Changing Aging

I used to think that I wanted to live to 100 or beyond.  If I’m enjoying life, I’m still for it.  But if moving my body makes me miserable and chronic illness rules my day, I’m pretty sure I’ll opt for slow medicine.

Is slow medicine something that is appealing to you or do you say ‘no way!’ . . . ?

Slow Medicine is an approach that encourages less aggressive and less costly care at the end of life.  It’s a strategy similar to hospice - focusing on comfort - not cure.  Kendal at Hanover, a senior community connected to Dartmouth Medical School, has become a leader in slow medicine.  According to a recent N.Y. Times story, which you can read on Kendal’s website here, most residents there don’t opt for “medical heroics,” the hugely expensive, pull-out-all-the-stop medical interventions  to keep people living.

I like how Hanover provides customer “choice” to the very end of life.  It seems like a very healthy approach to health care.

Following are highlights of the American Association of Homes and Services for the Aging (AAHSA) framework for financing long-term care, which was presented at the recent forum at the University of Minnesota Humphrey Institute.  Earlier we outlined the AARP plan here.  To read more about The Long-Term Solution by AAHSA, go here:

Key Features

• Cash should be the one, if not the only, choice of benefits to be used at the beneficiary’s discretion.
• Benefits should be tied to a simple level of need based on functional status, not age.
• Benefit levels should provide for a foundational level of services for people in the community and in residential settings, consistent with keeping the program actuarially sound.
• Systems to ensure that beneficiaries can access with appropriate help selecting and securing needed services must be available.

The Solution: National Insurance Trust Financed by Premiums

The foundation of a long-term financing strategy should be a broad-based national insurance trust with low overhead costs and an all-inclusive risk pool.  This insurance should be financed by premiums, not by general tax revenues, with premiums and benefits aligned to produce an actuarially sound program.  This approach would allow baby boomers to prefund their long-term care needs.  An independent, federally-charted organization could manage the premiums, investments and payments to ensure the funds are used only to pay benefits for this program.

Benefits Available Regardless of Setting

Benefits should be available regardless of setting.  The dollar value of benefits should be tied to simple level-of-need determination that consumers can easily understand and focuses on a person’s need for assistance with activities of daily living (ADLs), including bathing, dressing and eating.

Even if all or most Americans are enrolled, the benefits would not cover all long-term care costs.  Some may wish to purchase extra wraparound insurance to cover full costs, and some may pay the difference with private funds.  People with very low incomes will continue to need financial assistance.

Wraps Around Medicare, Doesn’t Replace It

The optimal financing plan is one that wraps around and extends, rather than replaces, existing Medicare benefits, which will continue to provide for the more intensely medical and shorter-term rehabilitation needs.

Future expected Medicaid costs could be mitigated, helping to ensure the sustainability of Medicaid as a safety net.  But near universal participation will be required, which could be achieved through a mandate or - perhaps more likely - through a strategy in which people are automatically enrolled in the plan and can opt out if they wish.

Could a National Insurance Trust Work?  Yes, For the Cost of a Cup of Coffee a Day

AAHSA commissioned The Moran Company, a nationally known economics consulting firm, to model a long-term care insurance trust that would provide a daily cash benefit for people needing assistance with two or more ADLS and be fully funded for at least 75 years.  The model provided premium prices for one, two, three and five-year benefits as well as a lifetime benefit.  For simplicity, participation was determined to be mandatory for all adults.

The study found that for about the cost of a large cup of coffee each day for each of us, we can create a national insurance trust that would pay a benefit of about $27,000 per year to each adult who needs assistance with two or more ADLs.

Here are 10 reasons why we have to change the way our country pays for long-term care.  Please add others:

1.  The Age Wave is Unprecendented:  About 10 million Americans need long-term care today.  (Note: Long-term care is an array of services, from home care to assisted living, not simply nursing home care.)  By 2020, 12 million older Americans will need long-term care.

2.  Americans Want More Choice:  People want more choices than ever in how they live and receive care.  The nursing home isn’t a place they want to choose. Guess what?  Many states rely on institutional nursing homes for long-term care.   To pay for choices that today’s consumer desires, we have to have new ways to pay for care.

3.  The Costs are Unsustainable: According to the independent, non-partisan Government Accounting Office (GAO), Medicare, Medicaid  (which pays nearly half of all long-term care expenditures)and Social Security will nearly double as a share of the economy by 2035.  Today long-term care alone costs federal and state governments $116.8 billion every year.  We’ve been able to sustain these entitlements because of a low-depression era birth rates and a large postwar workforce.  No more.  Absent substantive change, Medicaid, Medicare and Social Security will overwhelm the rest of the Federal budget.

4.  America’s Savings Rate is Deplorable:  Americans are horrible savers.  In fact, 2005 and 2006 marked the first time since the Great Depression that American’s charted a negative savings rate in back-to-back years.  By 2030, many retirees will not have enough income and assets to cover basic expenditures or any expenses related to aging services.

5.  Business Production is Taking a Hit:  According to the Metlife Mature Market Institute and National Alliance for Caregiving, American businesses lose as much as $33.6 billion in annual revenue because of employees’ need to care for their loved ones.  That is approximately $2,110 per full-time employee who is also a caregiver.

6.  Busting State Budgets:  On average, state governments spend 18% of their budgets on Medicaid, which pays for all most half of all long-term care costs.  These costs are only rising and if left unchecked will crowd out all other spending.

7.  Americans are Clueless as to What Care Costs:  In 2006, according to AARP study, only 8 percent of Americans over 45 could estimate the average monthly cost of what care costs within 20 percent of its actual cost.  In an Ecumen study of baby boomers, nearly a third of boomers think that they will use Medicare to pay for their long-term care costs.  Sorry . . . . Medicare won’t pay for costs such as memory care and assisted living.

8.  Long-Term Care Insurance isn’t the Whole Answer.  Only one in five Americans can afford the long-term care insurance policy needed to meet their long-term needs.  And even if everyone purchased the best private coverage he or she could afford, Medicaid costs still would triple by 2045.

9.  A Worker Shortage:  According to the U.S. Department of Health and Human Services, the next four decades will see a need for more than 4 million care professionals in the U.S.  Who will pay their salaries?  We need to change the financing system to attract great professionals to this profession for the long-term. 

10.  Voters Want Change:  The vast majority of Americans say that our health care system is broken and they desire a well-coordinated, integrated, cradle-to-grave system.  To have such a system, long-term care/aging services must be part of the solution.  According to a 2007 national poll by Genworth and the Mellman Group, voters want long-term care/aging services to be part of national health care reform.  Nearly 8 in 10 voters (78%) stated that the presidential candidates should make this part of their health care proposals.

Costco Connection, the publication for Costco members nationally, recently interviewed Ecumen CEO Kathryn Roberts in an article about how technology is transforming aging and aging services.  You can read it here.  (Note: you’ll need Adobe Acrobat Reader)

I encourage you to take a few minutes to read two articles that appeared in the Minneapolis Star Tribune on Sunday (links below).  They provide insightful context to the tremendous opportunities for innovation in our profession, and Ecumen’s role in living our mission, vision and values to help lead and shape that change.

We Want to Be the Choice for Customers’ New Choices

The first story, The New Idea in Elder Care: Membership, outlines the work we and another Twin Cities-based senior services provider, DARTS, are doing to adapt Boston’s Beacon Hill Village “virtual retirement community” model in Minnesota.  The Ecumen project is in Minneapolis, and it’s called Mill City Commons.  It’s being designed to empower people to “age in place,” so they have the choice not to leave the neighborhood they love if they don’t want to.  It also leads with the social dimension of successful aging rather than the medical dimension, while integrating both. Mill City Commons is paradigm-shifting work that’s challenging us to deliver our mission of creating home in a new way, while underscoring our vision for changing aging:  We envision a world in which aging is viewed and understood in radically different ways.

We’re Making Change, Instead of Waiting for it to Happen

Star Tribune political columnist Lori Sturdevant writes in the second column Budget-Hungry Nursing Homes are So Last Century how 70% of the government dollars spent on long-term care in Minnesota goes to nursing homes.  That’s not sustainable public policy, and it doesn’t match up with what consumers want.  That’s why we’ve been diversifying – and will continue to diversify - our services across Ecumen.

The column commends our profession for “looking forward,” and highlights a citizen’s workshop held last week by the Citizens League, a leading non-partisan public policy organization.  The workshop, which involved several Ecumen people focused on shaping ideas for providing and financing aging services.  Ecumen helped convene the workshop as part of our commitment to shaping “what’s next.” 

Two forces are coming full speed at our profession and country: new consumer expectations and needs to finance senior services in new ways.  What an incredible time to be where we are today: making change instead of waiting for it to happen to us.

Yoga.  Massage.  Tai Chi.  A salt-water pool.  Personal trainers.  Bike racks.  And a Wii machine.

What could be mistaken for an upscale spa or gym is actually a glimpse of the future of aging unfolding in Chisago City.    Read the Minneapolis Star Tribune article on the Vitalize! Wellness Centre at Ecumen’s Parmly LifePointes community.  Or see the Vitalize! video here.

This is a cool mission statement:

To transform a source (the knowledge, talent and skill of the region’s 50+ population) into a force for enriching our community by helping individuals find meaning and the means to contribute to the greater good.

It’s the mission of Coming of Age, a Philadephia collaboration of four partners:  Temple University’s Center for Intergenerational Learning, WHYY Wider Horizons, the United Way of Southeastern Pennsylvania, and  AARP Pennsylvania. 

Coming of Age has three objectives: 

1.  Helping people age 50+ plan for the future;

2.  Promoting 50+ volunteering, learning, and community leadership;

3.  Working with nonprofits to recruit, train, and retain 50+ volunteers.  

Coming of Age is a great model for other communities who want to seize opportunities of an unprecedented age wave.  It’s fresh, invigorating, inspiring, fun . . . It’s also drawing dollars . . . Atlantic Philanthropies recently gave it $1.8 million to expand in other parts of the U.S.. . . . .

Do you know of any other communities that are doing this?

An interesting new study on China’s “oldest old” has been released by Duke University researcher Dr. Matthew Dupre and is available in the American Journal of Public Health.  (note: you have to have a paid subscription to access it)  He did the research while at the University of North Carolina and is now at Duke University Medical Center. 

Highlights of the Chinese Longitudinal Healthy Longevity Study, which included a sample size of more than 13,000 people include:

- Fewer than 1 percent of of Chinese 80 and older are living in nursing homes.

- Most are free of chronic disease and not disabled or cognitively impaired.

- For urban men and women, living in larger households was associated with longevity, suggesting that residing with one’s children, or grandchildren, might extend lifespan.

- Most study participants said they “looked at the bright side.”

- Rural women - likely the most disadvantaged group in China - showed the greatest longevity benefit from being optimistic.  Most people in the survey have a positive outlook.

- Most also eat veggies, and a lot of them are poor, have little education and drink and smoke, challenging some of the advice we get in regard to living a long time.

Just when you think there aren’t issues that Red and Blue America can agree on, there comes this little thing called aging that we’re all doing and want to do well. 

On Wednesday a packed auditorium at the University of Minnesota Humphrey Institute of Public Affairs participated in a discussion about financing long-term care in America. And what one saw was a great issue opportunity for Red and Blue America to forge common ground.  As several panelists, including a Republican state legislator, said: Aging isn’t a Republican or Democratic issue.

The forum was sponsored by the Minnesota Health and Housing Alliance, the American Association of Homes and Services for the Aging and AARP.  Twin Cities Public Television is creating a one-hour special on it and we’ll post that when it comes out later this year. 

In upcoming posts we’ll look at finance plans introduced at the Forum, but first, following are several highlights/themes from the discussions moderated by Minnesota state commissioner of labor and industry Steve Sviggum and Larry Jacobs, director, at the University of Minnesota’s Center for the Study of Politics and Governance.  I know a number of Changing Aging readers were there, so please share what you found interesting or heard differently . . . thanks.

- Environments are Disabled:  Jan Malcolm, CEO of Courage Center, put a different paradigm on disability.  Too often people live in environments that don’t allow for people with physical challenges.  So why do we always focus on the person’s physical disability? Why aren’t we focusing on maximizing the physical environment in our communites to allow people young and old to live easily where they want to? 

- Money Has to Follow the Person:  With government reimbursement money encumbered and siloed in so many areas of health care, people are mice in a never-ending maze, captive to running to the cheese (fragmented, inflexible funding sources).  Let the money follow the person, so they can make the choices in their care and service options. 

- A Healthy Health Care System in America Must Include Aging Services:  If we’re going to truly have a well-coordinated cradle-to-grave health care system that focuses on wellness, aging services must be an essential piece of the solution wheel. We have to connect the dots.

- New Language:   What do you think of when you think of long-term care?  Many people think “nursing homes.”  Guess where people don’t want to live? Long-term care, er, aging services encompasses so much more than a nursing home, including:  assisted living, rehab services, wellness centers, transportation, home care, memory care, technology . . . .

- Home-Centered System:  Home has to be an integral part of public policy innovation.  Because that’s where people most want to be.  Nursing homes will still have an integral role, but they will look very different. 

- This is a [Fill in the Blank] Issue:  Long-term care isn’t just a long-term care issue.  It’s a health care issue, business issue, education issue, economic security issue and community development issue.  If we don’t ride the age wave, it’s going to damage other sectors of our communities.

- Marry Technology and Results:  We spend billions in America on technology in hospitals, attempting to help people live longer.  What about adding life to years?  Technology in aging services, such as sensors in people’s homes that spot small health problems before they grow into big ones, is the preventive-type of technology we should be focusing on in a results-based, wellness-focused health care system.

- Fiscal Responsiblity Doesn’t End with the Mortgage:  To save safety nets for those truly in need, more of us simply have to plan ahead and pay our way for aging services.  The alternative is not sustainable for America.

Many people have visions of developing senior housing, but what separates dreams from ground breaking cermonies is the people with vision who put the right team together.  Essential to this effort is a financing partner.  Senior Housing Financing Options is a new Ecumen whitepaper that outlines some of the key financing options for would-be senior housing owners.  Download here.