Editor: "What are some of the issues surrounding long-term care today?"

Joshua Wiener: "One-eighth of national spending for health care is for long-term care. 

“Workforce issues are the 800-pound gorilla of long-term care.”

 Medicaid and Medicare pay for three-quarters of the people in nursing homes and a majority of home care users. As a result, public policy is a critical determinant of what happens in long-term care. A growing number of people have chronic diseases and along with chronic disease comes disability. As the population ages, expenditures will increase. Long-term care is particularly important for the states because they control many dimensions of long-term care through Medicaid and other regulatory mechanisms."

Editor: "What are the biggest myths regarding financing long-term care?"

Joshua Wiener: "First, there is a widespread belief that the expansion of private long-term care insurance will reduce spending on Medicaid by reducing impoverishment of the middle class. Only 8 percent of the population currently has long term care insurance. A good quality long-term care policy costs $2,300 to $2,900 a year. At age 65, people can't afford it. The people who can afford it are not the people who spend down to Medicaid.

"The second myth is that people can use extensive amounts of home equity to pay for long-term care. A home equity conversion, also called a reverse mortgage, allows the owner to borrow money against the equity in his or her house. Most people with substantial disabilities do not have very much home equity. In addition, interest costs and banking fees absorb a substantial portion of loans. Some observers suggest combining home equity conversion and long-term care insurance. This is a non-starter, as it involves people depleting their major asset and using the money to buy insurance whose purpose is to protect their major assets.

"The third myth is that there are substantial amounts of money to be saved by cracking down on the transfer of assets from the elderly. A number of studies estimated the amount of money available for transfer. The unanimous outcome of these studies is that there isn't that much money transferred. Older people with disabilities don't have much in the way of income or assets. An elderly person with three factors of ADL [activities of daily living] had average total assets of $51,000 in 2001. You can't transfer large amounts of assets if you don't have large amounts of assets.

"The overarching myth is that the future cost of long-term care will be completely unaffordable for society. The proportion of GDP used for long-term care is bound to increase as the numbers of older persons grow, but the economy will also increase. The projected increase in the proportion of the GDP likely to be spent on total long-term care expenditures for older people is likely to increase from 1.4 percent of GDP now to 2.3 percent of GDP in 2050, when the Baby Boom generation needs long-term care. It is a substantial increase, but not so large a number as to be unaffordable, if we as a society decide we are going to meet those needs. It's a matter of whether you see this as half full or half empty."

Editor: "Why have you called workforce issues the 800-pound gorilla?"

Joshua Wiener: "Right now we have a number of serious problems with the long-term care workforce and no one is talking about them. It's difficult to recruit and retain workers, with the impact being a shortage of staff in nursing homes and home care agencies, which has an effect on quality of care. People approved for services by Medicaid aren't getting the approved level of service because providers can't find workers. For the workers themselves, they are low income workers, without health care or other fringe benefits, so it's a dead end job that's hard to fill now. With the relative decline of the working-age population compared to the growing number of people who need services, it's only going to get worse over time.

"There are some strategies available for coping with the shortage. One strategy is to broaden the pool that we recruit from, including looking at older workers, consumer directed home care where people can hire their own relatives, welfare beneficiaries and men (this occupation is overwhelmingly dominated by women). Facilities aren't so much doing it as policy, but they are relying increasingly on immigrants, which raises issues in terms of communication with clients, differences in culture and possible exploitation of the worker, because we don't want to pay enough to draw Americans into the job. Another strategy is to increase wages and benefits. The problem is someone has to pay and government has been reluctant.

"Changing organizational culture is another strategy. Higher wages and benefits may get workers in the door, but if you want them to stay, you have to make the work more satisfying. People now feel they don't have much control over their work environment. Initiatives like the Eden Alternative are working to make nursing homes a better place to live. While not designed as a workforce initiative, the changes do positively impact the workers." [Editors Note: For more information on the Eden Alternative, visit www.edenalt.com.]

Editor: "Why do you believe the states are the engine of long-term care reform?"

J. Wiener: "The states already control most of the levers for long-term care reform. They decide on what services Medicaid covers, how services are paid, how many nursing home beds there will be. They are responsible for monitoring quality assurance in nursing homes using federal standards and are completely responsible for quality of care for home and community-based services. They are now, and have always been, heavily involved in long-term care. Long-term care is higher on the political and policy agenda at the state level. Long-term care is a higher proportion of state expenditure than at the federal level, with seven percent at the state level, and less than one percent at the federal level. When there is a quality scandal at a nursing home, it's the state that deals with it. When people are on waiting lists for home care services, it's the state that has to deal with it, not the feds. The states are in the thick of it.

"In addition, long-term care is a highly personal service, involving highly intimate things like bathing, eating and dressing. It involves how people live their lives, so you want care designed by people who understand the local context, not people in Washington. Washington is ideologically paralyzed. It's at the state level that the parties are more pragmatic, and things don't tend to be as partisan and politically divided. As a result, things get done at the state level. The price is that there is great variation in what states do, raising issues of equity across geographic areas."

Forums Institute is grateful to Joshua Wiener and RTI International for participating in this interview. Statements made by Mr. Wiener do not represent the views of Forums Institute, a policy neutral organization.