Cost for long-term care rising

The cost of nursing home care in Rhode Island is rising faster than in any other New England state, according to a recent survey of long-term care costs.
The price tag for a year of care in a Rhode Island nursing home rose 26 percent, to $90,640 a year, between 2004 and 2008, according to a cost survey by Genworth Financial, a Virginia-based insurance company.
Experts and senior advocates say part of the problem lies in the Ocean State’s relatively high percentage of seniors enrolled in Medicaid, the state- and federally funded program that pays medical bills for seniors who have exhausted their assets. Among Rhode Islanders 65 years and older, 13.2 percent are enrolled in Medicaid. That is 3.6-percent higher than the national average for Medicaid – according to the most recent data provided by the federal Centers for Medicare and Medicaid Services.
The relatively high Medicaid enrollment drives up the cost for private payers and insurance companies, as nursing homes seek to make up the difference with higher fees. At the Elmhurst Extended Care at Roger Williams Medical Center, Medicaid reimbursements fall short by about $20 a day of the cost to keep a client in a bed, said Vice President Richard Gamache.
“This is such a horrible, horrible system – an archaic system,” Gamache said. Like most businesses, his operating costs are up: latex gloves are up 23.5 percent; linens 21 percent; mattresses 18 percent; durable medical equipment 27 percent, he said.
Additionally, a nationwide shortage of long-term care workers has driven up nursing homes’ labor costs, said Buck Stinson, president of Genworth Long-Term Care Insurance.
Several states have sought to reduce Medicaid costs by offering alternatives that are less expensive than nursing homes, like in-home or community-based care. But the U.S. Department of Health and Human Services, which administers Medicare and Medicaid, places restrictions on those options.
Elder-care advocates like Richard Bidwell of the Gray Panthers of Rhode Island say that needlessly puts seniors in expensive nursing homes, when most would prefer to remain as independent as possible. Many seniors are simply having difficulty managing in their own homes, needing only a few hours of daily help with tasks, he said.
Gov. Donald L. Carcieri in January proposed a major overhaul of the state’s Medicaid law. Under the proposal, approved by the House Finance Committee last week, the state would accept a voluntary cap on federal reimbursements in exchange for loosening federal restrictions on reimbursements for alternative care. The reform will save the state $67 million, the administration estimates.
Details of the cost-saving plan are being worked out between the state Department of Human Services and the federal Centers for Medicare & Medicaid Services.
DHS Director Gary Alexander told Providence Business News last week he was hopeful lawmakers would approve the recommended changes, which he said could come with some “conditions of oversight” set by the legislature.
“The budget [crisis] has driven this, but without it we’d still be driving these reforms,” he said. Alexander cited federal mandates to have seniors receiving long-term care in the least-restrictive settings.
“In Rhode Island we have a heavy institutional bias [but] seniors and adults with disabilities all want to live in the least-restrictive settings,” he said.
Such plans seem intuitive, but they may fail due to what’s known as “the woodwork effect,” said Mark R. Meiners, a professor in the Department of Health and Policy at George Mason University.
Many Medicaid-eligible seniors may decline public assistance, because they don’t want to enter a nursing home, he said. Instead, they rely on friends and family members for help with everyday tasks.
About 80 percent of seniors get assistance in this way, Meiners said. “To keep those folks in the game a lot of times it takes relatively little, as long as you have caregivers who are willing to do the daily chores, daily activities and personal-support kinds of things.”
If more Medicaid vouchers are made available for paid in-home assistance, these seniors may come out of the “woodwork,” negating any money saved by switching from nursing homes to alternative care, the theory goes.
A reimbursement cap also may deny some seniors who really do require help with bathing, dressing and walking, said Maureen Maigret, policy director at Providence’s Senior Agenda Coalition.
Under Carcieri’s plan, the Medicaid cap puts a fixed limit on assistance dollars for those classified as having a “high need” of assistance. These seniors do not require daily medical treatment or skilled nursing assistance, but they do need help dressing, bathing, or walking, for example. If the money runs out, they would be put on a waiting list for those services, Maigret said.
“I’m not talking about people who are already in nursing homes,” she said. “I’m talking about people in the same degree of need in the future who may not get services if funding is not available.”
Gamache, the Elmhurst Extended Care vice president, said the reimbursement cap will result in an immediate 15-percent cut in staff there. Meanwhile, costs will increase as healthier seniors opt for in-home assistance and nursing home populations fill with those who need the most extensive care.
“If the governor’s cuts go through, I have to cut 15 percent of my caregiving staff to keep pace with the cuts,” he said. Meanwhile, too little attention is being paid to the issue. “We’re not headline material until someone is neglected in a wet bed or falls,” he said. “Then we’re top story.”
Alexander acknowledged that nursing homes may see a higher percentage of patients needing costly acute care.
“We are going to take a look at that in reforming nursing home rates of reimbursement” in the second year of the governor’s plan, he said. &#8226