in mid-1980, I have seen many of the benefits of this housing and many of the changes taking place with my fellow residents and in our neighborhood.

    At the outset, the residents seemed more appreciative of the housing and the socialization which occurred there. I think not so many of us were in need of personal and medical services. Of late, I think otherwise, as our new residents are not as ready to join our functions and perhaps are in need of more help from agencies. Even my older friends seem to need more support.

    Peter White, the Director of Christopher Community, tells me this subcommittee is seeking to keep the HUD senior housing program alive and well, perhaps through funds made available under your guidance. In that regard, we might well use some funds which would provide more roll-in showers, perhaps a community space for physical therapy, and a separate kitchen where meals might be prepared by an agency which could operate at the Villa for those who become home-bound. In other words, the addition of conveniences that would make it easier for all of us to get along better as we get older.
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    Our building seems to be in very good shape, as the staff pays attention to cleaning and repairs. Congressman Walsh visits us, and I believe he can attest to its attractiveness. Mr. White worries about funds for future repairs and the cost of improvements, so if your subcommittee can increase the funds available for both repairs and improvements, it would be greatly appreciated.

    I might add that when I became Superintendent, I was most impressed with the tenants that came in when they entered our building, they were downtrodden and their heads were bowed and wearing—their hair wasn't made up, you know, by a hairdresser, and their face wasn't full of cosmetics, and they were there maybe two weeks when there was a rebirth. You saw them walking down the hall, smiling, saying hello, and it is really something that made me feel like I was doing something worthwhile.

    And when I took the job, I told Father Pisano I would take it only as long as it was needed to fill the apartments. Once they were filled, I didn't want the job because I didn't want to be pinned down. I like to be free. I went to Africa on two occasions to help build churches. I went to the South Pacific with the Jesuits, and I like to be free to do as I please. I didn't want the job. Five years later, they hired a Superintendent to replace me. So thank you for your attention.

    Chairman LAZIO. Ms. Sylvester, you are now recognized.

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    Ms. SYLVESTER. I am Rose Sylvester, and I have been a resident there for going on nineteen years, and to me it was a blessing because I was in my own home, but the neighborhood got so bad I had to leave. So coming in there the first night, there was something, I can go to bed and go to sleep and not be afraid, but as we get older now—I was a lot younger then—but as we get older, it's even better. The people we have in there are great. We are like a family. We are closer to them than we are sometimes to our own families because we see them every day.

    One thing we do need there, we need some security. We are not in a very good neighborhood. We are afraid to go out at night. If we go out, we are afraid to come back. We have nobody there that could look out for us. We need it at night. We need it on Sundays, weekends, but other than that, everything Leonard has said is right, and I thank you very much for listening.

    Chairman LAZIO. And Ms. Phelps, you are now recognized by the subcommittee.


    Ms. PHELPS. My name is Dorothy Phelps. I am 79 years old and live in my own home at Malta House Apartments in North Syracuse. I have lived at the Malta House for close to a year-and-a-half.

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    I moved there from North Star Apartments in Liverpool. The rent at North Star Apartments was high and difficult to manage on my fixed income. I am very thankful to now be living in an apartment where I call home.

    I began to live alone in my own apartment after the death of my husband in 1997. I was weepy when I first moved to Malta House. Although I have two very supportive daughters, one in Rochester and another in Chicago, they are unable to be with me on a daily basis. I needed to live where I could get the support I required to be independent.

    At Malta House Apartments, I take part in the program called Independent Living Services. The goal of ILS is to provide people in the program with all the medical and social supports that they need to continue living independently in the community. Without this program, many seniors living at Malta House would need to move to a nursing home to get the care they require. A team of care providers, which include a doctor, nurse and social worker, therapists, aides and drivers provide for our daily needs.

    This team closely monitors our health care and makes adjustments to the care we receive on a daily basis as needed. This makes certain that people like me who live alone without family nearby will have all our needs met. My daughters are very pleased with the care.

    It was important for me to be able to find an affordable complex such as Malta House so that I could take part in an ILS program and continue to live on my own. I enjoy having my own apartment and furnishings around me. These things remind me of past times with family and friends. While I miss my daughters and wish I could spend more time with them, I have enjoyed making new friendships at Malta House. It has become my home, and the people are my big extended family.
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    I am happy to be living at Malta House. It's much needed by older adults living on fixed incomes. I hope that you will consider ongoing support for affordable, accessible housing such as Malta House to benefit the growing population of older citizens in Central New York. Thank you.

    Chairman LAZIO. Thank you very much. Thank you all. I want to begin by thanking you on behalf of the subcommittee, and I know it took some effort to come here and prepare a statement and think about what you wanted to express, but it's very important for us. This will be part of the permanent records of Congress because we have everything you said transcribed, and it will be available in print for you to see if you would like. It will be looked at by staff and experts and by people thinking long and hard about the future of affordable senior housing in America.

    Your presence here is important to us, and I want you to know that. I have a few questions for you, but I am going to turn first to my host, Congressman Walsh, who has been obviously very instrumental in the development of a number of those Section 202 projects here in Syracuse.

    Mr. WALSH. Thank you for your testimony. It's good to have you here with us this morning. We haven't had too many Congressional hearings here in Syracuse. I think the last one we had was on dairy policy, and I remember farmers dressed up like cows, protesting the price of milk, and this is a little bit different, but certainly equally important.

    This issue of security—by the way, I have obviously been to Villa Scalabrini a number of times, and Malta House several times, and they are wonderful facilities. What Mr. Biscotti said about people coming in with their head down and having been through a trauma. Any move is traumatizing. The older you get—I am 51—I don't intend to ever move. It's tough, picking up and leaving memories behind and going someplace else, but you can see the reaction.
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    And I hear these stories too, from people when you are in talking to them how someone came in and their chin was on their chest, and the weight of the world on their shoulders, and they make friends and become socialized and become part of the program. It's more than just housing, isn't it?

    This issue of security is always a big one. Obviously, the buildings themselves are secure, but what suggestions might you make, for you mentioned weekends and at night, talking about security around the building or in the building.

    Ms. SYLVESTER. There was one time where some man came into the lobby, got onto the phone, picked a name at random, and he got a lady, he told her he was looking for his grandmother. She let him in. He wound up knocking at quite a few doors. Thank God, nobody did open their door. He did knock at mine too. He was drunk, and he was supposed to be in the Skyline, and he was in our building.

    These are things that could happen, and some of the people that come would—if someone calls on the phone and says, ''I am coming to visit my daughter or son,'' and don't give a name, they will let them in.

    Mr. WALSH. I know at Villa Scalabrini there is an electronic door.

    Ms. SYLVESTER. We do that on the phone. They call up to an apartment, and somebody buzzes them, and then they can come in because it's down in the lobby.
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    Mr. WALSH. Can they get into the building to make these calls unless somebody lets them in?

    Ms. SYLVESTER. He makes the call in the first lobby. We have two lobbies, and they buzz him in, and he comes in.

    Mr. WALSH. Does Villa Scalibrini provide training and instruction for all of the new residents on what to do, what not to do?

    Ms. SYLVESTER. Yes, but some of them don't remember, and coming home late at night, it's bad. The neighborhood is bad. Unless you call one of your neighbors and say, ''I am coming in late, would you kind of watch for me?''

    Mr. WALSH. That's not an easy one. Certainly it could be improved, and the residents' suggestions would be, I am sure, the most appropriate, because you have to deal with the security problem. The issue at Malta House, it's a little different because you have a campus with health care right there?

    Ms. PHELPS. Yes.

    Mr. WALSH. You have health care right on the campus, which is really great.

    Ms. PHELPS. Yes, it is.
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    Mr. WALSH. It's a contiguous service. The people at Villa Scalabrini, you have to go out to the doctor's office, and you have to go to the hospital?

    Ms. SYLVESTER. Yes.

    Mr. WALSH. Does that present difficulty for you?

    Ms. SYLVESTER. No, that doesn't. We have a call-a-bus that comes in and picks them up to go to the doctors, and even have call-a-bus to take them grocery shopping. They don't have a problem that way.

    Mr. BISCOTTI. In the case of emergency, you might, because I was called several times to take somebody to the hospital because they weren't ill enough to call an ambulance. They didn't want to call an ambulance, and they said, ''Len, do you have time to run up to the hospital?'' And I said, ''Sure, I will take you.''

    Ms. PHELPS. We have buses that take us to the doctors, to the dentist and anyplace we want to go.

    Mr. WALSH. That's call-a-bus at Centro?

    Ms. PHELPS. No, that's Independent Living, Malta House.

    Mr. WALSH. It's part of your——
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    Ms. PHELPS. Program.

    Mr. WALSH. One last question, then I will turn it over to Chairman Lazio. Does either place have a computer that's connected to the internet? This probably isn't the first thing on your agenda when you are thinking about goods and services, but it will be after a time, and I think when people realize, especially seniors, how much information there is there, I think it's going to be important.

    Especially one of the things I have found in my political life is seniors have time to do the research, and when they come after you, they come after you prepared. They are good, and it would seem to me that one of the things that we are going to see change—not change, but in addition to Section 202 housing and other public housing, affordable housing, is this information access need for the residents.

    Do you have any thoughts on that? Something that's occurred to you, or not?

    Mr. BISCOTTI. I think it would be great, myself. Naturally, a lot of people can't afford access to the internet, but if we had one there in the building where they could come down——

    Mr. WALSH. In a common area?

    Mr. BISCOTTI. Yes, and I think it would be a great help.
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    Mr. WALSH. OK, thank you.

    Chairman LAZIO. That's actually a fascinating question. I just had someone visit me in my Congressional office who was about 75 years old, my mom's age, who said, ''I just got a computer a year-and-a-half ago, and I can't get off of it, I am a computer junkie.'' It's amazing how much information is on the internet. Using the computer so you don't have to actually go out and visit other places to shop for the cheapest price because it's right there in your own living room, your own common room, that's going to be a very important issue as we move along.

    One of the things we are thinking about right now is how to best serve seniors as we move forward—for example, how can we prevent situations where seniors who don't really want to be in nursing homes are forced into nursing facilities because that's their only option? Maybe their spouse has passed away or can't take care of them, and the only option is a nursing facility, which is a costly program for the public and not always a happy living situation for the senior.

    I am going to begin with Mr. Biscotti. You have had experience as a superintendent, and talk about the roll-showers—my dad was in a wheelchair, I am very sensitive to that. He was a stroke victim, and there are some folks who don't really need nursing, but need help in terms of access.

    Speak to me, if you would, is it a real problem? Do we need to provide better services for people who may have some mobility problems or some hearing problems, or need some housekeeping, but may not need a nurse all the time?
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    Mr. BISCOTTI. I think the roll-showers are very, very important because we have quite a few that use walkers to get around, use crutches to get around, and they definitely have difficulty climbing into a tub to take a shower, and I think a roll-shower would be a great advantage to that. We have quite a few of those, they need help to get into the tub. Whereas if it was a walk-in, roll-in shower, they wouldn't have this problem.

    Chairman LAZIO. Ms. Sylvester, you have been in your complex for 18 or 19 years. If your complex had two different buildings or two different wings, in one wing you had seniors who had one level of independence, and that may have been the first place they came in, and in another wing, you had another level for folks who had a little bit more difficulty, do you think this would be an emotional problem? If a senior fell and broke his or her hip, God forbid, and felt like he or she needed a little more care, a little more help or housekeeping or preparation in terms of meals, could the resident move to another wing? Do you think people would be willing to do that?

    Ms. SYLVESTER. If it were me, no, but I think other people would, because I like to do things for myself, but it has happened where they have broken their hip, and they have had to go to like St. Camillus or James Square for rehab, and then they come back, but in our building, we don't have room for anything like that.

    Mr. BISCOTTI. I think the problem there would be where would you establish a line, these people belong in this or that, and that would be a difficult thing to determine, that who needs the help. Do you really? Well, let me look at that, I don't think you need that much help. You can go over here. This kind of thing. That would be a difficult thing to do, but I think it would be great if you could do it.
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    Chairman LAZIO. It would be a challenge.

    Ms. Phelps, some seniors in Section 202 housing are relatively young. They are in their 60's, and others in their 80's or maybe even 90's. How do you feel, what do you think is the best mix of ages in a senior project? Does it make a difference how many very old people there are, or do people get along well, regardless?

    Ms. PHELPS. They get along very well. We all look out for each other. A neighbor wants you to come in and help her or something, you go in and do it.

    Chairman LAZIO. Sometimes you actually feel needed when you have to go in and help somebody who actually has more of a need?

    Ms. PHELPS. I like that.

    Mr. BISCOTTI. I don't think you should use numbers to separate people. I am 83 years old. I am very active, in perfect health.

    Chairman LAZIO. Apparently.

    Mr. BISCOTTI. You know, you shouldn't use these numbers at all.

    Ms. SYLVESTER. I agree. I am 82.

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    Mr. WALSH. I thought you were all in your 60's.

    Ms. PHELPS. We are all chickens.

    Mr. WALSH. My dad is 86 in July, and he is still playing golf.

    Ms. SYLVESTER. If you ever came in our buildings and saw some of the ladies past 85, we have a lady 94, you would never know. She drives her own car.

    Mr. WALSH. My brother Michael's wife, her name is Chris Malone, her aunt, I think is in Villa Scalabrini. Her mother's maiden name would be different. Is there a Mrs. Malone there?

    Ms. SYLVESTER. No.

    Mr. WALSH. She is in most nattily dressed woman, always wears a hat.

    Ms. SYLVESTER. Mrs. Rizzo, the hat.

    Mr. WALSH. How old is she?

    Ms. SYLVESTER. She is about 89, I think.

    Mr. WALSH. She is a remarkable lady.
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    Ms. SYLVESTER. She has always got a hat on. She won't come downstairs without her hat.

    Mr. BISCOTTI. She is at mass every day, at church. Remarkable woman.

    Ms. PHELPS. We have a blind lady, she doesn't have any help, no aides or anything, and she knows where everything is, and she has gotten so she can walk to the dining room, and sit in her chair—they have a special chair for her, and she enjoys it. And she has gotten so she knows everybody by their voice. She is very pleasant.

    Chairman LAZIO. In any of the complexes, do you have housekeeping services? And describe to me the nutritional or eating dinner services that you have.

    Ms. SYLVESTER. Not in our building, but we have St. Peter's Senior Center right next door, and we serve lunches there three times a week.

    Chairman LAZIO. You don't have a common area where people have meals? Is that a problem for some seniors in terms of being able to cook for themselves?

    Ms. SYLVESTER. Yes, because a lot of them receive Meals on Wheels.

    Ms. PHELPS. And they put on a hot lunch for everybody at noon for people who belong to that and a bag lunch for your supper, and I like that. I don't care about cooking.
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    Chairman LAZIO. How about housekeeping? Are there folks that actually have some trouble getting around where they could use some light housekeeping?

    Ms. PHELPS. They have aides that help them with the meals if they can't get out.

    Chairman LAZIO. The question here is are we providing enough services so that people are not forced to be in nursing homes or other situations they may not want to be in? Obviously, listening to the three of you, seniors are happy around other seniors where you have social activities and fun and games and you go out together and talk. And once you get isolated, and you are with people that may be sicker than you are, it does tend to present some special challenges.

    Ms. PHELPS. All of us see somebody worse off than ourselves.

    Chairman LAZIO. Which probably gives you a sense of, I am lucky to be——

    Ms. PHELPS. You want to help them all you can.

    Chairman LAZIO. That's great. I don't have any other questions.

    Mr. WALSH. One other one. I will ask the administrators this, but the people coming in now, and maybe you can reference your own experience, are they waiting a long time to get into Malta House?
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    Ms. PHELPS. Yes, we have a long line.

    Mr. BISCOTTI. We don't have that long a line at Villa Scalabrini. There is a long line, but not like it used to be, two-year waiting. It's sort of gone down considerably.

    Ms. SYLVESTER. Used to be five years waiting.

    Mr. BISCOTTI. When we first opened, everybody wanted it.

    Mr. WALSH. Phylis, you have been there 18 years. How long has it been?

    Mr. BISCOTTI. 1970.

    Ms. SYLVESTER. It's one of the best.

    Mr. BISCOTTI. By far. I am not prejudiced.

    Mr. WALSH. Because he ran it for five years.

    Ms. PHELPS. I think the Malta House is the best.

    Chairman LAZIO. Let me thank all three of you for taking the time to come down here. You have given great testimony and been very helpful to Congressman Walsh and myself.
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    Mr. BISCOTTI. You are welcome, it's my pleasure to come down.

    Chairman LAZIO. The second panel will come forward when they have a chance, please. I want to welcome the second panel to the hearing and thank you for your assistance to the community.

    In the case of Carl Young in particular, we have worked together since I have been Chairman, and I appreciate your efforts. Congressman Walsh is going to provide two of the introductions. Carl is President of the New York Association of Homes and Services for the Aging, an organization of which Carl is a national figure. It's an organization representing community-benefit organizations in New York State, such as nursing homes, adult care facilities, senior housing, continuing care retirement communities and community services providers.

    Mr. Young is also President of NYAHSA's research and education affiliate, the Foundation for Long Term Care, and has chaired the State executives forum of NYAHSA's national affiliate, the American Association of Homes and Services for the Aging. Before joining NYAHSA, Mr. Young also served as Broome County executive from 1981 to 1988, and he has some special experience in terms of executive leadership in a nationally recognized alternative health care delivery system for the elderly. We look forward to hearing about your experience and expertise in providing affordable housing opportunities for seniors.

    We recently had the occasion to speak in Albany about developing a continuum of opportunity for seniors, which I am really looking forward to working with you on, and I would like to turn to Congressman Walsh for his introduction of the two other witnesses.
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    Mr. WALSH. I have the pleasure of introducing two gentlemen that I have had a lot of opportunity to work with over the last ten years.

    First is Jim Introne, President of Loretto. Loretto has a special place in my heart, that's where my grandfather, my dad's dad, spent his last days. That was a long time ago. That was thirty years ago. They have grown since then, I will tell you, and provided lots of services, very innovative programs and alternative care. Jim is the Chief Operating Officer for several non-profit agencies. He also worked for New York Governor Hugh Carey's Administration as the Director of State Operations and the Commissioner of the Office of Mental Retardation and Developmental Disabilities. He has provided a variety of residential community services for the elderly, including out-patient health, congregate living, and mental health and retardation community residence. That's about as broad as you can be.

    They really pioneered the PACE Program here in Central New York, one of the first in the country, after I believe San Francisco is where it started, and I remember Kathy Ruscitto, who is also here. It was a good fit to so many of our senior concerns, and in his long service, he has been Executive Director of United Cerebral Palsy Association, a member of the State Public Health Council, Chair of the Governor's Task Force on Long-Term Care Reform and several other posts in State government under Hugh Carey.

    I didn't mean to imply that Jim was at Loretto when my grandfather was there, but he goes back enough to have served under Hugh Carey.

    Next is Peter White. Peter has been Executive Director of Christopher Community for 21 years. We have done a lot of things together. Very innovative group, very caring group, very professional, run their facilities very well. They developed a lot of housing for a lot of needs in our community, and we are very, very grateful to Peter and Christopher Community for the work they have provided and the help they have given to so many low-income individuals and families.
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    Peter is a graduate of Providence College, has a Master's in Public Administration from Maxwell School and additional college credits in regional planning and architecture. Mr. White was previously the Deputy Director of the Syracuse Model Cities agency, and truly one of our local authorities when it comes to housing, and in particular, senior housing. It's good to have you both here.

    Chairman LAZIO. Thank you, also, Congressman, and I want to thank the witnesses. This is probably not the first time any of you have testified and contributed to the housing policy. And I want to thank you for what you have done, not just in terms of advising us on terms of policy, but in implementing it and making sure that what we say we want to do actually gets done, and for the ingenuity and creativity you bring to your job. Let me first turn to Carl. Thank you again. Good to see you, old friend.


    Mr. YOUNG. Thank you very much, Congressman. In some respects, you have already heard from the most important witnesses because really the direction of housing and long-term care policy needs to be driven by the people who need and use the services. I do believe we have something to add to the discussion, but I wouldn't minimize what you already heard, and I will not read my prepared testimony. I will try to supplement that.

    As you know, the NYAHSA represents basically a little over 500 members, not-for-profit and public providers of long-term care, and the services provided by our members do cover the full spectrum from housing to nursing homes, to assisted living, retirement communities, home care, and so forth. And in a way, I suppose you can argue we represent the continuum of care, but continuum is still very much an unrealized ideal.
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    There aren't many Lorettos where a consumer can enter a system and find a full range of whatever it is they are going to need, and that's really the direction that long-term care needs to move. That is what people want. They don't want to have to go through a series of applications every time their needs change.

    I think we tend to think of a continuum, people move from independence to higher and higher dependence. The fact of the matter is, people move back and forth. A person may be in independent housing. Their health needs change, they have a bad episode. They are hospitalized, but then they want to get back to the housing if at all possible. The housing piece of the continuum is, in many respects, I think the fundamental building block and also has been under-valued by us in our policymaking and in our thinking.

    We haven't gotten down to the basics in policy, the system. We talk about a continuum, but it's still kind of a disjointed and duplicative kind of a process, and we here in New York epitomize a lot of the duplication and fragmentation. And in our written testimony, I acknowledge my dismay at the fact that you—meaning Congress—have to fight every budget session for 9,000 or 10,000 units of senior housing. There should be another zero on that number, and it's inexplicable to me this incredible need is overlooked.

    I have been with NYAHSA for nearly a decade, and it has been an ongoing travail. The context that I want to just address—and I will get to the housing piece of it, but I think it's important that we take housing in a broader context. As you noted in your remarks, Mr. Lazio, the demographics are pretty startling between increased longevity on the one hand and the baby boomers coming along, we are on the front edge of what could be a crisis if we don't act fairly expeditiously.
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    And the fact of the matter is, we don't have a long-term care policy. We don't have one in New York State, or as a Nation. By a policy, I am not talking about some Government-imposed straightjacket in which we would force people to operate. But we don't have any kind of vision for what the system ought to look like, or a concept of what are the behaviors that we want to be encouraging, what are the needs.

    We have heard from some people what they think the needs are. We don't have a sense—we have a lot of programs, a lot of real good programs, and in many cases, they trip over each other. They don't connect in many cases. In many instances, we put extraordinary resources into one component of the system—nursing homes—and less into another, when a balancing of the resources would be more cost effective and advantageous in terms of quality for the recipient.

    Housing is absolutely critical in meeting these long-term care needs. Part of our dilemma, and I think that applies in both Albany and Washington, is so much of our decisionmaking starts first at budget, and we try to fit whatever policy we are going to do into some kind of budget-driven box, and that again is not something new. This has been a bipartisan approach to long-term care policy for some time, and it's understandable.

    I held elected office for sixteen years, and I understand very well the kind of pressures that come from the constituents. Generally speaking, we constituents want more services and lower taxes, and we want them simultaneously.

    Thank you very much.
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    Mr. WALSH. It doesn't change.

    Mr. YOUNG. The result of budget driven long-term care has been a more expensive system than we need, and it doesn't provide the kind of quality that it could provide if we were operating first from the policy. If we really think about what we want the system to look like, I am absolutely certain it will cost less than if we start out with how many beans are in the jar and how to allocate these beans.

    A good example is, whenever an idea is proposed, the first question asked by the media and many of us is, ''What's the effect on the budget?'' Congresswoman Johnson has proposed what I think is an important first step, and that is that the insurance premiums for long-term care insurance be made directly deductible and not subject to the adjusted gross income cap.

    The first question asked was: What would the effect be on the budget? And it's a reasonably big number in the short term, but I can guarantee you that the savings that would be realized by obviating the Medicaid estate planning that is epidemic in this country would drop the actual cost to the Federal budget if we were to implement this kind of thing. It's the kind of long-term thinking, and I am glad to hear she has found a Senate supporter and the bill is going to resurface and get another try. That's the kind of thing we need to take a look at.

    Budgeters are great. When I was County Executive, the office that was attached to mine was my Director of Budget, but we never let Ken dictate policy. He just told us what the resources were we were dealing with. The whole discussion about saving Medicare has essentially been a financial discussion, not a system of care discussion. The appeal of managed care for Medicare was basically cost containment, rather than system delivery. And as long as this is our starting point, it's really a straightjacket in terms of our thinking.
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    I am absolutely certain that if we can step back from the process and develop a broader picture or concept of what the system ought to look like, it would work better and be more cost effective. I know that's a hard thing to do, Congressmen. You mentioned you only have a two-year tenure in your current spot. We can get the process started.

    I heard a speaker, a staff person from the National Governors Conference at a meeting a couple of weeks ago talk about the difficulty of getting governors to think in terms of a broad vision, because they only have four-year bites of time, and I know that's an issue, but a real legacy might be to have simply started a process that takes longer, but has fruit that bears a great harvest.

    What does all this have to do with housing? I am by nature, both personally and professionally, a generalist. I won't get into some of the specifics of the various pieces of legislation. As we heard just a few minutes ago, safe, affordable housing really has to be the foundation on which we build the rest of the system. I absolutely believe that that's not where we have started.

    We have decided to start with the nursing home and work our way back with regard toward independence, but a modest investment in housing on the front end will result in lower long-term care costs and better services. Currently, we see all around us the consequence of overreliance on institutional care and services.

    A couple of years ago in meetings with groups of our members around the State, I was asking primarily nursing home members, ''What percentage of your nursing home residents could be cared for in a less intensive setting if the programs and services were available?'', and this would include assisted living and adult care facilities.
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    With one exception, no one gave me a number lower than 10 percent, and many went as high as 20 percent. And 10 percent of 115,000 nursing home beds in New York State is a pretty good number, and I would guess that the same policy shortcomings exist in most of the other fifty States as well, and we have emphasized what is indeed the most expensive, least preferred level of the care system—which is not to diminish the role of the nursing home. It will always have a place.

    What people want, I think, are real choices, viable choices that maximize their independence. This is where policy needs to go. Maximize their independence. Maximize the quality of life they are able to enjoy. And I am not suggesting that we just step back and not do anything while we are doing the big picture stuff.

    I think H.R. 202 is an important step to effectuate while we are doing the big picture kind of thing, and certainly I am not going to tell you what's in the bill. You know what's there, you put it there. It's an extremely important step in the way of providing some of the services we are talking about. It's cost effective, gives greater security and greater flexibility. There are no losers in H.R. 202.

    The last thing I want to underscore is we can't just look to HUD for developing long-term care policy. We shouldn't look to HUD for housing policy any more than we should look to HHS exclusively for health care policy. It's all a part of a system, part of our fragmented system. It's a consequence of fragmented policymaking, and we need to find some ways, and the legislature is certainly the forum in which to create those bridges to connect all of the components of the system.
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    And I have used more than the five minutes. Before I was a politician, I was a classroom teacher, so forgive me. If you give me a forum, I have to remind myself to shut it off, but I will be happy to respond to any questions as we go along.

    Chairman LAZIO. Thank you very much, Mr. Young.


    Mr. INTRONE. Thank you. We are delighted that you are here, and we welcome you to our community. I have submitted written testimony, and I will briefly review that and reserve the time for questions.

    Mr. Walsh also introduced Loretto. To give you a little more of an extended version, Loretto is a Syracuse non-profit agency whose primary mission is to improve the quality of life for the frail elderly of our community. We believe in the programmatic and financial merits of a system of services that can be coordinated to effectively meet the complex and changing needs of the population we serve.

    Loretto has long recognized and advocated the tremendous importance of affordable housing as a part of the continuing care service continuum. Nearly one thousand of our clients reside in housing we own and operate, most of which has been financed or funded through Sections 232, 236 or 202 HUD authorizations.

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    Loretto itself owns and operates nearly a thousand units of subsidized housing throughout Central New York, but in addition to housing, we provide a full array of continuing care services, including out-patient medical services, and residential health care. And each of Loretto's housing residents receives the benefits of being part of a system of services that can provide them with the support they need when they need it.

    In the past, and generally it remains true today, subsidized housing for the elderly has been perceived primarily as a means of assuring quality housing for individuals whose financial wherewithal was diminished by retirement and perhaps disability. We think it's only part of the potential benefit of subsidized housing programs for the elderly.

    As is becoming increasingly clear by the very rapid growth of market rate assisted living, dedicated senior housing with supported services is considered by the elderly, particularly those who are aptly described as ''frail elderly,'' as a very desirable alternative to either in-home support or nursing homes.

    When we refer to ''frail elderly,'' we mean people who have chronic illness or disabilities and lack one or more of the essential skills necessary for independent living. For these people who lack the ongoing support of family or friends and/or the financial wherewithal to purchase services to help overcome their limitations, community-based organizations such as Loretto must provide necessary care and assistance.

    Frail elders make up roughly 12 to 14 percent of the Medicare population, and despite the many advances in the overall health and well-being of older Americans, this segment of the elderly population can be expected to grow in line with the overall growth of the Medicare population. The prevailing public perception is this group of elderly, the frail elderly, are high users of health care because of their inherent characteristics.
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    We take a somewhat different view. In our opinion, better care coordination, coupled with expanded community services, can produce dramatic reductions in this population's use of high cost institutional and medical services. And this relationship is clearly demonstrated by the PACE program; we are very pleased that Congress has recognized this and made PACE a permanent part of the Medicare program.

    In our opinion, HUD-supported housing ought to be considered an integral part of a comprehensive response to the needs of people unable to live independently, but not in need of nursing home care. Unfortunately, there are barriers in the way of the useful implementation of this model.

    Many, but not all, States have made assisted living a part of their Medicaid program through use of waiver authorization. Typically, Medicaid will cover program services, and room and board is made available though the combination of Social Security and subsidized housing. This opportunity needs to be expanded by making supportive living services a mandatory Medicaid benefit, and Congressional authorization for Section 202 housing should explicitly recognize its role as a foundation for such services.

    It would be helpful, in fact, to have a specific set-aside of Section 202 housing for the frail elderly, and for the purposes of assisted living. Current housing eligibility requirements preclude the assignment of wait list priority to individuals with the greatest needs. Worse, individuals requiring supportive services to maintain their independence might not be considered appropriate for Section 202 housing.

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    Of course, not everyone eligible for subsidized housing is eligible for Medicaid. Especially, given recent reductions in Medicare supported services for the chronically ill and disabled, some means needs to be found to provide support to those individuals who do not qualify for Medicaid, but who also do not have the financial capability of even minimal support. Efforts should be made to direct monies available through Title XX, the Older Americans Act, or other social service programs to this purpose. Housing support for service coordinators is helpful, but not nearly sufficient.

    Finally, especially for the frail elderly, subsidized housing needs to be thought of as a more local than community-wide resource. Even seniors who live independently have strong preferences for staying in the same geographic areas in which they have lived their lives. In the Syracuse area, where nearly everything is reachable in less than a 30-minute car ride, we have housing vacancies in some areas and lengthy waiting lists in others. Statistical formulations alone are inadequate determinants of a community's need for subsidized housing.

    For too long, housing and continuing care have developed independently. The result has been an inefficient use of the scarce resources required to adequately respond to the needs of our rapidly aging population. It is heartening to see the barriers between the two service systems are beginning to break down. Recent HUD proposals to convert existing senior housing into assisted living units is a welcome recognition of the need for a more expansive view of the Federal role in elderly housing.

    At the national level, we know that the Catholic Health Care Association and Catholic Charities are devoting a great deal of attention to encouraging this kind of collaboration between health care and housing. In our community, Loretto and Christopher Community, the area's leading sponsor of Section 202 housing, are bringing together their long-term care and housing management expertise. On the State level, the New York State Association of Homes and Services for the Aging is actively working to bring housing and long-term care providers together.
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    Unfortunately, voluntary and local efforts to foster the integration of services and housing will not proceed very far unless they receive the very active support of the responsible Government agencies. At both the State and Federal levels, we hope that the housing and services agencies will accelerate their efforts to work together in order to assure coordinated funding and policies.

    We have not yet, as Carl Young mentioned, defined the service model we will need to cost effectively respond to the challenges posed to the rapidly growing elderly population in the early part of the 21st Century. It is clear, however, that affordable housing will be a key element.

    These are important issues, and we very much appreciate your efforts to explore them. Thank you for the opportunity to offer testimony.

    Chairman LAZIO. Thank you very much.


    Mr. WHITE. I am Peter J. White, Executive Director of Christopher Community of Syracuse, New York. I would like to thank Congressman Rick Lazio and Congressman James Walsh for the opportunity to appear before the Subcommittee on Housing and Community Opportunity to discuss the present and future needs of senior citizen housing, particularly the Federal 202 program.
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    For the record, Christopher Community is a not-for-profit organization that develops and manages housing for low-income persons. Our primary focus is senior citizen housing as we operate approximately 2400 units in Upstate New York, and we operate another 300 apartments for families, primarily in the City of Syracuse. We also operate three shelters, two of which serve emotionally disturbed persons, and one which provides transitional housing for women and children. We administer the Section 8 Rental Subsidy Program for Onondaga County's towns and villages. And this program serves more than 400 households.

    When we developed the Section 202 housing in the late 1970's and through the 1980's, we were clearly filling a void in the need for subsidized housing for seniors. In Upstate cities, towns and villages, it was clear that if we built it, the seniors would fill it; and build we did. Our experience took us as far west as Buffalo, north to Watertown, south to Binghamton and Elmira and east to Utica and Albany. Our area of services covered many towns and villages in between the Upstate cities as well. In most areas we were viewed as an agency cooperating with local government, churches and health care providers to achieve a community need.

    I would digress here to mention—I will apologize to Congressman Walsh for taking his daughter's soccer field in order to build one of our housing units.

    Mr. WALSH. I forgive you.

    Mr. WHITE. In the early years, there seemed to be few seniors with extensive medical problems and the impact of aging in place had not yet come upon us. However, over the past several years, we have noticed many changes as seniors are living longer, and it has become evident that many of our residents and applicants require some personal care, health care services to allow them to function in the apartments they now or would call home. It would appear to me that some aspects of H.R. 202 would address the present and future needs of the seniors who would occupy our apartments.
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    For instance, in our older buildings, we see the need to accommodate the provision of health and personal care service. This would include conversions in individual apartments for roll-in showers, to provide for other community bath facilities and provide larger community kitchen space which would allow the preparation of meals, should the need for a meals program become necessary.

    While it would not be our intention to convert our buildings to complete assisted living facilities, there should be an effort to upgrade them so essentials are in place to allow home and health care organizations to be of sufficient assistance to our residents.

    We are fortunate that Loretto, through their new dynamic Independent Living Services Program, will be teaming with us to serve our increasingly frail elderly in our facilities. Their role could be easier and more efficient through selective improvements.

    In a similar vein, I note that in H.R. 202, there is a reference to having service coordinators for the various facilities. I believe that the term ''service coordinator'' should not just apply to a particular project position in a particular project that we would fund for existing Section 202 senior housing, but rather could also be defined in such a way to allow us to contract with qualified agencies for coordinated services to our residents. We feel that there is more depth in training and staff capability to be provided through an agency approach than if each building or group of buildings relies on one individual to serve in the senior coordinator role as is the standard now.

    H.R. 202 discusses improving market viability and services for our seniors. In this regard, I would hope that Congress would advise the Secretary, even now, to cooperate more easily with those of us who manage buildings where neighborhoods have undergone change detrimental to seniors and would allow us to have security personnel for our evenings and weekends at the properties. I know it's sometimes a difficult process to approve, but I would say the HUD office, and I would say that the Buffalo office with whom we deal is most receptive, but again that question of budget and money and how far can we go often comes to mind when it comes to dealing with security.
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    Having security would allow us to address emergencies quickly and provide a peace of mind to those seniors coming and going at a time when the normal staff was not present. Christopher Community has a policy of having resident superintendents wherever we can, and we find it to be most helpful in dealing with emergency situations, but their role is not necessarily to be the policeman on the project. When that type of protection is needed, they know how to get to the police and call the police and work with neighborhood watch groups, but there are times when they too have to have a life and be elsewhere. In most cases, we have been fortunate to work with the police and neighborhood watch groups.

    As your demographics show, there is another wave of seniors coming in the near future. They are primarily women who will not have either extensive pensions or Social Security, who will need the housing assistance and coordinated services of the Section 202 program. I would note to this subcommittee that the Section 202 program, as it was and as it is, is a very successful Federal program administered well by HUD, and I would note, extremely well by the HUD Buffalo office whose staff, past and present, we hold in high regard.

    This is a HUD program that should stay at the Federal level and not be minced, sliced or diced by transferring it down to the States, counties, cities, towns and villages by combining its allocations with funds going to these other Government units as I have seen discussed elsewhere. There is more than enough control of housing development programs in the Community Development Planning process and the Consolidated Plans of the States and of their respective communities.

    In short, I believe the concepts of H.R. 202 gives this senior housing program the vitamins and prescriptions it needs to successfully meet the requirements of future senior citizens. It is a program which does not require legislative surgery, but rather just a reasonable supplement to what already exists.
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    Chairman LAZIO. Thank you very much. One of the things I wanted to mention, and Mr. White, you just sparked my recollection of this, is that the State does have a housing role, does play a housing role, and it needs to play a role as a partner in housing. I just spoke to the Commissioner, Joe Lynch, this week, who made an announcement that they were going to develop a State tax program that would parallel the Federal housing program.

    Well, if we could think out of the box for a moment, if we had to start from scratch and develop a program or a plan to help seniors, to house them and to provide for their basic needs, what would it look like? Keeping in mind the need for cost efficiency and the limits to the Federal Government's ability to provide oversight, what would it look like? And let me begin with you, Carl.

    Mr. YOUNG. If I had that prescription off the top of my head, I would be more wealthy than I am, but I would not be keeping it to myself. I think we have to start where you started this hearing, with the people who use the services. And there are certain principles that I think we would want to pursue. One of which is to, from a financial standpoint, find a way to reduce the system's dependence on public dollars, whether Medicaid or Medicare.

    In New York State, Medicaid and Medicare pay for 87 percent of nursing home care. That system has to collapse if we don't make changes. We want to have options like private long-term care insurance, and we need to have an array of options, and it needs to be a continuum as I mentioned earlier. Maybe pulling together a national panel or something like that. I think that's a really important first step, as long as we understand we are not going to solve the problem in six months of putting our heads together, but it needs to include people from the provider community researchers.
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    And I learned an incredible statistic a couple of months ago that is reflective of a broader problem. Less than 3 percent of the graduating medical students have even taken an elective in geriatric medication.

    I hope you will have those hearings across the State and across the country because we have to elevate this issue in the public's consciousness now before we are dealing with it on a crisis kind of basis, but what the system ought to look like, it needs to be fluid, it needs to maximize independence and needs to give people as many options as they can manage themselves. And yet, as you know, it has to be financially doable.

    We have gotten to where we are by prescribing specific programs, but doing so outside of the big picture. I think if we could step back and take a look, I think we will discover there are several models that would enable us to get there. The life care community model works for some people. It's a system where you pay on the front end, and it's in essence a kind of insurance. It's works for some people. It's right for upper middle and upper income folks in some communities.

    The Loretto model provides people with a continuum of services in a community. There are any number of models that we can come up with. We need to start with what you want the outcome to be rather than what you want the process to be.

    Chairman LAZIO. Mr. White, Mr. Introne, and Carl Young mentioned the duplication and fragmentation in the current system. Given the patchwork of initiatives to respond to the differing needs of the elderly, there is an understanding that we also need to protect the initiatives that already work right now. We need to look for ways to strengthen the good programs, such as the Section 202 program, and preserve them over the long run.
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    Do you agree that we have developed a patchwork system that has inherent inefficiencies, and can you imagine us thinking out of the box and developing a continuum of opportunity that is cost-efficient and also compassionate? Let me ask Mr. White first.

    Mr. WHITE. I was hoping you would start with Jim.

    Mr. INTRONE. I guess the understanding I would have as sort of the foundation for a response is there really are differences—that the elderly is not a homogeneous group. We think there really is a fundamental difference between the needs of what we refer to as the frail elderly and others. When an older individual loses the ability to care for themselves independently, to cook for themselves, shop, take care of their personal hygiene and do the other things necessary for independent living, they become fundamentally different than other individuals. Until that time, people are capable of a great deal of self-advocacy, and to a large extent, they could do their own coordination of services.

    I think you had a couple of examples here today, older individuals still independent and capable of self-adequacy and determining their own patterns of life, and in contrast Ms. Phelps, who has begun to develop, due to illness, the kind of dependencies that do not allow her to live independently. She needs a different type of approach, and she can, and does, benefit from a fully coordinated service system. She needs shared decisionmaking because she can't really take care of her own advocacy or her own coordination. And for this type individual, we need to step forward as advocates and providers.

    The fragmentation of the services is too much for individuals with functional dependencies to cope with. They lunge from crisis to crisis, from trauma to trauma, with perhaps excessive reliance on medical services and pharmacy. For this group, the frail elderly, we think coordination of services provides a real opportunity for producing improved quality of life at much less cost than we are seeing today.
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    Mr. WHITE. I don't see it so much as a patchwork. I am looking back over the years and seeing our whole effort, and including the one that Loretto and Christopher Community is putting together, as kind of building blocks, and I like the approach of the more recent HUD 202's having the rental subsidy to make sure you can maintain your reserves.

    And facility design has played a much more important role, and we can team with qualified agencies to take care of the needs as they arise, and I also incorporated into that the idea that some of the facilities we have could be altered to allow for assisted living and the inviting of other service agencies to come in and serve those folks.

    And these very same things can be done in the New York State DHCR projects. We have four we administer, funded through State housing trust funds, tax credits, local initiatives, and some of those folks who come to us bring their Section 8 housing vouchers, which the income range is a little different from HUD.

    We have incorporated the way to get the building built, through the housing trust and tax credit. We have welcomed people with vouchers and welcome the assistance of agencies, and even in the State provision of housing, we are using the experience we have gained with the Section 202 programs.

    Chairman LAZIO. The freedom to be creative is an important part of the solution, it seems to me, and I should also mention Jim Walsh as the Chairman of the Appropriations Committee has enormous pressure to balance the competing needs within his area. One of the frustrations we all face is that the Federal Government both in terms of the Executive Branch departments and the Legislative Branch committees is set up along artificial lines that don't necessarily serve the best interests of the communities or the people living in them.
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    While we are talking about bricks and mortar, it's impossible, really, as I am thinking about what you are saying, to divorce housing from the services, whether it's health services or various counseling or nutritional services that help provide for the overall umbrella of the quality of life and maintain some level of independence. And so that integration, would you agree or argue that we need to move toward a much more integrated model of services in order for us to be the best possible partners?

    Mr. INTRONE. Absolutely, well spoken.

    Mr. WHITE. We happen to have a model in our community.

    Chairman LAZIO. Let me turn to Congressman Walsh.

    Mr. WALSH. We both have an obvious interest in housing, although the fact is Rick authorizes and we appropriate, and so that does cause some tension, and it was designed to be that way. That's the way the House of Representatives is set up, and that's the way the Senate is set up. Appropriators take a lot of heat, and we do all the work and we make some mistakes from time to time.

    Anyway, this is a very creative approach, and it's a good approach and it prioritizes senior housing, and based on what you have all told us, no matter how much we do, it's not enough because we are way behind. This is sort of a rambling statement, but the fact is we are behind, and we are not keeping up with the demand, and Carl cites Nancy Johnson's great idea of providing long-term care insurance premiums as deductibles, but then how much does that cost? Of course, an appropriator is going to ask that question.
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    We need to know how much that is so we can take it out of one program and put it in another. We have a surplus budget now. It's a great situation to be in. We are talking about firming up existing programs like Medicare and Social Security that need to be shored up. These are the priorities, and Nancy suggested we make long-term care insurance premiums deductible, but we have 43 million Americans without any health care right now today, so that's what the priority is, to make health care deductible.

    I think Social Security, we have to do more. We have done it with businesses. We need to do more of it. In the meanwhile, we have to deal with the reality of a great society and what can we do now, what should we be doing now under the demands that we have of fixing Medicare, fixing Social Security and dealing with the health care problem of the uninsured in this country, what do we do now to get ready for what's soon to be an onslaught of needy seniors?

    Mr. YOUNG. I think again it comes back to trying to craft a broader vision, and then we can prioritize how we get there, certainly, and I am not naive that there is a simple solution. One of my favorite quotes is a line from H.L. Menkin who said: ''For every complex problem, there are any number of simple solutions, and they are all wrong.'' And I think he is certainly correct, but I think that we have, many of my points of reference are things that we are doing or have done here in the State, and they just underscore the absence of vision.

    One of our members in the Albany area, The Eddy, which is nationally recognized, much like Loretto, is adding a new element to their campus. It's basically a full-service kind of a campus, and first it was going to be an assisted living facility, but then as they got into the project, they had to decide whether or not they wanted it to be in the assisted living program or part of the enriched housing program or as a limited license home care agency.
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    Now the people who are going to be served are the same people, but because of the structures that we have created, this very sophisticated organization is going through a dance of ''which program—under which should we build the project?'' The same people are going to be served in it, no matter what they call it. And I think that's an example of the kind of patchwork thinking.

    Each of the programs was a legitimate effort to address a piece of a problem. I think certainly Congress, from the standpoint of domestic tranquility, if nothing else, the Congress and Administration need to be forthright in taking a hard look at Medicare, both in the short term, but while we are doing that, we need to be operating on parallel tracks. What are the things we can do right now to shore up the system while we are trying to figure out what we really want the system to look like two decades from now?

    Mr. WALSH. One of the things, it's obvious, is your suggestion that we reduce the dependence on public dollars, because if all of a sudden we have 53 million Americans totally dependent on the Federal Government for housing and health care, we have a big problem because we can't do it. We can't afford it. At a minimum, we need to start creating ways and financial incentives to get people to save.

    Mr. YOUNG. I believe Federal employees—maybe this was part of the President's proposal, I am not sure whether it's ongoing or something new. I believe Federal employees are allowed now to pay for the premiums that they might buy long-term insurance care with through the Cafeteria plan or health plan, basically paying with pre-tax dollars. And New York State just implemented that last year.
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    Mr. WALSH. Like a health IRA.

    Mr. YOUNG. Kind of, like that's not—long-term care insurance isn't a short-term solution to the problem because the people who need to be buying it are young fellows like Mr. Introne and Mr. White, and even people in my advanced age. It's affordable, but there is no incentive to do it.

    Mr. WALSH. What about the Robert Wood Johnson?

    Mr. YOUNG. It's a great program. It should be expanded. My biggest complaint about it is the State has not marketed it nearly as effectively as they should have. Conceptually, it's a step in the right direction. To give you an idea of the impact of Medicaid asset divestiture, if we assume there is only one resident per nursing home in New York State on Medicaid that could be paying for their own care, the hit to the medical system is over $30 million. You could fit in a phone booth every nursing home operator who thinks it's only one per facility.

    If we implement these incentives today, that's not going to save any money in the year 2005, but it will in the year 2015 and 2020, and I think that's some of the kind of thinking we have to approach. Again it's not a panacea. The Lone Ranger is dead, there are no silver bullets, but we need to think short-term and long-term.

    Mr. INTRONE. If I could just put in another plug for the PACE program here, Congress authorized expansion of the PACE program, 200 sites nationally. We think it's a very good program and good model. Right now it's only available to people who meet a standard definition of nursing home eligibility.
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    It has broader applications than that to a broader group of individuals who can't live independently, and it would be wise to couple the PACE program at a Federal level with a housing application. PACE supports the service side of things, and we still need the housing part of it. We put them in this community together in a multi-campus, and that's a model I think should be looked at nationally.

    And even as I say that, I have to recognize that given the Federal proclivity here seems to be to regulate everything to death, I think the PACE program is under some threat at this point. Right now HCFA is considering a new methodology for determining capitation payments under Medicare managed care, and I understand there is a research basis for this, but generally the methodology would relate capitation levels to prior hospitalization experience, which on the face of it doesn't seem to me the right kind of incentive structure.

    Thankfully, HCFA has decided to give both PACE and the Social Health Maintenance Organization demos a pass on this new methodology for a couple of years, but we are worried about it. If HCFA decides to amend the methodology for determining capitalization payments to the PACE program, it would undermine one of the very few effective programs out there that does support the coordination of services. So it's this propensity for ever more regulations and ever more proscription that gets in the way of the coordination and achieving the efficiency we all want.

    Mr. WALSH. To bring back an old clinker that made the rounds about two years ago, remember who was accused of saying he wanted to see Medicare wither on the vine, and whereas what he really wanted was to see HCFA wither on the vine.
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    Chairman LAZIO. I don't have any other questions. I want to thank this panel for your testimony, excellent testimony. It's going to provide a very good foundation as we begin the process of thinking out of the box, and we are going to be working together. I think this is going to be a model relationship between authorizers and appropriators.

    I hear you loud and clear. I think Congressman Walsh does as well. The services are absolutely essential and should be married with the bricks and mortar to address the housing needs of seniors. We can't afford to wait. We have a crisis that is looming in terms of the graying of America, the graying of New York, and now is the time to meet that need, and we will be calling on you. I hope you will be as responsive as you have been in this hearing in helping us think through some solutions because we cannot do it all from Washington.

    You are in the very best position, having been residers and practitioners of housing for seniors, to tell us what works and doesn't work and what would provide the right incentives for both cost efficiency and creativity for the highest quality of care for our seniors. We thank you for your attendance and presentation, all of which was excellent, and thank Congressman Walsh for hosting this and his leadership most particularly on issues affecting seniors in Syracuse and throughout America. This hearing is now adjourned. Thank you.

    [Whereupon, at 12:40 p.m., the hearing was adjourned.]