Grants Helped Build a Health Facility of ‘Peace and Happiness’

When Jennie Chin Hansen’s father suffered a debilitating stroke, she knew where to bring him.

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Ms. Hansen was a researcher at On Lok SeniorHealth Services, a San Francisco charity that provides myriad health and social services to frail elderly patients who live at home. She removed her father from the Boston nursing home where he had been staying — and where doctors had predicted he would soon die — and brought him to On Lok.

There, physicians and therapists helped him regain his ability to eat. He resumed his hobby of painting and lived five more years — in his daughter’s home rather than in a nursing home.

Ms. Hansen is now executive director of On Lok, which in Cantonese means “a place of peace and happiness,” and the charity that helped to make her father’s last years happy ones is helping to transform the way elderly people nationwide are cared for.

What distinguishes On Lok’s approach is that patients receive both acute medical services and long-term care at the same place, with the same familiar staff members, rather than having to negotiate the normally fragmented health-care system.

Moreover, each patient has a team of doctors, therapists, and other staff members that continually reviews his or her case.

Numerous foundations have helped spread the On Lok strategy across the country, and the federal government gave the charity’s approach a vote of confidence by allowing organizations that want to copy its methods to receive reimbursement for their services through Medicare and Medicaid.

On Lok began as a solution to a local problem. In 1971, a group of concerned citizens in San Francisco’s Chinatown got together to find a way to help the area’s poor, elderly residents obtain medical and social services. Although their original plan was to build a nursing home, they decided instead to try a new approach. Using a $10,700 grant from the San Francisco Foundation, the group opened a facility where elderly people in poor health could receive health and social services, plus hot meals, during the day, then be driven back to their homes at night.

It was one of the first such centers in the country.

“Even back then, we were thinking out of the box,” says Ms. Hansen. “We saw a problem that the system couldn’t handle, where people didn’t have access to nursing beds, and found a new way to tackle it.”

Two years later, thanks to another grant from the San Francisco Foundation, On Lok began offering help to older residents in their homes. The assistance included not only nursing care but also such things as helping people get dressed and cooking their meals.

By 1978 the charity was providing full medical care for people who would otherwise be in nursing homes. Since then it has opened five additional centers in San Francisco and now provides services throughout the city.

“On Lok looks at health care in a unified way,” says Brian Hofland, senior vice-president of the Retirement Research Foundation, in Chicago, which has awarded four grants totaling $730,000 to the charity since 1984. “They’ve integrated long-term and acute care in a way that few others have.”

Since government insurance programs would not cover a program that combined emergency and long-term care, On Lok also devised an innovative payment system for its patients, most of whom have low incomes.

The charity won permission from the federal government to test its system, obtaining waivers that enabled it to collect fixed monthly payments from Medicare and Medicaid in exchange for providing a spectrum of services: hospital care, including surgery; physical and occupational therapy; vision and dental care; and emergency services, among others.

The innovations and successes gained On Lok widespread attention. But some people wondered whether such a program would work as well outside San Francisco’s tight-knit Asian community.

In 1984, On Lok received a $300,000 grant from the Retirement Research Foundation to conduct an evaluation and answer those concerns. Among other things, the evaluation found that On Lok’s program cost about 15 per cent less than the traditional, but more fragmented, fee-for-service arrangement between patients and health-care providers.

It also showed that the program’s integrated method of care worked well with the non-Asian patients that used On Lok’s services.

In the mid-1980s, the charity began to spread its method of care, using more than $6-million in grants from the Robert Wood Johnson and John A. Hartford Foundations to serve as a model for similar programs across the country.

The nationwide expansion, known as the Program of All-Inclusive Care for the Elderly, or PACE, received a big lift when the 1997 Balanced Budget Act gave approval to the financing system developed by On Lok and used by PACE sites, enabling them to get reimbursements without going through the waiver process. The legislation also authorized 40 new PACE sites that year, plus up to 20 each succeeding year.

On Lok has expanded in other ways as well.

In 1980 it used a loan from the federal department of Housing and Urban Development, as well as grants from the Evelyn and Walter Haas, Jr., Fund and the Levi Strauss Foundation, both in San Francisco, to build low-cost housing for elderly people with health problems.

More recently, On Lok received a $750,000 grant in 1996 from the John A. Hartford Foundation to train physicians, nurses, and therapists to work together better in solving complex problems that face elderly people with chronic illnesses.

The Hartford Foundation has also awarded the charity $1-million to help it develop electronic medical records for all of its patients. The records are accessible to all the health-care professionals who work with patients at On Lok.

Meanwhile, the Archstone Foundation, a Long Beach, Cal., institution that focuses on aging, has given On Lok $347,000 over three years to expand its program to include middle-income elderly patients.

The San Francisco Foundation also plans to make additional grants to the charity, to open new centers around the Bay Area.

“Being able to operate and even thrive in this environment that is so challenging to non-profit health-care organizations is no small accomplishment,” says Diane Aranda, the San Francisco Foundation’s program executive for community health.

“Jennie’s approach has been to walk a fine line of staying very true to On Lok’s mission and to the community, yet being very business-savvy about what the financial realities are and what needs to be done to survive,” Ms. Aranda says. “I think they’re just going to keep paving the way.”