What’s Ahead for 2003?

“The problems of regulation and staffing are directly related to the financing problem. Heavy reliance on inadequate government financing led to staff shortages, which led to quality problems, which led to stricter and stricter regulations that have contributed to tort liability suits causing skyrocketing liability insurance premiums, leading to revenue shortages and more threatened bankruptcies, etc., etc. As LTC providers and financiers told us in the Center for Long-Term Care Financing?fs LTC Triathlon study, ?eThe government demands Ritz-Carl-ton care for Motel 6 rates while imposing a regulatory jihad.?f [For similarly colorful quotes from angry and frustrated LTC providers, financiers, and insurers, see The LTC Triathlon: Long-Term Care’s Race for Survival at www.centerltc.org/pubs/triathlon.pdf.]*

“Regarding deinstitutionalization and the Olmstead decision, you’ll never find a better case study in how good intentions can lead to disastrous consequences. The Department of Health and Human Services is spending millions to promote the ?eNew Freedom?f to receive Medicaid-financed long-term care at home and in assisted living facilities, and states are following the lead. Very negative unintended consequences will soon follow, for three reasons: (1) people will come out of the woodwork to take advantage of these new services and quickly overwhelm the program financially, (2) Medicaid estate planning (artificial self-impoverishment) will explode in popularity if it buys people Medicaid-financed services they want instead of just nursing home care, and (3) the budding market for private LTC insurance will collapse if the public perceives they can get home care and assisted living without having to pay for them personally. Ironically, unless the government first targets its scarce LTC resources effectively to the needy, any other efforts to finance home- and community-based services through Medicaid or Medicare will either remain tiny and underfinanced (as heretofore), or they will do more damage than good by impeding the potential sources for private financing of long-term care, which include home equity conversion, private LTC insurance, and personal savings and investment.

“I’m sad to say everything today points in the direction of repeating the mistakes of the past. Pushing more and more government money into financing long-term care services will only further desensitize the public to this risk, increase their appetite for taking advantage of the public programs, and reduce their sense of urgency to plan and insure for long-term care. Consequently, the current tragic status quo will likely continue to get worse.

“On a slightly happier note, the worse that publicly financed LTC becomes, the more obvious it will be that people must pay privately to gain access to quality care. Thus, over the long run, even if we fail to solve the problem by changing public policy [along the lines of LTC Choice], I believe the crisis will self-correct in time. Boomers who fail to insure for LTC will end up having to use their home equity to obtain quality LTC as government-financed care becomes so bad that people won’t accept it, even for free. When boomers have to pay privately, they will demand quality and noninstitutional care, which will breathe financial oxygen into the service-delivery system. In time, LTC insurance will finally take off as the burden of paying for LTC becomes more real. As usual, the only people really hurt in the future will be the poor whom, ironically, Medicaid is supposed to serve.”

“Perhaps 2003 will finally see general recognition that the current approach to regulating long-term care-the orienta-tion toward pro-cess requirements and punishment for the failure to achieve them-has not been an overwhelming success. The new CMS emphasis on quality indicators in the nursing home arena might well augur a new approach, at least in that sector. In assisted living, the Assisted Living Work-group established by the Senate’s Special Committee on Aging has the potential to develop a ‘new paradigm’ to regulation, one focused more on outcomes and customer satisfaction than on process and procedure. Application of the more traditional nursing home approach threatens to violate the essential difference between the two models of long-term care-namely, assisted living’s emphasis on cus-tomer choice in lieu of government mandate. The key will be the degree to which regulatory guidance can achieve the appropriate balance between two imperatives: strong regulatory systems designed to ensure quality of service, while, at the same time, preserving the right of assisted living residents to make their own choices as to the services they receive and the environment in which they receive them.

“Staffing will continue to be issue number one as far as long-term care providers are concerned (although tort litigation is coming up rapidly behind). Research shows, however, that turnover statistics are not uniformly dire. There are communities that have shown a sustained ability to operate at two to three times the level of retention as national averages would suggest. Recent evaluations of Wellspring, the Pioneer Movement, and the Eden AlternativeÖ show promising evidence that applying some of the basic principles of staff empowerment can dramatically increase employee satisfaction and loyalty- approaches that include comprehensive staff training, mentoring, and recognition. While we continue to press federal and state government to reimburse facilities at a level that allows payment of reasonable salaries, we should continue to apply techniques of quality management that will ensure a sense of fulfillment and professionalism on the part of staff, which might also lead to higher levels of enthusiasm and retention.

“I don’t think deinstitutionalization is as much an issue as the prevention of institutionalization in the first place. Certainly, Olmstead has played a role (as have the ADA and Fair Housing Amendments Act), but the inherent desire of the elderly to remain in their own homes and the consequent (and powerful) market pressures that result are perhaps the more compelling forces at work. The successful companies and communities will be those that can work within that environment. There are companies, for example, that have launched their own home-care agencies, not so much to develop a different line of business, but as to tie into the desire of seniors to delay movement to a long-term care community as long as possible. Developing brand loyalty among customers while they’re still residing in their own homes can only enhance the provider’s ability to retain those customers when a long-term care community is the next best option.”

“The nursing home industry will continue to press for weaker regulation, including alternatives to the survey and certification process that would require a ‘collaborative’ rather than an enforcement relationship between the regulators and the regulated. The latest thing we’ve seen is a host of recommendations from the Health and Human Services Secretary’s Advisory Commission on Regulatory Reform that closely track the industry’s long-standing agenda for regulatory change. However, [CMS Administrator] Tom Scully has repeatedly promised that this administration would not weaken nursing home regulation, and we expect to hold the administration to that promise.

“Staffing will continue to be one of the most critical issues for nursing home residents and for nursing homes themselves. Everyone agrees that the issue must be addressed, and consumers and providers will feel more pressure in the coming year to engage in a dialogue on how to resolve it. NCCNHR believes the cost savings from improved staffing would be tremendous-think of the financial implications, for instance, when it costs $3,000 to 4,000 to replace a nursing assistant in an industry that has 100% turnover, when it costs $5,000 to 50,000 to heal a bedsore that could have been prevented with routine nursing care. If it costs more to increase staffing to levels necessary for good care, then there have to be accountability measures to ensure that the new money goes to staffing.

“As for the Olmstead decision, there are a lot of issues for our members in this. One is to ensure that consumers have choices of where they receive long-term care. (As one of our board members said the other day, ‘Why do states have to get Medicaid waivers for home- and community-based services-why shouldn’t they have to get waivers to put people in institutions?’) Another issue here is competing resources-some people will always need nursing home or other institutional care because of their medical condition or lack of family support; we have to continue our focus on quality nursing home care while advocating for alternatives for those who need and can use them.

“Another serious issue with deinstitutionalization in general is that it can involve transferring residents of mental health facilities to nursing homes without regard for patients’ rights or potential threats to the safety of the traditional residents. Resident-on-resident abuse is increasing, and there have been some very serious consequences.

“Finally, alternative programs are going to have their own quality-of-care problems that may look a lot like the problems seen in nursing homes. Home care and assisted living are also trying to operate with undertrained, underpaid paraprofessional staff. We need high-quality standards and strong federal and state enforcement in all long-term care services.”

“As for regulation, this is a presidential administration that doesn’t like to regulate. Even with the Quality Initiative, or ‘regulation by yardstick,’ as I call it, I don’t see this government becoming actively involved in any strict application of regulation.

“The staffing situation will only get worse. Despite the valiant efforts of at least some nursing facilities to improve staff recruitment and retention, people will be looking for job alternatives to long-term care and, if the economy improves, will be finding them, too.

“Olmstead has encouraged a trend toward home- and community-based care, but it is a very slow-developing trend, and I don’t see any spike occurring in that type of activity in 2003.” NH

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