LTC Bullet: How to Advance Progress on LTC Reform
June 15, 2001
Center for Long-Term Care Financing President Stephen Moses’ latest article focusing on the Center’s LTC Triathlon project appears in the May/June, 2001 issue of “Advance” magazine and is reprinted with permission below.
the Triathlon project’s inception, we’ve encouraged LTC Bullets subscribers
to find out about industry cross-cutting issues by attending the professional
conferences and subscribing to the trade journals of long-term care financiers,
insurers, and providers, regardless of personal focus.
Here’s another opportunity. “Advance
for Providers of Post-acute Care” offers clinical and business information for
providers across the post-acute care continuum, including long-term, subacute
and home care, assisted living, case management and HME.
To subscribe, go to www.advanceforpac.com
or call 800-355-1088. Subscriptions
are free to qualified recipients (managers, directors, adminstrators and case
managers in post-acute care).
Center’s LTC Triathlon report, upon which the article in Advance is based, can
be read or copied for free online at www.centerltc.com/pubs/triathlon.pdf.
If you'd prefer, order a hard copy for $49.95 by contacting Sarah Allen
at 425-467-6840, firstname.lastname@example.org,
or by mailing your request to Center for Long-Term Care Financing, 11418 NE 19th
Street Bellevue, WA 98004. Sarah
will send you a copy of the report and an invoice to return with your payment.
the race for the survival of long-term care, three players lead the
pack--financiers, providers and insurers. The
Center for Long-term Care Financing is helping them cross the finish line.
Stephen A. Moses
parents and grandparents fought two great wars to make the world safer and freer
for us. They struggled through the
Depression, scrimped and saved so we could enjoy greater prosperity.
the past 35 years, we have rewarded their long, hard efforts with an inadequate
long-term care system based primarily on institutionalization and welfare
one believes the current system can meet future needs.
Our challenge today is to find and finance a better way of providing
long-term care before the clock runs out on the baby boomers, leaving an even
bigger problem for the next generation.
the most benign economic conditions in United States history, America's
long-term care service delivery and financing system is a tragic mess:
major nursing facility chains have declared Chapter 11 bankruptcy. Consequently,
between 10 and 20 percent of all nursing home beds in the country are in
bankrupt facilities today.
of home health agencies have gone under financially.
new assisted living facilities are filling far more slowly than anticipated.
care stock prices are down precipitously.
capitalization by debt or equity is almost non-existent for publicly held
are in desperately short supply, whether they are low-wage nurses' aides in
long-term care facilities or unpaid friends and family in private homes.
long-term care services are too expensive for most Americans to afford, but
Medicare and Medicaid pay too little to assure quality home care or nursing home
against nursing homes and assisted living facilities for allegedly providing
poor care is on the rise and driving liability insurance premiums through the
7 percent of seniors and virtually no baby boomers own private insurance that
can help them with the catastrophic cost of long-term care.
America's gigantic and rapidly aging baby-boom generation guarantees that
the challenge of long-term care will become greater and far more expensive with
time. As of now, we are losing the long-term care race.
What is wrong and how can we fix it?
That depends on whom you ask. The
government blames providers. The
providers blame government. Probably
both positions have some merit, but the government has the biggest bullhorn so
its point of view often prevails in the popular and academic media.
Few people give much attention or credence to the private sector
components that struggle to build, operate and maintain the long-term care
service delivery system.
of this, the Center for Long-Term Care Financing interviewed a sample of
financiers, providers and insurers of long-term care.
Titled the “Long-term Care Triathlon,” the study’s objective was to
give voice to their views and begin the search for a solution.
We conducted 119 telephone interviews to find out their opinion regarding
what is wrong, who is at fault, what should be done and how.
These were the questions we asked:
1. Why do you think the long-term care system is having so much trouble these days, i.e., nursing homes declaring bankruptcy, assisted living facilities filling slowly, stock prices decreasing, debt and equity markets drying up?
2. What is your opinion of public financing sources for long-term care, e.g., Medicaid, Medicare or a possible new government-financing source?
What do you think about private long-term care insurance?
Why has long-term care insurance been so slow to take off?
Among the three main players in long-term care--the financiers, the
providers, and the insurers--do you think there should be more communication and
cooperation? How? What are the
tapped into a gusher of anger and frustration directed primarily at the public
programs that finance most long-term care in the United States:
Medicare and Medicaid. Respondents
complained that “Medicaid does not cover costs," and "There is no
question the nursing home sector was killed by Medicare cuts."
One participant criticized the government for demanding
"Ritz-Carlton care for Motel 6 rates" and simultaneously enforcing an
"unprecedented regulatory Jihad."
Although assisted living providers depend far less on government than do nursing homes and home health agencies, they too are tempted by and frightened of public financing. According to our respondents, government financing is necessary but not sufficient. It must go only to the needy, with private funding and insurance for all others.
Most respondents agreed that:
government involvement caused many of our long-term care problems
public financing is not the permanent solution
public financing impeded the growth of private financing alternatives
care insurance is the most promising answer for the future.
more private financing is the key to a solution, however, why haven't private
financing and insurance played a larger role already and what should be done to
effectuate such a result? We heard
many opinions, but little agreement.
financiers, who provide capital for the industry, traditionally have depended on
Medicare and Medicaid to cover their cash flow requirements.
They know little about private financing sources such as long-term care
insurance. The providers, who offer
services directly to the public, either relied heavily on public financing in
the past, had little or negative experience with private insurance, or both.
The insurers, who try to protect people against a risk about which most
Americans are in denial, do not understand the providers' problems or trust
of these groups has different challenges, different stakeholders and different
priorities. And each group, by its own report, lacks a long-term vision for its
business. Each pursues its own
private interests and public policy objectives independently, and, so far, less
effectively than all would prefer.
all three groups agree that a better understanding of each other's businesses
could advance their own, their clients', their customers', and America's
interests. They share a common
purpose to pursue long-term care policy that is less dependent on government and
more reliant on private financing.
near consensus prevails among the groups toward the goal of better coordination
and cooperation, more industry cross-cutting conferences, publications and
speeches. The problem is where and
how to start. Most respondents
stated that accomplishing these goals would
be a difficult task.
the Center for Long-Term Care Financing is going to try.
We will distribute the "LTC Triathlon" report widely to
encourage mutual understanding of the challenge.
We hope to convene a "LTC Summit" conference this year to
facilitate a conversation between long-term care financiers, providers and
insurers. We will speak and publish
widely on the importance of communication and cooperation between the primary
private sector stakeholders in long-term care, and we will encourage and assist
the major long-term care trade associations [note 1] to unite in the
identification and pursuit of mutually beneficial public policy initiatives.
call on readers of this article to review the “LTC Triathlon” report, become
familiar with the Center for Long-Term Care Financing, and join us in this
campaign to improve long-term care for all Americans.
1: These include The National
Investment Center, The American Health Care Association, The American
Association of Homes and Services for the Aging, The American Association for
Home Care, The National Association for Home Care, The Health Insurance
Association of America, the American Council of Life Insurers, and others.]