Medicare Compliance & Reimbursement

Leaders speak out with aggressive propositions on LTC reform

Ready or not, over the next 10 years, the aging baby boom population will transform the long-term care system. But will the struggling LTC system be able to ready itself--and repair itself--in time?

Most elderly Americans consider health care an entitlement, studies show. Nevertheless, "most Americans are in denial about the reality that they might live long enough to require some form of long-term care that will make them dependent on people outside of their immediate family," claims the National Institute of Health Policy's David Durenberger. "Most Americans mistakenly think Medicare covers their long-term care needs. Or they just don't want to think about the problem at all," he adds.

Industry leaders are worried, to say the least. In spite of LTC's small successes over the past few years, leaders concur that the system needs massive reform to support the millions of baby boomers who expect adequate coverage in home-based and assisted living settings. "Today, only those who need high-level care around the clock--and don't have family members to care for them--are likely to be placed in skilled nursing facilities," points out John F. Derr, American Health Care Association executive vice president.

Inadequate Funding And Quality Measures Top Laundry List Of Problems

Health care leaders have called the current LTC system everything from "flawed" to "broken," citing an abundance of growing problems that demand ambitious and inventive solutions. Durenberger calls Medicaid "a tennis ball hit back and forth in the political responsibility court ... when it comes to setting public priorities, prescription drugs for Medicare beneficiaries, health information technology, and funding for education for health professionals come first--and long-term care finishes last." One of LTC's greatest threats is yet to come. The baby boom generation is fast approaching retirement age--when it hits it will tax the LTC system greatly, leaders fear.

Among LTC's most challenging hurdles is its growing price tag and diminishing funding, leaders agree. "Our current health care system drives many older Americans toward poverty, just as their need is greatest," notes Edward C. King, executive director for the National Senior Citizens Law Center. Costly nursing home care, lacking LTC insurance, limited Medicare LTC coverage and selective private coverage options make it increasingly difficult for the elderly population to afford quality care. Even individuals who consider themselves financially sound in their 60s eventually find themselves reliant on Medicaid, King points out.

Escalating health care costs threaten to put quality-of-care on the chopping block. Baby boomers will certainly demand a level of quality that's above and beyond the level that program funding currently affords LTC programs, notes Derr. Individual LTC insurance from private carriers could improve quality, but insufficient enrollment has caused most private insurers to drop their LTC plans or offer plans that are merely on par with Medicaid coverage.

Derr also blames LTC financing's current turmoil on the prospective payment systems Medicare implemented for home health care and skilled nursing services in 1998 and 1999, pointing out a continuous stream of subsequent cuts to reimbursements and treatments. "Although these new systems apply only to Medicare-covered post-acute care, they dramatically changed the landscape of long-term care financing by restricting and redistributing the flow of payments to and among providers," he alleges.

Progress And Potential Define LTC For The Next Generation

Despite LTC's ailing reputation, it has seen major progress over the past 15 years, notes King. The Federal Nursing Home Reform Law has improved health care quality in nursing homes since its inception in 1990. "This important statute has brought about the greater focus on patient assessments and care planning, diminished the use of patient restraints, and established standards that have improved the quality of nurse aide care," King notes. In addition, assisted living has gained legs as a respected LTC option, allowing today's elderly better care options outside of institutionalized care settings.

Health information technology and pay-for-performance initiatives are also paving new ground, leaders agree. Pay-for-performance stands to improve care quality through an incentivized payment structure. And health IT's potential reaches far beyond streamlining claims paperwork--it could help balance the disproportionate worker-patient ratio by putting benes in greater control of their own health and well-being.

Leaders Propose Flexible Care Options, Patient-Driven Care Along With Finance Reform

Regardless, the current LTC system needs a complete overhaul--an effective LTC system requires formidable financing reform, leaders agree.

Durenberger proposes taking LTC coverage out of Medicaid altogether and replacing it with a combination of private and social insurance coverage. "Financing reform should combine the existing Supplemental Security Disability Income program with a new Medicare catastrophic benefit and a 14- to 18-month private insurance benefit," says Durenberger. "This last benefit could be paid for with premiums funded by a combination of purchaser premiums and tax-subsidized transfers from equity built up in other tax subsidized savings and investment plans."

But financial reform on its own isn't enough to repair the flaws in the current LTC system, according to industry leaders. Quality and pay-for-performance standards are critical to creating enough incentive to foster system change. The underlying challenge is that lower-performing facilities are the ones that need investment and incentives the most, notes Derr.

Consumer education about the LTC system and the variety of care alternatives can also eliminate surprises and help aging Americans brace for unanticipated needs, leaders say. Leaders support flexible care options that offer benes ample LTC choices without sacrificing access to quality care. "The future of long-term care should permit those who need care to live their lives under their own control, to the degree possible," upholds Durenberger.

In a similar vein, Derr proposes a "patient-driven" LTC system that expects benes to assume greater responsibility for their own care, replacing today's reactive care system with a more active approach. IT would play a critical role in a "patient-driven" LTC system by allowing benes to track their own health status; benes could work with providers to identify personal health trends and formulate corrective action, instead of relying so heavily on providers to do the legwork. "Most people watch their bank accounts to ensure that they do not overdraw their funds," argues Derr. "Why can't they do the same for their health?"

New developments in health IT, including electronic health records and telemedicine, can also offset LTC costs by helping compensate for the shrinking proportion of health care workers to benes. Benes can use health IT to communicate with their providers and take control of their care options, leaders pose.

The bottom line is that there is still hope for providing quality LTC services to the elderly in the years to come. "Leaders concerned about long-term care in this nation must step forward, providing information to the general public and creating awareness of the need for positive changes that will prepare this country to address the long-term care needs of the baby boom generation during the next 40 years," asserts King. "We must create a state of readiness. If we fail to do this, many will suffer and we will have disserved our nation and those we seek to serve."