LTC Bullet: Long-Term Care Racism: Diagnosis, Treatment, and Cure

Friday, September 22, 2023

Seattle—

LTC Comment: Once you understand its cause and effects, LTC racism’s cure becomes manageable. Analysis after the ***news.***

*** “LONG-TERM CARE: THE SOLUTION,” Paragon Health Institute’s long-awaited sequel to “Long-Term Care: The Problem,” published last fall, is due to be published on October 2. “The Solution” explains why the challenge of financing LTC for burgeoning numbers of aging Americans remains unmet and proposes a solution. As Medicaid caused most of LTC’s problems, that program’s radical reform is the key to resolving them. The same Medicaid reform is also the crucial step required to eliminate systemic LTC racism. Stay tuned. ***
 

LTC BULLET: LONG-TERM CARE RACISM: DIAGNOSIS, TREATMENT, AND CURE

LTC Comment: Our previous LTC Bullet offered a selection of quotes about LTC racism from peer-reviewed journal articles and invited readers to reflect on the material and its meaning before turning to analysis and recommendations. Let’s go now to that next step.

What is LTC racism?

“Structural [LTC] racism operates through laws and policies that allocate resources in ways that disempower and devalue members of racial and ethnic minority groups, resulting in inequitable access to high-quality care.” (“Structural Racism In Historical And Modern US Health Care Policy,” 2022, Abstract)

What are some examples of LTC racism?

“The long-term services and supports (LTSS) sector is a microcosm of systemic racism that exists in our society. Nationally, half of frontline professional caregivers are nonwhite, while mid- and executive-level managers and board members are predominately white.” (“The Value Proposition for Diversity: Creating A Pipeline of Diversity in The LTSS Sector,” 2022, Abstract)

“Long-term services and supports (LTSS), including care received at home and in residential settings such as nursing homes, are highly racially segregated; Black, Indigenous, and persons of color (BIPOC) users have less access to quality care and report poorer quality of life compared to their White counterparts. Systemic racism lies at the root of these disparities, manifesting via racially segregated care, low Medicaid reimbursement, and lack of livable wages for staff, along with other policies and processes that exacerbate disparities.” (“Evidence for Action: Addressing Systemic Racism Across Long-Term Services and Supports,” 2022, p. 1)

“Findings revealed that black residents are more likely than white residents to be restrained with bed rails, side rails, and trunk restraints. Findings suggest that racial disparities exist in the use of physical restraints. Implications for practice, policy, and research are discussed.” (“Racial disparities in the use of physical restraints in U.S. nursing homes,” 2013, Abstract)

“Racial disparities in nursing homes have been reported for a number of outcomes, including pressure ulcers, influenza vaccination rates, pain management, hospice use and in-hospital death. (16–19, 22) Our findings confirm that compared to Whites, Black residents experience more aggressive EOL[End of Life] care with higher rates of in-hospital deaths and lower rates of hospice use.” (“Racial Disparities in In-Hospital Death and Hospice Use Among Nursing Home Residents at the End-of-life,” 2012, p. 6)

What causes LTC racism?

“Nursing home care is currently a two-tiered system. The lower tier consists of facilities housing mainly Medicaid residents and, as a result, has very limited resources. The nearly 15 percent of U.S. nonhospital-based nursing homes that serve predominantly Medicaid residents have fewer nurses, lower occupancy rates, and more health-related deficiencies. They are more likely to be terminated from the Medicaid/Medicare program, are disproportionately located in the poorest counties, and are more likely to serve African-American residents than are other facilities. The public reporting of quality indicators, intended to improve quality through market mechanisms, may result in driving poor homes out of business and will disproportionately affect nonwhite residents living in poor communities. This article recommends a proactive policy stance to mitigate these consequences of quality competition.” (“Driven to Tiers: Socioeconomic and Racial Disparities in the Quality of Nursing Home Care,” 2004, Abstract)

“A tiered system of nursing home care that concentrates blacks in marginal-quality nursing homes also appears to exist.” (p. 1449) “We found that nursing home care was relatively segregated in 2000, with two thirds of all black residents living in just 10 percent of all facilities.” (p. 1453) “Disparities in payment between Medicaid and private payers make the financial viability of a nursing home dependent on the proportion of private-pay patients it is able to attract. Homes unable to attract sufficient private-pay patients will tend to have lower nurse staffing levels and more-serious inspection deficiencies.” (p, 1456) “Nursing home operators might also try to control admissions to their facilities, limiting the number of first-day-eligible Medicaid admissions and expanding as much as possible admissions of those with sufficient resources that are unlikely to spend down and become eligible for Medicaid.” (p. 1456) “It [discrimination] might also play a role in shaping the decisions of white private-pay nursing home patients and their families about where to get care, including whether to opt for non–nursing home alternatives altogether.” (p. 1456) (“Separate And Unequal: Racial Segregation And Disparities In Quality Across U.S. Nursing Homes,” 2007)

LTC racism: Diagnosis

The definition above attributes structural LTC racism to the “laws and policies that allocate resources in ways that disempower and devalue members of racial and ethnic minority groups, resulting in inequitable access to high-quality care.” What are those laws and policies? They are the statutes, regulations, policies, procedures, and guidelines that cause long-term care’s two-tiered structure: one top quality tier for private payers and a lower tier for Medicaid dependents.

Specifically, Medicaid LTC financial eligibility rules sort people who need extended care into two groups. Those who have too much income and resources are expected to spend down in the private market. Those who have liquid wealth low enough to qualify become Medicaid recipients with all that entails for the access and quality of care they can expect. This is cause number one of LTC racism. People with wealth, privileged majorities, enjoy the better LTC tier, while underprivileged marginalized groups rely predominantly on Medicaid, in the lower tier.

But the reality is actually much worse than this simple sorting of people by wealth suggests. Medicaid financial eligibility rules allow people with substantial income and assets to qualify for LTC benefits along with the poor and disadvantaged. States either subtract private health and LTC expenses from income before they apply the low-income standard or they permit excess income to be diverted to a “Miller trust.” The rule of thumb is that income below the cost of a nursing home, easily $8,000 or $9,000 per month, is not disqualifying. Nor do assets stand in the way of Medicaid LTC eligibility in most cases, because the largest assets seniors possess are exempt, such as a home, car, personal belongings, etc. and any countable liquid wealth is easily made non-countable by purchasing exempt assets. Even far more affluent people qualify for Medicaid LTC benefits by retaining elder law attorneys to impoverish them artificially with special trusts, annuities and other sophisticated strategies.

Key Money: LTC Racism’s Motor

Why would people who could afford private LTC manipulate eligibility rules to qualify for Medicaid which has such a poor reputation for access and quality? Some Medicaid facilities are better than others. They may serve mostly Medicare or private residents, receive much higher reimbursement rates, enjoy philanthropic support, and have only a few Medicaid beds. Savvy seniors, their families, and legal advisors learn to use “key money” to access those better facilities. Medicaid planners tell their affluent clients to hold back enough liquid capital from the artificial impoverishment process to enable them to pay privately for a while. Because LTC providers are desperate for private payers who contribute half again as much as Medicaid to their bottom line, they roll out the red carpet for new private-pay admissions. Once in a good facility, the advisor flips a legal switch converting the client to Medicaid. By law the provider cannot expel a resident simply because the funding source changes from private to Medicaid.

This is how Medicaid, commonly considered a LTC safety net for the poor, came to be the dominant LTC funding source for nearly everyone, even the affluent, stricken by catastrophic LTC costs. By covering the “medically needy”—people with too much income to qualify categorically, but too little income to pay their health and LTC expenses privately—Medicaid’s limited resources were overwhelmed. The program tried to do too much for too many and ended up doing too little for most. Worse, Medicaid allowed privileged majorities to coopt its better facilities and services while diverting the less advantaged, who lack key money, to the program’s least desirable facilities and services. This is how structural racism, deficient public LTC services for those most in need, came to predominate. Nothing will change until this cause is removed.

LTC racism: Treatment

The most common remedy for LTC racism proposed in the academic literature is to allocate more resources to Medicaid so it can pay caregivers more, provide better services, offer more home- and community-based care, and relieve family caregivers. For example, one source calls for a multi-prong effort to add “disproportionate-share payment adjustments to nursing homes with a higher proportion of Medicaid residents” and to equalize “Medicaid and private-pay payments.” (“Separate And Unequal: Racial Segregation And Disparities In Quality Across U.S. Nursing,” 2007, Abstract) Another source suggests “increase Medicaid and Medicare reimbursement rates, especially for providers serving high proportions of Medicaid-eligible and BIPOC older adults” and “expand access to Medicaid-waivered HCBS services,” “increase promotion of integrated HCBS programs that can be targeted to BIPOC consumers.” (“Evidence for Action: Addressing Systemic Racism across Long-Term Services and Supports,” 2022, Abstract) All have proven to be politically unachievable goals.

But simply spending more on Medicaid would only mean increased resources going disproportionately to the over-privileged with relatively less reaching the underprivileged. The only way to eliminate LTC racism once and for all is to remove from Medicaid dependency the people who rely on the program now, but who could, should and would have prepared to pay privately otherwise. The easy availability of Medicaid LTC late in life while preserving wealth created a moral hazard that discouraged early planning for LTC. The middle class and affluent who crowd out the poor from Medicaid’s best services, could have saved, invested or insured for LTC and avoided reliance on Medicaid. Bottom line, it is they who must be incentivized to take personal responsibility early in life so that later, when they need LTC, they can pay privately, access the best possible care in the most desirable venues, and free up Medicaid to do a better job for those most in need. Relieved of the burden to cover everyone, Medicaid will have the resources to pay private rates, afford top-quality professional caregivers thus eliminating their shortage, offer more HCBS, and move everyone on the program into the top-tier of LTC services.

Long-Term Care: Cure

The solution to LTC racism is to move privileged groups into the private LTC market in order to save and improve Medicaid for the less fortunate. That is a big ask. How can we possibly do it? Government tried unsuccessfully for decades (1) to reduce excess Medicaid dependency (employing income and asset limits, transfer of assets penalties, estate recoveries, even “Throw Granny in Jail”) and (2) to encourage private LTC insurance. Nothing worked. People struggling in mid-life with house and car payments, child care, elder care, retirement and education savings, etc. would not think, plan or prepare for the potential risk and cost of LTC in the distant future. The fact that Medicaid paid for the vast bulk of catastrophic LTC expenses probably didn’t enter their awareness but it influenced their financial planning nonetheless, enabling their denial.

These conditions are the dam obstructing progress toward a solution of LTC racism. I propose a way to break that dam and improve both private and Medicaid LTC in a new paper, titled “Long-Term Care: The Solution,” for the Paragon Health Institute. It is due for publication on October 2 and follows a paper, “Long-Term Care: The Problem” that Paragon published last fall. We’ll bring you more analysis and answers soon.