June 2010 Archives

Medicaid long-term care is well on its way to destroying state budgets, according to a new study by the international consulting firm Deloitte LLC. By 2030, according to estimates by the firm's Center for Health Solutions, Medicaid long-term care benefits for both home and nursing facility care will absorb a staggering 18 percent of total state budgets if current trends continue. Overall state Medicaid spending will almost double by 2030 and the total program, including acute care benefits for young mothers and children, will swallow nearly 35 percent of state revenues. That would make it by far the biggest single state program, eclipsing even education.

This outcome is, honestly, impossible. Long before states face these costs, they will slash the program, either by cutting benefits, limiting eligibility, or both. We can already see this happening in the current recession, where state home and community programs are being cut and nursing home payments frozen or trimmed.

As the report notes, states are facing "a catastrophic fiscal left hook" from Medicaid. On one hand, the new health law requires them to provide Medicaid medical coverage for 14 million near-poor Americans. While the federal government promises to cover all of those extra costs until 2016, states will be on their own after that. At the same time, a rapidly growing and long-lived aging population that will suffer increased chronic disease and demand more long-term care under Medicaid.

What will states do about this? The Deloitte report suggests more efficient delivery focused on better care coordination for those receiving both Medicare and Medicaid, more home care services, and further incentives to encourage middle-class people to buy private long-term care insurance. But the real solution, I fear, will be global budgets where total Medicaid spending is capped at a certain level.  

The Deloitte study is more evidence that, in the long run, we need to get Medicaid out of the long-term care business. And to do that, we need to build on the just-passed CLASS Act and make long-term care an insurance program, not a welfare program. Trying to preserve the broken Medicaid system will only bankrupt states even as it provides families with the wrong care, at the wrong time, and in the wrong place.     

Those of us who are caring for our parents or other loved ones know how tough it is. The emotional, physical, and financial burdens are sometimes overwhelming. Bathing your father or changing his adult diaper puts both of you in a new, uncomfortable, and difficult world.

But at a Syracuse University long-term care conference I attended last Thursday and Friday, Carol Levine reminded me about the medical expertise caregivers need these days. With patients being discharged quicker than ever to their homes from the hospital or from nursing facilities, adult children and spouses increasingly are being asked to do the work that was once left to highly trained nurses. 

Carol, a former family caregiver herself and director of the Families and Health Care Project at the United Hospital Fund in New York, has a long list of these tasks, for which few caregivers are ever prepared. Among them:

Medication management: It is common these days for a senior with many chronic diseases to be taking a dozen different medications. If you've been a caregiver, you know the drill--the green pill three times a day, the blue pill twice a day with meals, the other blue pill twice a week....Worse are the sometimes deadly interactions among these drugs. With few doctors keeping track of all these meds, preventing medication disaster is up to family caregivers.

Operating medical equipment: This is work that you'd need a license to do if you were not a family member. Is the oxygen tank full, are drugs flowing freely through IV tubes, are wounds being kept clean and appropriately bandaged, are you giving injections properly? And this is the easy stuff. Some family members must do even more complicated work, such as managing complex ventilator care.

Coordinated care: This may be the toughest task of all.Somebody must make sure that all the doctors and other health professionals are on the same page. With a few exceptions (such as hospice), docs and nurses won't do it. So it is up to family members who must learn medical jargon and become disease epxerts in their own right. And keep in mind, as hard as it is for adult children to provide this complex medical care, it can be far more challenging for spouses, who may face their own physical and cognitive struggles.     

There is almost nowhere for family members to go to get this training. I have found only a handful of such programs around the country. The Schmieding Center in northwest Arkansas is a great model. But they are few and far between. 

And even if this training were available, who has time to take classes when they in the midst of a caregiving crisis? 

We all want to be cared for at home, but to make it work, family members will need the training to perform increasingly sophisticated medical tasks. And right now, there are far too few people thinking about where their education is going to come from.   

In the new health bill, Medicare is planning to pay family practice doctors extra money to organize complicated care for the chronically ill--a role known as a medical home. But as family caregivers know all too well, they are the real medical homes--and probably will be for the forseeable future.     

Nice to see President Obama and Health and Human Services Secretary Kathleen Sebelius beginning to talk about the CLASS Act--the voluntary national long-term care insurance program that is included in the new health law. But unfortunately, even at a town hall yesterday at a senior center, CLASS was little more than an afterthought for the Administration.

Sebelius discussed the new program only in response to a question. Obama was focused on other benefits, such as shrinking the donut hole for the Medicare Part D drug benefit and new preventive care under Medicare. Of course, these are important. And because people must still be working to enroll in CLASS, many seniors who attended the event will not be eligible for the program. Still, the Administration will need to talk far more aggressively about CLASS if the program is to succeed.

As private insurers will tell you, selling long-term care coverage is very hard. Consumers don't want to think about disability and they are reluctant to pay premiums today--which will reduce their current disposable income-- to insure against the possibility of needing personal care in 30 or 40 years.

That's a big reason why only about 7 million people have private long-term care insurance and why so few policies are being sold these days. Like private insurance, CLASS will be be nothing more than a niche product without an aggressive marketing campaign. And unless millions of people buy, CLASS will fail.

A lack of funding to promote CLASS is a major flaw of the new law. It allows the government to spend only 3 percent of premiums on all administrative costs, including marketing. This is far too little. But it actually overstates the available resources. The key period for promoting any new product is just before it goes on sale. And since no-one will have yet purchased, the government will have no premium income and thus no funding for advertising. 

A handful of private foundations and some advocacy groups are quietly discussing ways they can help market CLASS coverage. But the White House has tbe biggest megaphone of all and, I hope the President will use it to encourage people to prepare for their long-term care needs. If not, the government will learn what private insurers already know--only a few people will buy long-term care insurance, no matter how important many of us think it is.       

For months, physicians have been refusing to take new Medicare patients, and some are now even dropping long-time patients. The problem: Congress's inability to resolve a now 13-year-long argument over how much Medicare should pay docs.

The whole mess started in 1997, when the government concluded that Medicare was overpaying many doctors. The reality was that some physicians probably were being paid too much while others were not being paid enough. For instance, the numbers of board-certified geriatricians have been shrinking for years--a clear sign that (among other things) their compensation is too low.

To try to fix this, the government first adopted a new physician payment system that would have begun reducing Medicare reimbursements over several years. That set off a predictable firestorm, but rather than wade through the politically explosive issues of rationalizing Medicare payments, Congress simply delayed the pay cut--year after year. Now, these cumulative reductions amount to a staggering 21.3 percent. In other words, Medicare docs are about to get hit with an immediate 20 percent+ pay cut.

This is, of course, impossible. But once again, instead of addressing the issue (Congress seems to have missed this despite passing the biggest health reform in a half-century), lawmakers again temporarily delayed the pay cut. Three times this year, they passed short-term delays. But the last one ran out on June 1 and the Senate went off on holiday before extending the doc fix for a few more months. 

Already stressed by health reform, physicians seem to have reached the end of their collective rope. For years, many have been threatening to stop taking Medicare patients but no-one took them very seriously. Now, many seem to be doing it.

I have not seen any hard data, but I am hearing a lot of anecdotes. One 80-something told me the following story: His wife needed a new primary care doc and tried to move to his physician. But the doc told my friend's wife that she was not taking any new Medicare patients. My friend complained, and the doctor dropped him too.   

This is probably extreme, and many doctors say they have an ethical obligation to continue to treat long-time patients. But the economics of health care, irrational in the best of times, is now beginning to hurt real people.

The government needs to fix the Medicare payment system--not patch it, not duck the issue for a few more months--but fix it in fundamental ways. Its failure to address this as part of health reform was a scandal. But, despite the profound wishes of many in Washington, the issue is not going away.