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The fourth annual Long-Term Care Colloquium, sponsored by The Commonwealth Fund and conducted by AcademyHealth, was held in Orlando on June 2 in conjunction with AcademyHealth's Annual Research Meeting. The colloquium provided a variety of long-term care (LTC) stakeholders an opportunity to learn about the research base and policy implications of select challenges faced by the LTC community. Participants, in turn, shared their experiences, asked essential questions, and presented ideas for potential solutions. Building on the momentum generated by the first three colloquia, the 2007 Colloquium highlighted two long-term care issues:
Medicare & Medicaid: Conflicting Incentives for Long-Term Care David C. Grabowski, Ph.D., of Harvard Medical School, presented highlights from his background paper describing the conflicting incentives for optimizing quality of care, financing, and service delivery between the Medicare and Medicaid programs. Given the bifurcated coverage of acute and long-term care under Medicare and Medicaid, neither program has an incentive to limit costs that may pertain to the other program, nor do they have a broader incentive to take responsibility for care management or quality of care. The lack of coordination within the individual programs is problematic for the majority of beneficiaries. Yet, the population most directly affected by the negative consequences of conflicting incentives is “dual eligibles,” beneficiaries eligible for both Medicare and Medicaid. Though dual eligibles comprise a fairly small population group, they have more complex health needs, are 1.5 times more costly than other Medicare beneficiaries, and comprise 42 percent of Medicaid spending. State Medicaid programs often serve dual eligibles with wraparound coverage for Medicare, which only covers a little over one-half of beneficiaries' health care expenses and nominal long-term care costs. Grabowski argued that states have an incentive to shift costs within settings by minimizing Medicaid benefits in order to place a larger burden on Medicare, referred to as “Medicare maximization.” This can be seen in the negative relationship found between Medicare and Medicaid funding of home health care. States with lower Medicaid home health payments and spending often have higher levels of Medicare home health use. Because Medicare and Medicaid cover different services, States also have incentives to shift costs between settings. This can result in substituting care in lower-cost settings, like nursing homes, for care in higher-cost settings, like hospitals. Providers also try to maximize Medicare funds in this way since it is widely recognized as the more generous payer of the two programs. One apparent consequence is the significant number of preventable hospitalizations. Unnecessary transitions between care settings have been shown to have adverse effects on quality of care and health outcomes for the patient. Grabowski provided a number of potential policy solutions that could address the conflicting incentives that currently exist between the Medicare and Medicaid programs. These include capitation, which potentially blends the financing of the two programs, federalization of care for dual eligibles, and pay-for-performance, which can be used to address the misalignment of particular incentives such as the hospitalization of nursing home residents. Grabowski explained that the key objective of such policies is to have Medicare and Medicaid internalize the other program's costs, while also sharing any potential savings across the two programs. Grabowski recognized that his suggested solutions all have potential promise, but also drawbacks. He believes additional research evidence is needed on the effects of capitated payments, the impact of pay-for-performance strategies on nursing home hospitalizations, and the costs and savings associated with federalizing Medicaid. The presentation by Grabowski was followed by commentary from discussants, Diane Archer, J.D., of the Medicare Rights Center, William Weissert, Ph.D., of Florida State University, and moderator by William Scanlon, Ph.D., of Health Policy R&D. The response panel helped place the discussion in a real world context. Weissert presented his analysis of two incentive payment approaches for long-term care. The first was a patient-based nursing home incentive reimbursement system. This initiative provided financial incentives in the form of bonuses to homes that admitted patients with complex cases, achieved specified outcomes goals, and maintained discharged patients in the community for 90 days. Results showed there were increased complexity of admissions, increased life expectancy, shortened length of stay, and doubled discharges. The second incentive payment approach focused on home care. Weissert proposed an ERV payment system that based reimbursement on the Effectiveness of home care, Risk of adverse outcomes, and Value of outcomes avoided. They found that the treatment group, which had more information about risk, value, and potential benefit, wrote care plans that had lower costs than the control group's plans. They also found that the treatment group was better at targeting scarce resources toward high-risk-benefit potential patients. Archer stressed the importance of expanding the discussion beyond financing to also include quality of care. She argues that correcting the fragmented payment system only solves a small piece of the conflicting incentives problem. In order to resolve conflicts that affect quality of care, there needs to be health-systems change that promotes coordinated care and quality, political and provider will, long-term vision, and adequate payment levels. Discussion Facilitated small group discussions took place to generate collaboration and dialogue on questions raised during the plenary discussion. Two general themes emerged. The first dealt with the fragmented payment system and the second addressed the fragmented delivery system for long-term care. Many voiced the need for a solution to the fragmented payment system. Participants compared Grabowski's proposed policy approaches: capitation, pay-for-performance, and federalization of Medicaid options. The group agreed that there were no perfect solutions; however, many felt that the Program of All-inclusive Care for the Elderly (PACE) model of capitation was one of the best choices currently available. Still, this model has very limited expansion since its inception. With regards to federalizing Medicaid, many participants raised concerns about the difficulties that arose when Medicaid-covered prescription benefits were incorporated into to the Medicare Part D prescription drug benefit. Participants emphasized that many innovations begin at the state-level, and they were concerned that federalizing Medicaid LTC services might forfeit this valuable resource. However, many also acknowledged that not all states are innovative and moving forward. The disparities that exist between states is a concern that must be addressed, and participants felt that federal programs can provide important leadership. Overall, it was agreed that there needs to be more cooperation between the federal and state payers. In terms of delivery systems, participants provided examples of a number of care options within long-term care that were not addressed in Grabowski's presentation. Participants supported the general assumption that older adults prefer not to go to an institution for care, and, in fact, 80 percent of LTC is provided by family or friends. Some argued for the need to better examine and expand home and community-based service programs such as Cash & Counseling or Money Follows the Person, as well as assisted living settings. Some also felt that it is necessary to examine the supply-side of care in order to consider the role of educators and case managers who are on the front lines in the management of conflicting incentives. Finally, participants felt that the general public needs to be more aware of the impact of conflicting incentives between Medicare and Medicaid and would be better served if they had easier access to information on all of their LTC options. Consumer Preparedness for Long-Term Care The second session at the 2007 Colloquium debuted a new format designed to stimulate discussion on an important issue that currently boasts only a relatively small body of research. A panel of experts who have been thinking about the issues involved with long-term care planning addressed the alarming discrepancy between consumers' expectations with respect to LTC and their actual needs. Panelists included Lisa Alecxih, of The Lewin Group, Brian Burwell, of Thomson Healthcare, Robert Kane, M.D., of University of Minnesota, and Brenda Spillman, Ph.D., of the Urban Institute. Prior to the Colloquium, each expert prepared short written background pieces highlighting their perspectives on LTC planning. These materials and the panelists' presentations discussed barriers that prevent consumers from adequately preparing for future LTC needs, including the lack of viable financing options, and strategies to encourage consumers to engage in the planning process. With the assistance of the facilitator, Len Fishman, of Hebrew SeniorLife, the panelists shared their perspectives about issues of concern to policymakers and identified research needs. The facilitator also encouraged Colloquium participants to engage in the discussion, sharing their experiences, questions, and ideas. Fishman began the panel discussion by presenting highlights from a long-term care study from the National Academy of Social Insurance that focused on consumer's knowledge of long-term care. In general, the study found that seniors had some general knowledge of LTC, but did not believe they were going to need any assistance. Regardless of knowledge of LTC, a majority of respondents believed that long-term care should be a priority for our nation. Alecxih provided an overview of the current LTC system, highlighting the types of services provided, the demographics of those seeking LTC, and current service and financing options. She also shared projections of future LTC needs and potential options for meeting them. She noted that while LTC services and supports are very costly, the majority of LTC is provided in homes by unpaid family and friends. A significant portion of costs are paid out-of-pocket, especially by those who have had to spend down to qualify for Medicaid. Alecxih emphasized that most adults are not preparing for long-term needs. One of the few ways of preparing is LTC insurance, but only 10 percent participate. Alecxih argued that consumers need to be provided with trustworthy and reliable information in order to make informed decisions about their investment options. Spillman provided an overview of personal financing options for LTC. She noted that LTC insurance is the most highly promoted personal financing vehicle, but other ad hoc options, such as personal savings, life annuities, and reverse mortgages, were also available. Yet, all of these options have serious drawbacks that make personal planning for potential future LTC needs difficult. Spillman suggested solutions such as federalizing Medicaid LTC benefits and tax-incentives for mandatory LTC insurance options. More evidence is needed to inform the policy debate that should be considered in the context of retirement security. Burwell presented findings from a LTC focus group that worked to understand individual perceptions of long-term care. The study found that people have different motivators in planning for their future. LTC planning requires simultaneous acceptance of future functional decline and faith that one has control over future events. Individuals were clustered into four marketing groups based on each group's interests. These findings were used to create a LTC Awareness Campaign, “Own Your Future,” which attempts to persuade individuals to begin their personal planning to ensure dignity and choice in the aging process. The campaign offers advice and individualized alternatives for appropriate planning. Burwell concluded that while there is some initial research on “propensity to plan,” more is needed, as is a better understanding of effective motivators for LTC planning. Kane concluded the panel presentation by providing a consumer's view of LTC. He noted that slightly more than half of adults identify LTC as a “very/fairly high priority” and 70 percent think the Federal government should be more involved in the provision and/or financing of LTC. Kane raised concerns about the viability of LTC insurance as a planning tool for meeting LTC needs. The difficulty in predicting the stability of the insurance market, with the effect of inflation and the ever changing federal role, make it difficult to rely on LTC insurance as a safe investment for one's future. He also noted that LTC insurance imposes restrictions on choice of services, since coverage is typically limited to nursing home or formal home care. Kane also highlighted consumer struggles with finding, much less planning for, quality care. He believes adults should feel comfortable and safe with the care they will be receiving, but notes that is not the current situation. Discussion Participant discussion reinforced the belief that the public is not ready to face the difficulties associated with aging. Generally, people are in denial that they will need LTC services. Participants debated the value of investing in LTC insurance and agreed that individuals want choice and control over their futures. Planning for future LTC needs is about financial literacy and retirement planning that considers disability and health planning. While there was disagreement among participants about whether researchers and policymakers should be concerned with consumer LTC planning, all agreed that there needs to be practical, sustainable financing, as well as a choice of LTC products and planning tools, available. ___________________________________________-
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