Last week's post (here) on the recent hearing conducted by the U.S. Senate Special Committee on Aging struck a cord with readership. The question of how to best provide and finance long-term care services and supports (LTSS) for older Americans lies at the core of the debate on how best to cope with the approaching age tsunami as it threatens to destabilize federal, state and household budgets for years to come.
The testimony of Judith Feder Ph.D. and Bruce Chernof MD further evidenced that innovation is critical to expanding the capacity and efficacy of the long term services and supports (LTSS) infrastructure, yet encumbered by the Medicaid program's historic (exclusive) reliance on skilled nursing care. Secondly, stakeholders remain uncertain as to how to encourage Americans to take responsibility for funding their future long term care needs. Feder emphasized that it is not solely the Medicare beneficiaries with chronic conditions who drive high Medicare spending:
The 15% of Medicare beneficiaries with chronic conditions and LTSS needs (due to functional limitations) account for nearly 33% of all Medicare spending.
Average per person spending for Medicare beneficiaries with chronic conditions and long term care needs is at least double the spending of those who only have chronic conditions. This pattern of spending remains true regardless of how many chronic conditions an enrollee may have.
For enrollees with long term care needs, admissions to hospitals, emergency rooms, short term stays in SNFs and home health services are the largest sources of extra spending compared to those enrollees who only have chronic conditions.
Dr. Feder is hopeful that recent innovations sponsored by CMS (enabled by the Affordable Care Act) to increase care coordination (here) will reduce this exact type of over use. She was emphatic in asserting that unless care coordination targets beneficiaries most at risk (those with chronic conditions and LTSS needs, then the coordination is not likely to produce results (i.e. reduce costs).
Dr. Chernof's testimony relied heavily on the important research conducted by the Scan Foundation in conjunction with Leading Age. Although Americans are living longer with both chronic conditions and functional limitations, they remain unaware of the financial risks and cost of care. Chernof reflected on Medicaid's evolution from being focused exclusively on nursing home care to now including home and community based services. Nearby Wisconsin is a model of this evolution, ranking fifth in the nation for comprehensive LTSS (sadly, Illinois ranked 23rd). Chrenof emphasized the importance of picking flexible models of care delivery rather then building rigid structures. His assertion that states which only focus on cost savings, without consideration to improving person centered access to care delivery risk creating undue harm reminds me of the race to deinstitutionalize those with a mental illness diagnosis in the late 1960's without concurrently establishing community based services to serve that vulnerable population.
Current reliance on Medicare is unsustainable without substantial change. The current premium gap between payroll taxes and current Medicare expenditures is $300 billion per year.
Feder observed to date the emphasis on reform has focused primarily on Medicaid, even though 80% money spent on dual eligibles (those Americans who are enrolled in both the Medicare and Medicaid programs) is federal money (two-thirds through the Medicare program). Chernof's testimony dovetailed nicely with Feder's as he concluded that private sector financing must be enhanced to accommodate the trifecta of: living older, living longer with chronic conditions and functional limitations and lower savings rates among baby boomers.
What do you think? How should we fund our expectation of affordable access to comprehensive services and supports for older adults?
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