If we’re ever going to reform our health care system successfully, part of the solution must address long-term care. Given the growing role of long-term care as America ages, that’s just common sense.
Right now, nursing homes and long-term care in homes and communities consume about 16 percent ($4.3 billion) of overall health spending in Minnesota and about 31 percent of state-sponsored health budgets ($3.5 billion).
Those percentages are expected to rise dramatically as Baby Boomers hit retirement age. Minnesota’s population between the ages of 65 and 85 will double by the year 2030, according to the latest census projections. The number of Minnesotans 85 and older will nearly double.
Minnesota faces unique challenges and opportunities when it comes to reforming long-term care, many of which go hand-in-hand.
For years, Minnesota has been one of the healthiest states in the nation with one of the longest average life expectancies. We currently rank second only to Hawaii, and we also have one of the country’s highest proportions of residents over the age of 85. That’s worthy of pride, but it presents the challenge of increasing demand for long-term care.
Minnesota also enjoys a reputation as a leader and innovator in long-term care. In 2001, after a decade of study, Minnesota began a ground-breaking effort to overhaul our long-term care system.
It sought to expand community-based options statewide and reduce reliance on more expensive nursing homes. We began designing a long-term care consultation service to screen patients and determine their best care options; increased funding for Elderly Waiver and Alternative Care services; provided tax credits to individuals who buy private long-term care insurance; gave nursing homes incentives to decrease beds and shorten patients’ stays; raised pay for nursing home workers to keep up with inflation and improve the quality of care, and helped coordinate planning between counties and long-term care providers.
Unfortunately, most of those reforms were gutted by Gov. Tim Pawlenty’s budget cuts in 2003. Increased funding for community and at-home care vanished and 1,200 seniors were forced out of the Alternative Care program because of stricter income guidelines. The program, which provides limited at-home care, cost about $650 a month per senior. The monthly cost for the alternative — a bed in a nursing home — was $3,741.
The expected savings from the voluntary reduction of nursing home beds, which was supposed to be invested in community-based programs, went instead to pay off the state budget deficit. Nursing home cost-of-living increases evaporated and wages were held flat.
In addition to those outright cuts, the governor tagged nursing homes residents with surcharges of between $990 and $2,815 a year. (So much for no new taxes.) That surcharge leveraged $98.5 million in matching federal funds, but seniors and nursing homes didn’t see a cent of it. Instead, the governor put the money in the General Fund to paper over part of the state’s $4.5 billion deficit.
All that left a severely weakened system. Fewer nursing home beds were eliminated than anticipated, but nursing homes were forced to cut wages and benefits, which made it harder to attract and keep quality workers. Cost-effective programs like Meals on Wheels, Senior Nutrition (which provides meals at senior centers), Senior Companion, Retired Seniors and Foster Grandparents were able to serve fewer people.
While many of those cuts have been slowly reversed, the momentum for reform has stalled. To get it back, we’ll need leadership and vision, something that has been lacking from our current administration.
Here are some progressive suggestions for where Minnesota should be going:
Recognize the importance of families and help them provide care
Much of the care of our elderly and disabled comes from relatives and friends who want their loved ones to be safe and healthy and live out their days in dignity and comfort.
This type of care is the most cost-effective and often the most desired by older Minnesotans. Informal caregivers take a tremendous load off long-term care institutions, and the economic value of their services nationwide dwarfs national expenditures for professional long-term care.
The Minnesota Department of Human Services estimates a yearly saving to taxpayers of $30 million for every 1 percent increase in individuals being cared for in their own homes instead of nursing homes.
The toll on caregivers, however, can be tremendous. Typically, a caregiver provides 12 hours of services per week over four years. During that time, two-thirds also hold down jobs and 40 percent are raising their own children.
In recognition of this contribution, we should offer caregivers a tax credit to help offset expenses and lost wages associated with providing care. Such a credit could go to family members whose loved one would otherwise qualify for admission to a nursing home. We should also allow employees to use sick leave to care for a spouse, parent, grandparent or stepparent.
Encourage individuals to plan for long-term care
Public dollars dominate financing of long-term care. Medicaid pays for 45 percent of it nationwide, although Medicaid spending, eligibility and coverage vary from state to state.
Minnesota rates high in the use of private long-term insurance with 18 percent coverage. The national average is 2 to 3 percent.
This didn’t come about by accident. The state made it a priority through promotional strategies and, more effectively, tax credits. We need to make it a priority again by increasing the tax credit and educating the public about the benefits of long-term care insurance.
Expanding home- and community-based services
We’re just getting back to where we were four years ago in support for these cost-effective programs, but demand still outstrips the supply. These programs are popular because they work and because they fill a fundamental need to remain close to family and friends as we age. For example, we should expand our support for the Block Nurse program so seniors can stay in their homes. Why should we require people to live in an institution when they want to live at home?
Streamline existing services and integrate care
One of the great weaknesses of our long-term care system is the fragmentation of programs, providers and payment methods. That needs to change. If we see the long-term care system as a whole instead of separate parts, we will integrate acute and long-term care services in hospitals, nursing homes and at-home settings.
Retain nursing homes as a vital part of the system
As demand for at-home and community services increased, Minnesota tried to shift funding by cutting nursing home beds or closing homes altogether. As a result, the state is expected to lose 14,000 additional beds in the next 15 years, leaving fewer than half the 48,307 beds Minnesota had at its peak in 1987.
However, we have gone too far. A 2005 report from the Department of Human Services suggested that Minnesota faces a shortage of beds in some counties and that more homes may need to be built in some regions.
In addition, budget cuts have worsened the quality and cost of nursing home care, straining families and nursing home workers. Nursing homes also are having a harder time attracting and retaining qualified workers because state support for wages has been flat for most of this decade. We cannot expect nursing homes to provide high quality care when their own workers can’t afford health care. The state needs to restore funding to nursing homes and repeal the $2,000-plus surcharge (tax) on nursing home residents.
As with all of health care, long-term care offers both challenges and opportunities. How we address this issue will affect not only the health our families, friends and neighbors, it will also weigh significantly on our overall quality of life.