Vote: Your Health Depends On It

Earlier this month, the prestigious New England Journal of Medicine took the unprecedented step of publishing a political position paper in the name of the entire editorial board. Entitled “Dying in a Leadership Vacuum,” the journal urged Americans to vote out our “current leaders.” They based their argument on the mismanagement of the Covid-19 pandemic by America’s political leaders, naming no names but asserting that “when it comes to the response to the largest public health crisis of our time, our current political leaders have demonstrated that they are dangerously incompetent. We should not abet them and enable the deaths of thousands more Americans by allowing them to keep their jobs.”

While the disastrous handling of the pandemic is the most egregious failing of President Donald Trump, Senate Majority Leader Mitch McConnell, and others who could have made a difference, it is not the only area where our leaders promoted misguided health care policy—with disastrous consequences. I argued in an earlier post that “Trump is Bad for Your Health.” Today, as we approach the end of election season, I am going to spell out why Trump, Pence, their appointees (such as Alex Azar, Secretary of Health and Human Services), their Republican supporters in the House and the Senate, and fellow travelers in state governments (both legislators and governors), will be bad for the health of all Americans, older Americans in particular. It’s not just the pandemic performance that’s the problem: it’s the limitations on access to insurance, the roll-back of regulations that protect the environment, and the attacks on Medicare and Medicaid. 

Limiting access to health insurance: One of the major “accomplishments” of the Trump administration and endorsed by Republican legislators is its relentless attacks on the Affordable Care Act. The administration eliminated the “mandate,” the tax penalty on those who do not purchase health insurance. The mandate is an important part of what allows the ACA to work without driving up the cost of insurance: the fundamental principle of insurance coverage is that it works by distributing the risk over a large population; if people can opt out, only those who are sick will remain insured, raising the cost for everyone. And indeed, with the end to the mandate, health care costs have risen—making this a leading issue for the electorate, young and old. 

Rollbacks of environmental regulations: As of October 15, according to the NY Times, the Trump administration has rolled back or is in the process of rolling back almost 100 environmental regulations. Twenty-one involve air pollutants (plus 5 in progress); six involve water pollution (plus 3 in progress); and six involve toxic substances and safety (plus 2 in progress). Estimates are that these changes will result in thousands of extra deaths per year, affecting older people as well as those who love and care for them.

Attacks on Medicare: just this month, Trump issued an executive order designed to promote the privatization of Medicare. Ostentatiously and misleadingly titled “Protecting and Improving Medicare for Our Nation’s Seniors,” the order calls for shifting costs to beneficiaries, limiting choice of providers, and moving more and more patients into the private sector by joining Medicare Advantage Plans. 

Limiting Medicaid: among the many ways in which the Trump administration has undermined the role played by Medicaid in providing health care is a rule allowing states to cap Medicaid spending for poor adults. Through its endorsement of what are essentially block grants, the federal government is enabling states to reduce health benefits for those who gained coverage to Medicaid thanks to the ACA. In 2018, 12.2 million people were dually eligible for both Medicare and Medicaid. In addition to opting to cut back benefits under Medicaid, states have the option of refusing to allow Medicaid expansion. This is an approach authorized by the ACA that enables the near-poor to receive health insurance through Medicaid. To date, the governors and legislatures of 39 states (and the District of Columbia) have accepted Medicaid expansion; 12 states have not.

Regardless of where you stand on issues such as taxes, immigration, and reproductive rights, whatever your views on foreign policy, your health and that of your children and grandchildren is too important to allow supporters of Trumpian policies to remain in office. Whether they are found in the federal government (as senators, representatives, or in the executive branch) or state government (as legislators or governors), vote them out. Do it now. 

If We Had 2020 Vision, What Would Nursing Homes Look Like?

Futurism is all the rage: worn down by the relentless drumbeat of Coronavirus hospitalizations and deaths, the mind-numbing unemployment statistics, and the unimaginable reality of parents trying to work while home-schooling their children, we are beginning to think about life-after-the-epidemic. Will movie theaters survive? Restaurants? What about orchestras and theater companies? Will doctors and researchers fly across the country and even across the ocean to attend conferences? Will anyone ever go on a cruise again? The answers to these questions have implications for how we will live our lives, for the environment, for the economy…the list goes on and on. But today’s NY Times speculates about another possible casualty of the COVID-19 outbreak, nursing homes. Battered by an acute rise in costs together with a precipitous decline in revenue as admissions fall, and shattered by their new reputation as a “petri dish for the worst pandemic in generations,” America’s nursing homes risk going under.

The US currently has roughly 15,400 nursing facilities which house 1.5 million of the oldest, frailest, most vulnerable people in the country. The Centers for Medicare and Medicaid (CMS) calls these facilities skilled nursing facilities; most of the rest of us refer to them as nursing homes. To confuse matters, the majority of these skilled nursing facilities (referred to as SNFs and pronounced “sniffs”) also provide care to another 1.5 million Medicare beneficiaries who are admitted for a short period, typically a few weeks, following an acute hospital stay. They are transferred from the acute hospital for rehabilitation or to complete a course of medical treatment prior to returning home. 

Skilled nursing facilities are paid by Medicare for short-term “post-acute care;” they are paid by Medicaid or privately, by the residents themselves, for long-term residential care. And while the subacute part of the business is profitable—according to the MedPAC (Medicare Payment Advisory Commission) “Report to Congress” just published last month, profit margins are 18 percent—the long-term residential component is not. Profit margins in the residential component are non-existent, with the latest, 2018 figures averaging negative 3 percent. Residential, long-term care SNFS were financially precarious before the COVID-19 epidemic. So, it is not surprising that they are faring especially poorly during the epidemic.

             
While the major toll, as the NY Times has reported, is the 7000 deaths among a total of 36,500 nursing home residents diagnosed with COVID-19, there has been a huge financial hit as well. One non-profit chain in Minnesota reported that the average 72-bed nursing home has been spending an extra $1922 per day on personal protective equipment for staff members and another $1500 per day for extra staff to care for residents who are in isolation or who are substituting for staff who are out sick. At the same time, revenue is down because facilities cannot fill their empty beds. Nursing homes have large fixed costs to cover salaries for staff, mortgage payments, food, and equipment. What they don’t have is much reserve. 

In light of these statistics, what will nursing homes do? What will happen to the 1.5 million Americans, who live in these facilities today? One way to imagine the future is by looking at the past. And it turns out that once before, in the not too distant past, the nursing home industry experienced a great contraction.

A funny thing happened in the late 1970s and early 1980s. Despite decades of growth of the elderly population and dire predictions about imminent shortages of nursing home beds, the demand for nursing homes fell. It fell because the baby boomers read books like “Tender Loving Greed” by Mary Adelaide (1974) and “Why Survive? Growing Old in America” by Robert Butler (1975) and concluded they didn’t ever want to go into a nursing home. Not only that, but they didn’t want to see their parents enter a nursing home. In response to the growing demand to stay at home and “age in place,” Medicare expanded its home health benefits: federal legislation in 1980 (the Omnibus Budget Reconciliation Act, known as OBRA 1980) relaxed prevailing restrictions on the ability of Medicare patients to receive nursing, physical therapy, occupational therapy, and other services in their homes. 

Then, in the mid-1980s, a new kid arrived on the block. Touted as promoting dignity and fostering independence, the new institution, which came to be called assisted living, was supposed to keep older people out of nursing homes by offering them the help they needed in the privacy of their own apartment. Between 1991 and 1999, the number of such facilities increased by 49 percent. Between 1998 and 2003, the number increased another 48 percent. Fortune Magazine reported that assisted living was a leading growth industry and that Wall Street investors were falling all over each other to get a piece of the action.

As assisted living and home care grew in popularity, the demand for nursing home care fell, relative to the population. That is, the absolute number of nursing home beds continued to increase, reflecting the growth of the older population in general and of the population over 80 in particular. But by 1980, the number of nursing home beds per person over 65 had begun to fall. A study published in 1985 projected the elderly nursing home population would rise from 1.2 million in 1980 to 1.9 million in 1995 and to 2.8 million in 2020. But here it is 2020 and the number of older people in nursing homes is back down to 1.2 million—the same level as 35 years ago.

Did nursing homes close in response to the fall in demand in the 1980s and 1990s? Some did. But many simply retooled. At just about the same time that assisted living began replacing nursing home care for many older individuals, Medicare made a dramatic change in the way hospital care was paid for, a change that would have an equally dramatic impact on nursing homes. What happened is that Congress passed legislation requiring that Medicare bill for hospital care using prospective payment. Accordingly, Medicare introduced the concept of “diagnosis related groups” in 1983, essentially paying a flat fee to hospitals for a given medical problem, say a heart attack or a broken hip, rather than reimbursing hospitals on a per diem basis. 

The implications of this payment model were immediately apparent to hospitals: since the rates assumed an average length of stay for a given diagnosis, any hospital that discharged patients sooner than the average made a profit and any hospital that discharged patients later than average sustained a loss. The incentive to discharge patients “quicker and sicker” was clear. How to do this with older patients, many of whom were weak and debilitated after their acute problem had been addressed, was less clear. 

Enter the skilled nursing facility, aka the nursing home. A little used proviso in the original 1965 Medicare legislation provided for “post-hospital extended care” in a “qualified facility having an arrangement with a hospital for the timely transfer of patients.” When acute care hospitals looked around for a place to which they could send patients (usually older patients) who were well enough to leave the hospital but not well enough to go home, they seized on this clause. Suddenly they saw nursing homes in a new light. Here were medical facilities that provided round the clock nursing care, room and board, and were accustomed to caring for older people. And those nursing homes had empty beds. 

Not only did nursing homes have empty beds but, as they soon learned, they would be reimbursed much more generously by Medicare if they used the beds for “rehabilitative” or “post-acute care” than they would be by Medicaid if they used them for long term care. On average, Medicare today pays $503 per patient per day for SNF care whereas, on average, Medicaid pays $206 per person per day for residential care.  As a result, use of the short-term skilled nursing benefit soared, going from minimal utilization in the 1980s to 2.2 million admissions in 2018, at a cost to Medicare of $28.5 billion. Not surprisingly, almost all skilled nursing facilities now accept short-term patients. A few take short-term patients only. 

So, what can this slice of history teach us about the predicament of nursing homes today? First, odds are that some nursing homes will close. Many of those that close will already have been operating at less than 100 percent capacity before the COVID-19 epidemic. Some will be temporarily bailed out by the large corporations of which they are a part, health care conglomerates that have other revenue streams. But the for-profit owners—and 70 percent of nursing homes are for-profit—will not want to borrow from Peter to pay Paul very long. They will seek to unload the failing parts of their empire as soon as possible. 

Other nursing homes will probably remake themselves. Just as their predecessors moved into the post-acute business from the strictly residential, long-term care business, today’s nursing homes may decide that the money is in the health care sector and not the residential sector. They might build on their “subacute” units—the parts of the skilled nursing facility that provide short-term care are typically physically separate from the remainder of the institution, expanding them and developing new capabilities. It would be a short leap to becoming a low-tech hospital, equipped to care for simple problems that are nonetheless too complex for patients to manage at home, such as relatively mild cases of pneumonia or kidney infections. Just as community hospitals provide some but not all of the services offered by large, tertiary care hospitals and transfer patients from one site to another if additional technologies are required, so too could skilled nursing facilities provide some but not all of the services offered by community hospitals. These new health care entities could be branded “infirmaries” or perhaps even “geriatric hospitals.” 

Acute care hospitals will in all likelihood be happy to see frail, elderly patients admitted to such facilities. They were desperate for an alternative site of care during the COVID-19 outbreak, either to house COVID-19 patients who did not require an ICU or to house hospitalized patients who had problems other than COVID-19. In the pre-COVID-19 era, they lost money on such patients because they often developed complications—falls, adverse drug reactions, acute confusion—that prolonged their hospital stay. 

What about the patients themselves? Where will they go if their nursing home goes bankrupt? After the dismal performance of the country’s nursing homes during the COVID-19 outbreak, some of which was preventable and some of which may well not have been, nursing home residents and their families will be very interested in moving to a different site of care. This will be challenging since today’s nursing home population is tremendously needy.

According to the most recent data, 41 percent of nursing home residents are dependent in four very basic daily activities such as bathing, dressing, or feeding themselves. Another 22 percent are dependent in five or more basic daily activities. In addition, cognitive impairment is widespread in nursing homes, with 24 percent of residents diagnosed with moderate cognitive impairment and 37 percent with severe cognitive impairment—where “severe” means profound limitations in communication and mobility and total dependence on others for personal care. Nonetheless, some nursing home residents will move to assisted living complexes. These facilities, which over time have come to serve an increasingly impaired population, will need to adapt to a still needier clientele. 

Other nursing home residents will move to the surviving conventional nursing homes, where they and their relatives will apply pressure to develop models of care that are fiscally sustainable and, at the same time, focus on supporting those capabilities that remain as well as compensating for those that have been lost. 

Change is often difficult and transitional periods are often marred by missteps. But if we learn from past mistakes and if we focus on what’s best for the oldest and the frailest among us, the almost inevitable shake up in the nursing home industry just may prove to be a good thing.

Who Will Care for Me When I am Old?

In an important article in the NY Times this week, journalist Paula Span points out the dire consequences to the nursing home industry if the Trump administration ends “temporary protective status” for refugees from countries such as Haiti and El Salvador. These countries are where many of the poorly paid, hard-working, desperately needed aides who care for nursing home residents come from, especially in certain states including New York, California, and Florida.

But there’s even more at stake in the immigration debate than the devastating but short-term problem relating to temporary protective status. Trump is promoting what he calls “merit-based” immigration: determining who can move to the U.S. with the hope of ultimately becoming a citizen based on what they will “contribute” to American society. That’s not necessarily a bad idea—although it’s important to preserve the distinction between refugees and immigrants, where refugees see the U.S as a haven from the discrimination and persecution that they face in their home countries, and immigrants see the U.S. as a land of economic opportunity as well as political freedom. But if we are going to accept immigrants based on their potential benefit to American society, who will decide what counts as a benefit?

The U.S. does not just need brilliant scientists and engineers. And in fact, robbing other countries of their elites may be destabilizing for those countries and not, in the long run, beneficial to the U.S. The U.S. needs unskilled workers such as nursing assistants—people who are in short supply at present and the need for whom will soar in the coming years as the number of people over age 85 (the group in greatest need of personal care) triples.This past year, 45,000 nursing assistant job openings went unfilled. These are not jobs that Americans are clamoring for: the pay is poor (the median wage in 2016 was $12.34 n hour), injury rates are high, and opportunities for advancement are meager.

If standard economic models were applicable to this situation, we would expect wages to rise, attracting more workers. But nursing home revenue is determined in large measure by how much state legislatures allow Medicaid to pay nursing homes, and financially strapped states are not increasing their Medicaid budgets. As a result, nursing homes will compromise patient care or close before they increase wages.

Who does take a job as an aide in a nursing home? 

The 600,000 people who take care of some of the oldest, most vulnerable members of our society are largely black women; 20 percent of them were born outside the U.S.

If immigration reform means entry to the U.S. will be based on who has the most to give, we better make sure that poorly educated but caring and conscientious women are our priority.

Double, Double, They're In Trouble

The headlines on Tuesday, March 14 focused on two items: the blizzard that was belting the Northeast and the CBO report which predicted that 24 million Americans would lose health insurance coverage over the next 10 years if Trump Care became law. Far less prominently featured was the Senate confirmation of Seema Verma as head of the Centers for Medicare and Medicaid Services (CMS). Approved by a 55-33 vote, Verma could potentially have a major effect on the shape of health care for older Americans. So what do we know about Ms Verma?

We know she’s a first generation American and that she has a BA from the University of Maryland and an MPH from Johns Hopkins. She was the president and founder of SVC (which presumably stands for Seema Verma Consulting rather than superior vena cava, though I can’t find any reference on the website to what the letters stand for), an Indianapolis-based company that says it provides “strategic health policy solutions.” Her main claim to fame is that she (or SCV, Inc) came up with a strategy that enabled the Indiana Medicaid program to charge residents for premiums. She is widely expected to promote a similar strategy at the federal level as head of CMS. Medicaid is generally thought of as a program for the poor; how would Medicaid reform affect older individuals?

As of 2011, there are 10 million people who receive both Medicare and Medicaid, of whom 61 percent, or 6.1 million, are 65 or older. The remainder are younger people with disabilities. Just who are these people? The short answer is that they are the sickest, most impaired, and most vulnerable members of society. Nearly 3 in 4 have at least 3 chronic conditions. Over 60 percent need help with basic self-care activities such as eating, bathing, or dressing. And nearly 60 percent have a cognitive or mental impairment such as dementia.

And what does Medicaid provide for these “dually eligible” patients? Medicaid pays for nursing home care. It pays for long term care in the community. And it makes Medicare more affordable by helping cover Medicare premiums. The biggest chunk goes to long term care, with Medicaid allocating 62 percent of the $147 billion it spent in 2011 to long term care.

The amount that Medicaid pays for these services is considerable. Medicare beneficiaries account for 15 percent of Medicaid enrollment but 36 percent of Medicaid spending. Many states devote a considerable amount of their Medicaid spending to dually eligible, and 6 states spend over 45 percent of their Medicaid budget on the dually eligible.

What all this means is that Seema Verma could introduce policies that have widespread repercussions for 10 million people, over 6 million of them seniors. Within hours after being sworn in, she and DHHS Secretary Tom Price sent a letter to state governors urging them to impose premiums for the poor, charge Medicaid recipients for use of emergency rooms, and require many of those on Medicaid to get jobs. 

Reforming Medicaid, Republican style, would take the form of block grants. This means that the federal government would dole out a fixed amount of money to the states and allow them to set their own eligibility criteria. But it also means that there would be a cap on what each state gets, regardless of growth in the vulnerable population or their needs. 

States then have a choice: they can raise the eligibility standards, they can cut back on benefits, or they can reduce payments to providers. For people living in nursing homes, the single largest group of older individuals receiving Medicaid, how would that translate into practice? Well, the state could decide that only people with deficiencies in 5 activities of daily living (rather than 3 or 4) will be admitted to nursing homes under their Medicaid benefit, keeping more people at home longer without providing the necessary support to make this safe. Or it could limit the number of months it will cover nursing home care, forcing the burden of care onto families that in many cases have already concluded they cannot bear that burden. Or it could cut back the already bare bones payments to nursing home facilities, jeopardizing the quality of care in those institutions.

Medicaid matters. Write to Ms. Verma. Let her know.

The Price of Tom Price

The Senate confirmed Tom Price (R-Georgia) by a 52-47 vote as the new Chief of the Department of Health and Human Services this week. Much of the debate focused on Price’s ethically and legally dubious stock purchases. He bought stock in a medical device company--and then promptly authored a bill to increase Medicare reimbursements for that company’s products. Attention to Price’s many apparent conflicts of interest are important but should be taken up by the SEC as part of an investigation of insider trading. Unfortunately, with all the attention paid to financial shenanigans, there was correspondingly less attention paid to what Tom Price would try to do to Medicare and Medicaid.

In fact, there’s a great deal of speculation about what Tom Price believes or would do, and less reliable information about what he wants to do. What we do know is that he is an orthopedic surgeon (one of the medical device companies he invested in, and which stands to benefit from legislation he favors, is Zimmer, a leading manufacturer of artificial hips and knees) who strenuously dislikes the recently introduced “bundling” of payments for joint replacement surgery under Medicare. According to this plan, which so far seems to be lowering costs without adversely affecting quality, Medicare pays a single amount for all care involved in replacing a hip or knee: hospital care, the surgery itself, and post-surgical care for 90 days. Providers whose care costs less than the target amount stand to be paid a bonus and those whose care care exceeds the target amount are hit with a penalty. Programs such as this one are piloted by the Center for Medicare and Medicaid Improvement, an agency authorized by the Affordable Care Act--and Price has specifically tried to de-fund the CMMI.

What we know is that Price was one of the authors of “A Better Way,” the House Republican outline for replacing the ACA. This document strongly favors “premium support,”  a voucher program that would give patients a fixed amount of money with which to purchase a (private) health insurance plan. While this might simply be what Medicare already does with respect to Medicare Advantage programs, the current alternative to fee-for-service Medicare, it raises the question both of whether the vouchers could be used to buy a conventional Medicare plan and also how much control CMS would have over what must be included in eligible plans. 

We know that Price favors repeal of the ACA, which provides for free coverage of preventive services such as colon and breast cancer screening, and which has reined in Medicare costs by reducing payments to hospitals, skilled nursing facilities, and Medicare Advantage plans. Undoing the ACA has the potential to reverse all these trends. 

Finally, we know that Price is in favor of converting Medicaid to a block grant program—essentially turning it over to the states. Medicaid already demonstrates enormous state to state variation, with the contribution and standards of the federal government standing between a robust insurance plan and a total farce in states such as Alabama and Mississippi. Right now, 9 million of the 46 million Medicare enrollees are dually eligible—they receive both Medicaid and Medicare.

A far larger proportion of older, eligible voters go to the polls on election day than any other group. In 2016, voter turnout among the 65+ set was close to 60 percent; among those 18-29, it was under 20 percent. 

Older people count in the eyes of our elected officials, if for no other reason than that they vote. Maybe those enrolled in Medicare didn’t realize that a Trump administration would mean for them. But with the appointment of Tom Price, we know a little more. It's time for older people to speak up for Medicare.