2

The Challenge

Important Points Made by the Speakers

•   Most of the 11 million people who need long-term services and supports are living at home and in the community and rely solely on informal or family caregiving for all their care. (Feder)

•   Many people with impairments have high levels of unmet needs. (Feder)

•   The costs of long-term care services exceed most families’ ability to pay. (Feder)

•   The need for extensive and expensive long-term care is a highly variable and unpredictable event that is well suited for insurance. (Feder)

•   A “care gap” is emerging as the population ages, and the workforce for long-term services and supports continues to have serious capacity problems. (Stone)

•   The provision of long-term services and supports for an aging population will require a highly trained and competent workforce across all care settings. (Stone)

•   Technologies for communication, engagement, safety, security, health, and learning can all help people age successfully in their locations of choice. (Orlov)

•   If the long-term services and supports system is committed to consumer-centric care, it needs to find a way to accommodate the decisions made by people with disabilities. (Iezzoni)



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2 The Challenge Important Points Made by the Speakers • Most of the 11 million people who need long-term services and supports are living at home and in the community and rely solely on informal or family caregiving for all their care. (Feder) • Many people with impairments have high levels of unmet needs. (Feder) • The costs of long-term care services exceed most families’ ability to pay. (Feder) • The need for extensive and expensive long-term care is a highly variable and unpredictable event that is well suited for insur- ance. (Feder) • A “care gap” is emerging as the population ages, and the work- force for long-term services and supports continues to have serious capacity problems. (Stone) • The provision of long-term services and supports for an aging population will require a highly trained and competent work- force across all care settings. (Stone) • Technologies for communication, engagement, safety, security, health, and learning can all help people age successfully in their locations of choice. (Orlov) • If the long-term services and supports system is committed to consumer-centric care, it needs to find a way to accommodate the decisions made by people with disabilities. (Iezzoni) 7

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8 FINANCING LONG-TERM SERVICES AND SUPPORTS D uring the first session of the workshop four speakers provided a broad overview of the challenges posed by the financing of long- term services and supports in the United States. Judith Feder, pro- fessor of public policy at the Georgetown Public Policy Institute, provided an overview of the financing of long-term services and supports. Robyn Stone, executive director of the Center for Applied Research and senior vice president of research for LeadingAge, examined workforce issues, which are related both directly and indirectly to funding. Laurie Orlov, founder of Aging in Place Technology Watch, described the potential of technology to help meet the needs of older adults. Lisa Iezzoni, director of the Mongan Institute of Health Policy at Massachusetts General Hospital and professor of medicine at Harvard Medical School, discussed the choices people with disabilities make and the need for society to respect those choices. THE FINANCING OF LONG-TERM SERVICES AND SUPPORTS: AN OVERVIEW Judith Feder Georgetown Public Policy Institute The vast majority of the 11 million people who need long-term services and supports are living at home and in the community, Feder said. Only about 1.5 million, mostly older people, are in nursing homes. In addition, 80 percent of the people living at home rely solely on informal or family caregiving for all their care, she said. A very small percentage rely solely on formal care. Reliance on families is a good thing, Feder said, in that families care about their loved ones and want to support them. It is not a good thing, however, if the care is inadequate, if the burden on caregivers is excessive, or if care at home is a family’s only choice. Surveys indicate that people with impairments have high levels of un- met needs. These unmet needs are associated with significant consequences such as falling, an inability to dress or toilet, or going without meals. Fami- lies are doing what they can, Feder said, but in many cases it is not enough. Evidence also indicates that the costs of long-term services and supports exceed most families’ ability to pay. This suggests that the care provided by family members is not just a labor of love but is a financial necessity for many people. Caregivers, in turn, can incur costs of their own or negative health consequences as a result of the care they are providing. The Affordability of Long-Term Care Most people cannot afford formal long-term care. A nursing home costs on average more than $80,000 per year (MetLife Mature Market Institute

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THE CHALLENGE 9 and LifePlans, Inc., 2012). Assisted living, in which a facility provides some supports but not nursing care, costs an average of about $40,000 per year. Intensive home care or daycare for people who have considerable needs costs an average of somewhere around $20,000 per year. Most people do not have enough money to afford such care for long, Feder said. Young people who are disabled tend to be on the low end of the income spectrum, and most young people have not yet had a chance to save much money. Among older Americans, fewer than one-third have incomes greater than four times the poverty level, which is about $42,000 for an individual or $53,000 for a couple, and only one in three seniors has savings as high as the annual cost of a nursing home. Some people argue that a lack of savings reflects poor planning and in- sufficient personal responsibility. But that argument assumes that everyone will eventually need long-term care, which is not the case. Though a com- monly quoted statistic is that 70 percent of people now turning age 65 will need long-term care before they die, that number includes informal or fam- ily care, and some people included in the 70 percent will require just a little care while others will require a lot. While 4 in 10 65-year-olds will need 2 or more years of care, 3 in 10 will die without needing any long-term care. The reality is that the need for extensive and expensive long-term care is a highly variable and unpredictable event. Thus, Feder said, it is “exactly the kind of event for which insurance is suited.” Long-Term Care Insurance Private long-term care insurance has not been a success (see Chapter 5). Only 7 million to 8 million people have policies. Coverage is available only to people who do not have long-term care needs and is not available if someone is likely to need care. Policies generally are affordable only for people with relatively high incomes. The premiums are not guaranteed and can rise unexpectedly despite rules trying to limit such increases. These increases can lead people to conclude that they no longer can afford the insurance and thus to drop their coverage. Insurers are retreating from long-term care insurance, Feder said, because they have not found a way to make it a useful, viable product. Getting people in their 40s and 50s to plan for their living expenses in retirement is a higher priority than buying long-term care insurance, Feder argued, particularly given the limited value of such insurance. Medicare and Medicaid By law, Medicare does not cover custodial care. Even in cases where Medicare does cover home health care and skilled nursing facility care,

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10 FINANCING LONG-TERM SERVICES AND SUPPORTS restrictions limit access to benefits. These limits can be the subject of con- tention, but they generally keep Medicare from being used for long-term supports and services. Medicaid covers long-term supports and services for people who do not have any resources. According to Feder, it is a last-resort financing mechanism for people who exhaust their own resources. It does not pro- vide protection against financial catastrophe; it helps only after financial catastrophe strikes. The level of protection that people get from Medicaid varies dra- matically across states, particularly with respect to long-term services and supports. According to estimates by AARP, Feder said, only one in five low- income people in need of long-term supports and services gets Medicaid in the least generous states, compared with two-thirds in the most generous states. Similar variation occurs in the amount of spending per person. Home- and community-based care is often unavailable under Medicaid, though such care has expanded in recent years for the younger disabled community and, especially, the intellectually disabled community. For se- niors, nursing homes continue to dominate the landscape, Feder said. Health care reform is focused on improving primary care rather than on people who need long-term care. But the chronic conditions that create high costs in the health care system also create a need for long-term care, Feder noted. The Future The number of people over age 65 in the United States will double over the coming decades. Furthermore, the burden across states will vary greatly because of differences in the ratio of the low-income disabled population to the working-age population. According to Feder, the result is likely to be a decrease in the adequacy and equity of services. Feder drew several key lessons from her overview: • Long-term care needs to be treated as a social responsibility, not just a personal responsibility. • Savings are not a solution because the risk varies at all ages. • An inability to plan ahead means that risk needs to be spread though some kind of public insurance mechanism, especially given the failure of private industry to provide a workable solution. Her own preference, Feder concluded, would be an equitable, adequate financing system for everybody who needs long-term care. Policy makers may be concerned that greater funding for long-term services and supports will displace family caregivers. But the existing evidence indicates that when

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THE CHALLENGE 11 supports are available, family caregivers provide other kinds of services rather than going away. Also, some displacement of responsibilities would be welcome. Some family caregivers are ruining their own health, and some cannot do an adequate job. WORKFORCE ISSUES Robyn Stone LeadingAge Center for Applied Research The workforce for long-term services and supports has serious capacity problems. Recruiting staff is difficult in every segment of the workforce, including administrators, physicians, nurses, social workers, aides, and ancillary staff. The field has rapid turnover and high vacancy rates. The professional and direct care staff are aging, and the preparation of potential candidates is inadequate for current and, especially, future realities. Finally, a poor image and a lack of financial incentives exacerbate recruitment and retention problems. To this list of negative trends, Stone added a positive one: Given the aging of the population, long-term services and supports will provide a growth area for jobs if financing is available. She also said that many workers love these jobs, even though some may not admit that they work in long-term care. Beyond the capacity of the workforce, other issues bedevil the field. The pay and benefits in the field are lower than in hospitals or the primary care sector, and working conditions tend to be poor. Long-term services and sup- ports have a much broader set of demands than is the case in health care. Relatively little is being invested in education or training or in adding new personnel. Though the Affordable Care Act mentions geriatrics, its focus is on hospitals and on primary care. Few data are available on supply and demand imbalances, either now or in the future. The result of all these trends is an emerging “care gap,” Stone said, which is going to grow as the population ages and as more young people with disabilities live into old age and need services. In the future, more care will be delivered in homes and in the community, but most of the work on developing a workforce for long-term services and supports has concentrated on the nursing home setting. For their part, nursing homes are focusing more attention on post-acute care, which means that home- and community-based settings will provide more traditional long-term services and supports. But the workforce may not be available to provide such services.

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12 FINANCING LONG-TERM SERVICES AND SUPPORTS Greater Diversity Older adults are becoming more ethnically and racially diverse. By 2040 about one-third of the elderly population is going to be non-white, Stone said. Cultural competence issues between caregivers and their clients will become even more complex than they are today. Already, Stone said, some of the most significant issues in workforce development involve how various cultures, groups, and individuals work together in organizations. The next cohort of elders will include more highly educated and wealth- ier older adults, who are likely to put greater demands on the workforce. Also, some clients will have many more resources than others, which could create a two-tiered system. Meanwhile, the expansion of consumer-directed service systems is complicating the training of the workforce because some clients may not want more training and credentials for the workforce. Immigration issues have a direct bearing on long-term services and sup- ports. According to Stone, immigrants already provide the foundation for the frontline workforce in many parts of the country. The debate over im- migration reform that was ongoing in Congress at the time of the workshop therefore has important implications for long-term services and supports. As the population ages, retirement could undergo a redefinition, Stone said. Older adults may remain in the workforce, and one possibility is that some of these older workers will find new careers in long-term care. Changes that could make this more likely include the development of tech- nologies that help to retain older staff; the redesign of work, such as the introduction of job-sharing options; the use of retired providers as mentors or coaches for younger staff; and the use of retired geriatric professional caregivers as educators. Mental Health Issues About one in five older Americans—more than 8 million altogether— have some type of mental health or substance use condition, and older veterans are even more likely to fall into this category than the general older population. Depressive disorders and behavioral problems secondary to dementia are the most prevalent mental health issues. In the future, more adults are expected to have dementia and associated behavioral and psychological symptoms. The use of illicit drugs is likely to increase, Stone said, especially the illegal use of marijuana and the non- medical use of prescription drugs. The workforce is in general not trained to deal with these issues.

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THE CHALLENGE 13 Potential Actions Stone made several recommendations related to workforce issues. The provision of long-term services and supports for an aging population will require a highly trained and competent workforce across all care settings, including direct care workers, clinicians, managers, and administrators, she said. Geriatric and gerontological competencies are essential, including an understanding of not only medical but also social needs. Interdisciplinary team approaches have been linked to the quality of care, as has geriatric training, and both will need to be emphasized. To meet current and future demands, the supply of personnel entering the field needs to be augmented, Stone said. She argued that wages and benefits need to be increased or redesigned to create more competitive positions, and that working conditions and the quality of jobs need to be improved, with larger and smarter investments in the formal and continuing education of the workforce. Because Medicare and Medicaid are large pay- ers in this area, their actions have major implications for the development of the workforce. New models for the organization and delivery of long-term services and supports need to be developed, Stone said, with an emphasis on moderat- ing the demand for personnel. Technology has a role (as pointed out in the next section of this chapter), but she added that it needs to complement and work with human caregivers. Other countries have started to grapple with workforce problems, Stone said. For example, Germany has an apprentice- ship program for home caregivers which recognizes the need to develop professional competencies and skills. Stone asserted that the licensing and certification of health care pro- viders should require the demonstration of competencies in basic geriatric care and that schools and training programs should expand geriatric and gerontological coursework. Appropriate content needs to be developed to teach needed competencies across all settings. More clinical placements in community-based settings are needed, she said, along with the creation of geriatric nursing long-term care specialist programs aimed at registered nurses with less than baccalaureate-level preparation. Finally, new models of care, such as managed long-term services and supports, and new inte- grated models provide an opportunity to think about the workforce in a different way. Workforce issues for long-term services and supports are receiving increased attention at the state, federal, and even global level, Stone con- cluded. New initiatives, foundation activities, and legislation are providing new opportunities. The provision of long-term services and supports is a growing field. The challenge will be to make the jobs in this field desirable.

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14 FINANCING LONG-TERM SERVICES AND SUPPORTS Comments from Workshop Participants Stone’s remarks on the workshop issues sparked several comments from workshop participants. Forum member Terry Fulmer, dean of the Bouvé College of Health Sciences at Northeastern University, noted that the size of the workforce could be almost doubled if men were represented in it to the same extent as women. Robert Jarrin, senior director of government affairs for Qualcomm Incorporated, noted that family caregivers and people with disabilities also need education about their conditions and the options that may be avail- able to them through technology. A workshop participant observed that the reigning medical paradigm is that if something is wrong, you take a pill. But older adults also need to change their behaviors in order to maintain their functionality. Not enough people get this message and act on it, he said. TECHNOLOGY Laurie Orlov Aging in Place Technology Watch If successful aging is defined as the ability to do things for oneself, feel safe, and be healthy as one gets older, then successful aging in place includes the ability to remain in one’s home of choice, whether a private home, an assisted living facility, a shared home, or some other option. Aging in place requires connected relationships among older adults, health care providers, and families and caregivers. It also increasingly will require technology, Orlov said, especially given that the number of nursing home and assisted living facilities has dropped in recent years, even as the number of older adults has increased. Orlov discussed four categories of use for aging-in-place technologies. (She did not discuss robots, which she termed “a fantasy much talked about in the press” but much too expensive for routine care in the near- term future.) 1. In the area of communication and engagement, she listed e-mail, chat, games, video, cell phones, smart phones, and various kinds of portable and desktop computers. 2. In the area of safety and security, she mentioned webcams, fall detection devices, home monitors, and other kinds of safety and security devices. 3. In the area of health-related technologies, she cited telehealth appli- cations, medication management technologies, disease management

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THE CHALLENGE 15 technologies, and fitness technologies, including those designed to improve cognitive fitness. 4. In the area of learning and contribution, she listed technologies for enabling education, volunteering, and work. For example, online courses can retrain older adults for a “fourth stage” of life. Even people with dementia or in nursing homes can continue to learn with easy-to-use computers. These four categories both overlap and depend on each other, Orlov emphasized. People can become isolated and depressed if they lack access to the technologies for any particular one of these categories. The Adoption of Technologies All of these technologies already exist. The major question is what will drive their adoption. Orlov said that her strong belief is that the caregiv- ers of the people who need these technologies should be the ones making choices about which technologies are developed and used. With the exception of a few limited pilot programs, these technolo- gies are typically paid for by the user or other private sources, Orlov said. Even telehealth technologies are rarely funded by public sources, she said. The market for these technologies is very large—as much as $20 billion by 2020—but it is fragmented. A positive development, however, is that technologies are becoming increasingly customizable, Orlov added. Tablets, smart phones, motion sensors, and other technologies can all be modified for each individual ac- cording to his or her needs. The Commercialization of Technologies During the discussion period, forum member Margaret Campbell, a senior scientist for planning and policy support at the National Institute on Disability and Rehabilitation Research (NIDRR), noted that technologies need to be commercialized to reach the public. NIDRR funds research on these technologies, but it does not fund trials for efficacy or effectiveness. The pathway from research laboratory to successful product needs to be studied so that it can be improved and so that promising technologies can be applied, she said. Orlov agreed that efforts to commercialize promising research results are extremely limited, with just a few exceptions. Ph.D.s can be earned and technologies can be piloted in assisted living or nursing homes, yet they never get beyond the pilot stage. In some cases the need for a new technol- ogy may not exist, or an existing technology may meet existing needs. In

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16 FINANCING LONG-TERM SERVICES AND SUPPORTS other cases, the deployment of a technology may require training of the workforce—and not just the frontline workforce, but administrators at all levels. Jarrin also observed that payers may cover expensive technologies that have undergone a U.S. Food and Drug Administration clearance or ap- proval process and then achieved federal reimbursement while not covering much less expensive new and innovative technologies that arguably provide the same functionality and service. PERSONAL PREFERENCES Lisa I. Iezzoni Harvard Medical School and Massachusetts General Hospital Many people with disabilities think they have a reasonable quality of life and want to extend the lives that they have. Iezzoni, who travels in a wheelchair, mentioned a friend who is a quadriplegic and can barely move any part of his body. Yet, when she and her friend went to the Barnes Col- lection near Philadelphia, the odometer on his 4-year-old wheelchair clicked past 8,000 kilometers—the equivalent of traveling across the United States. People with disabilities are just as diverse and have just as many dif- ferent opinions as anyone else, Iezzoni said, and those opinions can change over time. For example, they may want a technology at one point in their lives and later not want it. They make choices that may have long-term con- sequences, such as whether to get married or have children, even though so- ciety sometimes discriminates against them when they try to make choices. For example, after a divorce, courts often reward custody of children to a non-disabled spouse, she said, even though the person with disabilities may be fully capable of caring for those children. People with disabilities can make choices that are not in their best inter- ests. For example, they may decide that they want to live at home without full-time care even though they may be unable to communicate effectively in emergencies, or someone may not want to walk with a cane or walker despite the risk of falling. If the health care system is committed to person- centered care, it needs to find a way to accommodate such decisions. People who are born with disabilities or who become disabled early in life often have very low rates of employment and low incomes, which make it difficult for them to save, Iezzoni said. As a result, they may not have the resources to accommodate their disabilities because insurers often will not pay for assistive technologies or support services. But disabilities can be viewed as having society-mediated causes. Someone may have a functional impairment that they accommodate with a wheelchair, but a wheelchair

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THE CHALLENGE 17 is not effective unless sidewalks have curb cuts and subways have reliable elevators. Some people may be so disabled that they need constant assistance to accommodate not just basic needs but quality-of-life needs. However, soci- ety may have the resources to accommodate basic needs but not quality-of- life needs. Some people may end their lives without the quality of life that they could have had if society had the resources to provide that assistance, Iezzoni concluded. Confronting this issue will require political and public will.

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