Nursing homes and home care: A shotgun marriage

Long-term care advocates have discovered over the years that a division of interests into residential versus home healthcare may be preventing the creation of reasonable, effective long-term care policy. For the past 20 years, most advocates of policy for affordable, quality long-term healthcare have been divided into two antagonistic camps: the owners, operators, and advocates for residential institutions in one bloc (dominated by the American Health Care Association [AHCA] and its state chapters and allies), and the owners, operators, and advocates for home healthcare in the other.

The split hasn't been absolute. The American Association of Homes and Services for the Aging (AAHSA), which began in the “residential” camp, now includes members that straddle both types of long-term care. In general, though, residential long-term care and home healthcare have been regarded on Capitol Hill as competitors for the same client base and therefore rivals in the formation of healthcare policy.

The division of long-term care policy advocacy into antagonistic interests has been very helpful to politicians. When a legislator has introduced a measure that creates problems for SNFs, the author has been able to describe it as “legislation that levels the playing field for home healthcare, so that our elderly can choose to remain at home.” A measure that benefits SNFs, in contrast, is characterized as “an important step forward in ensuring that those in need of nursing home care will get the quality they deserve.” In this way, the complex policy conversation over quality long-term care is shifted to the simple world of interest group politics, where one side “wins” and the other “loses.”

The origin for this perception lies in the 1980s, when an oversight in the original planning for Medicare placed home healthcare at a severe disadvantage in trying to be reimbursed for its services. To make the case for better access to Medicare, home healthcare providers convinced many legislators that Medicare policies requiring admissions to hospitals and nursing homes would achieve much lower costs through improving access to home care.

The strategy of arguing that the “bias” favoring SNFs was unnecessarily costly came at a crucial time. Many states were beginning to struggle with rapidly rising Medicaid expenses. Reimbursement policy at that time was driven by legislation that readers will fondly remember as the “Boren amendment.” States were required to reimburse care at rates that reflected the actual cost of services, allowing SNFs to file federal lawsuits against states that tried to engineer lower reimbursement rates to hold the line against rising Medicaid costs. Governors, state legislators and, eventually, the federal government seized on the arguments raised by the home healthcare providers as a way out of the dilemma—if states couldn't manipulate their own Medicaid rates to save money, they could enact policies shifting clients to “lower-cost” home healthcare.

Of course, as could be predicted, politicians began railing against the “soaring cost” of government-reimbursed home healthcare. A few high-profile cases were used to illustrate that home healthcare agencies could, and did, bill for services not actually delivered or for poor-quality, neglectful care.

Perhaps because they are both being tarred by the same brush, there are signs that the feud between the Capulets of home healthcare and the Montagues of residential care may be ending. In state capitols across the country, the state affiliates of AHCA, AAHSA, and the American Association for Homecare are developing parallel legislative wish lists. An informal, unscientific review of long-term care affiliates in eight states found that both the local home care advocates and the AHCA affiliates want to pursue the following:

• relief or assistance in recruiting and training nurses and aides for long-term care

• fair reimbursement for the actual costs of delivering long-term care

• improved coordination between Medicaid providers, including (in some states) long-term care case management

• tax breaks for long-term care insurance or other measures to encourage marketing or purchasing of legitimate policies covering multiple levels of care

• in some states, tax relief for conversion of abandoned property for use of elderly services, such as nursing home care or adult day care

• clarification of state requirements for staff background checks

Although hardly comprehensive, the state legislative agendas proposed by long-term care providers on both sides of the residential/home care divide clearly contain elements of common purpose that reflect common needs.

According to Mark S. Wheeler, executive director of the Iowa Association for Home Care, the parallel policy proposals raised by long-term care providers in his state did not come into existence by accident. Under the administration of then-Governor Tom Vilsack, Iowa's activist Medicaid Director Eugene Gessow pursued a deliberate agenda of bringing representatives of care providers together for discussions on how to rationally organize care, with the expectation that agreement could be achieved on a reimbursement system that accurately reflected the needs of the clients at all levels. The result was a carefully negotiated strategy that encourages integrated care plans. Wheeler noted in an interview with Nursing Homes/Long Term Care Management that his agency and the local AHCA affiliate do not collaborate on policy. But the shift toward looking at both SNFs and home healthcare as part of the continuum of services is changing how Iowa looks at long-term care policies.

The recent policy winds blowing from Washington will likely contribute to future parallel policy agendas in more states. The Medicaid budget proposals of the Bush administration may weigh more heavily on nursing homes, but the fundamental approach of pushing for reimbursement reductions regardless of actual costs affects home care providers, as well. Also, the nursing shortage that is the “2,000-pound gorilla” for SNFs is an equally large threat to home care providers. The growing interest in “rethinking” Medicaid as two programs—one to reimburse long-term care, one to reimburse acute care for low-income Americans—also has the potential to directly affect both types of long-term care providers.

Changing the perception that home healthcare and SNFs are “natural” antagonists is likely to be a slow, evolutionary proc-ess. However, in a world without “Boren” protections, a world that forces both camps to share common interests and goals, détente looks inevitable.