LTC Bullet: LTC Juxtapositions

Wednesday, October 27, 2004


LTC Comment: Six recent seemingly unrelated news stories illustrate the fundamental problems with America's fragmented, dysfunctional long-term care service delivery and financing system. More after the ***news.***

*** THE REALIST'S GUIDE TO MEDICAID AND LONG-TERM CARE "should be required reading for any long-term care provider" says McKnight's Long-Term Care News, a leading LTC provider trade journal. Read McKnight's interview with Steve Moses titled "More Than Enough Assets to Solve LTC Financing" at . Download the Center's "Realist's Guide" report at . ***

*** THANKS HARLEY and the Corporation for LTC Certification for recommending the Center for Long-Term Care Financing's upcoming Boston Long-Term Care Graduate Seminar to all CLTCs. Steve Moses will present this highly regarded class on Thursday, November 11, 2004 at the University of Phoenix, 100 Grossman Drive, Suite 201, in Braintree, Mass. Pre-registration is required. Contact Executive Director Amy McDougall at 425-377-9500 or to register. Tuition is $225 for the full-day program, except for CLTCs who will receive a $50 discount if they mention Harley's recommendation. An additional $25 discount will apply if the class has not yet been approved for continuing education credit in your state. Check out the syllabus, rave reviews, and other details at . We call this class a "LTC graduate seminar" because it is intended for experienced and knowledgeable insurance agents, financial advisors, attorneys, and LTC providers. Instead of sitting through another dose of LTC 101, you'll be getting an advanced program available nowhere else from a leading national authority on long-term care service delivery and financing. ***

*** CONSUMER REPORTS BACKTRACKS. We recently warned donor-zone readers that a nursing home watch list published by Consumer Reports was just as dubious as the magazine's notoriously specious advice on LTC insurance: "LTC E-Alert #4-048--Can You Trust Consumer Reports About Nursing Homes?," , user name and password required. Now it comes to pass that "Consumers Union is withdrawing its 2004 Nursing Home Watch List for review. CU has learned the list, which relies on state inspection surveys, may be based on incomplete data . . .. The organization says the current list should not be used in choosing a facility . . .. The nursing home industry has long criticized the watch list as inaccurate and misleading . . .."

Source: LTC Daily Analysis Briefs, October 19, 2004, prepared by for . ***

*** LATEST DONOR-ONLY ZONE CONTENT: Here's the latest Zone content followed by instructions on how to subscribe so you can receive these critical epistles daily by email.

The LTC Reader #4-041--Scot-Free for LTC (Scotland's free home care program is imploding financially leading to a call for private LTC insurance.)

LTC E-Alert #4-052--LTCi About to Explode? Don't Hold Your Breath (MetLife's prediction that LTCi sales will take off in the short term is wishful thinking because it overlooks a key factor.)

The LTC Data Update #4-038--New Data Sources from NGA and Kaiser (Up-to-date demographic data on the aging of America two noteworthy sources.)

LTC E-Alert #4-050--Protect More People from LTC Risks and Costs (Read the glowing reviews of our LTC Graduate Seminars in Sacramento and Costa Mesa, CA. Then join us for the class in Boston, Nov. 11, see registration information above.)

LTC E-Alert #4-053--CMS Provides Treasure Map to LTC Services (Having turned LTC into an incomprehensible labyrinth, the government is giving grants to help people navigate the maze.)

Don't miss our "virtual visits" to major LTC industry conferences in The Zone. You'll find our comparison of the conferences, session summaries, interviews and pictures at .

Individual donors of $150 or more and corporate donors to the Center for Long-Term Care Financing receive our daily email LTC Bullets, LTC E-Alerts, LTC Readers, and LTC Data Updates for a full year. You'll also get access to the donor-only zone where these publications are archived along with other donor-only features. 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 donor zone content and archives: . If you do not already qualify for The Zone, mail your tax-deductible contribution of $150 or more to the Center for Long-Term Care Financing, 2212 Queen Anne Avenue North, #110, Seattle, WA 98109. Then email your preferred user name and password (up to 10 characters each). You can also contribute online by credit card or direct withdrawal at . ***


LTC Comment: Following below are six news stories about long-term care with no obvious connection between them. In briefest summary, they are:

(1) A National Association of State Budget Officers report about Medicaid's continued drain of state budgets.

(2) Two Kaiser Family Foundation studies document the threat to long-term care providers of further Medicaid cutbacks.

(3) A National Governors Association report warns states of likely severe long-term care workforce shortages in the future.

(4) The federal Department of Health and Human Services gave 31 states $31 million to promote Medicaid-financed home and community-based services.

(5) A new journal article finds that more assisted living residents suffer from dementia than previously thought.

(6) A new commission has been formed to improve long-term care quality.

The common reaction by academics and policy makers to these depressing, but all-to-common findings is to wring their hands, furrow their brows, and march hat in hand to the public financing trough. Lacking an analytical framework to explain our broken long-term care system, they don't know what else to do besides ask for more government financing and regulation. But that's like fighting fire by dousing it with gasoline.

Try this instead:

Nearly forty years of financing nursing home care through Medicaid brought that program to the brink of insolvency. Hence Story #1.

Excessive dependency on inadequate Medicaid reimbursements threatens providers' survival. Hence Story #2.

With too little revenue from Medicaid, and too few private payers because of Medicaid's predominance, providers are unable to attract and retain top quality workers. Hence Story #3.

In a desperate effort to reduce costs and improve care, Medicaid is trying to get people out of nursing homes and into home and community-based services. Hence Story #4.

But Medicaid has crowded private payers out of long-term care and chilled demand for private insurance or home equity conversion. Consequently, the new, predominantly private-pay assisted living facilities are filling too slowly to be profitable even as they are having to take on higher acuity patients to survive. Hence Story #5.

Too many Medicaid recipients, too little Medicaid reimbursement, and too few private payers has dragged down long-term care quality at every level of care. Hence Story #6.

But no mere Commission will solve long-term care's quality problems. You can't make a silk purse out of a sow's ear.

The only solution that will work is to target Medicaid to the genuinely needy. Enforce spend-down requirements, liens and estate recoveries so Medicaid is a loan not a grant for prosperous seniors. Use the savings from these measures to encourage private insurance and home equity conversion with tax incentives and education.

With more private payers, every level of care will improve in quality. Competition will replace regulation to ensure quality. Private payers will demand services at the lowest cost and in the least institutional setting feasible. And, when fewer people are dependent on Medicaid, that program will be able to provide a wider range of better services and pay providers adequately.

For a fuller explanation of why the long-term care status quo continues to deteriorate, read "The Elephant, the Blind Men and LTC" at .


LTC Daily Analysis Briefs. Medicaid Costs Devour State Budgets. WASHINGTON, DC -- 10/13/2004 -- (Eli Digital) Medicaid is eating up a larger share of states' budgets, putting services to elderly and disabled citizens at risk for cuts. A report released yesterday by the National Association of State Budget Officers shows that in fiscal year 2004 states for the first time expect to spend more on Medicaid than on elementary and secondary education. In fiscal 2003, Medicaid accounted for 21.4 percent of all state spending, nearly as much as was spent on education, which totaled 21.7 percent. About three-quarters of Medicaid costs are for the elderly and disabled. Medicaid spending increased by 8 percent between fiscal 2002 and fiscal 2003. By comparison, total state spending, which includes mandated federal programs, increased by 4.5 percent during the same period. "Medicaid is crowding out other parts of state budgets," said NASBO Executive Director Scott Pattison. "Medicaid's unsustainable pace of growth means that over both the short- and long-terms, states must find some source of relief." For a PDF copy of the study, click here.

Source: LTC Daily Analysis Briefs, October 13, 2004, prepared by for


LTC Daily Analysis Briefs. Medicaid Cuts Still Threaten LTC Providers. WASHINGTON, DC -- 10/05/2004 -- (Eli Digital) States continue to face budget pressures that could mean reimbursement cuts for long-term care providers, according to two new surveys released yesterday by the Kaiser Commission on Medicaid and the Uninsured. All states are planning at least one new cost-containment action for their Medicaid programs in fiscal year 2005, as 39 Medicaid directors expect pressure on their programs to grow while the remaining 12 expect the pressure to remain at current levels, the surveys found. The most popular actions have been controlling drug costs and reducing or freezing provider payments, with every state taking at least one of these measures in the past four years. However, rising costs for the chronically ill and aged and disabled populations covered by Medicaid have led to increased interest in cost controls in both institutional and community-based long-term care services in fiscal year 2004. For more details about the surveys, click here.

Source: LTC Daily Analysis Briefs, October 5, 2004, prepared by for


Report: Long-term care workforce needs major boost to prepare for upcoming elderly population. The new National Governors Association report warns states that to prepare for the projected 12.3 million Americans who will need long-term care by 2030, they need to work on recruiting and retaining quality workers. The NGA prepared the report to help states identify policies and solutions to balance the increase of elderly Americans with how this population's proportions will differ and produce a strong workforce to provide care. States should look at how the proportion of elderly in their population will differ in the next few decades. For example, Pennsylvania has the second-highest proportion of elderly Americans (15.2%), but the state is estimated to rank seventeenth with 21% by 2020. The report makes projections about these changes, which, for states to handle in the upcoming years, will involve producing a larger, stable quality workforce. Texas, for example, will need 55,000 additional workers to cope with the rise of elderly Americans.

Source: Daily Update, October 21, 2004; to register, send an email to with "SUBSCRIBE LTC" in the subject field.


HHS awards $31 million in grants to 31 states to help elderly, disabled live at home. The Department of Health & Human Services will hand out $31 million in grants to 31 states to help people with disabilities or long-term illnesses live at home instead of seeking aid in long-term care facilities, Secretary Tommy Thompson has announced. The grants, part of the New Freedom Initiative begun by the Bush administration in 2001, were awarded on the basis of nine categories, including quality assurance, integrated housing such as assisted living, reform of long-term support services and a rebalancing initiative to remove patients "inappropriately" placed in long-term care facilities, according to the HHS. The agency distributed the grants to states so that they may fund programs furthering the New Freedom Initiative's purpose of eliminating barriers to community care.

Source: Daily Update, October 12, 2004; to register, send an email to with "SUBSCRIBE LTC" in the subject field.


LTC Daily Analysis Briefs. Study: Mental Health Problems Plague ALF Residents. INDIANAPOLIS, IN -- 09/30/2004 -- (Eli Digital) Groundbreaking new research has discovered that residents of assisted living facilities suffer from mental health problems at a surprisingly high rate. A study that appears in the October issue of the Journal of the American Geriatrics Society reports that two-thirds of ALF residents studied exhibited symptoms of mental health problems, with half suffering from dementia and a quarter showing signs of depression. More than half of those studied took psychotropic medications including anti-psychotics, antidepressants or sedatives. "Now that we know that a significant proportion of assisted living residents have mental health problems, we need to work with assisted living residents, administrators, health care providers, policy makers and advocates to ensure that these facilities can accommodate their residents without over-medicating," said co-author Dr. Malaz Boustani, assistant professor of medicine at Indiana University and a research scientist with the school's Regenstrief Institute. For an abstract of the study, the first large-scale one of its kind, click here.

Source: LTC Daily Analysis Briefs, September 30, 2004, prepared by for


LTC Daily Analysis Briefs. New Commission Aims to Improve Long-Term Care. WASHINGTON, DC -- 10/13/2004 -- (Eli Digital) The National Quality Forum yesterday announced that it was forming a blue-ribbon commission to improve the nation's long-term care system. Former Nebraska Sen. Bob Kerrey and former Speaker of the U. S. House of Representatives Newt Gingrich will serve as co-chairs of the National Commission for Quality Long-Term Care. The commission will evaluate quality of care, identify factors necessary to improve care and make recommendations about national efforts that should lead to sustainable quality improvement. Other members of the group include Idaho Gov. Dirk Kempthorne and Virginia Gov. Mark Warner. The National Quality Forum is a private, nonprofit membership organization created to develop and implement a national strategy for health care quality measurement and reporting.

Source: LTC Daily Analysis Briefs, October 13, 2004, prepared by for