LTC Bullet: LTC Druggies?

Wednesday, January 12, 2005

Santa Fe, NM--

LTC Comment: What's more addictive, drugs or government entitlements? Both?! More after the ***news.***

*** OUR PASADENA LTC GRADUATE SEMINAR was a huge hit last week and the Minneapolis program scheduled for January 21 is nearly overbooked. Would you like to have a "Long-Term Care Graduate Seminar" in your town? Contact Executive Director Amy McDougall at 425-377-9500 or to learn more. If you can deliver at least a dozen paid attendees, a conference room and a few other essentials, we'll do the rest AND you'll attend this outstanding 7-hour course for free. For details on the program, please go to . ***

*** CLTC MASTER CLASS SCHEDULE. The Center for Long-Term Care Financing does not endorse specific companies or professional designations, but we are acutely aware of the need for education and certification of LTC insurance agents. We've often found that LTCi agents with the "CLTC" certification rank high in professional knowledge and expertise. We also appreciate the financial support provided to the Center for Long-Term Care Financing by the Corporation for Long-Term Care Certification. As a public service, we will provide each month a schedule of forthcoming CLTC classes with a link to further information. The Corporation for Long-Term Care Certification will offer the "Certified in Long-Term Care" (CLTC) program in a classroom setting referred to as a Master Class on January 22 and 23 in Orlando, FL; January 27 and 28 in Indianapolis, IN; January 31 and February 1 in Livonia, MI; February 3 and 4 in Fort Worth, TX; February 7 and 8 in Canonsburg, PA; and February 10 and 11 in Chesterfield, MO and Hurricane, WV. For more information, call 877-771-2582 or go to .***

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LTC Comment: Prescription drugs are in the news lately. Some examples: The expensive, new Medicare pharmacy entitlement. Exploding Medicaid prescription drug costs. Excessive drug use by all Americans, but especially the elderly. High numbers of unsafe prescriptions for older people.

It makes you wonder where all this is leading. Today's LTC Bullet juxtaposes a series of recent reports about the pharmaceutical issue as it affects seniors. We suggest that you consider these frightening facts in the larger context of long-term care financing, a challenge America has not yet begun to face.

Shouldn't some of the windfall of government financing for pharmacy benefits be diverted toward education and tax incentives to encourage responsible long-term care planning?


Let's begin with some excerpts from a column by Robert J. Samuelson in the December 14, 2004 edition of The Washington Post titled "Who Will Say No?"

". . . Let's see. Even before the [Medicare] drug benefit, the combined costs of Social Security, Medicare and Medicaid (which covers some nursing home care) were projected to grow by about 80 percent, as a share of national income, by 2030. This implies huge tax increases, immense budget deficits or dramatic cuts in other government programs. The drug benefit merely adds to the costs. In 2006 Medicare will spend an average of $2,069 on drug bills for each recipient, say Medicare's actuaries. By 2013, that reaches $3,367.

"As baby boomers retire, Medicare drug spending rises rapidly. Without the drug benefit, Medicare spending was projected to grow from 2.6 percent of national income (gross domestic product) in 2003 to about 5 percent of GDP in 2030. Adding the drug benefit, total Medicare spending jumps to almost 7 percent of GDP in 2030 -- a huge increase. In today's dollars the extra drug spending would amount to $200 billion annually in 2030.

"Well, if the cost is staggering, at least the need must be overwhelming. Actually, it isn't. True, drug costs are rising; the elderly pay more. But there's scant evidence that most Medicare recipients can't get the drugs they need.

"Consider: Three-quarters of Americans older than 65 already have some insurance for drugs. Medicaid often covers the poorest of the poor. For many elderly people, drug costs aren't oppressive. About 10 percent have no drug costs at all, the Congressional Budget Office estimates. An additional 29 percent have annual costs of less than $1,000. Only 28 percent have costs exceeding $3,000. Those figures represent total costs, including what insurance pays. As for out-of-pocket drug spending, it averaged $623 for people older than 65 in 2000. In opinion surveys, only about 3 percent of Medicare beneficiaries say they can't get the drugs prescribed for them -- for economic or other reasons.

"Let it be said that there is a case for a Medicare drug benefit covering truly catastrophic costs. But that benefit should have been a carrot for basic reforms, raising the eligibility age and slowly shifting more overall costs to retirees. No one attempted that bargain. Instead, President Bush, Secretary Thompson and every member of Congress who voted for the Medicare drug benefit knowingly worsened the long-term budget outlook without solving any major social problem. The main result is to allow the elderly to spend more of their money on things they want by shifting the cost of drugs to younger taxpayers. . . .

"In wealthy democracies -- welfare states all -- individual benefits once conferred are considered sacrosanct, but when their total costs threaten the collective good, they must somehow be controlled. There's the paralyzing contradiction. The politics of 'yes' must ultimately yield to the politics of 'no' -- and the longer it's delayed, the more painful it will be."


Medicaid drug costs are also exploding as these brand new data for 2003 show:

"In the public sector, Medicaid is the largest payer, accounting for 19 percent of such payments in 2003. Medicaid spending for prescription drugs rose 17.5 percent in 2003, similar to growth in the past two years. This occurred in part because cost sharing is not as pronounced in Medicaid as in the private sector, and because states were more limited in the tools they could use to curtail spending growth."

Source: Cynthia Smith, Cathy Cowan, Art Sensenig, Aaron Catlin, and the Health Accounts Team, "Trends: Health Spending Growth Slows in 2003," Health Affairs, Vol. 24, No. 1, January/February, 2005, p. 193, .


Are tax payers getting their money's worth from all this government spending on pharmacy benefits? Research shows prescription drug use is skyrocketing:

"Prescription drug use soars nationally

"More people than ever are turning to prescription drugs to treat everything from heart disease to hair loss, according to the latest report [] on the nation's health from the Centers for Disease Control and Prevention.

"Forty-four percent of Americans take at least one prescription drug, and 17% take at least three, according to analysis of data collected from 1999 to 2000. Those figures increased from 39% and 12%, respectively, in a prior data collection period ending 1994.

"In 2002, health expenditures climbed 9.3% to $1.6 trillion or 14.9% of gross domestic product, up from 14.1% of GDP in 2001. Prescription drugs were the fastest growing expenditure and comprised 10% of total medical costs. . . ."

Source:, December 7, 2004, subscribe at


And prescription drug utilization is highest among the elderly:

"LTC Daily Analysis Briefs. Elderly Americans Are Heavily Medicated, Study Finds ATLANTA, GA -- 12/06/2004 -- (Eli Digital) Almost half of all elderly Americans regularly take three or more medications. That's the finding of the latest report on Americans' health from the U.S. Department of Health & Human Services. The study found that prescription drug use is rising among people of all ages, with almost half of all Americans taking at least one medication. It also found that drug use increases with age. Five out of six persons 65 and older are taking at least one medication. Prescriptions for nonsteroidal anti-inflammatory drugs, antidepressants, blood glucose/sugar regulators and cholesterol-lowering statin drugs increased notably between 1996 and 2002. For a copy of the report, click here."

Source: LTC Daily Analysis Briefs, December 6, 2004, prepared by for


Unfortunately, easier and easier access to more and more prescription drugs may be too much of a good thing for many older Americans:

"Study: High numbers of doctors prescribe unsafe meds for elderly

"Approximately 70% of physicians have prescribed potentially harmful medications for their elderly patients, according to a new study by Georgia researchers.

"Researchers, as a result, are encouraging physicians to re-evaluate the drugs their elderly patients take to determine if they are appropriate, if alternative drugs would be better or if dosages should be adjusted. Some drugs are safe for a 55-year-old but not for a 75-year-old, said Dr. Donna M. Fick, RN, associate professor of nursing at Penn State, formerly of the Medical College of Georgia when the study was conducted.

"Certain drugs such as diazepam (Valium) and other anti-anxiety drugs have a tendency to build up in the elderly body because the distribution and elimination of drugs from the body changes as the body ages, Fick said.

"Drug interactions and lack of communication between all caregivers are other issues creating unsafe prescribing situations, researchers reported in the American Journal of Managed Care.

"Blue Cross and Blue Shield of Georgia Center for Healthcare Improvement and The Medical College of Georgia funded the study."

Source: Daily Update, January 10, 2005; to register, send an email to with "SUBSCRIBE LTC" in the subject field.