Did you know that the elderly population in the United States is expected to increase from 35 million in 2000 to 69.4 million in 2030? And that the health care needs of this group accounted for 40 percent of hospital stays and 49 percent of all days of care in hospitals in 1995?[1] It is expected that more elderly will require long-term care assistance and services because of disabling conditions and other chronic illnesses that limit their ability to perform basic activities.

Econometrica has been contracted by the Centers for Medicare & Medicaid Services (CMS) to adapt, implement, and maintain health care quality measures for a little-known Government program called PACE—Programs of All-Inclusive Care for the Elderly.

As a response to the needs of individuals in this age group, PACE was founded in the early 1970s, with On Lok Senior Health Services, located on San Francisco, CA, as the first PACE organization. Originally designed as a project to provide community-based care for the elderly in the Bay Area within the Chinatown-North Beach community, On Lok saw a pressing need to provide long-term care services for families whose elders had emigrated from China and the Philippines.

With the continuing success of PACE Organizations, legislation was passed in 1997 as part of the Balanced Budget Act to make PACE a permanently recognized provider for Medicare, enabling States to provide PACE services to Medicaid beneficiaries as a State plan option. Recognizing the economic advantages of PACE, Congress established a program to expand PACE to rural areas of the country, under the Deficit Reduction Act of 2005. By 2001, there were 30 PACE Organizations in 19 States. As of September 2015, that number has grown to 120 PACE Organizations in 31 States serving more than 32,000 PACE participants.

The PACE care model provides community-based care to eligible individuals who meet three of the following eligibility criteria:

  1. Age 55 or over.
  2. Deemed nursing home certifiable by their State.
  3. Live within a PACE service area.
  4. Able to live safely in the community with the help of PACE services at the time of enrollment.

Each PACE Organization is designed around a social system of adult day health care. This involves a full spectrum of medical and long-term care services, from primary medical care to contracts with medical specialists. The PACE Organizations complement health plans by facilitating the incorporation of multiple funding streams while also completely integrating and coordinating the delivery of care and services to participants. PACE focuses on providing the best care for the participant.

Operationally, PACE Organizations are unique in that they are implemented through a three-way program agreement among CMS, individual States, and PACE provider organizations. CMS and the individual States share equal responsibility for monitoring the programs’ operations, cost, quality, and effectiveness.

To experience an inside view of this program, watch this video to see PACE in action and to hear what veterans have to say about the program: “The people who work here really care, and if you have a problem, they are always there to help you, and you can count on that.”


[1] Hirth, V., Baskins, J., & Dever-Bumba, M. (2009, March). Program of All-Inclusive Care
(PACE): Past, present, and future. JAMDA, 10, 155–160. Retrieved from http://www.dhcs.ca.gov/provgovpart/Documents/Waiver%20Renewal/PACE_Article_JAMDA_091.pdf.

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