De­sign by com­mit­tee

Dead­line looms for long-term care pro­pos­als

Modern Healthcare - - LONG-TERM CARE - Jessica Zig­mond

Ask­ing 15 ex­perts to solve a $200 bil­lion-plus prob­lem that has stymied fed­eral law­mak­ers for decades seems chal­leng­ing enough. Add to that task a dead­line of less than three months, a bit­terly di­vided Congress and a bat­tleweary ad­min­is­tra­tion, and it’s hard to imag­ine that the con­gres­sion­ally man­dated Com­mis­sion on Long-Term Care will suc­ceed in its aim of de­vel­op­ing a plan to es­tab­lish, im­ple­ment and fi­nance a long-term care sys­tem by the time the panel’s fund­ing runs out Sept. 30.

Dif­fi­cult but not im­pos­si­ble, ac­cord­ing to ex­perts both on and off the com­mis­sion, whose cre­ation was qui­etly tucked into the Amer­i­can Tax­payer Re­lief Act that Congress passed in Jan­uary.

Seen by many as a con­so­la­tion prize to sup­port­ers of the Com­mu­nity Liv­ing As­sis­tance Ser­vices and Sup­ports Act, or CLASS—the 2010 health re­form law’s vol­un­tary, long-term care sys­tem cham­pi­oned by the late Sen. Ted Kennedy that Congress re­pealed in that same fis­cal-cliff leg­is­la­tion—the com­mis­sion com­prises clin­i­cians, pol­icy ex­perts and ad­vo­cates who are long on ex­per­tise but short on time and po­lit­i­cal clout to achieve their goal.

Some mem­bers have shown con­fi­dence and op­ti­mism that they’ll be able to craft some vi­able op­tions by Septem­ber. But even if the com­mis­sion suc­ceeds, the ques­tion then shifts to whether pol­i­cy­mak­ers have the po­lit­i­cal will and in­ter­est to use the rec­om­men­da­tions in a way that cre­ates a long-term care sys­tem that is ef­fec­tive and fi­nan­cially sol­vent.

The chal­lenge is that the money to fi­nance long-term care for the bur­geon­ing num­ber of Amer­i­cans who will need it in the next few decades has to come from some­where—from govern­ment pro­grams, pri­vate house­holds or some com­bi­na­tion of the two. By 2030, there will be 72.1 mil­lion peo­ple age 65 or older, more than twice their num­ber in 2000—ac­cord­ing to HHS es­ti­mates.

Only two months re­main un­til Sept. 12, when the com­mis­sion must vote on a blue­print that it in­tends to share with law­mak­ers. Af­ter that, the panel has an ad­di­tional 30 days to fin­ish its work, but its fund­ing stops af­ter Sept. 30, says Larry Atkins, pres­i­dent of the National Acad­emy of So­cial In­sur­ance, who was named the panel’s staff di­rec­tor in Wash­ing­ton last month. And it hasn’t helped mat­ters that the panel has had such a slow start since it was cre­ated six months ago.

Dr. Bruce Ch­er­nof, pres­i­dent and CEO of the SCAN Foun­da­tion and chair­man of the com­mis­sion, cites two rea­sons for the de­lay. First, the law didn’t cre­ate a fund­ing mech­a­nism for the panel. Congress later pro­vided one-time fund­ing of $500,000, which will be used to pay Atkins and other staff, as well as for of­fice op­er­a­tions and the travel ex­penses for mem­bers, who are not paid for their ser­vice on the panel. Mean­while, the leg­is­la­tion re­quired five of­fices—the White House and the ma­jor­ity and mi­nor­ity lead­ers in both cham­bers of Congress—to ap­point mem­bers, the last of whom wasn’t ap­pointed un­til March. The group didn’t host its first (and, so far, only) pub­lic hear­ing un­til June 27.

“This is a di­verse group of com­mis­sion­ers— in­ten­tion­ally so—ap­pointed to re­flect a range of views, and we’re go­ing to work to get as much com­mon ground as we can in the time we have,” says Atkins, who ex­plains that the com­mis­sion op­er­ates un­der the rules of the Se­nate and soon ex­pects to launch a web­site, where it will post tran­scripts of pub­lic meet­ings. Cur­rently, the staff con­sists of two mem­bers, but Atkins says he ex­pects that num­ber to grow.

With the lo­gis­tics mostly ironed out, the com­mis­sion now faces an up­hill climb as mem­bers gather in­for­ma­tion from stake­hold­ers to de­vise a plan. At the heart of that so­lu­tion is how to fi­nance a long-term care sys­tem in the U.S., where long-term care ser­vices and sup­ports for the el­derly and younger pop­u­la­tions with dis­abil­i­ties cost about $210.9 bil­lion in 2011, with about two-thirds of that bill paid for by Med­i­caid, ac­cord­ing to a Fe­bru­ary re­port from the National Health Pol­icy Fo­rum.

The fi­nan­cial prob­lems be­come more com­plex as com­mis­sion­ers are faced with a col­laps­ing long-term care in­sur­ance mar­ket. Ex­perts say the fi­nan­cial and per­sonal bur­den of longterm care on in­di­vid­u­als and fam­i­lies is se­vere, even with Med­i­caid.

“The big ques­tion for the com­mis­sion is whether they’re go­ing to try to come up with a set of rec­om­men­da­tions that ev­ery­body can agree with, or if the Democrats come up with their pro­posal, which will be more pub­lic sec­tor-ori­ented, or if the Repub­li­cans come up with their pro­posal that is more pri­vate-sec­tor ori­ented,” says Joshua Wiener, a dis­tin­guished fel­low and pro­gram di­rec­tor for ag­ing, dis­abil­ity and long-term care at RTI In­ter­na­tional in Wash­ing­ton.

Wiener wrote about long-term care ser­vices and var­i­ous op­tions in the jour­nal Health Af­fairs this past May. “It’s hard to know what ev­ery­one will agree on, in par­tic­u­lar be­cause al­most ev­ery­thing costs money,” he says.

“Things that cost money are go­ing to have a tough time with Repub­li­cans.”

In the pri­vate arena, nurs­ing home care comes at a great cost. Ac­cord­ing to the National Health Pol­icy Fo­rum, the aver­age an­nual cost of nurs­ing home care was $81,030 for a semipri­vate room and $90,520 for a pri­vate room last year. Mean­while, op­tions for in­di­vid­u­als to buy pri­vate long-term care cov­er­age have grown in­creas­ingly limited as some ma­jor play­ers—in­clud­ing MetLife and Pru­den­tial—have dropped out of the mar­ket in re­cent years (March 11, p. 6).

Ch­er­nof says the pri­vate long-term care in­sur­ance mar­ket has suf­fered be­cause it took a hit from ex­traor­di­nar­ily low in­ter­est rates on in­vest­ments in a slug­gish econ­omy and also be­cause it has had a tough time sell­ing its prod­ucts broadly in the mar­ket­place.

“Let’s look at the his­tory here: Has it worked to date?” says Larry Min­nix, pres­i­dent and CEO of Lead­ing Age, an or­ga­ni­za­tion that ad­vo­cates for se­niors, chil­dren and peo­ple with spe­cial needs. Min­nix says he has seen pre­mi­ums on his own long-term care in­sur­ance soar by about 60% in the past two years. “In the last year, some of the big­gest names have got­ten out of the busi- ness or gone broke.”

The long-term care fi­nanc­ing is­sue in the U.S. has long been caught up in ide­o­log­i­cal and par­ti­san di­vi­sions about the role of govern­ment. A re­port from the Or­gan­i­sa­tion for Eco­nomic Co-op­er­a­tion and De­vel­op­ment— which rep­re­sents 34 coun­tries in­clud­ing the U.S.—found that most OECD na­tions have es­tab­lished “col­lec­tively fi­nanced schemes for per­sonal and nurs­ing-care costs.”

With a com­pletely pri­vate long-term care op­tion seen as un­af­ford­able and largely in­ef­fec­tive, and the re­peal of CLASS as a strong in­di­ca­tor of Congress’ view that a pub­lic op­tion for long-term care in­sur­ance is un­ten­able, com­mis­sion­ers and staff di­rec­tor Atkins sug­gest a hy­brid ap­proach could end up in the fi­nal re­port.

“I think the com­mis­sion will come for­ward with a range of views,” Ch­er­nof says. “Given the place that we’re in, there are strengths and weak­nesses in both the pub­lic and pri­vate pro­grams.”

In Novem­ber 2010, Ch­er­nof’s SCAN Foun­da­tion spon­sored a study con­ducted by the Cen­ter for Health Care Strate­gies that fo­cused on how Arizona, Hawaii, Ten­nessee, Texas and Wis­con­sin have de­vel­oped man­aged-care ap­proaches to long-term care ser­vices and sup­ports. In their re­port, the au­thors listed what they called 10 “mile­posts” that other states could work to­ward to de­velop man­aged long-term ser­vices and sup­ports. Those in­cluded ap­proaches such as struc­tur­ing a long-term care ser­vices and sup­ports sys­tems around a goal that ad­dresses the needs of the state and com­mu­nity and then com­mu­ni­cat­ing that mes­sage to stake­hold­ers; struc­tur­ing a ben­e­fits pack­age that in­cen­tivizes the right care in the ap­pro­pri­ate set­ting, co­or­di­nated with acute care; and de­vel­op­ing fi­nan­cial per­for­mance in­cen­tives to achieve the pro­gram’s goals.

“There are a fair num­ber of states that drive a bet­ter sys­tem, and we can learn from those,” Ch­er­nof says.

With the dead­line loom­ing, the com­mis­sion will host an­other pub­lic hear­ing in Wash­ing­ton on July 17, ac­cord­ing to Atkins, who says he ex­pects the group to meet three times in Au­gust and prob­a­bly twice in Septem­ber, in a com­bi­na­tion of pub­lic and pri­vate meet­ings, all in Wash­ing­ton.

“We’ll have to see,” says RTI’s Wiener, “but it’s a pretty tall or­der for the com­mis­sion in a short pe­riod of time to come up with a mean­ing­ful list that they can rec­om­mend that ev­ery­one can agree with.”

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