Advances in medicine and preventative care measures have extended the life span of the aging population in the United States. This expansion has resulted in a growing need for more individuals needing long- term care. Long- term care is a broad range of supportive and health services for individuals with a broad range of chronic illnesses and disabilities for ninety days or more. Although this expands an age range from infancy to the elderly, for the purposes of this paper, I am focusing on the aging population. Since health care expenditures in the long-term care industry supersede acute care expenditures, I will address the events that lead to these high expenditures, including an overview of the government’s role, and an integrated care model to reduce inefficiencies.
The two publicly funded government sponsored programs that pay for Long-Term care services are Medicare and Medicaid. Medicare operates at a federal level and provides coverage for short term care also known as post acute care. These services include care in nursing homes, skilled nursing facilities and home health services. According to Ng, Harrington and Kitchener (2010),
An estimated 4.9 million (15%) Medicare beneficiaries received short-term post acute services out of a total of 32 million beneficiaries who used Medicare services in 2007. The total number of Medicare post acute beneficiaries grew by 21 percent, while their expenditures increased by 75 percent. (p. 22)
Review of the expenditures across nursing, home health care and hospice facilities reflects the cost increases were more than double the amount of Medicare beneficiary increases. Medicaid, which is a joint federal and state program, only provides services once the Medicare benefits and other assets are exhausted. According to Brown and Finkelstein (2011), “Because Medicaid applies both asset and income tests to determine eligibility in individuals who own private insurance, they are less likely to qualify for Medicaid” (p.129). Therefore, while Medicaid expenditures continue to rise, individuals are taxed and penalized by Medicaid for having private insurance to help cover their medical costs.
In 2007, Long-Term care Medicaid spending grew by 39 percent which is at an even higher rate than Medicare expenditures. Although institutional based services are higher than home and community services, the rise in Medicaid expenditures is attributed to the large growth in home and community based services. Because of the Olmstead ruling of 1999, the federal government has developed a number of initiatives and resources to assist states in complying with this ruling, which increases access to home and community based services. Because each state varies in their access and cost containment strategies, there is also a variation of Medicaid expenditures. According to Ng et all (2010), “Overall state spending for home and community-based services depends on annual state budget allocations, which are...