LTC Bullet:  Right Diagnosis, Wrong Prescription

Friday  February 16, 2001



Every once in a while, a news story explains so clearly why our long-term care financing system is such a mess and in need of major repair.  Below is a recent article titled, "Texas Nursing Home Care at Crisis Stage," which describes the increasingly grim situation in Texas.  Almost every major challenge to providing quality long-term care is converging on a public program unable to cope with the strain.  We at the Center took notice especially of the fact that, according to the article, Texas pays more to support a prison inmate than it does to support a senior on Medicaid. Too bad the article's suggested fix is just more of the problem!

Despite the suggestion that more public money is needed in response to Texas' long-term care financing crisis, overreliance on public reimbursement in combination with onerous regulatory burdens (which only increase in step with the amount of public support) are exactly the factors most responsible for the crisis in the first place.
What is needed in Texas and elsewhere is a new approach which recognizes the role private financing can play in relieving the pressure on public programs and ensuring access to quality long-term care for everyone.  Reforming long-term care in this direction certainly takes more courage than trying to squeeze more tax dollars out of lawmakers who, by the way, are understandably afraid of burgeoning Medicaid costs and declining tax revenues.  Sooner or later, however, reform which promotes private financing of long-term care for most Americans will not be an option, but a necessity. The Center for Long-Term Care Financing's "LTC Choice" public policy proposal is good place to start.  Read more about "LTC Choice" on the Center's website at

Here's the article excerpted from the February 8, 2000 edition of Long Term Care Provider.Com Newsletter. (Check out to subscribe to this free and informative publication.)

"Texas Nursing Home Care at Crisis Stage"

February 5, 2001
"Increased State Support and Reform of Medicaid Funding Formulas Urged by New Movement
"The quality of long-term health care for elderly Texans has reached the crisis stage and can be remedied only by a major increase in state financial support and reform of current Medicaid funding formulas.

"That was the urgent message Thursday of a new statewide movement headed by the Texas Alliance for Nursing Homes at a joint conference on the issue at the Texas Medical Association headquarters.  Other sponsors were the Texas Medical Directors Association and Southwest Texas State University's Institute for Quality Improvements in Long Term Health Care.


"'Long-term health care providers have reached a point of desperation in attempting to maintain a viable system to care for our elderly,' said Mike Burris, chairman of the Alliance.  'It is critical that the Legislature enact emergency measures to provide financial relief, or facilities simply are not going to be able to care for the growing number of Medicaid residents.'
"Burris pointed to the fact that one-fourth of the state's nursing homes are in Chapter 11 bankruptcy.  And as many as 60 percent of the 1,200 homes statewide are in financial peril.
"Burris traced the current crisis to a combination of inadequate state reimbursement to nursing homes for Medicaid residents, overly complex and unrealistic Medicaid funding formulas and increased costs associated with enhanced regulatory requirements.  He also pointed out that liability insurance rates for nursing facilities have soared by 500 to 600 percent the past year.
"'The average nursing home operator will likely lose more than $10 per patient per day to care for Medicaid residents this year, and the gap is widening,' Burris said. 'At the same time, they are faced with increased regulatory burden.  We simply cannot survive on the present course.'

"Burris said that the state's past rate increases have been insufficient, and that current budget requests by the Department of Human Services fall far short of adequate funding.

"'We keep falling farther behind, so the need to address the funding issue without compromising quality of care is growing more critical, and our elderly are the losers,' he said.

"Burris said last year Texas provided reimbursement of $81.22 per day in state and federal funds for Medicaid residents, compared to a national average $108 per day per resident.

"'It is hard to explain to our elderly and their families that the state of Texas pays an average of $42.75 a day to house inmates in our prisons, yet will pay only $24.80 per day to meet the health care needs of our deserving senior citizens.'  (The federal government pays 60 percent of  Medicaid costs.)

"Burris said that many of the state's nursing homes have been able to keep their doors open to this point by charging higher fees to private care residents, thereby subsidizing the costs of Medicaid residents.

"He noted that even if the state did reimburse at the rate determined through the established formula, the crisis would still exist.

"'We simply can't provide adequate care for our state's elderly if we cannot hire sufficient staff.' He said that operators statewide currently experience more than 100 percent annual turnover rate in employment due to inadequate pay.
"Burris stressed that the Alliance fully supports close state supervision of nursing homes to guard
against any potential abuse by a few unethical operators.

"'At the same time, the strict regulations and reporting requirements to which we must comply add major cost to operations for which we are not paid.  It is only fair for those costs to be fully reimbursed.'

"Source: Texas Alliance for Nursing Homes"
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