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Report Shines Light on Long-Term Care Spending in Medicare

Several contributors to THCB have commented that long-term care tends to get short shrift in healthcare discussions. New research might help to make a case for why we can no longer afford to demote this critical issue as we contemplate overarching healthcare financing strategies.

In the report, researchers looked at beneficiaries ages 65 and older who receive help with three or more activities of daily living (ADLs) — longhand for people who need long-term care — and found that, even though these individuals represent only 7% of the Medicare population, they account for nearly 25% of spending in Medicare Part A and B.

This is interesting because Medicare doesn't actually pay for extended nursing home stays, which is where long-term care is usually delivered, but it does pay for limited post-acute care. The implication here is that Medicare services that transition patients from acute to long-term settings might actually be filling a gap for long-term needs. And, given the size of the gap, it is equating to staggering levels of spending.

To put this in real numbers, the report — which was authored by Avalere Health on behalf of the SCAN Foundation — notes that, in 2005 — which is the most recent data available — these beneficiaries consumed $18,902 per capita in Medicare spending compared with $4,289 for beneficiaries without disabilities. This equates to 4.5 times more per capita Medicare spending.

Hospice trends help to illustrate this issue.  Medicare covers palliative care and support services for beneficiaries who are terminally ill and have a life expectancy of six months or less. The new research shows that hospice lengths of stay from 2000 to 2005 took double-digit leaps for those suffering from Alzheimer's disease and senile dementia, suggesting that the Medicare hospice benefit may be addressing a shortfall in long-term care services.

As we enter into serious discussions on health reform, we must ensure that policymakers have a full understanding of the cost-drivers in our entitlement programs. They need to understand that long-term care cannot be categorized simply as a Medicaid or individual family problem and that more integrated solutions need to be considered.

Anne Tumlinson is a health policy consultant with nearly two decades of experience in long-term care financing policy. She is a senior advisor at Avalere Health and most recently directed the Post-Acute and Long-Term Care Practice at Avalere Health. In that role, she conducted and oversaw research and analysis on post-acute and long-term care policy for government, foundation, and commercial clients. 

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Victoriaarizona insuranceAndrew MassonSam OliverJim Recent comment authors
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Victoria
Guest
Victoria

My mother paid into CalPERS long term health care for years. When we contacted them about covering her expenses, we were told that there was a 90-day period that had to elapse before benefits could kick in. She died on Friday, never having received one dollar of coverage from the company. While I’m sure they were legally “right” and all was per her contract, I was stunned by their lack of empathy. The purpose of this message is a Buyer Beware: read all the clauses carefully and be sure that coverage is available when you need it.

arizona insurance
Guest

The feds ideally should be telling people to buy LTC insurance through insurance companies to shift the burden away from tax payers. It is highly annoying that the feds feel it is acceptable for billions of tax payer money support this.

Andrew Masson
Guest

Greg’s comments point at the heart of the problem. There is sometimes little balance between actual resident centered care and profit centered care. The question really is, are those that are in the enforcement or overwatch business in long term care looking at the correct things. The enforcement types look at “how the facility did the paperwork” rather than was the treatment provided relevant to providing the best care for the patient. Will the urinary tract infection be cured by helping the resident to ambulate, transfer and perform bed mobility through skilled physical therapy five times a week? Probably not.… Read more »

Sam Oliver
Guest

Healthcare reform is something we have taken a look at for some time now. It is my hope that we do not neglect studies in integrative care as well. Much of our attention is focused on lowering the cost of health costs. Why not create a rally around teaching others how they can support those in need like we did 40 years ago.

Greg Pawelski
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Greg Pawelski

Jim. LTC patients and their families have had a negative predisposition toward LTC facilities long before I had enlightened more of the public about them. These people became so cynical as a nation over the last eight years. We (as a nation) are too busy doing anything else to touch base on this issue. It is only when one is directly hit with health issues, does one take the effort to confront the issue head-on. Unless you directly have or had a loved-one in a nursing home, you don’t know what goes on in one. I don’t think I’d have… Read more »

Jim
Guest
Jim

Unlike Disneyland that provides a service everyone wants but nobody needs, the people in LTC provide a service no one wants and some people need. Due to scare mongering such as Mr. Pawelski’s comments, LTC patients and their families already have a negative predisposition toward LTC facilities. Having worked in both For Profit and Not For Profit companies, I have found that the level of compassion and caring is no different among employees of either structure. I have also found that the efficiency levels for operations and financing in Not For Profit are often below the efficiency levels of the… Read more »

Greg Pawelski
Guest
Greg Pawelski

I’m reminded of the astute John Bogle, founder of the Vanguard Group and elder statesman of America’s financial sector. Bogle explained the broader implications of The Carlyle Group’s buyout of Manor Care Nursing Homes. More and more, Wall Street is taking control of corporations, making Main Street pay the price, and making health care less attainable. The financial sector takes billions of dollars a year out of society, subtacting value from the economy. I know about mandatory binding arbitration. A system rigged in favor of nursing home owners. The owners provide a steady flow of business to those arbitrators who… Read more »

dudley
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dudley

Greg
Any serious attempt at universal, cost effective healthcare is going to involve everyone giving up something.
Reducing payments into the system while at the same time not reducing the risks of practicing in the system is going to lead to an inadequate # of lower quality people providing care. Parroting talking points of the plaintiff lobby cannot change reality.
That is why, despite any legislation passed, there will be no real effective “reform” on the current administration’s watch, the plaintiff bar will make sure its interests are respected.

Greg Pawelski
Guest
Greg Pawelski

Any tort reform legislation would do nothing to alleviate the real problems in our long-term nursing facilities, the repeated acts of serious negligence and the failure of public regulatory bodies to punish and stop those who are responsible. It will be our elderly parents and grandparents who would be denied justice for their pain and suffering in nursing homes. Insulating the nursing home industry by protecting their liability would be a travesty, an insult to nursing home victims of abuse, neglect and wrongful death.

realityreferee
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realityreferee

15 yards Greg, for either not living in the real world or having undisclosed ties to the tort industry. The threat of civil liability is by far the least efficient form of regulation in any industry, spawning at a high cost, initiatives that merely address the liablity risk and do nothing to address efficiency or quality of care. If you really want to address the issue and not just protect plaintiff lawyer incomes, a combination of reasonable accountability and making sure the payor has an agent with skin in the game is a reasonable solution. How come every answer about… Read more »

Greg Pawelski
Guest
Greg Pawelski

Tort reform and the practice of mandatory arbitration in nursing home contracts is one that preys on vulnerable seniors and their families when they are making tough decisions about long-term care. It is a system deliberately designed to take advantage of the weakest members of our society in order to pad the profits of greedy nursing home corporations.

Mariko
Guest

I’m glad they’re at least trying to take care of medicare and the elderly.
http://www.etribes.com/therighttime

wm. bradley jackson
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wm. bradley jackson

“The goal is for the resident to ambulate, transfer and perform bed mobility. The only intervention is for skilled physical therapy five times a week. This has nothing to do with urinary tract infections.” Most declines in function are the result of primary Dx not directly related to the roots of the functional declines but the consequences. It seems a shame to criticize the system when it attempts to address the decline of an individual’s independent safe function and it stinks of a myopic argument to regulate care just to save a buck. However, if that is the point, then… Read more »

anon
Guest
anon

I was wondering when someone would notice this. As a physician with a heart for long term care I can validate the cold ruthlessness Greg notes above. In fact, he understates it. Most nursing homes are frightenly efficient in legally working the system to maximize their return from Medicare. The physicians who serve these patients are felt by their fellows to be at the absolute bottom of the pecking order,untouchables doing a necessary but extremly distasteful and low-value job, probably because they are lazy or not very good. They are paid accordingly by Medicare as determined by RUC. Indeed, the… Read more »

communication skills
Guest

thanks for the article.