Older Americans Act

Shrinking resources and growing demands have led to contractual relationships between area agencies on aging and private corporations. The agencies provide eldercare services to private employers under these public-private partnerships. These arrangements have been criticized on the grounds that preference should be given to older individuals with the greatest economic and social needs, with particular attention given to low-income minority individuals. GAO found that by 1991-92, only a small portion of agencies had actually entered into public-private partnerships. Most of the agencies with such partnerships were not generating enough profits through these arrangements to finance significant amounts of additional services. Moreover, agencies with partnerships reported typically using existing staff to provide services to those referrals they received. Among the 31 agencies that reported both income and cost data for eldercare services provided in 1991, the median net profit was $0. GAO summarized this report in testimony before Congress; see: Older Americans Act: Eldercare Partnerships Generate Few Additional Funds for Public Services, by Eleanor Chelimsky, Assistant Comptroller General for Program Evaluation and Methodology, before the Subcommittee on Human Resources, House Committee on Education and Labor. GAO/T-PEMD-93-4, May 27, 1993 (nine pages).

GAO found that: (1) by 1992, few AAA had entered into public-private partnerships to provide information and referral or case management services; (2) most AAA partnerships have provided enhanced information services rather than case management services; (3) AAA partnerships are limited in scope and most AAA use existing staff to provide eldercare services; (4) AAA partnerships do not generate enough profits to offset decreasing supplemental resources or finance significant amounts of additional services; (5) of the 31 AAA partnerships that reported income and cost data for eldercare services, 15 showed a net profit generated from the partnerships, 13 broke even, and 3 reported net losses; and (6) 11 out of the 15 partnerships that reported net profits used additional funds for maintaining or increasing services.