The Long-Term Care Financing Crisis - Case Study Example

The Long-Term Care Financing Crisis Introduction Health is an important element of human development. Since the empowerment of people always comes from the freedom they enjoy. These freedoms include: freedom to lead a healthy life, freedom from poverty, undernourishment and hunger. Access to health care is very essential in order to improve health status, as good health is needed for empowerment (Rao and Choudhury, 2012, p.1). Long-term health care includes those health’s, transportation, housing, social, and other supportive services which are needed by person suffering from mental, physical and cognitive disability; therefore not able to lead an independent life. The need for long-term care services is determined by evaluating daily activities of a person which he cannot do such as eating, toileting, bathing, dressing and getting in or out of bed; these all comes under ADLs and also the instrumental activities such as house work, laundry, meal preparation, transportation, taking medication and financial management etc; and these comes under IADLs (Kff, 2009, p.1). The crisis of long term care includes that each year thousands of families lose their saving to pay for the chronic illness of their family members. In spite of poor health indicators, the government spending on the health care is very low than what actually is needed in most middle-income countries. With over 70% of the spending on health being out of pocket and the uneven distribution of public spending on medical and public health have been a major reason for providing limited access to poor. In 2009, the United States spent only $205 million on long-term care, including $137 billion on nursing home care and rest is given by the pocket of patient only. In 2006, nursing home stay cost was on an average of $76,000 annually. Long-term Care Financing Services Long-term care financing services includes Private insurance long term coverage, Medicare long term coverage and Medicaid long term coverage and out-of-pocket payments. Medicare long-term coverage Medicare usually provides services which are needed for a few weeks or months after a sensitive hospitalization but does not pay for that care which are required by a stable chronic condition. It only pays for skilled care services which includes the services provided by physical and occupational therapists. It does not cover the custodial care services which includes cleaning house, cooking, shopping, helping a patient to the toilet and getting in or out of bed. Only 28% of the long-term care costs are financed by Medicare. Medicaid long-term coverage Medicaid provide 24-hour-a-day help to the patients by paying the costs of nursing home care but it does not pay for those people who were not able to care for themselves. In order to qualify for the coverage of Medicaid nursing home, families are required to spend their savings down to low levels. Only 34% of the long-term care costs are financed by Medicaid (Behdasht, p.1). Private insurance long-term coverage It plays a minor role in long-term care financing, with only 8% of total long-term care cost covered by private policies. For this type of insurance, the largest market is the elderly population. 8% of the long-term care costs are financed by private insurance (Behdasht, p.1). Out-of-pocket payments In United States, direct out-of-pocket payments by patients and their families financed 22% of long term care services. A common scenario in United States is that after a portion of a family life savings are spent for the long-term care, and then families become eligible for Medicaid long term care coverage. Issues Regarding Long-Term Care Services Most people who are in a need of long-term care services receive them from their friends and family. In 2007, around 52 million people served as unpaid family caregivers, of whom major population were women. For elderly people, they do not have family living nearby to provide them assistance and this is a reason for nursing home placement. 37% of people who are giving informal care to their elder family members are either quitting their job or reducing their working hours. This results in shorter hospital stay, lower inpatient expenses and fewer readmissions for the elderly people signifying that the unpaid caregivers make a great deal of value for the health care system. Community-based long-term care is provided through different programs, such as adult day care, home care, home-delivered meals and mental health programs. Disabled people, who want to live independently, formed a strong push away from institutional care towards community based and home care. Rapid movement towards home care services reduces the Medicare hospital stay and this led to the changes in the Medicare payment policies resulting in excessive cuts in Medicare home care payments. The limitation of home hospice services is that it does not accept terminal patients without an informal caregiver at home. Therefore, most of the people who want this service cannot receive it. It is also out of the reach of low and middle income families because the average annual cost in 2009 was $34,000, and most of which comes from out-of-pocket payments. Nursing homes differ widely in quality. The average number of deficiencies per facility in nursing home increased from 5.7 in 1999 to 7.1 in 2005. Only 9% of nursing homes had no deficiencies in 2005. The most commonly cited deficiencies were quality of care, inadequate food sanitation, housekeeping, accident prevention, infection control, comprehensive care plans and dignity. To keep down costs in nursing home, most care is provided by nurse’s aides, who are paid very little, are inadequately supervised and receive minimal training. In order to offer good facility to patient, it is required that nursing home should be abolished and adequately financed home and community based care should be developed more (Behdasht, pp.2-4). Ways to Improve Long-Term Care The cost of health care for the elder people was so much that they can’t afford it. In 1960, it was acknowledged that private insurance was not able to solve the problem of health care financing for elderly people. So, a social insurance program, Medicare was passed. There are some proposals for improving the long-term care services, and those are: Shifting from home care to community-based care through improved financing of community based care in order to offer good facility because of the deficiencies occurred in the nursing home care. Expanding the number of wide-ranging acute and long-term care organization modelled On Lok Senior Health Services, which reduces cost by keeping the elder patient out of the hospital as much as possible. It was advocated that long-term care should be provide at home because the ideal long-term caregivers are the patient’s friends and family, therefore, long-term care reforms should assist, support and pay informal caregivers and should not replace them with nurses. Team of physical and occupational therapists, nurses, social workers, physicians and attendants can train and work with informal caregivers and they should be available to provide care and assistance to the patient, so that informal caregivers can have some relief. On Lok program provides in-home care, housing assistance, home-delivered meals, comprehensive medical care, skilled nursing care and hospital care under one program. Evaluation of Government Plan The Pepper Commission (1990) suggested that the nation should introduce a social insurance program to finance long-term care. This program could be financed by an increase in the rate of social security contribution by employees and employers. It would help in the payment for caregivers to provide all those services which are not covered by Medicare, especially in-home assistance in dressing, feeding, bathing, housework, transportation, grocery shopping and other assistance with ADLs and IADLs (John and Rockefeller, 1990, p.1). In 1983, On Lok became the first organization in the U.S. which has taken full financial risk for the care of elderly patient, receiving monthly capitation payment from Medicaid and Medicare to cover all services. On Lok spent only 17% on hospital and nursing home services, thus making 83% available for ambulatory-home and community-based services. Programs of All-Inclusive Care for the Elderly (PACE) were established to provide services for frail elderly patient. PACE services was provided to Medicaid beneficiaries as a state plan option (Cms, 2011, p.1). It was badly needed solution to the problems of long-term care in U.S. References Behdast. Medicaid Long-Term Coverage. Retrieved from http://medolympiad.behdasht.gov.ir/uploads/280_954_First_Modiriat7_2.pdf. Behdast. Private Long-Term Care Coverage. Retrieved from http://medolympiad.behdasht.gov.ir/uploads/280_954_First_Modiriat7_2.pdf. Cms. (2011). CMS Manual System. Programs of All-Inclusive Care for the Elderly (PACE) Manual. Retrieved from http://www.cms.gov/Medicare/Health-Plans/pace/downloads/r1so.pdf. John, S. & Rockefeller. (1990). The Pepper Commission Report on Comprehensive Health Care. Retrieved from http://www.nejm.org/doi/full/10.1056/NEJM199010043231429. Kff. 2009. Medicaid and Long Term Care Services and Support. Retrieved from http://www.kff.org/medicaid/upload/2186_06.pdf. Rao, M. G. & Choudhary, M. (2012). Health Care Financing Reforms in India. Retrieved from http://www.nipfp.org.in/newweb/sites/default/files/wp_2012_100.pdf. Read More