Simplistic rhetoric that Medicare is “broken” fails to diagnose where the real challenge lies in creating enduring financial stability for this critical program. Medicare is doing exactly what it was designed to do: draw in funds from working individuals and beneficiaries to help millions of older Americans and people with disabilities pay for medical care. A fundamental problem is how Medicare pays for services and how the delivery system responds to that payment structure.
The current medical care delivery system that Medicare pays for is fragmented, uncoordinated, favors the health care provider over the person receiving care, and is exceedingly expensive. How traditional Medicare pays for services — through a fee-for-service model that values quantity of services over quality of health outcomes — validates the current delivery system. However, with growing overall health care costs, increased use of expensive high-tech medical services, and the coming of age of baby boomers, rising Medicare costs for this broken delivery system threaten to upend the program and bankrupt the nation. But there is hope: Medicare can be used to transform our broken health care system by changing the way it pays for services.
Medicare’s antiquated payment system and the inefficient health care delivery system it encourages creates an even more egregious problem for those individuals who are part of Medicare’s most expensive population: seniors who have chronic health conditions (such as heart disease, asthma or cancer) combined with difficulty with activities of daily life. They see multiple doctors, take numerous medications, and are faced with the difficult task of managing this complex array of providers, services and treatments on their own. The 15 percent of seniors who have both chronic conditions and functional impairments account for nearly one-third of total Medicare costs. Medicare spends almost three times more on these individuals than on those with chronic conditions alone.
Growing older with health care and support needs is a “people” issue; not a partisan one.
As the entitlement debate rages on and the health care system evolves, the bottom line remains that there needs to be more affordable and accessible options for all people who need long-term care. This is the kind of care that we are all likely to need at some point in our lives as we age; it will range in scope from everyday assistance such as getting groceries, to more comprehensive help in the form of assisted living or nursing home care. Those few who are fortunate enough not to face these kinds of needs personally are likely to need to care for a loved one at some point in their lives, such as a parent, grandparent, or spouse. As a country, we seem blind to these realities, even as the short window that we have to make a meaningful difference for the emerging older population is closing rapidly.
The fact is that roughly 70 percent of Americans over the age of 65 will need some form of long-term care, on average for three years. Yet most people, when asked, think they will never need this kind of care.
To make matters even worse, many individuals mistakenly believe that Medicare will pay for long-term services and supports even (it does not). The result is a public that is woefully underprepared and ill-equipped to prepare for what are probably inevitable health needs.
This gap in knowledge and awareness has contributed to our current “non-system” of financing long-term care, in which people are left to fend for themselves to pay for services or spend down to near poverty levels to qualify for Medicaid; for only then is public help available. This is neither a sustainable nor a dignified policy. We need to develop a better model that will ensure that all Americans can age with dignity, choice, and independence. But what would that look like?
As a physician, I believe we have perfected the health care delivery model for 1972 that focuses on acute care, and is not necessarily designed to meet the needs of individuals living for an extended period of time with multiple chronic conditions. What we need today and into the future is an updated toolbox for financing long-term care that serves the needs of a 2013 population. In 1965, the average life expectancy was 69 years old. If an older person experienced a major health event—a heart attack or stroke, for example—they might have recovered, but they probably did not live much longer beyond that event. Today, with advances in medicine and technology and the increased number of intensive care units and critical care units, people are living longer than ever before, but with functional impairments and multiple chronic conditions. The delivery model we have today is not designed to meet these growing care needs, and the financial strains on individuals and families are significant.
It starts with a call that a loved one is in the hospital after being in a serious accident. Sometimes it comes from having chronic health conditions that minimize daily functioning as one grows older. These life-changing events present individuals and their families with a new set of needs and challenges that require a variety of human capital and financial resources to redefine and maintain daily living on their terms.
The likelihood that you or someone you love will need this kind of support is greater than you may think. While nearly all Americans hope to remain in their homes as long as possible—enjoying good health and living independently—the reality is that 70 percent of people over 65 will need some form of support to assist them with daily activities at some point in their lives, for an average of three years.
Over the next two decades, Americans will reach that milestone at a rate of nearly 8,000 a day. The older people become, the more likely they will need long-term care, and with advances in medicine and technology, we are living well into our 80’s and 90’s.