The United States spends $2 trillion a year on medical goods and services, nearly half coming from public subsidies. We seem to have a response to every medical need. An abundance of high-tech medical and surgical resources and the substantial incomes of specialists in cardiology, orthopedics, neurosurgery, oncology, and radiology are testimony to the rewards this country showers on the medical-industrial complex. Americans seem more than willing to pay the price of this access to specialty care, with few serious questions about quality, safety, effectiveness, or efficiency.
Why Long-Term Care Lags
Yet the nation's long-term care "system" bears little resemblance to the broader health care sector. Health professionals who work in long-term care are viewed differently than their colleagues in acute and chronic care, even though they deal with such far-reaching problems as dementia, poor mental health, and physical infirmities.
What's more, most Americans are in denial about the reality that they might live long enough to require some form of long-term care that will make them dependent on people outside of their immediate family. But as we age and become frail, almost all of us will find ourselves in this situation—likewise if we sustain serious physical disability or mental impairment earlier in life.
Long-term care does not come cheap: estimated annual costs run from $70,000 to $100,000. Even so, 95 percent of us lack insurance to protect ourselves from the potentially catastrophic financial demands of such vital services. Instead, many of us wind up tapping into the Medicaid program to pay the costs of long-term care for ourselves or our loved ones. Medicaid now consumes more dollars each year than Medicare, with 70 percent of the new money going to support people in the long-term care system.
Because it's a state–federal program, Medicaid is a tennis ball hit back and forth in the political responsibility court. It always comes up $100 million or $10 billion short, depending on whether you live in St. Paul, Minn., or Washington D.C. But one thing is constant: when it comes to setting public priorities, prescription drugs for Medicare beneficiaries, health information technology, and funding for education for health professionals come first—and long-term care finishes last.
The Bush Administration tried to privatize Social Security, which is actually the least costly and least threatening of our national income security problems. But there have been few significant proposals to slow the meter on health care costs, which are doubling every six to 10 years. And no attention at all has been paid to the long-term care "system," in which 20 percent of all Americans will find themselves immersed in a few short years as the Baby Boom generation retires.
Every other developed nation has turned its attention to the problem of its aging population, and each one has found an answer in reform of its social or private insurance systems. That's because they realize the need for long-term care is truly an insurable event, in which a minority of the population, with little ability to predict on an individual basis, generates very high costs. What keeps Americans from doing the same?
For one, we are a young country, so the problem isn't quite as immediate as for many other nations. Second, we haven't seen a problem we couldn't afford, so why bother? Third, no national leader has raised long-term care policy to the level of a public priority since Rep. Claude Pepper of Florida, who was a prominent voice for the needs of the elderly during a congressional career that spanned from the 1930s through the 1980s. Finally, most Americans mistakenly think Medicare covers their long-term care needs. Or they just don't want to think about the problem at all.
What Can Be Done
Are we without solutions? Not at all. In fact, the solutions aren't even that difficult, or too political to pursue. Since the late 1980s, there has been surprising consensus—in the 1990 Pepper Commission report as well as among congressional leaders and most academics—on how to create a genuine, affordable, family-oriented long-term care system. Financing reform takes long-term care out of the Medicaid program and involves a combination of private/social insurance coverage.
Financing reform should combine the existing Supplemental Security Disability Income program with a new Medicare catastrophic benefit and a 14- to 18-month private insurance benefit. This last benefit could be paid for with premiums funded by a combination of purchaser premiums and tax-subsidized transfers from equity build-up in other tax subsidized savings and investment plans.
But financial reform isn't enough. We must also establish national standards on long-term care quality and access that incorporate the expectation of all stakeholders, including providers, regulators, and, most important, consumers and their families. Establishing quality and access standards will either force the necessary system improvements through direct policy changes or create incentives for the system to change under its own momentum.
Finally, we must educate consumers and their families about the long-term care system, the range of care alternatives, and the intricacies and challenges of long-term care financing. The future of long-term care should permit those who need care to live their lives under their own control, to the degree possible.
We can accomplish this goal through greater use of information technologies and flexible care options that address the needs of the individual consumer. We can create an affordable long-term care system that focuses on quality and access. We simply need to commit—on a national level—to making long-term care reform a top public policy priority.
Durenberger is chair of the NIHP and Senior Health Policy Fellow at the University of St. Thomas in Minneapolis. He was senior U.S. Senator from Minnesota from 1978 to 1995.
The views presented in this commentary are those of the author and should not be attributed to The Commonwealth Fund or its directors, officers, or staff.
