LTC Bullet: "What Can One Physician Do About Long-Term Care?"

Thursday, November 14, 2002

Honolulu, HI--

*** Today's Bullet, which follows the ***news***, will help LTC professionals encourage the medical profession to educate the public about the importance of long-term care planning. This Bullet is sponsored by The Constellation Group, LLC, a Business and Tax Strategy Think-Tank in Miami Beach, Florida, founded by Mr. Fraser Allport. Constellation specializes in Income Tax Reduction and Asset Protection. For more information, contact The Constellation Group at or consult the company's website: . Thanks so much to The Constellation Group for their generous support of the Center. Won't you help too? Go to to sponsor an LTC Bullet. Find out how you can sponsor other Center activities (e.g., articles, speeches, conference exhibits) by contacting Amy Marohn at 425-377-9500 or . ***

*** New content added today to the donor-only zone includes "The LTC Week in Review for November 11-15, 2002: LTC E-Alerts #261-#265." Every LTC E-Alert contains some news or information that will help people understand the need to prepare early for the risk and cost of long-term care. If you already qualify for The Zone, you can click the following link, enter your user name and password, and go directly to the latest

E-Alerts: .

LTC E-Alert #261--Double Jeopardy for Nursing Home Private Payers
LTC E-Alert #262--Senior Workouts Minimize Falls
LTC E-Alert #263--More on Medicare and Social Security 2003 Rates
LTC E-Alert #264--Self-Fulfilling Prophecy of Deficient Care
LTC E-Alert #265--Socialize to Maintain Mental Acuity

To Zone In, mail your tax-deductible contribution of $100 or more to the Center for Long-Term Care Financing, 2212 Queen Anne Avenue North, #110, Seattle, WA 98109. Then email your preferred password and user name (up to 10 characters each). You can also contribute online by credit card or direct withdrawal at . ***


Fraser Allport of The Constellation Group, LLC commissioned the Center for Long-Term Care Financing to write a series of four short articles designed to encourage physicians to get actively involved in long-term care planning. What follows is the third article in that series. To read the first article, titled "Ominous Parallels--Medicine and LTC," go to the LTC Bullets archives at . To read the second article, titled "First Do No Harm," go to . The remaining article will be published in LTC Bullets soon. If you would like to use these articles to help educate the medical profession in your locality about the importance of long-term care financial planning, please contact Mr. Allport at 305-532-1231 or for authorization.

"The Unnecessary Tragedy of Long-Term Care: A Four-Part Series for Medical Doctors," by Stephen A. Moses, President, Center for Long-Term Care Financing ( for The Constellation Group (

Part Three: "What Can One Physician Do About Long-Term Care?"

Long-term care in America is an unnecessary tragedy. Millions of good people suffer its ravages excessively. The emotional and financial pressures of caring for elderly loved ones tear families apart. A good service delivery and financing system for long-term care would go a long way to mitigate the devastation caused by Alzheimer's, Parkinson's and stroke.

Unfortunately, America's nursing home based, welfare-financed long-term care system is in a terrible state of disrepair. Well-intentioned, but ill-conceived public policies have created perverse economic incentives that cause most Americans to ignore the risk of long-term care until too late. Once stricken by the chronic illnesses of old age, elders and their families have nowhere else to turn for care and asset protection but to Medicaid.

Ostensibly a welfare program, Medicaid has become the major third-party payor for long-term care in America, covering nearly 80 percent of all nursing home patient days. As the old adage says: "Programs for the poor are poor programs." Low Medicaid reimbursements and heavy government regulations have driven most publicly financed long-term care providers to the brink, and many over the brink, of bankruptcy. Physicians are not exempt. Few economic incentives exist to attract medical doctors into the critically needed specialty of geriatric medicine.

What can one physician do? Plenty. Here are some ideas for starters:

o First, make sure you are not one of the half of all physicians cited in Part Three of this article who are unprepared to treat common geriatric conditions. Expand your knowledge and hone your skills in this practice area.

o Learn the facts about long-term care risk. Seniors have a nine percent probability of a five-year or longer stay in a long-term care facility according to the New England Journal of Medicine. (Footnote 1) The journal Medical Care placed the risk at eight percent for a stay exceeding five years and two percent for a stay over 10 years. (Footnote 2)

o Learn the facts about long-term care cost. Nursing homes charge private payors $55,000 per year on average, but fees range from $35,000 in some rural areas to over $100,000 per annum in certain major metropolitan areas. Assisted living facilities average half the cost of nursing homes, but their charges also range widely depending on the breadth and quality of their services. Full time home care for chronic long-term illness is affordable only by the most affluent elderly.

o Visit three nursing homes--a 100-percent Medicaid facility, a 100-percent private pay facility, and a facility with a mixture of privately and publicly financed residents. Your five senses, especially smell, should tell you where you, your loved ones, or your patients would prefer to reside if and when care in a skilled nursing facility becomes necessary.

o Visit an assisted living facility (ALF) or two. ALFs are the modern, mostly private-pay alternative to nursing home care. They're like hotels where you can call room service for help taking a bath or leave a call at the desk to be reminded to take your medications. Assisted Living Facilities provide three meals a day in a restaurant-like setting or in one's room. They maximize the social aspects of residence while minimizing the institutional feeling.

o Understand that the key to obtaining quality long-term care at the most appropriate level, i.e. home care, assisted living, and nursing home care only as a last resort, is the ability to pay privately. To pay privately without spending down personal income and assets requires special, private insurance protection. Managed care, major medical and Medicare supplemental insurance do not cover long-term custodial care.

o Read extensively about private long-term care insurance and interview one or more insurance agents or financial planners who have proven expertise in this complicated product. Two good sources of information are "Long-Term Care Planning: A Dollar & Sense Guide" published by the United Seniors Health Cooperative ( For a book-length treatment, try Phyllis Shelton's Long-Term Care: Your Financial Planning Guide ( (Footnote 3)

o Focus on the tax benefits of purchasing private long-term care insurance for yourself, your family, and your employees. According to J.K. Lasser's Choosing the Right Long-Term Care Insurance, "To encourage more corporations to offer their employees long-term care insurance, the IRS says that these companies may generally deduct a portion if not the entire cost of the premium as a business expense." (Footnote 4)

o Become proactive. Recommend this series of articles on long-term care to your friends, family, patients, colleagues, and others. Nearly forty years of government-financed nursing home care have anesthetized the public to the risk and cost of long-term care. Wake them up! Be a Paul Revere of long-term care. In the long run, providing and financing long-term care for the aging baby-boom generation may be as important to America's well-being as homeland security is today.

A wag once said "The best way to help the poor is not to become one of them." The single biggest financial risk seniors face is a long-term nursing home or assisted living stay incidental to one of the chronic illness of old age. To eliminate that risk and assure access to quality long-term care, people must plan early to save, invest or insure for long-term care. The more people can be persuaded to take personal financial responsibility for long-term care, the better able Medicaid and Medicare will be to pay for the care of those who cannot care for themselves. As a trusted medical professional, you can influence your patients, colleagues and fellow citizens to prepare. Please do it!


(1) Peter Kemper and Christopher M. Murtaugh, "Lifetime Use of Nursing Home Care," New England Journal of Medicine, Vol. 324, No. 9, February 28, 1991, p. 597.

(2) Christopher Murtaugh, Peter Kemper, Brenda C. Spillman, and Barbara Lepidus Carlson, "The Amount, Distribution, and Timing of Lifetime Nursing Home Use," Medical Care, Vol. 35, No. 3, 1997, p. 212.

(3) Phyllis Shelton, Long-Term Care: Your Financial Planning Guide, Kensington Books, New York, New York, 2001. Also Marilee Driscoll's "The Complete Idiot's Guide to Long-Term Care Insurance."

(4) Benjamin Lipson, J.K. Lasser's Choosing the Right Long-Term Care Insurance, John Wiley & Sons, Inc., New York, NY, 2002, p. 59.

Stephen A. Moses is President of the Center for Long-Term Care Financing in Seattle, Washington. He was formerly a Medicaid state representative for the Health Care Financing Administration and a Senior Analyst for the Office of Inspector General of the United States Department of Health and Human Resources. He is widely recognized as an expert and innovator in the field of long-term care. For further information, please consult

The preceding article was commissioned by The Constellation Group, LLC, a Business and Tax Strategy Think-Tank in Miami Beach, Florida, founded by Mr. Fraser Allport. Constellation specializes in Income Tax Reduction and Asset Protection. For more information, contact The Constellation Group at or consult the company's website: .