Key Issues in Post Acute Care

Robert E. Burke, PhDGordon A Friesen Professor of Healthcare Administration

School of Public Health and health ServicesThe George Washington University

April 10, 2013

Disclaimer

• Views Expressed Are Based on My Past Work Experience

• These Views Are Not to Be Considered as Representative of the Wertlieb Institute, The George Washington University Nor Any Public, Private, Federal or State Agency.

Today’s Goal

• Provide you with some background and facts and some stories so that you

• Can interpret and add to the health policy discussion with respect to health services for the elderly, frail and disabled.

Objectives

• To clarify some of the confusing issues and topics in Long Term care

• What is post acute/long term care• Who pays for what• Artificial complacency• The impending age wave – real or imagined• Impact on all the labor force

Population Pyramid

• Past (Ideal)

US1950A094123noctyb

Population Pyramid

• Currentish

Population Pyramid

• Future

Definitions

• Post acute care• Skilled Care• Rehabilitation Services • Home and Community Based Services• CCRC (Continuing Care Retirement

Communities)• Assisted Living

Who pays for what

• Private Pay• Medicaid• Medicare• Insurance – long term care, disability and

workmen’s compensation

When does long term care start

• At the end of a hospital stay?• When there is a need for supportive services• Is it all medical and health care• What are the social needs?• Role of friends and family

Indicators of Long term care need

• Diagnosis• Functional Ability• Instrumental Activities of Daily Living (IADL)• Activities of daily living (ADL)

– Late loss ADLs as trigger

Providers of Care

• Friends and family (60%)• Paid• Clinical, home health aide, homemaker• What ties it together is ‘case manager’

Historical Information

• Number of skilled nursing home facilities in 1977 was 16,000

• Number of skilled nursing home residents in 1977 was 1.5 million

• Do the math and see that the average size of nursing homes was about 100 beds.

Historical Information

• Nursing homes as we know them really are a post World War II phenomenon

• County and religiously sponsored• State and locally operated until Medicare and

Medicaid certification in 1966.• Social security Amendments of 1972 increased

participation of proprietary nursing home

Historical Information

• In 2013 how many nursing homes are there?• How many nursing home beds are there?

Historical Information

• What happened?• Population – age of admission – depression?• Assisted living – not regulated by federal

government…..• Growth of home and community based

services.

What is Long Term Care?

• Confusing Question - All Post Acute Care?• Skilled nursing home, intermediate care,

custodial care• Independent and Assisted Living• Home and Community Based Services

– Aging in place– VNA, Home Health Care Aide, Homemaker

Starting Points

• Number of Certified SNF – 16,500• Annual Turnover

– Administrator – 40 to 50%– DON - same– CNA – up to and over 100%

• Numbers seeking NHA Licensure decreased by one third since 1990 (MCCA)

• Number of ALF is over 40,000• Annual Turnover – unknown as not reported

How Big is Long Term Care

• It is very big…………

Long Term Care Expenditures

Year Total CostIn Billions

2000 $96.2

2005 $135.9

2010 $183.4

What does the nursing home business look like?

• It is most regulated health care business • Average 100 beds• Average 100 staff• 80% census – dropped from over 95%• At least 4 different payment systems,

– Medicaid, Private, Insurance and Medicare• Annual Revenue of between $3 and $5 Million

Nursing Home Facilities and Beds, by Type of Ownership

Type of Ownership

Number of Facilities

Percent Number of Beds

Percent

For-Profit 10,759 65.4% 1,188,643 66.2%

Not-For-Profit

4,676 28.4% 485,706 27.1%

Government 1,011 6.1% 120,923 6.7%

Total 16,446 100% 1,795,272 100%

How Much is Long Term Care

• Skilled Facility - $60 to $120,000 per year• Assisted Living about $40 to $60,000 per year.

It is an “a la carte plan.”• Assisted Living have an Admission fee which

ranges up to $1 million with a proportion returnable to heirs

• Home and Community – After Medicare, what the market will bear.

Who Pays for Long Term Care

• We all do– Medicare Premiums– Medicare Payroll tax deductions– General tax revenues that support Medicaid – Different insurances

• LTC• Workmen’s Comp• Personal health

Who Pays for Long Term Care

• Private – including insurances 40 to 50%• Medicare – 10 to 20%• Medicaid - 40 to 50%

• For some states, the largest item in the budget is Medicaid.

Skilled Long Term Care

• Medicare Part A is for Acute Care but– SNF benefit is 100 days per spell of illness– First 20 days at full payment– Days 21 to 100 IF DETERMINED TO BE MEDICALLY

NEEDY have a copay of $141 per day to total $11,280.

– Average Medicare LOS• Ortho – less than 20• CVA – about 30

Skilled Long Term Care

• Medicare Part B is and Option for Physician and Other Professional Services.

• Medicaid “Buy-In” for Medicare Part B• Medicare Part C aka Medicare Advantage is an

HMO Option run by private insurance companies

• Medicare Part D is the Pharmacy Option

Long Term Care Utilization

• Data suggests that 20% of all over 65 will use a nursing home.

• BUT only 5% will use it for greater than 90 days.

• Long Stay Nursing Home Admissions are– Female– 84– Who need nursing supervision

Who Regulates Long Term Care

• Federal– Certification for Medicare and Medicaid

• State– Licensure of facility, administrator and other key

personnel– Ombudsman

• Local– Fire and Sanitation

Remedies

• Until OBRA 1987, there were not mid level sanctions.

• It was all or nothing……– Result very few closings….very little real regulatory

punch• After OBRA 87 there is a plethora of sanctions.

Physicians in Long Term Care

• Total number of MDs in US - approximately 750,000 estimate of AMA

• Board Certified Geriatricians (?)• Physician Members of American Geriatric

Society – 4,700• Physician Members of American Medical

Directors Association – 5,300

What Type of Long Term Care Do People Want

• What is perfect for me

Brief History of education for nursing home administrators

• 1950s – most common nursing home administrator license was “in situ.” – Had the job, got the license.

• 1960s – GWU starts an correspondence course in nursing home administration.

• 1966 – Medicare requirements more sophisticated management required, GWU courses are incorporated into the MHSA degree

Brief History of education for nursing home administrators

• 1972 Social Security Amendments spell out the general requirements for licensure for the States to adopt.

• 1980s GWU’s nursing home administrator program receives national reputation

• 1998 The inception of the Wertlieb Institute• Today, GWU is only one of 5 nationally known

Master’s Programs in the US– Duke, Hopkins, USC, and North Texas

News

• Good – There will be a continued need for post acute care

• Bad– Number of those seeking careers in geriatrics remains low

and more disturbing, applications for nursing home administrator licenses has dropped

• Indifferent– Boomers will not need nursing services until 2032….why

worry

Impact of Health Reform

• NOT CLEAR• ACOs• LTC will not go away• Services and some provider or provider types

may change focus and locus

What types of Long Term Care is Available

• Model is changing

• Lack of funds– True or not

• Lack of staff

Who Will Take care of ME?

• How do we encourage careers in post acute care?

• Attitude, it needs to be changed– Most dreaded words are Nursing Home

• Values– A difficult one in our culture of immediate

replacement – people are not cell phones or i-pods

Major Infrastructure Problems

• Personnel Shortage• Regulatory Atmosphere• Reimbursement Strategies/ Liability Ins• Ownership

– Inability to raise capital• Growth of other options

– Assisted living– HCBS (home and community based services)

Solutions

• Market Forces– Just increase the awards and rewards

• FEAR……the usual American response– Increase regulations and requirements

• A Plan– That focuses on recruitment and retention– Move out of our sacred silos to develop a program that the

post acute care industry wants and meets and expands GWUMC capacity.

Growing Paradox

• Proprietary owned facilities and corporations serve more Medicaid residents than the nonprofits.

• What does that say?

Emerging Assisted Living Trends

• Larger units• Increased amenities• Special Care• Wellness clinics• Residential character

Dementing Illness/Alzheimer’s

• Approximately 4 million Americans

• 5.5 million by 2010 & 14 million by 2050

• 4th leading cause of death in adults

• 100,000 deaths each year

• Need for special programs

Long Term Care Insurance

• Should I purchase LTCI for– Self, Spouse, or Parents?

• LTCI is asset protection, therefore, do I have assets protect?

• Financial Planners suggest the asset threshold in 2005 dollars $600K

Long Term Care Insurance

• Should I buy LTCI?• ANSWERS…….• DO THE MATH for your personal situation• Group policies tend to give more service

options per premium• Ask what the sales representatives

commission is…….you might be surprised at the answer.

What’s Next?

• Be on the look out for your parents….those take-charge baby boomers.

• The Tsunami is coming in the next decade.• Keep a sense of humor