The Argument for Managed Care - Research Paper Example

?Running head: THE ARGUMENT FOR MANAGED CARE The Argument for Managed Care (school) The Argument for Managed Care Purpose of study Thisstudy was chosen because it presents an issue which impacts on the effectiveness of long-term managed care. It presents a viable research topic because there is a need to establish the factors which affect the efficacy of long-term managed care. This study shall seek to establish the cost of long-term managed care on the health care system and how such costs can be managed or reduced. The intended audience for this research includes the health managers, especially those involved in health economics and health financing. They are the intended audience because the results of this study can guide them in making decisions about health financing and related decisions. Opening Statement, Assumptions or Hypothesis Long-term managed care often involves the care of chronically ill individuals. As the term implies, the chronically ill often spend a significant amount of time in long-term care facilities or under constant supervision and care in the community setting. Such long-term care also implies various health needs including medicines, health personnel, and rehabilitation, and similar needs. This health needs all add up to significant financial costs for health insurance and for health authorities, and most especially for families. In the current climate of economic hardships, the health sector has not been spared from the financial crisis. In fact, in the past few years, budget cuts have been made for health allocations. Health rationing and rationalization practices have been considered in order to establish effective ways of health financing. With the significant costs of long-term care, health authorities review the possibility of reducing long-term health costs. The implications of this decision impact on the quality and on the availability of health services for those who are under long-term care. These patients would likely impact them negatively, and yet, the financial burden of long-term care is a significant issue which is weighing heavily on the health care industry as a whole. In applying health care rationalization processes, budget cuts to long-term care in relation to other health services would seem more rational. Based on these assumptions, this study shall then consider the financial burden of long term managed care and the implications of health rationalization on the delivery of adequate long-term managed care. Tentatively, this study answers the query posed by expressing that long-term managed care has a significant financial burden on the health care system and that based on health rationalization, long-term managed care would have to suffer financial cuts. Discussion of Findings The Department of Health and Human Services (DHHS) (2008) discuss that long-term care is the blanket term for various services which are meant to meet the medical and social needs of a patient. Patients under long term care mostly include elderly patients and the patients with permanent disabilities or those who are terminally ill. These care facilities include assisted living facilities; these are facilities meant to cater to those who need assistance with their daily activities, but are otherwise able to live on their own (DHHS, 2009). The Continuing care communities are small communities which include various housing apartments, small houses, and nursing homes. These communities cater to the needs of those who are still active and healthy. Home care includes care which is offered by private agencies delivering care in the patient’s homes. Hospice care is also considered long-term care. This type of care is usually offered to those who are terminally ill, helping make the patient and his family as comfortable as possible during the last days of his life. Long-term care involves numerous activities and services. For nursing homes, the care includes room and board, meals, assistance in activities of daily living, housekeeping, 24-hour supervision, skilled nursing care, wound care, physical therapy, occupational therapy, and speech therapy (Prudence Research, 2009). For assisted living facilities, the care includes room and board, three meals a day, assistance in ADLs, when necessary, light housekeeping, and reminders for medication intake. For home health care, care includes assistance with ADLs, when necessary, light housekeeping, light meal preparation, and medication reminders (Prudence Research, 2009). In the above care needs, skilled nursing care is also an essential aspect of the nursing care process. Skilled nursing care includes, wound care, blood pressure check, physical and occupational therapy, and speech therapy. Based on statistics, within the next 20 years, the number of aging Americans will likely double, representing about 20% of the US population (Prudence Research, 2009). The longer life span of the elderly population would also likely impact on the need for long-term services, with about 70% of this population over the age of 65 needing some form of long-term care. Long-term care costs have increased since 2004 from 4.7% to 6.6% (Prudence Research, 2009). The average cost for a private nursing room in a day is about $ 247 or about 90,000 dollars in a year. Home health care costs also increased to 13% in 2008 to 5% in 2006 (Prudence Research, 2009). These long-term care patients are likely to place a significant strain on long-term health services with the increase in the elderly population being very much apparent from the years 2011 to 2030; in the next 10 years, the number of Americans over the age of 65 will register at 55 million, and in 2030, their number would swell to 71 million (Prudence Research, 2009). These older population would also likely suffer various illnesses which would require them to be under long-term care in the home, in the community, or in the nursing home setting. The above numbers signify an increased need for long-term care in the current as well as the future context. This increased need represents a significant burden on the government and on the health care system in general because health financing is a highly limited financial facility for health care. The financial impact of long-term care has been discussed in a paper Yelin and Wanke (2001) where the authors sought to evaluate the distribution of direct medical costs of rheumatoid arthritis. The authors were able to establish that medical costs for rheumatoid arthritis average at about $5,000 a year, and more than half of such costs are attributed to hospitalizations. Moreover, the more progressive the rheumatoid arthritis becomes for the patient, the more he incurs medical expenses, and the less he is able to function and to carry out his daily activities (Yelin and Wanke, 2001). The fact that these patients are unable to work because of their condition also exacerbates the burden of the disease and of the long-term care services. Spillman and Lubitz (2000) discuss how the population of elderly individuals is set to increase in the next 20 years. They point out also that the implications of this increase to the aspect of delivery and financing in the health care is very much significant because elderly individuals would likely use health care services to a higher degree as compared to their younger counterparts. In effect, a larger number of elderly individuals seeking medical care would place a greater strain on the Medicare program and other health care allocations (Spillman and Lubitz, 2000). This study was set to establish the effect of longevity on spending for acute and long-term care. It revealed that total expenses from the age of 65 years until death increase significantly with longevity, from $30,000 to those who die at the age of 65 and to more than $200,000 for those who die at the age of 90 (Spillman and Lubitz, 2000). This increase is mostly attributed to the increase in nursing home expenses for the elderly. Spending is usually higher in the last two years of a person’s life due to terminal or chronic illnesses. The authors established an important point when they concluded that “increases in longevity after the age of 65 years may result in greater spending for long-term care, but the increase in the number of elderly persons has a more important effect on total spending” (Spillman and Lubitz, 2000, p. 1409). In effect, the longer the life of the elderly patients, the more likely they would need health care and the more likely their needs would put a strain on limited Medicare and health financing resources. An analysis by Birnbaum and Kidder (1984) present an economic analysis by the National Hospice Study, requested by the US Congress on the various implications of including hospice care in Medicare. Data was based on about 4000 patients under hospice or terminal care in 25 hospices and 12 conventional care areas. The study revealed that the hospital-based hospice registers at a cost 44% higher than home care hospice costs (Birnbaum and Kidder, 1984). Cost savings on hospice as compared to conventional care register higher savings as compared to conventional care, even with longer days of stay. The authors point out that the cost of hospice and possible savings is largely based on the integration of hospice care into the health care system. With hospitals and hospice centers working with each other, well managed hospice care can still be financially profitable. In the age of higher hospital regulation, hospitals need to establish arrangements in the discharge of terminal patients who do not need to be hospitalized (Birnbaum and Kidder, 1984). This study points out crucial possibilities in long-term care – the discharge of terminally ill patients who do not need to be hospitalized. With the higher cost in hospital-based hospice care, a better alternative in home-based care for long-term patients can be considered as a means to reduce costs in long term care. In a study by Connor, et.al. (2004), the authors also discussed the cost and financial burden of long-term care, or more particularly hospice care. They first described how most hospice patients are 85 years or older, and the number of these patients are increasing with most of the patients being mostly Caucasian, with non-Caucasian patients rapidly increasing in number. Most of the patients are cancer patients, with a small percentage having dementia (Connor, et.al., 2004). Most of these patients are covered by Medicare and others by private payers. Based on 2002 financial data as presented by Connor, et.al., (2004) average total daily cost for inpatient general care registered at $454, for inpatient respite care $144, and for visiting services at $71. Per admission cost for visiting services was at about $3500, and for nursing care about $2,100 (Connor, et.al., 2004). All of these costs represent significant financial burdens on Medicare and on health financing because they require the greater allocation of funds with each patient and with each care administered. The significant cost of long-term care registers for elderly cancer patient care, but it is also apparent among cancer patients. In a paper by Yabroff, et.al., (2007) the authors sought to establish the cost of care for elderly cancer patients in the US. The authors carried out surveillance, epidemiology, and end-results in order to identify about 700,000 cancer patients and about 1.6 million non-cancer control respondents. Costs of care were based on Medicare claims according to a 5-year survival rate of cancer patients. The study revealed that the highest cost for elderly cancer patients were seen mostly at the beginning of the disease or treatment and the last year of the patient’s life (Yabroff, et.al., 2007). High costs for cancer care were highest for lung, colorectal, and prostate cancers. This study implies how significant costs for cancer treatment presents a heavy burden on the health care system, especially as these patients often require long term healthcare, as well as constant supervision. In the analysis by Wiener and Stevenson (1998), the authors also acknowledge that long-term services for older adults represent a significant share of the health care budget of the US; this concern is a significant issue among policymakers and legislators. Nursing home and home health care associated with long-term care represents about 12% of personal expenses and about 14% of all state and local health care allocations. It is also unfortunate to note how elderly patients have no private long-term insurance. In effect, these elderly patients often have to rely on their own resources, or that of their family’s; when such resources are depleted, Medicare and state-funded programs are tapped into (Wiener and Stevenson, 1998). Medicare long-term costs are set to increase as the population of the elderly is also set to increase. Since many of these elderly patients spend much time in hospitals seeking medical attention, many of them end up becoming dependent on Medicare and Medicaid. Various states are motivated by various goals in order to control the rate of spending for long-term care, however, these efforts have been difficult to actually set into motion because of the negative implications on the availability of health services for patients under long-term care. The discussion above highlights the significant costs and financial burdens which chronic care, long-term care, hospice care, and similar health services imply. In applying the principles of health rationalization which is one of the policies being implemented by health policy administrators, long-term care financing would have to be subjected to budget cuts and reduced allocations. Of health rationalization, a study by Warren (1996) acknowledges that the population of the world is ageing and that there is a need to establish age-specific causes of diseases. The author also points out that it is important to establish means by which prevention and treatment can best be effective, and to apply rationality in these prevention and treatment methods. In effect, the process of allocating funds must be based on rational considerations. Long-term care would likely suffer from budget cuts because there are other health concerns which justifiably need greater health allocations (Warren, 1996). It would be more rational to allow the diversion of limited resources towards health ventures which would likely yield more health benefits. Long-term care as was illustrated above often involves care for those who are already terminally ill and who are elderly. Allowing caps for health expenditures in long-term care would help ensure that timely and adequate health services can be delivered to other health needs, like those involving care for children and adults. There are crucial questions which have to be answered by health administrators and these questions must be based on rational and fair answers (Morrissey, 2011). In effect, choices have to be made, and they have to be made logically and they must have a rational basis. For example when choosing between allocations for childhood diseases and long-term care, the rational choices would dictate that the more rational expenditures must first go to childhood diseases, for long-term care to receive allocation, the expenses must first be rationalized and justified (Morrissey, 2011). The process of health rationalization is likely to incur significant budget cuts on long-term care but even using health rationalizations, it is still possible to establish workable solutions for long-term care. Recommendations There are various recommendations to resolve the issue of long-term care cost. Inasmuch as health rationalization seems to imply eventual budget cuts for long-term care, it is still possible to utilize the rationalization process to minimize the impact of budget cuts on long-term care. The process of rationalization can actually be used to justify the need to reduce budget cuts on more specific aspects of long-term care. For example, although hospice care for the elderly cancer patient may not be rationalized in terms of health allocations, cancer care for the non-terminal older adults may be rationalized as necessary health expenditures. There are other adjustments in long-term care which can be made in order to reduce health expenses, without having to resort to total budget cuts. For example, instead of resorting to hospital care for terminally ill patients, home-based care can instead be recommended. Community efforts can also be utilized in order to assist in the care of long-term care patients. This can especially be applied for elderly patients in the community setting where programs can be set up with members of the community to assist the patient in his activities of daily living, including his grocery shopping, his recreation, and even his exercise. Members of the community can be recruited to assist these elderly patients, and the cost for their assistance can be set-up as part of charitable enterprises and ventures for the community. This type of long-term care assistance can however work only for the long-term care patients who can actually live in the community setting. Nevertheless, the community assistance can go a long way in reducing health care costs. As was established above, the expected life-span of people has increased and will be expected to increase in the coming years. The number of elderly people above the age of 65 and 80 is set to increase in the next 20 years, and such increase would mean greater monetary allocations needed for long-term care. With this eventuality, it is crucial for long-term care insurance to be introduced to the general public. Their investments on their future health must include this investment and various payment terms can actually be utilized in order to secure the viability of this investment. This investment can come in the form of private health insurance; or it may also come in the form of government programs integrated within the existing Medicare or Medicaid program. Investment in long-term care through long-term care insurance can help ensure lower cost for the patient and for the government in the eventual onset of illness or any injuries which may require long-term care. Conclusion/Summary Based on the above discussion, long-term care is a costly aspect of the health care system. Its total expenses registers at such a significant cost that it makes a huge impact on the budget and allocations in health financing. Based on the studies above, the cost of long-term care registers via different health issues, but mostly among the elderly population who are prone to experiencing numerous health issues. Various health issues which often lead to long-term care include cancer, rheumatoid arthritis, diabetes, and similar chronic illnesses. These health issues often cause the patient to deplete his paid insurance allocations, and then to also consume his personal savings, making him qualified for Medicare and Medicaid. The government is responsible for patients who are no longer able to secure adequate long-term care. Government allocations imply significant costs to an already over-extended health care budget. For which reason, solutions for the reduction of costs in long-term care, as well as the improved management of long-term care has been proposed and recommended. Health rationalization implies health budget cuts for long-term care and other unsupported and unjustified services. Nevertheless, its processes can also be used to justify health allocations for necessary long-term care services. Moreover, adjustments in the health spending within long-term care can also be utilized in order to cut-back on costs. Long-term insurance must also be seriously considered as a solution to the current issue because it represents a planning process which can yield long-term benefits. The results of this study imply that government officials must make hard decisions on long-term care financial allocations. These decisions must however be rationalized and justified. Moreover, a more active involvement and promotion process for long-term insurance must be considered by the government in the hope of reducing the impact of long-term care in the future. Reference Birnbaum, H. & Kidder, D. (1984). What Does Hospice Cost? Am J Public Health, volume 74: pp. 689-697. Connor, S., Tecca, M., LundPerson, J., & Teno, J. (2004). Measuring Hospice Care: The National Hospice and Palliative Care Organization National Hospice Data Set. Symptom Manage, volume 28: pp. 316–328. Department of Health and Human Services. (2009). What is long term care? Retrieved 05 August 2011 from http://ucare.utah.gov/what_is_ltc.html Morrissey, J. (2011). Preparing for Long-Term Care: Any Good Options? Time. Retrieved 05 August 2011 from http://www.time.com/time/nation/article/0,8599,2044464,00.html Prudence Research. (2009). Long-Term Care Cost Study Including consumer perceptions and cost trends by state and key metropolitan areas. Retrieved 05 August 2011 from http://www.prudential.com/media/managed/LTCCostStudy.pdf Spillman, B. & Lubitz, J. (2000). The Effect of Longevity on Spending for Acute and Long- Term Care. N Engl J Med, volume 342: pp. 1409-1415 Yabroff, K., Lamont, E., Mariotto, A., Warren, J., Topor, M., Meekins, A., & Brown, M. (2008). Cost of Care for Elderly Cancer Patients in the United States. JNCI J Natl Cancer Inst, volume 100 (9): pp. 630-641. Yelin, E. & Wanke, L. (1999). An assessment of the annual and long-term direct costs of rheumatoid arthritis: The impact of poor function and functional decline. Arthritis & Rheumatism, volume 42(6), pp. 1209–1218. Warren, K. (1996). Rationalizing health care in a changing world: the need to know. Health Transition Care. Retrieved 05 August 2011 from http://htc.anu.edu.au/pdfs/Warren1.pdf Wiener, J. & Stevenson, D. (1998). State policy on long-term care for the elderly. Health Affairs, volume 17(3), pp. 81-100 Read More