Copyright ©2009 by Federal News Service, Inc., Ste. 500, 1000 Vermont Ave, Washington, DC 20005 USA. Federal News Service is a private firm not affiliated with the federal government. No portion of this transcript may be copied, sold or retransmitted without the written authority of Federal News Service, Inc. Copyright is not claimed as to any part of the original work prepared by a United States government officer or employee as a part of that person's official duties. For information on subscribing to the FNS Internet Service at www.fednews.com, please email Carina Nyberg at firstname.lastname@example.org or call 1-202-216-2706.
SEN. ROCKEFELLER: Welcome everybody. The attendance today is actually the fullest that I've seen in 24 years. That was a joke.
We are all here, all of us, for exactly the same purpose. And just as a point of mild peak, but statement, I've either been chairman or vice chairman of the house subcommittee for 14, 15, 16 years, something of this sort, and this is the second -- the second committee meeting we've had, which tells you sometimes how things don't work the way they should.
And because we've got the whole health care thing before us and we want to do it all, and long-term care has to be a part of it or else it doesn't work. And the president wants to do, you know, the budget and everything, the environment, energy, health care, education, everything all at once, and he is exactly right. Get to them all at once, no matter what it costs, you got to do it because if you don't, you fail the future.
You can fail because you can't pay your debts or you can fail because you just never there. That should -- actually should be enough, I think. Yeah, you're now one of my best friends.
MR. : You're welcome.
SEN. ROCKEFELLER: So again, I do welcome all of you and I'm just trying to find my opening statement. And it's prosaic, but it's passionate. A long time ago, somebody by the name of Dr. Judy Feder -- well, they had this thing called the Pepper Commission, and it had a much longer name than that.
And unfortunately Claude Pepper died, and they had all these sort of things in the Senate on it except for me. But I cared, and so nobody wanted to be chairman. And I said, well, I do, and because I figured that was my way to learn health care, because it was -- this was in 1968 or '88.
MS. FEDER: '90.
SEN. ROCKEFELLER: '89-'90, and we produced the only comprehensive health care bill that has ever been produced by the United States Congress, who did all of the acute-care and all of long- term care, and we won both, won quite closely.
And -- but the long-term care, we passed rather easily, 11 to 4. And it was declared by those who didn't like it, dead on arrival because health care's time did not arrive evidently. And so this is now, as we launch into the Obama, that's not to be political, this is because he is president, and one sort of recognizes presidents.
He wants to do health care. He wants to do the whole thing, and I really like that. And Judy Feder became my mentor. Oh, you did, I don't think you have any particular reason to be proud of that. But I am, and we have expert witnesses who will not get similar praise which is not fair, because I worked with Ray Scheppach for years and others.
The actual name of that was the U.S. Bipartisan Commission on Comprehensive Health Care. Why do we name things that are important with such awful names as that? So we just called it the Pepper Commission. Anyway, in the 20 year since we've made those recommendations, we've done nothing.
Congress has done nothing, the administration has done nothing, and if they've done something, it hasn't been with any intensity. To me, the whole business of achieving anything in health care, whether it's acute-care or long-term care, is intensity, is just voracious intensity, moral outrage that doesn't stop.
And to get health care, that's what you have to have. Benefits are severely limited. I can remember we used to talk and we still have to. If you are going to fit into a long-term care now into Medicare, you've got to spend yourself into poverty.
And I remember we were talking about that back in those days, and we are still talking about that because that's still the only way you can do it, except that the numbers on long-term care had jumped so enormously, so enormously, and the baby boomers are two years away, I think.
Am I right, my four panelists? Before they all qualify for getting this. And a lot of long-term care isn't for people who are older. It's for people who are between the ages of 16 and 60, a lot of it, something like 46 percent. So people, they make the mistake. I'm going to an Alzheimer's dinner tonight.
My -- what -- my mother had Alzheimer's and my wife Sharon's father has Alzheimer's and we are going to get an award with lot of other people, from Sargent Shriver, who is one of my ultimate heroes, one of the five great people in the American life as far as I'm concerned, who himself has Alzheimer's. And his daughter Maria is going to present it to us.
And I think back to when my mother had Alzheimer's and that was, you know, I -- our family could afford to get her all the care that she needed, I mean, which was endless numbers of oxygen tanks and flight to her doctors who didn't want -- you know, this and that and the other thing and biting down on feeding tubes, and advanced directives.
And, you know, we just went through endless, endless fury to keep somebody alive who didn't want to be kept alive, and who finally made that clear by biting down on her feeding tube. And that was her signal. All of her children were around, all of her children agreed. If one of the children hadn't agreed, then we wouldn't be able to do it under New York State law. And so we took her home, and she died three weeks later, but very peacefully with morphine and Bach, Mozart, and Handel. And that was the way she wanted to go, and that's the way she wanted -- the way that she would have wanted to go.
Payments for long-term care are so disjointed.
Why is that? Because we don't focus on it, because we don't talk on it. Young people, lot of people does not think a long-term care is getable. People don't offer it or if they do it, it's too expensive.
We've got it -- we've got all these silos, I mean, in the intelligence committee, they talk about the CIA wouldn't talk -- we had to -- actually after 9/11, we had to pass a bill saying that the FBI was okay for the FBI and CIA to talk to each other.
Well, that's the kind of the way it is in health care, and particularly, in long-term care. And insurance companies, of course, do their best to stay away from being a part of anything to do with this.
So when long-term supports and services are available, they are always extremely expensive. In 1988, these are -- this is interesting to me, that's when we were doing our work, a short stand nursing home costs more than $2,500 a month on average and exceeded most Americans' incomes.
And in 2008, 20 years later, 30 years later -- 20 years later, the average annual rate for private nursing home is $76,000. And that's more than $6,300 a month on average. So in 1988, we spent $53 billion on long-term care. What does it get us? We are not sure. Does it have any -- anything that anybody can depend upon? No.
Does anybody really understand it? No. Does anybody have the political will to undertake it? No. The chairman of this committee has it in his -- has a white paper. It's called a white paper which is meant to be very good. No long-term care in it, not mentioned, not mentioned.
Long-term care is the one thing every single person will face. Every single person faces, nobody doesn't do long-term care unless they die on a head-on crash. I mean, it's something -- that's the way I look at it.
So we're trying to do better. And this is our first hearing on this subject, and I will stop talking and we will have questions. And some people will come, hopefully. And if they don't, that's fine with me. Then I'll get to ask all the questions.
First, we have Dr. Judy Feder, who is a senior fellow at the Center for American Progress Action Fund. I keep saying you're dean at Georgetown.
MS. FEDER: I'm a former dean.
SEN. ROCKEFELLER: I know you're a former dean, but I --
MS. FEDER: Okay, go right ahead then.
SEN. ROCKEFELLER: You just can't keep skipping up --
MS. FEDER: Around.
SEN. ROCKEFELLER: Yeah, you got --
MS. FEDER: But I am still a professor of public policy at Georgetown.
SEN. ROCKEFELLER: Okay. Well, that helps a lot.
Then we have Dr. Raymond Scheppach, who I knew when I was governor, and he is executive director of the National Governors Association. And he has been working on this problem.
And then we have Mr. Dennis Smith, he is number three, who is the senior fellow in health care reform at the Heritage Foundation's Center for Health Care Policy Studies where he is working on ways to improve Medicaid program including the future of long-term care.
And then fourth, Joshua Wiener, and he a senior fellow at Research Triangle Institute International. I guess that's if you take Duke and North Carolina University, incorporate them, and then internationalize them. Is that what that is? It's kind of a limited partnership, something like that.
Anyway, he is the program director there of aging, disability, and long-term care at that international. So I look forward to statements and conversations, and we'll start amazingly enough with Dr. Judy Feder.
MS. FEDER: Thank you, Mr. Chairman. It is a great pleasure to be with you today and to continue the effort that you've championing for a long 20 years, and have health reform include long-term care reform so that everybody, the people who need both, can get both.
You called for that 20 years ago, said the time was now then, but the time is clearly now, now. So I'm sure many in the room join me in thanking you for this hearing. Sadly, the mythology about long-term care that the Pepper Commission report sought to counter still inhibits our ability to move forward.
As you've said, and the facts are, that young as well as older people need long-term care. And it's true that many, many people will need long-term care if they live long life. But actually even among older people, there is tremendous variability in the likelihood of needing long-term care extensive care. It remains an unpredictable catastrophic risk.
And despite claims to the contrary, families are giving their all in caring for their loved ones who need long-term care.
SEN. ROCKEFELLER: And I totally forgot to mention that. Thank you.
MS. FEDER: Well, I think you demonstrated it with your comments on your own family, and I thank you for that. And I think that you know the problem with today's long-term care system is not that individuals and families aren't giving enough.
It's that they don't have enough to give. And that is why we so desperately need public support that actually spreads the risk and the burden of needing long-term care rather than leaving it concentrated on -- and such a heavy burden on just those families who experience it.
Fortunately, we have ways we can go. We proposed some 20 years ago, and I've got a few proposals that I wanted to lay out for you today because we definitely have options. I'm going to give you four examples to focus on the low-income population on improving Medicaid while slowing the growth and its cause.
And second -- the other two are facing broad public long-term care insurance for the future so that people do not remain underserved and at risk of losing everything. So first on my list for consideration, is to assure broader Medicaid support for care at home where people want to be rather than in nursing homes, and homecare was a focus of the report 20 years ago.
Different proposals do that in different way. The community -- I think we have a lot of advocates for the Community Choice Act with us.
And I see -- so, you know, I hate to modify your eloquent statement, but I do believe that Senator Baucus in the white paper does have a mention of improving Medicaid for long-term care for home and community-based services. So we'll look at that.
SEN. ROCKEFELLER: Good.
MS. FEDER: Good. And if supported by federal dollars and changes in Medicaid, we really can go a significant -- make a significant difference in assuring that people, no matter where they live, no matter what state they live in or within states, that they have access to services.
Now second proposal that affects both Medicaid and Medicare beneficiaries is to better integrate acute and long-term care for the Medicare and Medicaid or as you know dual eligible who need both.
Now, dual eligibles are really the poster children for the population who can benefit from where -- what we're taking about in better coordinated and better chronic care.
There are many models that exist. There is sometimes a quick move to just changing payment for services, but I would urge us as we move toward that model, we make sure that we're focused on what we're actually delivering and on supporting a delivery system that works. But I believe there is promise in that regard.
Now for the future, that's what I'd like to see as to this minute, but for the -- well, I'd like to see us do it all this minute, but that take care of the low-income populations, but I believe that what we can do is start today to take care of all of us in the future with a -- by phasing in public insurance protection across the income scale.
One option that we received was developed for our Robert-Wood Johnson Long-Term Care Financing Project was to develop a Medicare benefit that would be phased in, so today not available to people who are currently 60 years of age or older, but pre-funded, so that contributions are made today. And we are essentially paying for ourselves when we get older.
A second option, the CLASS Act, would create a new long-term care benefit, again starting with the working age population and financed through a voluntary deduction form payroll unlike Medicare providing a cash benefit. Again, folks, although available to people in nursing homes, focused on people at home just as the social insurance recommendations of the Pepper Commission report did years ago.
Now you know that moving forward, you know better than anybody how challenging it is to move forward. But as you wrote, and I wanted to quote what you wrote 20 years ago, that after we gave the Pepper Commission report, after it was reported out, you said the following.
The president and the Congress have a choice. We can continue to duck our heads and hope this issue will not bring the nation to its needs, or we can use the Commission's recommendations as the rallying point for building the political consensus that can make universal coverage for health and long-term care a reality.
I, you, opt for the latter course, not just because it can work, but it's because it is the only responsible means to take action that we know is imperative.
I -- Mr. Chairman, it is -- now is the time with new presidential leadership, a powerful necessity to invest in rebuilding our nation's prosperity and new excitement about our nation's and our government's potential to build a better future.
Now is the time to confront those policy political and fiscal challenges you know so well to build a better long-term care system. And I look forward to continuing to work with you to do just that.
SEN. ROCKEFELLER: So we are breaking all rules today, okay, because I'm the only person here. So I can't be voted, not a voter. And the fascinating thing to me is that the president understands better than anybody else that you don't have - you cannot have a recovered economy unless you've done health care that the two are just like this.
MS. FEDER: Absolutely.
SEN. ROCKEFELLER: Excuse me.
MS. FEDER: Thank you.
SEN. ROCKEFELLER: You are not finished?
MS. FEDER: I'm finished.
SEN. ROCKEFELLER: You didn't say that.
MS. FEDER: Yeah, I looked -- I said I look forward to continuing to work with you.
And that was meant -- that was meant to be so. I'm now finished with this statement and look forward to continue.
SEN. ROCKEFELLER: I see. I see. You -- I've never heard you so short before.
MS. FEDER: Well, I was trying to do the five minutes, Senator.
SEN. ROCKEFELLER: Oh, we could be relaxed about that.
MS. FEDER: Okay.
SEN. ROCKEFELLER: All right.
MR. SCHEPPACH: Well, I'm beginning now.
Mr. Chairman, I appreciate the opportunity to appear before you today on behalf of the nation's governors to discuss the critical issue of long-term care and the need to include this issue as part of general health care reform.
To put it simply, failure to reform the under-funded, uncoordinated patchwork of long-term care supports and services is a failure to truly reform health care. This is an opportunity and a responsibility to do so now as part of the general health care discussions under way, and on behalf of the nation's governors, I urge you to give equal attention to this critical component of the nation's health care system.
The broader reform discussion so far has focused on improving the coverage cost and quality aspects of primary and acute-care services with an emphasis on prevention. These are the exact same issues with respect to reforming long-term care, and thus both need to occur simultaneously.
Mr. Chairman, I like to make just three arguments in favor of including long-term care with general health care reform. First, if we were starting anew to build a national long-term care public program, it would not look anything like the current program.
Currently, as elderly individual's health status and incomes deteriorate, they get services from two different programs, state- administered Medicaid and federally-administered Medicare. With very little coordination and little ability for the individual to understand which level of government is providing which services and which ones should be held accountable.
This is further complicated by the fact that there is often limited incentive for cost savings since the action by one level of government often accrues only savings to the other level of government. The bottom line is that from a quality, efficiency, and accountability standpoint, the structure of the existing system gets very poor grades.
Second point is that unfortunately the wrong level of government has financial responsibility for most of long-term care. From a federalism standpoint, a national division of responsibilities has emerged in the nation starting with social security in 35, and then through enacting of Medicare and Medicaid in 65 to the present.
Essentially, the federal government took 100 percent of the responsibility both administratively and financially for the elderly, for those over 65. This is seen in both social security and Medicare. This has been a distinct advantage in that at all the federal government through taxing ability and spending to redistribute funds for a mobile program so that no state that had a unusually higher level of elderly would be held responsible.
That seems to be a traditional role of the federal government. States, on the other hand, took administrative and to a large extent financial responsibility for working American's and their children through education, job training, nutrition, welfare, and other programs.
When Medicaid was essentially a health care program for low- income women and children, this was completely a rational division of responsibilities, as states could coordinate health care with other similar programs for that population.
Long-term care, however, with substantial state financing is inconsistent with this basic federalism division and responsibilities. Long-term care, which is mostly, at least a majority of it for elderly, should be a federal responsibility.
Third, not only is it the wrong level of government that means states, have the major financial responsibility, but states cannot sustain this program financially. I know we've made this point a number of times, but we all know the demographics in long-term care. It's not only the fastest growing component; it's likely to accelerate in the foreseeable future.
Unfortunately, both the short and long run fiscal viability has eroded substantially for states over the last couple of years. My best estimate is even after you factor in a recovery plan that you just enacted, states still face shortfalls of well over $200 billion over the next three years.
Even after that period, I suspect the U.S. economy will emerge in a very different form when we entered this recession. And unfortunately, I suspect the likelihood of slower growth is probably highly likely.
This means states probably going forward could not even fund the current level. Unfortunately, I would argue that from this point on, expansions or just the normal growth in long-term care will be paid by cuts in education, elementary, secondary, and higher education.
The bottom line, Mr. Chairman, is that the structure of our long- term care system in this country is broken. It does not deliver quality service, it is uncoordinated, not only is it inefficient, but it has perverse incentives, it's financed by the wrong level of government which is unable to sustain it.
Our fear is that the Congress does not include this at this time. It'll be 20, or 30, or 40 years before it's on the table again. It would be unfair to the nation's most vulnerable citizens and irresponsible to the nation to not incorporate it at this time.
Thank you, and I'm finished.
SEN. ROCKEFELLER: Okay. Thank you, Ray. And I don't agree with you that I will be another 20 or 30 years. I think we are going to be on this until we've done it. It's like climate change, it's like taking -- giving veterans the health care they deserve, and this kind of thing, immediate. I just think it's with us until we get it done, no matter how much it cost.
And incidentally, on the states and Medicaid, I'm not -- I'm a big non believer in Medicaid waiver which either you do or don't agree with, but I know Judy does that, you know, states -- you can't hold state's harmless.
Everything changes, everything changes. EPA has come out with some administrative announcement about mountaintop removing West Virginia which is -- which, you know, I'm not unsupportive of. I think that the coal industry which has been -- I mean, they haven't changed in 150 years. I mean, there has been no reason to.
Everything has been profitable. Now everything is different. Everything is different everywhere. The states are going to be run differently. The federal government is going to be run differently. We are going to be living under debt, deficit. And so I don't hold anybody harmless on anything. I don't think we can at this point. We may come to that point.
MR. SCHEPPACH: That's fair.
SEN. ROCKEFELLER: Okay.
MR. SMITH: Thank you, Mr. Chairman. It's great to be with you again. First let me say that my testimony reflects the views of only myself, not of my current employer or not of my previous employer, the federal government.
So you all posed four great questions. And I've tried to come up with four what I hope will be recommendations for serious consideration to reflect the changes there have been. And first, I'd like to say there have been -- there has been some progress for which I think that we can be proud of. Part of it attained through waivers; a lot of it though, quite frankly, I think the greatest credit goes to the families themselves. Very much so when you look at the increase in the percentage of Medicaid spending on long-term care for people with disabilities, that has now shifted to where a majority for that population is spent in home community-based care rather than institutional care.
In 19 -- in year 2000 total long-term care spending, 72 percent went to institutions; 2007, that had dropped to 58 percent. So we have made progress. But I think it's very interesting to note that 63 percent of the Medicaid spending on long-term care is now in the community rather than institutions. But for the elderly, 69 percent of their long-term care spending under Medicaid continues to be in the institutions. I think for a large part people with disabilities, it's the families who demanded the change and who, I think, really led the way.
In terms of recommendations; first, I would say, Medicaid itself needs to be reorganized in itself. And that should start by leveling the playing field between institutional and community-based care. It makes no sense to me of why an institution is a mandatory service under Medicaid, but to live in your home and in your own community is an option for which you have to go to the federal government saying, "May I please?" We've now had over 25 years of experience with home and community-based waivers. I think it's time that the statute itself keep pace with the people that it serves.
People with disabilities account for 51 percent of the Medicaid long-term care spending. I think you need an agency that is prepared to lead the way for the future. In all due respect to my former colleagues at CMS, I believe that CMS is too big and too slow to lead the change. Picking up on your very -- on your opening remarks, I believe there should be a consolidation of functions in an entirely new agency that is focused on the needs of people with disabilities to provide them with the assistance that you need.
If you asked a person with a disability, what type of assistance do you need from the federal government; chances are pretty good the answer will be, a job. They want to become taxpayers, they want to work, and if we change our institutions at the state and federal level to -- for them to attain what they want, then they will not only become more satisfied with the way government is serving them, they will also become taxpayers as well, reducing the cost of Medicaid, SSI, food stamps, et cetera. But I think you do need a new agency to lead the way.
Between -- I would not, though, distinguish policies in terms of people with disabilities versus our elderly because I think they basically want the same thing which is person-centered, money-follows- the-person type of arrangement, even though there might be different selections. A young person with a disability, for example, is much more likely to choose employment-sponsored -- employment-supported type of activities than perhaps an elderly person, but then they would have an equal choice of what type of services that they want.
Our current program's basic message to people with disabilities is don't work, don't become independent, don't plan for the future. For that remedy I would recommend that we create what we called previously Living with Independence, Freedom, and Equality Accounts, or LIFE Accounts, which would be tax-exempt special accounts to where people can build assets to plan for their future. Under current law, if you build assets, you lose your health insurance. I think that's exactly the wrong message to send people with disabilities.
My final point -- I see my time is expiring -- is to look specifically at the models that I think that are very successful out there, that achieve both things, the two principal things that we are trying to achieve, which is to give people the choices they want, but also to make it more cost effective. I would encourage the committee to look at Washington and Oregon who have long been considered the leaders in home- and community-based services and yet they also spend considerably less on a per capita amount. Washington spends 30 percent less than the U.S. per capita for people with disabilities; Oregon spends 21 percent less per capita than the U.S. average.
I think that we also need at the final round though is to change Medicaid financing, say, financing for the last because if you talked about financing first you tend not to get to the other issues. But I think we need to recognize the current financing system, A, is not working for states to begin with, and it is also -- actually becomes a barrier to move to home- and community-based services because institutional providers themselves have an advantage under the current financing situation.
Institutions can put up non-federal share of the match. Institutions can pay what are called provider taxes or assessments. So they become part of the financing solution. So they have an advantage over community-based care.
There are good reasons to want to change the reimbursement structures. Again, over the past it's been considered good public policy not to pay for an empty bed in a nursing home, for example. But in a movement towards home- and community-based services though, in order to maintain quality of care while a facility is downsized and taken offline, there are very good reasons to want to change the reimbursement system. To be able to do that in a more cost-neutral way, you then are also going to have to change the financing. I'm well over my time -- I look forward to your questions.
SEN. ROCKEFELLER: Do you see any blinking red lights? We turned them off.
MR. SMITH: Oh, you're very kind. Thank you.
SEN. ROCKEFELLER: Thank you very much.
MR. WIENER: Thank you, Mr. Chairman. I appreciate this opportunity to testify today on financing reform and long-term care.
During my time today I'd like to make five points. First, long- term care should be part of health reform for four reasons. Fist, with the aging of the population the number of people with disabilities is sure go grow substantially. The number of older people with disabilities will approximately double between 2000 and 2030.
Second, the federal and state governments spend substantial amounts of money on long-term care. In 2006, the public sector spent about $150 billion on long-term care for people of all ages, primarily through Medicare and Medicaid. The government's fiduciary responsibility requires it to spend its money wisely.
Third, not only do older people and younger persons with disabilities use expensive long-term care services, they have high medical care costs related to their underlying chronic illnesses. Addressing chronic illnesses solely through the medical care system is certain to fail in terms of controlling those costs.
And finally, the current system is broken and needs to be fixed. The system is biased towards institutional care. The financing system forces people on to welfare in the form of Medicaid. It's the leading cause of catastrophic out-of-pocket health care costs and all too often the quality of care is poor.
Second, the aging of the baby boom generation will increase spending for long-term care, but these higher expenditures will be manageable. You can afford to improve the long-term care system. Too often people have viewed the potential increase in demand for long- term care --
SEN. ROCKEFELLER: Doctor, why do you say that they will be manageable?
MR. WIENER: I will, that's exactly the points --
SEN. ROCKEFELLER: Okay.
MR. WIENER: -- I'm getting to now. Too often people have viewed the potential increase in demand for long-term care in apocalyptic terms and use that as a reason to avoid the problem. They say, well, we can't afford what we're doing now so obviously we can't afford any improvements.
But total public and private long-term care expenditures were about 1.5 percent of gross domestic product in 2005. Projections done before the current economic downturn suggest that they are likely to increase to about 3 percent of GDP in 2040 assuming that we have modest but positive economic growth. If we don't return to positive economic growth, then I'm sure this committee will be concerned about many other things.
Third, many other countries such as Sweden, Japan, Germany, and England already have populations that are much older than ours without dire results. Sweden, which has over 17 percent of its population over the age of 65, compared to our 12 percent, spends 3 percent of the gross domestic product for the long-term care. So my point here is not that we shouldn't be concerned, because we should. My point is that it's a substantial problem but one that we can in fact afford to fix.
Third, long-term care financing reform should be designed to shift the service delivery system towards home- and community-based services. The vast majority of older and younger people with disabilities live in a community and want to be there. Only about 17 percent people with disabilities live in nursing homes. Yet, in 2002, only 37 percent of older people who needed assistance with the activities of daily living received any paid homecare. And as Dennis alluded to, although Medicaid home- and community-based services for older people and younger persons with physical disabilities has been increasing, only 31 percent of Medicaid long-term care expenditures were for non-institutional services in 2007.
Fourth, private sector initiatives can do more but they are not likely to be a major source of financing without large public subsidies. A private long-term care insurance market has existed since about the mid-1980s but in 2005 only about 7 million policies were enforced covering between 8 (percent) to 10 percent of older people and much less than 1 percent of the non-elderly population.
The major barriers -- cost; a good quality policy purchased at age 65 cost more than $2,800 per year, too expensive for most older people. There are many options to reduce price, but unless they radically, and I underline the word "radically," reduce the cost, they are unlikely to substantially increase the number of insurance purchasers. The qualities of policies have improved over the years but far too many policies still provide no inflation protection and almost none have non-forfeiture benefits. More regulation is needed and that can be accomplished here in this committee.
Fifth, and finally, the limitations of private initiatives means that long-term care financing is likely to continue to be dominated by public programs. Three quarters of people in nursing homes have their care paid for by either Medicaid or Medicare, and much of the private payments is in fact Social Security and other public programs.
According to the Organization for Economic Co-operation and Development, public programs dominate long-term care financing in virtually all developed countries. There are a wide range of possible options. We could start minimally with demonstration programs that include initiatives that provide integrated care including long-term care for people with disabilities.
I would recommend breaking out of the budget neutrality requirements that have hampered many demonstrations under the Medicare and Medicaid program. We can increase funding for appropriated programs, such as title 20 or the Older Americans Act that fund home- and community-based services. We can expand Medicaid by requiring states to cover more home- and community-based services and easing financial eligibility requirements, such as proposed in the Community Choice Act.
SEN. ROCKEFELLER: Dr. Wiener, we -- are you willing to say --
MR. WIENER: I'm almost done.
SEN. ROCKEFELLER: All right.
MR. WIENER: And finally, we can establish a social insurance program for the long-term care as has been done in Germany, Japan, and the Netherlands, and as is proposed by Senator Kennedy's and others' CLASS Act.
SEN. ROCKEFELLER: Okay. I'm embarrassed, but I've got 5 minutes left on a vote. It will take me 5 minutes to get there.
And these days you just don't miss votes, we are debating community service all this week, and at least I want to send the president when he goes abroad -- let him be able to sign a bill increasing the Peace Corps, VISTA AmeriCorps, Teach for America, you know, every type of community service available working with everybody here.
And I -- that's what I think the vote is on and I want to go vote. So Senator Hatch will be coming, but in the meantime with your permission, I'd like to recess the hearing. And I'll be right back. I'm not a fast runner. I'll be back as fast as I can.
MR. WIENER: Thank you.
MS. FEDER: (In progress) -- I would have to double check what we actually show.
SEN. ROCKEFELLER: You don't remember it, Dr. Feder?
MS. FEDER: It's horrifying --
SEN. ROCKEFELLER: I love that.
MS. FEDER: It is horrifying, but that is true.
SEN. ROCKEFELLER: Yeah.
MS. FEDER: And I -- but I think that there are specifications in both proposals I put for you, CLASS Act and I'd have to check. Although I know there are many in the audience who know, and Josh may know, others on the panel may know what the specifications are.
The concern is that people -- three limitations and three activities of daily living is really pretty severely disabled. And that -- the desire is of course to get services to people while they are in the community able to -- so that you can keep them in the community. So our desire is to go down from that higher level of severity.
MR. : Clearly, is this the question of how much money you would need to put on the table. There are more people who have two or more problems with the activities of daily living. And three -- so depending on how much money you can -- what you -- the committee is willing to spend, then you can kind of slice and dice it to a level to meet that --
SEN. ROCKEFELLER: Yeah. And it's not a casual process because each ADL is a, you know, humongous task --
MS. FEDER: Right.
SEN. ROCKEFELLER: Whether it's, you know, toileting or bathing or preparing.
MS. FEDER: Right. And the concern actually with some of the Medicaid rules currently is that you -- only if you require -- they only give home- and community-based services to people who are nursing-home eligible. You're not able to help them remain at home which is what we want to do. So it is a -- both a goal for people's quality of life as well for properly using our resources.
SEN. ROCKEFELLER: Let me ask, I'm -- look, we're just here talking, okay. I remember -- a couple of times in West Virginia when I was governor, we had these huge floods. And since only 4 percent of the land is flat and all the rest is mountain, you could imagine what a flood does and what it wipes out.
And so I opened up all the National Guard Armories, at least in the affected areas; nobody came, nobody came. Why did nobody come? Because everybody took everybody in -- from their neighborhood in or they moved up, you know, 50 feet on a mountain side and moved into somebody's house and it wasn't just a question of your relative, it was a question of belonging to a community and the community acting to protect you, and this is what you were talking about, Mr. Smith.
And that's -- that's the whole concept of personal responsibility which liberals hear and say, well, that's avoiding giving the service, or it isn't. And in West Virginia, which is a very, very value- oriented, you know, mountainous and therefore very close -- all the communities are very small and very close and tucked into mountains and the sun doesn't come up until noon in some places, people are close and they do take care of each other.
And that is -- there is a sense of community responsibility that really works. But then as the economy begins to go sour, you could make two arguments. One is that, well, people have more time to do that. And therefore they can exercise their nature. Or you can argue people are -- become deeply frustrated out of their own situation, they're trying to find jobs, and are less inclined to do that because they have to be self-interested to protect any chance they have of a future.
And I'm kind of wondering what you think about that, the idea of a man -- because I mean I saw all kinds of examples and we used to talk about this, of you know, families that would move back from Ohio to take care of their mother or their father who had Alzheimer's, some other disability long-term disease. And then they would go broke. You know, they'd spend down.
That wasn't a question of qualifying for Medicaid, they'd just spend down, and what happened was their children couldn't go to college. And all of their dreams went right out the window because they were doing what children in Appalachia, in the Midwest, et cetera, tend to do. And that is be good to their families, take care of their families. But then there comes a point at which that becomes counterproductive.
So my question to you all is so philosophically, what is the relationship between the downturn in the economy, do you think, and the willingness now, and the willingness of people to participate in community care-giving, family care-giving, exercising personal and community responsibility? What do you predict?
MR. WIENER: Well, I think the fundamental thing is what you've underlined, which is that people don't abandon their relatives. And I think that basically happens -- people have that commitment in good times and bad times because that's what families do. And if you look historically at survey data, people have continued to provide substantial amounts of help to disabled relatives for as far back as we have data. And it's always -- it always comes out as the overwhelming amount.
People do, as you noted, move back or they move the relatives closer in. About two-thirds of people with -- of older people with disabilities have a relative within 20 miles of where they live. So that's there. But it's a -- as you pointed out, can be an unfair burden on the family in terms of what it means for their future and their ability to live a life. And especially for younger people with disabilities, it means living a life that -- in which you're perhaps dependent on a family care-giver when other people of your age are independent and able to live on their own and free from having to answer to the parents or those kinds of things. And you know, not every family gets along perfectly all the time.
SEN. ROCKEFELLER: And that is correct. And this can undo family relationships as well as it can bond family relationships, it just depends. I mean, for example, when my mother got Alzheimer's, I'm of that generation when my father simply felt he could not tell his children that our mother had Alzheimer's. We found out two years after she had it. And that was just the way it worked back then. And I wasn't very happy about it. But I wasn't going to blame him because that's what happens.
But another question I have is being community care-giver, being a family care-giver isn't just a question of loving somebody, and helping somebody or moving somebody from place to place.
It also has to do with a good deal of medical knowledge, and when you get to the use of oxygen, and you know, knowing when what medications are to be used. And that's not a casual event and people aren't trained for that as far I know.
MS. FEDER: No. And also what it raises, I was going to share with you that the most recent survey we've had, of people who have long-term care needs in the community and whether they are getting their needs met, is that 1 in 5 are reporting that they're not getting that -- the care that they need. And report -- are more likely to report that they are suffering serious consequences as a result, so which is not being able to eat or to bathe or soiling themselves or falling. So that even -- so independent of the medical, that even in the services, the support services that even if their families are doing a great deal, it's not sufficient to meet the needs of the people who need the care.
And that that's a very real problem when we have some evidence that we're in -- in states where there is greater paid care there is a lesser level of unmet needs. So it matters to have -- to be able to draw on people who are both paid to be there and --
SEN. ROCKEFELLER: Are trained.
MS. FEDER: -- have the skills to be there.
SEN. ROCKEFELLER: Yeah.
MR. WIENER: And in general in the United States --
SEN. ROCKEFELLER: Josh, let me just call on Mr. Smith and then Ray Scheppach. How you would answer that. I don't mean to be rude.
MR. SCHEPPACH: It's interesting, there has been a fair amount of research on what happens to communities when a major manufacturer or auto plant tends to move out and what are the impacts. And a lot of times what you find is that there is great stickingness (ph) originally, that the community holds together. They try to in fact find other firms to come in, they do not in fact move away. But as the situation continues to deteriorate then it breaks loose and people abandon that particular area. So I think up to a point economic hardship could be a plus in terms of bringing communities together, but further deterioration from that begins to break it apart.
MR. SMITH: I think this is an area where we have to really change our entire outlook from the current rules that we have in the program from the federal level that spills on down. A large part of long-term care has to deal not only with the individual, what is happening to the individual, but to also somebody else, whether you still have a living spouse who can help take care of the spouse who has a disability, whether your family arrangement is extremely important in determining what is happening to you.
I think part of a lot of this and again from your earlier question about trying to move away from the current standards about meeting an institutional level of care or how many ADLs do you need -- you may have only two ADLs, but have a greater need because you have no family or no support system. You may have three or four ADLs, but being in a large family with a large support group your needs are being better taken care of. So I think we need to move to a truly different model where we're talking about a needs assessment, a comprehensive needs assessment.
Housing is a huge -- maybe a huge factor in what happens to the individual, so I truly think we just need to have an entirely different model. In terms of the economy actually it works somewhat backwards. When I ran Virginia Medicaid and looking at long-term care in Northern Virginia the likelihood that your nurse's aides, your home health aides, et cetera, very likely you're going to have very high turnover within a year because there is a lot of competition for your work.
You move from a home health aide in an agency to a nursing home to a hospital because you had competition for your services, good for the individual, but very high turnover which also affects quality. We generally didn't have that problem in South West Virginia though, where a nursing home in fact was one of the best and most stable employers. So you have a lot of economic dynamics that go into the workforce itself, and as I said right now, it's -- actually is helping to stabilize the status quo when again in my estimation we need to move beyond the status quo.
SEN. ROCKEFELLER: We have been joined by Senator Cantwell who has a great interest in this subject. We welcome you.
SEN. MARIA CANTWELL (D-WA): Thank you, Mr. Chairman. I'm sorry I wasn't able to get here earlier because I was chairing a Subcommittee on Energy committee, but I do very much appreciate you holding this very important hearing on this subject.
I think there is lots of opportunities for us to continue to make investments that will help deliver better care and at more effective rates. I wanted to mention that my state Washington has been working to improve the long term care system for a couple of decades now. I was in the legislature when we made some of those reforms. But we are really I think a leader now in providing high quality cost-effective alternatives to nursing-home care, because I think we do a good job at both the education and benefits of keeping people in their homes longer.
Nursing-home care is almost 70 percent more expensive than the home-care approach and we now in Washington State provide almost twice as many people as we would have been able to cover if we had not reformed our long-term care system.
So unfortunately, as Dr. Feder was mentioning in her testimony, these states almost get penalized for that effectiveness and the national programs haven't evolved to that point. So we certainly want to work with the committee on how we might be able to take some steps at the federal level that would support these kinds of reforms similar to what Washington State made in that we do a better job on the Medicaid-Medicare dual eligibility population.
But I know Dr. Weiner, you discussed in your testimony the role that Aging and Disability Resources play in the resource center and that's a program obviously that provides a great deal of support to anybody, but it really does help them avoid that nursing-home care.
So I was wondering if we help increase, you know, that role of the Aging and Disability Resource Center, how that can help us in actually saving dollars and how we can make that clear to people as we've got this population that's reaching retirement that's going to demand more from these services, how critical it is that we reform this system and get a program in place where we're giving the right information to people to really actually keep them out of these long- term care facilities.
MR. WIENER: Well, I think the one of the key factors in long- term care financing is that the financing is fragmented; there are a variety of state programs as well as Medicaid, as well as the number of private organizations providing services. So one of the things that the Aging and Disability Resource Centers try to do is be a single point of entry into the overall long-term care system, so that people can see the complete range of options that are available to them, and put together a package of services that makes sense for them.
And as you alluded to, most people want to stay in the community if it's possible. It's not possible for everyone, but certainly Washington State is a state that has done a great deal to try to make home- and community-based services available.
The Centers for Medicare and Medicaid Services and the Administration on Aging have had a grant program that provides funds to 43 states to try to start to develop these Aging and Disability Resource Centers, but in most cases they're operating only in a couple of counties in each state.
And I think federal funds, infrastructure funds for this to help the states go to scale, go to state-wideness would be a big help, and I think would help to provide consumers with the information they need to choose the services that make the most sense for them.
SEN. CANTWELL: Dr. Feder, do you have any comments on the reforms that we've had in long-term care in Washington State and how it might be applied?
MS. FEDER: Absolutely, I think actually in the testimony earlier I think that Dr. Wiener talked about Washington State as an example of, just as you've said, of shifting from institutions to home- and community-based services.
And what I advocated in my testimony is that we make changes in Medicaid law and rules as well as support for -- with federal dollars and so both the dollars and the regulations so that other states are more likely and better able to move in your direction. I think without the federal changes, we're always going to have states that do far more than others and what matters is that no matter where people live that they have the opportunity to get the services they need, ideally at home where they want to be.
SEN. CANTWELL: But if this can save at least a billion if not billions, why haven't we implemented it sooner? What are --
MS. FEDER: Well, I think that the challenges are -- we do have some recent research which shows, and I'm sure that Washington is one of the states that's being looked at, is that when programs are mature, home- and community-based service are mature, and they are accompanied by other policies to limit the use of nursing homes than the development of nursing homes that the growth in total spending is slower than it would otherwise be. The initial investment, however, appears to cost in the first instance as we, as you said, serve more people. Sometimes we serve them with the same dollars, sometimes with -- initially we will serve them with -- it would take more dollars if it takes a while to get the system in balance. I think that what the history tells us is that it depends on how aggressive states are, and accompanying the new availability of home- and community-based services with restrictions on the use of nursing home.
SEN. CANTWELL: But in this case we know we are going to have growing population demand, we know that, so this is almost prevented if we're looking at that increase in number of people who are going to be demanding services and say how can you provide them at a more cost- effective --
MS. FEDER: I think you're absolutely right.
SEN. CANTWELL: Thank you.
Thank you, Mr. Chairman.
SEN. ROCKEFELLER: Thank you very much for being here, I'm honored. The whole problem of people available to provide services, community-based, nursing home, I sort of think of the -- all the geriatricians who are trained in this country. And then they practice geriatrics for a couple of years and then they -- there is some other specialty that pays a lot more money and they go into that and they leave geriatrics.
And I think that's the case. And that's a very unfortunate statement because the -- when you go back to the Hippocratic oath it never talks about -- there's nothing in it about curing people, it's about not doing harm. And which means taking care of people, responding to their needs. And you would think that with the present economic downturn people having to depend upon each other more that there would be a greater instinct -- and maybe just this theory that America works in cycles -- that people would feel a responsibility to help each other.
But I'm not sure that's going to be true. In other words, we've agreed, Dr. Smith that, you know, when you -- people in Appalachia do have that obligation, they do feel that. And they do elsewhere in the country, but they have to be trained, they have to know what they're doing, which means they have to take a course which means they've got to pay money and they can't learn on the job.
And I think I can remember Dr. Feder -- actually, Dr. Feder, that we talked 20 years ago about the fact that there were, across America at that time, some 9 million seniors living in completely inappropriate, you know, two-or three-storied old housing on the tops of hills. And there had to be sort of a check-in system, people would call every other day to find out, how are you doing. That was their form of community service that they would just call and of course if there was no answer the question was -- they would then go check out. That's a pretty shoddy system and I'm just trying to think, what does the fact of the training that people have to get in order to provide this service at a time that I hope, and I think that Senator Cantwell hopes, that there is new sort of sense of obligation to each other, to our families, to each other as we go through this really horrible period that people do have to get trained to do this stuff.
MS. FEDER: Yes, and you're talking -- people do have to train, people have to want to go into this and --
SEN. ROCKEFELLER: Right.
MS. FEDER: -- and it is across the spectrum of professions. So you're starting with geriatricians and that would take us back to the purpose of your hearing which is to make long-term care reform a part of health reform. And there is a concern both for medically -- a medical concern, good medical care and it affects very much people who need long-term care -- that we have an insufficient emphasis on primary care and preventions, and much to greater emphasis on specialty services and specialists.
And so I think that in part as we look at changing that balance in the medical field that when you're doing a service which I think we will do as part of health reform, we will be looking at what we can do to that those efforts can be very beneficial to people who need long- term care, not just in the geriatrician people, doctors trained in primary health care.
SEN. ROCKEFELLER: No, I understand that, I was just --
MS. FEDER: You know, I was going to go down the --
SEN. ROCKEFELLER: -- make a point with them.
MS. FEDER: Yeah, absolutely, which is why -- and I take back my language. I would go to other people and professions; we can involve more nurses and physician's assistants in care. We have the direct service workers who in many cases are earning sub-minimum wage and get no health insurance benefits. How can we expect them to be good caregivers if they are not adequately taken care of?
So your point, it is a point not -- even those who are dedicated to service need to be -- need to live quality lives. And so we need to look across the spectrum; the workforce is a very, very important issue. And you will remember that Robyn Stone was on the staff of the Pepper Commission and is now doing a great deal of work that I'm happy to share with your staff, I'm sure they've already seen in that area. I think there is a lot we can do.
SEN. ROCKEFELLER: So it is problem, it is a problem. I made a statement earlier which you corrected, and that is that everybody at some point in their life do -- at some point in their life is going to need long-term care. I tend to continue to believe that in spite of what you've said, which is an amazing statement in and of itself. (Laughs.) You weren't so sure about that and I'm very interested in why.
MS. FEDER: If you had a --
SEN. ROCKEFELLER: I mean, you know, if you have a head-on crash and two people die immediately obviously that's --
MS. FEDER: The reality is it it's much more than that. It's much more than head-on crashes lead people to die without needing long-term care. And I was just looking for the numbers which are in my testimony, I'll find them in a second. That --
MR. WIENER: Sixty-nine percent.
MS. FEDER: Thank you. Go ahead, Josh, you give it, you give the Senator the number --
Oh, yes, I've found it, never mind.
You could -- you can do it too, but 3 in 10, 3 in 10 people turning age 65 today, so even looking just at older people, are expected to die without needing any long-term care. If you die of a heart attack, you may need no --
SEN. ROCKEFELLER: Of course, of course.
MS. FEDER: -- other illnesses where you don't need those services.
And then at the other end of the spectrum that we have 1 in 5 who need five or more years of care. So there is variability even among people for turning age 65 now which is why we say the need for extensive long-term care is an unpredictable catastrophic event.
MR. WIENER: I think the key point though is that it's not a rare instance. And somehow the American think it is, that it's something that happens to somebody else in some rare instance, when as the figures that Judy was citing, clearly indicates that it's a normal life risk and one that most of us will have to deal with. But not -- but most people don't believe that, most people don't know that, and certainly most people don't prepare for that or arrange their life around that.
MS. FEDER: It's why, Senator, also you don't -- there's a variability. I mean, it's something that can happen to any of us and when you live to a very old age, it's very likely to happen to you.
SEN. ROCKEFELLER: I think the major problem on long-term care is that somehow the Congress, and the press, and the American people think that it's just unaffordable. And somehow acute care to them, because it's around them and visible a lot, is and it doesn't necessarily last so there's an endpoint. In long-term care, the endpoint may be some point off. And I could remember Dick Darman, and I think we've talked about this when he was President Reagan's director of the Office of Management and Budget; absolutely brilliant person.
He had testified for the Finance Committee and he just disappeared for a week or 10 days, nobody could find him. And he was just completely learning health care. And he said -- this was back in I guess, what, in the 80s. He said that, you know, the -- we're going to go up to 36 percent in gross domestic product and that was unsustainable; where are we now? And I would ask somebody other than Dr. Feder.
MR. : We're at 18.
MR. SMITH: Going up to 20 on health care. But again, I think this is one of the areas -- I think Senator Moynihan used to say actually we could spend everything on health care because the demand is so insatiable that we could spend everything. Obviously that can't happen from an economic standpoint, but -- and I think it's well short, when you look at what families can afford as a percentage of their family income, when you look at states as a part of what they can afford as a percentage of their budget.
We had two states in the past, Missouri and Tennessee got up to as much as 30 percent of their entire state budget being spent on Medicaid. And they found that that was unsustainable and they had to take very dramatic action to reduce that. So I think we're very close to it now.
But I think part of it is long-term care sort of in the existing model when CBO and OMB put their baselines together, and for example, flexibility. The (budgeteers ?) tend to score flexibility as costing money versus the flexibility that I talked about in terms of training family members, having people be able to self-direct. Those things save money in the longer term. If you can delay an individual's going into a nursing home or if you can shorten that length of stay in a nursing home you can save money and as states like Washington, for example, have demonstrated. Vermont has a very, I think, very interesting experiment going on right now, again, where they've leveled the playing field between services and they have moved to actually a model to help prevent going into a need for a higher level of care.
The current system is based on "we're going to wait until you're as sick as possible, until you have the absolutely highest need, then we'll step in and help you" versus a more "helping you through the continuum." Much of long-term care, although there is a medical element to it, if you have someone -- for example you need to learn how to help care for a catheter, for example.
But so much of long-term care is a social service and helping families just knowing who to call, giving them peace of mind, helping them to understand that there are people out there just like them and who want to support them, giving them the skills, training them to help deal with some of these conditions. Again family, this is very much a family issue. The rates of divorce among families with a disabled child are extraordinarily high. So the more we can do to help support them in staying together as a family -- again, those are things that will save money and lead to higher quality of care, much higher -- I mean the satisfaction rates among people who self-direct are extraordinary.
So these are things that we can do, but it does mean changing this -- just adding on to the system as we now have it, yes, is going to cost an extraordinary amount of money. So you've got to change the underlying structures of the current system.
MR. SCHEPPACH: And I might argue, Mr. Chairman, that this industry is very unique largely because productivity change is negative. There is almost no other industry in America where productivity change is negative. And that's a double-edged sword. When you talk about creating jobs and employment I suspect when we go back at this year 2008 there will be only one industry that has created jobs.
What the flipside of that is that we're not able to bring capital to make productivity changes in this industry, and ultimately that's the problem. It is so labor-intensive, capital investment is cost- increasing as opposed to cost-decreasing. It's partly inherent I think in the industry, but until we get to a point where we can use capital and have a positive productivity change we're stuck; Dick Darman will eventually be right.
So what Dennis talks about I tend to agree with. I would probably define the model somewhat differently. We've got to find a way of using capital intensely to get the cost controls that are necessary. Otherwise, it's going to continue to increase as a share of GNP and that may be the right thing to do from a nation, but the cost is ultimately going to be low productivity for the nation. The only increase in real wages we have as a nation is increases in productivity.
SEN. ROCKEFELLER: Judy, this is for you, and say what you are going to say. There are four parts to the president's program and one of them obviously is cost containment. And another of them is early intervention.
Now, it's pretty well-known whether it's early childhood education or whether it's EPSDT, which was not in the first children's health insurance bill, and which happily is in the second. I mean, shocking that it wasn't for six years there -- five to six years. That -- you know, you've got to make a balance between what you spend early and if you take life into two sections, you take long-term care and you take acute care.
When you're taking acute care you tend often to be getting -- to young people you're talking about immunizations and all the rest of it. Then there is a distinct relationship between what you do now and what you save later because of what you do now. That's a little more complicated, I would think, in long-term care. Help me understand.
MS. FEDER: Well, I think some of it is similar. If you can invest to prevent falls for example, or to manage chronic conditions then it's very similar to what you're thinking in terms of seeing a payoff to immunization. You really can prevent people from suffering circumstances that are going to make their health decline.
The other -- the reality of long-term care for an elderly person toward the end is that conditions are going to deteriorate. You can help them deteriorate more slowly perhaps, you can keep them in more comfortable circumstances, but you can't prevent the ultimate ending, you know, you must die, right. So you can't prevent that.
SEN. ROCKEFELLER: Let me ask one more question, then I have to adjourn. The -- I just went through a big long spine operation several years ago at Johns Hopkins and I was under anesthesia for 11 hours from which I'm still -- I'm still mad because I have no idea what they do. You know, I mean they -- you put your chin on this thing and I've still got a scar from that. And then after 11 hours you wake up, you've absolutely no idea what's in you, what it does to you, you know.
And that's actually something that needs to be understood by the American people. Anesthesiologists have to tell you that, and they don't. And they make a lot of money doing what they do and not telling you about what they're doing to you. But in any event, not falling was a huge part of my early rehabilitation.
MS. FEDER: Yes.
SEN. ROCKEFELLER: Huge part.
MS. FEDER: Yes.
SEN. ROCKEFELLER: Because I mean, they put this massive amount of titanium in my back which actually gave me a lot of confidence, but it had to graft with the bone, and so now I sort of feel impregnable on that front. On the other hand, there is the whole question of you have to keep physically healthy.
MS. FEDER: That's right.
SEN. ROCKEFELLER: And so six days out of seven I go out and walk for an hour usually -- I call it Rockefeller at midnight rather because I like the sound of that rather than Lincoln at midnight. So I like to walk and I just go out and I grab hills and come back and sweat and then go to bed and show up for work and I'm happy and I'm in condition.
That's one thing, as you're growing up or go through what I went through. It's quite another thing if you have loss of limb or you have -- you are suffering paralysis as some of our staff members have. And the whole question of how do you handle staying physically fit in order to compensate for the other acts of care that you're taking or are being helped with, physical fitness is important. Maybe somebody from -- that wants to answer that.
MR. : I always need -- (off mike). As far as health, I mean you certainly have a point -- thank you, sir.
SEN. ROCKEFELLER: You know, I've been watching you because you have been going up and down like this.
MR. : -- distracting you with my fidgets?
SEN. ROCKEFELLER: No, not at all. Educating me.
MR. : Chris Holder Graham (ph), I am with -- (inaudible) -- Rochester, New York. Obviously, with the shirts, we are here primarily supporting Community Choice Act. But in particular I'm a person who has lived with spinal chord injury for 19 years now.
I'm 33 and physical fitness is something that I don't do very well. I move around a lot, as you are identifying. I'm an incomplete injury; I have some of my sensation, but not a lot of motor control. So I feel my butt -- I must be honest, my butt being uncomfortable and I do my lift and get up, and it's -- we've kind of been talking about, it is preventative that some of --
SEN. ROCKEFELLER: So that's not just discomfort, that's a deliberate act of --
MR. : Right. The folks with that loss of sensation, that loss of movement, one of the very real risks, whether you are in a community or -- I mean, there's a couple in permanent nursing homes as pressure sores. That if you don't move enough, whether you are in bed or whether you are in a wheel chair, if you don't move enough your skin dies, and a sore can, you know, the necrotic flesh will just eat away inside, and it's a very real and very dangerous risk for folks.
So that physical wellbeing, but also having the supports to help you do that, and some of our folks can use their attendant services, whether consumer directed or otherwise, to do like PT-type exercises. That I know Terry that works with us has her attendants help her do those shifts, because she is not as physically mobile as I am, but she can use her community support to help her relieve that pressure so that she is staying healthy and so that she doesn't have to go to a hospital and that expenses accrue or go to the nursing home ultimately where some of our people get stuck doing because they don't have those supports from community.
SEN. ROCKEFELLER: Okay. I appreciate that.
MR. : Absolutely. Thank you.
SEN. ROCKEFELLER: Thank you very much.
Let me -- I've actually one final question. I'm a big believer in hospice and that's being slowly getting off of the ground in West Virginia, but we are getting it off the ground. And this is a delicate question, but how does a health care professional describe when it is that somebody decides to go to hospice who would also have other choices, but decides to go to hospice because that's the best thing to do medically or for the condition?
And in so doing, what does one give up if one decided not to do that, but to continue in another path? I mean, that's a complicated phrasing, but you understand my question? Or you don't?
MR. WIENER: I'm not.
SEN. ROCKEFELLER: Nobody understood it. I could try again.
MS. FEDER: When you choose, and I am going to need help from others on the panel, but when I think that you value about hospice and you hear it from many people is that there is a focus on what is called palliative care, of making you feel better and comfortable, and not over-providing care when you know that the course of an illness is going to end in death.
And I think that we all can imagine if we have not seen directly what that choice means. You --excuse me, you described that you brought your mother home so that she could listen to Bach and Handel and have her family around her rather than being, having her feeding tubes and all of her tubes. So those are the alternatives and I think what we want for people and need to do better with it is for people to truly have the choice of doing it their way. And not simply be, because of ignorance or not being offered opportunities, the ending or dying in a way that is lacking in dignity, is inconsistent with what they would choose, and involve them lot of -- also a lot of costs that aren't -- you must call them cost not --
SEN. ROCKEFELLER: well, who makes that judgment that it's time now to go to hospice? What if the doctor does, the doctor made the decision that my mother should not go home, and we just told him you know what.
MS. FEDER: Oh, over --
SEN. ROCKEFELLER: And took her home. That was when she bit down her feeding tube. Now, that was not a medical decision, that was her decision and she was -- you know, there was some kind of reaction. It just came from deep inside of her or was left to her, but there was nothing medical about it, and it wasn't -- it was a choice but it was, could you say was an informed or uninformed choice, I don't know. So who makes that decision?
MR. SCHEPPACH: I just -- well, I just happened to go through this personally with my mother and basically it's a discussion among the person, the family, and the doctor. And my experience was it was a pretty good discussion that most doctors are comfortable with it. It's also true that you don't necessarily have to go to hospice, you can have hospice come to you either in your nursing home that you are in, or in your home itself. My mother's situation was she was in a nursing home. It ended up a very positive thing because you didn't have to worry about the nursing home calling the emergency and taking her to the hospital, making her very uncomfortable for 48 hours, sending her back to the nursing home and 30 days later having it go again.
It forced them to call me and we jointly made a decision of whether she went there or if she decided to go to the hospital, they have a special hospice care wing on it. So I think it's, from my personal experience, a very supportive, made of all its sense, the decision-making was a lot of counseling.
SEN. ROCKEFELLER: But if there were, in my case, 4 of us who made the decision to take her home, and therefore could to the great displeasure of the New York hospital and the doctor visited and had beads of sweat on him, and I am not sure why whether he thought we were going to sue him or what, I never really figured that up, but he was terribly nervous. Because we were going to make her comfortable, i.e. use morphine. They didn't love that and so we did that.
But it always stuck to my brain that if anyone of the 4 of us had objected, she would have stayed in the hospital.
Now that strikes me as -- now I won't say amoral or immoral, but if you have a, you know, child which has a particular grudge -- oh, my heavens, run. I apologize. It's the purple tie that caught my attention and you are handsome profile, and I will shut up in a minute.
But that rule that if one child objects, that fact takes, therefore determines the future of your mother, it's very strange to me.
MS. FEDER: But it is -- you know circumstances where you could -- I could imagine independent of thinking about my siblings. Now I knew what was right and they were all wrong. If they wanted to do something different from what I did, it's not if I could understand but I -- it's difficult to get an agreement or you want to get agreement because what is right can be controversial, and not everybody has the best interest of a sick individual at heart. So I think I'll stay on that.
MR. WIENER: And I think that underlines why it's important for people to make clear what their preferences are before they get into that kind of circumstance. The other point I just would like to make is that because of reimbursement for Medicare, this sort of things, we've drawn this line between hospice and long-term care, but hospice is just good long-term care.
And good long-term care is good hospice care; it's one and the same thing. And there are lots of people in nursing homes and home care who die all the time. And somehow we have to bring the lessons of hospice into those other settings, so that we can get those advantages and have good long-term care and hospice care in both settings.
SEN. ROCKEFELLER: Senator Wyden, I apologize to you.
SEN. RON WYDEN (D-OR): Not at all, Mr. Chairman, and thank you first of all for doing this hearing. I think we both know that long- term care has essentially been the forgotten stepchild in this whole debate. And you have consistently been prosecuting this cause and I know that on your watch, we are not going to have a health reform bill in this session of Congress that leaves long-term care behind.
And I just want you to know that I am going to be your ally in this fight because you have been at it year after year after year, and I also want to join in welcoming all the folks from Community Choice. I think they've been --
I think they have been great advocates and the reality as they know what's better than any member of Congress could know, we are spending $2.6 trillion on health care in our country this year and more ought to go into community based services. Too much of it is going in --
-- too much of it is going into institutional care and I'm going to be Chairman Rockefeller's partner in this cause kind of balance this table.
Just a couple of question, if I might. Mr. Scheppach, you have been doing good work in these fields for a long time and I want to ask you a little bit about Medicaid. Because what is so striking about Medicaid, you know, today is that if you are poor, you got to go out and try to squeeze yourselves into one of these boxes in order to have get covered and every time something changes in your life, you got to go off and reapply and redo it, and all the rest, and it just seems so degrading to vulnerable folks, and I have always thought it is not in taxpayers interest either.
What do the governors think in terms of Medicaid reform and how it fits in to the agenda of Chairman Rockefeller?
MR. SCHEPPACH: Well, I think that, you know, the focus here of course was on long-term care and I think they do believe that that ought to be a federal responsibility. We think we cut a deal with the federal government long time ago that states sort of took responsibility for working poor and children and federal government took it for elderly. That works for Medicare and social security, that will work for long-term care.
So I think that -- now, obviously it's difficult to do, but over some long transition it seems to me it should be phased into Medicare. This having two levels of government provided services is really an awful system, no accountability, poor quality, and so on.
On the other components on it, I mean, I think in that case governors will probably be open to these, discussing some taking over more of the acute care program that we were willing to take over, more of the long-term care. I think it's a difficult conversation because, you know, Medicaid has evolved into fifty different state programs and therefore getting the equity, I think, between 50 states in transferring those programs is in fact difficult.
We would probably agree that the categorical nature of the program is pretty obsolete that one should move overtime perhaps to some income-based program. Although, again, I think they worry about the ability to fiscally sustain the program even if the program that we're in take over more long-term care because I think we are really getting to a position now of, I mentioned previously, just over the next two to three years the state deficits. This is after the stimulus is clearly over $200 billion and we are very fearful that the growth is going to be slower going forward after this. So the fiscal problems I think are very significant.
SEN. WYDEN: Let me move on to Josh Wiener. He's been doing yeoman work over the years and particularly looking at some of the financing options. What do you think, Josh, what are the best ways in tough financial circumstances to try to finance this public-private partnership that's going to be so important to long-term care?
MR. WIENER: Well, I think it really depends on how much money you are willing to spend. I mean there is a very broad range of options from simply increasing funding for appropriated programs such as Title 20 or Older Americans Act programs. Clearly the Community Choice Act would do a lot to expand home and community paid services. You know, we could go towards a social insurance program and that is an affordable thing to do.
Japan has done that, Germany has done that, the Netherlands has done that. That would increase expenditures. That would increase the role of government in the program. But it would have the advantage of covering everybody.
As Dr. Feder has often pointed out, private insurance can do a substantial amount, but when at the end of the day, maybe 20 or 30 percent of the population will have private insurance if we are lucky and that would only come after a very substantial subsidy.
So if we were serious about doing something about long-term care, then I think it has to be -- we have to start with thinking about what we want our public programs to be, fixing Medicaid in a variety of ways and trying to move into some ways that recognizes that long-term care is a normal support of life risk, and that you shouldn't have to impoverish yourself in order to get the services you need.
SEN. WYDEN: And certainly, I'm interested in that kind of approach. I also hope it will put more effort in long-term care and generally in health reform in looking at trying to spend the existing dollars in the system more efficiently.
As you know, on any given day, something like 10 percent of the population in this country uses more than 50 percent of their healthcare dollar and a lot of those folks are people with chronic conditions, heart and stroke and diabetes and often end up needing long-time care. And yet we haven't done much to boost doctors and health care providers in terms of the coordination in those chronic cases.
And you have been a master over the years at coming up with innovative ways to address financing and I hope whether it's chronic care or some of the other options in long-term care, you can give us some more of those creative Joshuaian ideas as we go forward.
Let me ask you one question, Dr. Feder, if I could because you have been out in these fields doing good work for a lot of years and that's -- your thinking about consumer protection.
You know, my sense is that a lot of the private long-term care insurance not unlike what we are dealing with back in the Medigap days.
And Chairman Rockefeller remembers that we would find seniors with a shoe box full of health insurance policies, lot of more worth of paper they were written on, and a lot of these private long-term care insurance policies, because they don't have inflation protection, basically don't give seniors much of a benefit.
So what's the latest thinking in the field about consumer protection in this whole area?
MS. FEDER: Senator Wyden, I actually I think Joshua knows that better than I.
Josh, you want to go?
MR. WIENER: Well, I've testified before this committee and the House Ways and Means Committee on numerous occasions recommending that the two highest priorities are to put mandatory inflation adjustments as a requirement in for private long-term care insurance policies. Because there is no circumstance in which it makes sense to have your best financial protection now right after you've bought a policy, after you have been medically underwritten, and are healthy.
Inflation, especially in private long-term care insurance, is very important because you are buying a policy 20 or 30 years in advance of using it. And so without inflation protection, the policy is nearly worthless.
I have recommended that. The industry has resisted it because it usually roughly doubles the premium, and so it reduces sales and they would rather have the sale and hope that people buy additional coverage over time.
But to me, that's the single most important thing that needs to be done. The other is establishing some kind of non forfeiture benefit. Again, because people are buying policies 20 to 30 years in advance, even if you have relatively low lapse rates compounded over 20 or 30 years that gets to be a very large number and it means that people will have overpaid for the protection that they have received and they ought to be able to get something back.
The industry says it will cost too much to do it, but at the same time they say lapse rates aren't a problem. Those two things cannot go together. If it's not a problem, then it shouldn't cost much to put in the benefit.
SEN. WYDEN: Sensible ideas. Dr. Feder, do you want to add anything?
MS. FEDER: Yeah, I just wanted to comment unless -- to thank Josh, but as of the -- what Josh has described unto you is that even as these are improvements in these policies that likely limit their scope because the number of sales, because it is going to raise the price. And that even when the inflation protection goes in, it is an estimated amount of inflation. It is not guaranteed to actually be what the price is and we are all trying to sell cost-growth, but you are not guaranteed.
So that you still is -- even when you improve these policies, the limitations to them remain substantial, and most important, the number of people who will be able to take advantage of them remains relatively modest and at the upper end of the income scale which is why it's so important to move forward with a public insurance, a public program, so that we really do protect everybody.
SEN. WYDEN: It's a fair comment and the National Association of Insurance Commissioners have raised a lot of the same concerns that Dr. Wiener and Dr. Feder have raised too.
The only other point I wanted to make, Mr. Chairman, is I am so glad that you also brought up hospice, at least during the part that I was here. One of the things that for the life of me, I can't figure out is why in the world someone would have to give up curative care in order to get hospice care under Medicare law?
And I've actually put that into the legislation I have that we talked about and you are going to be our champion on the hospice in the long-term care issue and I would like to work with you to make sure that we don't put Americans in this ridiculous Hobson's choice where they have to literally give up the prospect of curative care to get the hospice benefit.
And that the hospice advocates are very much in favor of that and I would like to work with you on it. But I feel badly about coming in late and just look forward to working with you, Mr. Chairman.
SEN. ROCKEFELLER: You are wearing your Alzheimer's tie. So all is forgiven.
And I think that point is that one that I was trying to make earlier. What is that point? Is there that point or is it just a non point that which one is --
MS. FEDER: My recollection of the rule is that there has to be a presumption of death within a certain period.
SEN. ROCKEFELLER: Made by?
MS. FEDER: Made by the doctor.
SEN. ROCKEFELLER: A doctor?
MS. FEDER: That I believe it has to be certified and I assume it is by a physician, but I would have to check that for you. You are getting a nod.
MR. : That's correct. Let's add six months to live or less.
SEN. ROCKEFELLER: Okay. Well, look, this has been terrific. I thank all of you. I thank at depth for being here. I thank everybody for being so patient. This went on longer than I thought, but not longer than I wanted. And I'm grateful to you, former Senator Wyden and former Senator Cantwell for being here.
It's my conclusion, it's just as like the stimulus package, were we meant to do another one? The president says and everybody blanches as we basically barely got the first one through, and that was, as you know, by one vote or two votes. And maybe it wasn't enough. So if we are -- and now there's the question of the banks.
And people say, well you can't do banks because they got AIG on their minds, and then but those banks have something to do with housing and if it does, isn't that something that you have to do. And then what do you do about energy and what do you about -- and there's is a particular technology that takes the carbon released from burning coal from 70 percent immediately down to 5 percent, which is with nuclear power which is considered a clean source of energy.
And so that's going cost money. Everything is going to cost money, and health care is going to cost money. And if we do long-term care, that's going to cost money. People talk about cost containment and in a funny way, it's an oxymoron, because you can't do what you need to do and have a health care system which keeps overall people healthier, and therefore, more productive and all the rest of it, and does early screening and prevention and advance directives and all of those things. You can't have that without spending more money.
And yet, we always think we can do things by somehow saving and we can't -- we can't. And that's a fundamental decision that Americans are going to have to face.
And then they look at their long-term grandchildren, and great grandchildren, and then I look at climate change, and I think, well, you know, if we haven't done anything about climate change by the year 2060, the water is going -- all of ice shelf they are going to be under water, and so they are not going to have to worry so much about death.
So I mean everything is relative, and I think this is our opportunity to strike it, all of it, to make a whole solution and I think it's the only way to be done. I think the president is right about that not because I am a Democrat because I think he is right. A lot of my colleagues don't. So we will see what happens.
But you have certainly made your contribution and your passion well known, and I thank you all.
This hearing is adjourned.
MS. FEDER: Thank you, sir.