15 Steps To Real Reform

15 STEPS TO REAL REFORM:

Building A “Patient First” Long-Term Care System for New York

The new administration of Governor Eliot Spitzer has hit the ground running in pursuit of Medicaid “reform,” including actions that will have widespread implications for the long-term care field. The new governor is using the concept of “patient first,” a theme that has resonance with care advocates, who largely support Governor Spitzer’s agenda, and likely also rings true with the wider population.

Reform of long-term care may well be overdue, but, from a provider perspective, the risk is that it can be come “all about money” in a quest to slash Medicaid and other costs. Reform, instead, should be about the power of an idea that resonates favorably with patients and consumers, those who finance care, public officials and, yes, providers. “Patient first” may, indeed, be the concept that can be used to shape a solid reform agenda for those frail and disabled persons who need continuing care and services.

This paper examines what reform measures are needed to transform care into a patient-focused system, something that a number of providers of long-term care (including our own Village Care of New York) are already pursuing.

Using the governor’s words, we are seeking “to finance the health care system we need.” It is not, however, simply about controlling budgets, an initiative seen time and again in this state and one which lacks integrity. Instead, it is about continuing to head down the road of realigning spending to match patient needs and outcomes.

Our own organization, Village Care of New York, has been engaged for several years in a broad effort to ensure that necessary, efficient and high-quality care is available, with our focus being on the downtown Manhattan communities. Village Care addresses the needs of both older adults and persons living with HIV/AIDS, offering services through a wide array of programs, from facility-based to home-based care. As a state-designated long-term care demonstration site, Village Care has a charge to shift resources and create a new role for the nursing home within an integrated care system, ensuring appropriate care in our community.

Village Care serves a community of nearly 60,000 seniors with a variety of care needs. Nearly 12 percent are “self-care disabled” and require assistance in their daily life needs, and another 16,000 are discharged from hospitals each year, requiring post-acute care to maximize their recovery. There are about 9,000 people suffering from cognitive impairments with another 3,000 younger individuals requiring self-care assistance. As one would suspect in any community, there is also a wide variety in incomes, assets and family support available.

Any reform must have an inherent logic that makes sense at these front lines of care, and a “shelf-life” of at least ten years. Moreover, because of constantly changing public sentiments and the vagaries of federal policy, substantial progress must be made in a short time-period. That notwithstanding, true transformation of the entire care continuum will likely take at least one generation, something learned with the radical transformation of the system of care for those who are mentally retarded and developmentally disabled that has occurred over three decades here in New York State.

Fortunately, we are already all in the starting gate, with a shared vision for a long-term care system that would be comprised of price efficiency, a reduction of financing silos, balanced system alternatives, true integration across settings, a high level of quality assurance and maximum personal responsibility.

Major progress toward this vision can be accomplished over the next five years, but it will only come about through an arduous effort, and compromise, by all parties involved. A stable provider base with a competent, experienced work force is necessary, and so is a recognition that priorities must change to meet the shifting needs of the people. Governor Spitzer’s commitment to fund the nursing home reimbursement reforms, home care expansion and other important initiatives are laudable and represent a significant step in the right direction. At the same time, without getting into the debate over Medicaid cuts, it seems reasonable that additional funds ought to be diverted this year to specific investments that advance long-term care quality and efficiency, such as pay-for-performance and information systems. There is considerable logic to these investments, which should appeal to public officials and ought to be seen as “the right thing to do.” New York’s history of transforming developmental disabilities care from a burdensome and unpopular institutional system to one that is today largely community-based is the perfect model to follow in advancing long-term care reform.

The following table looks at the reforms needed to achieve such a vision.

In taking the various perspectives and shared vision into account, there are fifteen powerful reforms that emerge, with each resulting in sustainable system savings. More importantly, they clearly advance the potent idea of putting patients first.

Some of these required reforms will likely engender further debate. Perhaps most significant is the institution of a Medicaid-only CMI calculation. We recognize that this is controversial because, currently, the “full house” CMI-calculation is being used to subsidize the current Medicaid short-fall. Even with complete pricing revisions, however, which would assure each payer puts up its fair share, there are still “pros” and “cons” that require further consideration. Pros include:
• The literature shows that nursing home providers tend to react fairly quickly to reimbursement changes, particularly case-mix adjustment, increasing their Medicaid payments by a significant degree (Reference: “The effect of state case mix payment on nursing home resident acuity, Mor et. al, 2006).
• A number of other States already use the “Medicaid-only” CMI—including Colorado and Ohio— and their nursing homes have an average, or below-average, Medicaid shortfall, according to a 2006 BDO Seidman report.
• In addition, given the growing obesity and behavioral health needs in New York, these case mix “add-ons” may spur new higher margin service lines for nursing homes.

The cons include:
• If providers cannot change their admissions and resident base quickly enough, there is potential for a significant loss in Medicaid revenue annually, for which New York State will only realize half the savings. With such a sizable loss, financially-precarious homes may be unable to participate in the other reforms.
• Additional revenue loss is likely through reduced eligibility for “bed-hold” payments, as higher CMI residents are more frequently hospitalized (This loss can perhaps later be reduced through a statewide Evercare model.)
• Staff may be ill-equipped to provide high-quality care for a higher-need population without additional training; therefore, simultaneously elimination of HCRA quality support seems counter-intuitive and unrealistic.
• Such a system will discourage nursing home admission for the many low-acuity individuals who can no longer live safely or efficiently in the community. Alternatives need to be made available for such individuals. Additional supportive housing must be accompanied with this nursing home reimbursement change, to ensure access to care for low-acuity individuals.

On the last point on housing, this is an area where a “Patient First” reform of long-term care simply cannot be accomplished without concomitant changes in affordable housing, particularly in the New York City area.

This 15-step reform proposal, with its various “pros” and “cons” for consideration, is a bold first step in rebuilding an essential long-term care system in New York. Immediate next steps include calculating the savings from this proposal, determining the magnitude of cuts and investments, and defining the specific tasks required to achieve these reforms in an aggressive timeframe.

There are two additional critical elements for success. First, the regulatory process must move at the pace of change, and must appropriately address the many potential regulatory roadblocks that get in the way of shifting resources. Second, there needs to be a vehicle to manage the reinvestment of public dollars. Without these two essentials, consumers might face choices that are not fully developed, or worse, they will not be able to find the services they require.

By way of demonstration, if these required reforms are achieved, the following shows what Village Care of New York, for example, could do in creating a system that puts patients first:

What is especially powerful about this model is that care coordination and advocacy activities, which help assure cost-efficiency and quality, are adequately financed through all payers who benefit from such integration and professional care management. In addition, facility-based care options are only one part of the system and are by no means the end-point for patients. Instead, they are an option for those needing 24-hour services at any given time.

In a final note, this reform proposal is focused on long-term care in its traditional sense—licensed and regulated combinations of skilled and supportive services. There is an additional potential opportunity to impact the need for traditional long-term care, and that lies in reforming or redefining the delivery of services in the aging network. While this proposal touches on this opportunity, by recommending the diversion of AoA funds in-home services and cluster care for long-term care, there may be opportunities to reduce disability and decline through other services, such as social day care, Naturally Occurring Retirement Community supportive services, and the like. The next phase of New York’s long-term care reform should consider this more expansive opportunity.