Uncategorized

Reforming Long-Term Care and Post-Acute Care Could Save Billions

Tumlinson Anne_46025_46026

Despite the extreme inside-the-Beltway focus on healthcare reform, there’s been hardly a mention of tackling reform of our long-term care system.  This is curious when you stop to consider that these services are used by the same seniors who use the most healthcare resources and that they account for hundreds of billions of dollars of personal and federal spending.  Our existing system strains already-stretched government resources and family networks and will become only more expensive as our nation ages.

A new report finds that a proposal to reform Medicare post-acute care could provide the funding needed to reform the long-term care system, resulting in overall savings of $35 billion over ten years—all the while improving efficiency in our post-acute care (PAC) system and creating a new, consistent, voluntary long-term care (LTC) benefit for seniors.

Reforming PAC is, in simple speak, a must-do.  Currently, Medicare payments for post-acute medical care – the kind of care that follows a stroke or major fall – are first based on where the care is provided, not on the actual patient condition and needs. There is widespread bipartisan agreement that reforming this disjointed, inefficient payment system could enhance care while also adding a healthy dose of spending discipline to Medicare. In addition, this could be a great area to showcase better evidence-based decision-making.

The question becomes what to do with the money generated through PAC reform.  The proposal at hand – which was developed by the American advanced by the American Health Care Association, the National Center for Assisted Living, and the Alliance for Quality Nursing Home Care – directs those savings toward the creation of a new, fully federalized, and voluntary LTC benefit system.

And there is certainly rationale for reforming LTC financing.  The nation currently spends more than $230 billion annually on a LTC system that inadequately protects today’s senior population from the financial devastation of a long-term disabling condition such as Alzheimer’s disease or stroke.  Seniors often rely on their savings, home equity, or children to pay for their care.  In the current economic climate, these sources of financing have proven to be a house of cards rather than a stable foundation—a problem that will gain urgency as the Baby Boomers swell the ranks of our Medicare population and families slowly recover from deep financial losses.

Specifically, the proposal seeks to combine PAC with LTC reform through the following measures:

  • Creation of a new, site-neutral Medicare payment system for post-acute care based on patients’ conditions and medical needs. Decisions would be based on more evidence using a standardized patient assessment tool.
  • Creation of a fully federalized, voluntary, catastrophic long-term care benefit. Medicaid would no longer pay for LTC for seniors.
  • An increased amount of private funds used for long-term care services. Individuals would share the cost burden of the new LTC benefit in the form of a personal responsibility allowance, scaled to income.

Using methods and assumptions similar to those employed by the Congressional Budget Office, Avalere Health built a model to assess the federal costs of these changes. According to the results, these Medicare PAC reforms would likely generate $81 billion in savings over 10 years of operation through more cost-effective placement of Medicare patients in PAC settings.  Those savings would offset the costs of launching a federal LTC program, which by Avalere estimates would cost $46 billion over 10 years.

The total 10-year program savings is $35 billion.

Any meaningful reform effort will involve a careful analysis of choices, policy options, and trade-offs.  This report illustrates how these types of tradeoffs and investments could play out—this time using PAC savings to fund urgently needed improvements to our LTC system.   It is precisely these types of policy choices that will guide this new chapter in national healthcare reform.

Anne Tumlinson has nearly two decades of experience in long-term care financing policy. She is currently a vice president at Avalere Health, directing research and analysis on post-acute and long-term care policy for government, foundation, and commercial clients.  She has co-published work with health reform experts including Jeanne Lambrew.


Livongo’s Post Ad Banner 728*90

Categories: Uncategorized

Tagged as: ,

21
Leave a Reply

21 Comment threads
0 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
18 Comment authors
HarveyAndyAndrewAndyJim Recent comment authors
newest oldest most voted
Harvey
Guest

The government has been planning this for years already but until now there are a lot of people who are in dire need of financial assistance. I think they’ve come up with a program CLASS ACT a few years ago, which was designed to give financial help to people who need long term care. It was too good to be true or too ambitious that it was cancelled right before it started. So people these days have no other option but to rely on federal programs or to purchase private insurance. Long term care insurance cost is very expensive these… Read more »

Andy
Guest

Interesting post. You guys have a great site here – will be sure to check back. Thanks & regards, Andy. how to lose a beer belly

Andrew
Guest

There seems to be a particular resistance to changing process in the long term care community. The application of simple lean engineering tools to clinical and administrative processes would eliminate Millions. However, the mere mention of standardized work and measureable process and human performance brings discussions to a halt. Standardized work does not infringe on the medical professionals’ judgment or their ability to treat and cure residents/patients. It just takes the waste out of every process that does or might support the care giving process.

Andy
Guest

Long-term and acute care, especially for conditions like stroke, SCI, and TBA, are definitely in need of reform. With any luck, such reform will manage maintain or better the current standard of care – the status quo seems to be content with gradual erosion of standards as costs increase and programs are cut. Heavy-lifting finances aside, what about increasing emphasis on transitioning high quality services out of expensive clinical environments to the home?

Jim
Guest
Jim

At the turn of the 20th century 9 of 10 hospital beds were faith based supported. We can see that today in the names of many hospitals, Presbyterian, Methodist, Cedars, Our Lady of Perpetual Mercy etc. Care and concern cannot be regulated. Only tasks and money flow can be regulated. Those who believe that the government is the best provider of healthcare should look to England. Women with breast cancer are denied a medication that could help them because it is not on the British Medical Formulary. This could be a death sentence for a young woman who is otherwise… Read more »

Howard Schoem
Guest

“A new report finds that a proposal to reform Medicare post-acute care could provide the funding needed to reform the long-term care system, resulting in overall savings of $35 billion over ten years” We reform the most abused public system on the planet, saving the US tax payer billions of dollars. We then take the savings and invest them into another government program ripe for abuse? I don’t have the solution but there has to be a better way! Why don’t we improve individual state LTC partnership programs while finding a way to work with established insurers to make coverage… Read more »

Tom Mitchell
Guest

I love when they talk about billions of dollars saved and spent like most people talk about when their wife goes to the department store with 3 bags of clothes touting how much money she saved. Anyway, reform is needed for 2 reasons to keep our Federal and State Governments out of financial problems, AND to allow Americans to save and transfer an inheritance to their children instead of giving it to the nursing home facilities.
http://www.discoverlongtermcareinsurance.com

Coral Andrews
Guest

In Hawaii, we have a problem with waitlisted patients. These are patients who are medically ready for discharge from the acute care setting but who cannot be placed in the post-acute care setting. We identified four key areas that contribute to this problem, many of which other bloggers are addressing. They are: reimbursement (need to build out a post-acute reimbursement methodology), capacity (insufficient type or quantity), workforce (insufficient numbers and the need for increased training in the care of higher acuity residents), and regulatory/government (streamlining the Medicaid eligibility process, overcoming the Medicare 3-day qualifying stay, etc.). We welcome the continued… Read more »

Lynn Kanzer
Guest
Lynn Kanzer

I applaud anything and anyone that can reform long term care reimbursement. I have been working in long term care for 34 years and have seen a dramatic decline in how residents healthcare is paid for. While I deal with residents being admitted on Medicare/Medicaid my specialty is working with those residents admitted under a managed care plan. From my vantage point I find myself fighting the companies in order to allow the residents to recuperate to the level of being safe for discharge. The answer I get most times is “they can receive these benefits (OT/PT) at home. However,… Read more »

MD as HELL
Guest
MD as HELL

First steps in reforming long term care: eliminate the PEG tube. If you can do that, then drive on to dialysis.

MD as HELL
Guest
MD as HELL

In long term care even a great doctor cannot combat the consumerism in care. A former NC family physician of the year, a doctor who in my opinion is one of the greatest doctors I have met, staffs a nursing home as part of his practice. Patient families descend on him and demand outrageous and unrealistic actions for their loved one. The patient is getting great and appropriate care, but with the clout of CMS, DFS and all other regulators sided with the voter, right next to the plaintiff attorney crowd, even he has to capitulate and send patients to… Read more »

anon
Guest
anon

Anne You do not mention the only the government’s only paid agent on the scene, the physician. CMS set up a system ripe for abuse, I see John Ballard’s story played out dozens of time a week. Yet they take their one agent on the scene and intentionally and specifically do not pay him to manage the patient. I take calls from the PT and the OT and the SW rom the NH all day long and cannot bill for it. The only folks left doing NH medicine have to do it in such volume that they are useless from… Read more »

John Ballard
Guest

Something just dawned on me.
One of the driving metrics of reform is “outcomes.” (It is clear that more money, more medicine, more procedures and more devices do not insure better outcomes.)
In the case of geriatrics, how does one measure “outcomes” when the natural life expectancy and recovery prospects are both low and short?

Bianca
Guest
Bianca

I must agree that the savings should start with the Seniors, but it often seems that the end up with the worse outcomes. Most seniors have fixed incomes so I am all for supporting any type of reform that is in their favor.

John Ballard
Guest

Praise the Lord! I thought no one would ever bring this up. My post-retirement jobs after a career in food service have been in senior living, both independent and assisted, and personal (non-medical) care. Seven years in that mix and taking care of my mother until her passing in January have given me an up close look at current long term care practices. And it’s not a pretty picture. Had I not learned the ropes first-hand my mother’s care would have been a nightmare. Rather than tell the professionals how to do their jobs I will stand on the sideline… Read more »