LTC Bullet:  How to Advance Progress on LTC Reform

 Friday  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. 

Since 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 or call 800-355-1088.  Subscriptions are free to qualified recipients (managers, directors, adminstrators and case managers in post-acute care).

The Center’s LTC Triathlon report, upon which the article in Advance is based, can be read or copied for free online at  If you'd prefer, order a hard copy for $49.95 by contacting Sarah Allen at 425-467-6840,, 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 LTC Triathlon

In 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.

by Stephen A. Moses

Our 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.

For the past 35 years, we have rewarded their long, hard efforts with an inadequate long-term care system based primarily on institutionalization and welfare financing. 

No 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.


Despite the most benign economic conditions in United States history, America's long-term care service delivery and financing system is a tragic mess:

*Seven 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.

*Hundreds of home health agencies have gone under financially.

*Many new assisted living facilities are filling far more slowly than anticipated. 

*Long-term care stock prices are down precipitously. 

*New capitalization by debt or equity is almost non-existent for publicly held companies. 

*Caregivers 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. 

*Formal 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 care. 

*Litigation against nursing homes and assisted living facilities for allegedly providing poor care is on the rise and driving liability insurance premiums through the roof. 

Only 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. 

Because 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?

3.  What do you think about private long-term care insurance?  Why has long-term care insurance been so slow to take off?

4.  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 obstacles? 

We 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:

*excessive government involvement caused many of our long-term care problems

*increased public financing is not the permanent solution

*past public financing impeded the growth of private financing alternatives

*long-term care insurance is the most promising answer for the future. 

If 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. 

The 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 their intentions.

Each 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.


Nevertheless, 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. 

A 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.

Nevertheless, 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. 

We 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.

[Note 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.]