Tame special interests to solve health care funding woes

The Times-Picayune continues its excellent series detailing how the nursing home industry in Louisiana tries to stay one step ahead of the law while at the same time keep its gravy train rolling to the detriment of the state’s elderly, disabled, and taxpayers.

The arrogance of their trade association, the Louisiana Nursing Home Association, rivals that of Agriculture Secretary Bob Odom. Even though they know they get favorable treatment relative to other states, even though the state is tight on money with so much of it going to health care, they howl when the slightest unfavorable change is threatened to be made.

One need only look at the Legislative Auditor’s April, 2004 report “Medicaid Long-Term Care Options for the Elderly and People With Disabilities: National and Louisiana Statistics” to see how seriously biased the system in Louisiana is towards nursing homes:

Louisiana ranked 1st in the nation in percentage of long-term care Medicaid expenditures used for institutional care in federal fiscal year 2002. Louisiana spent 90.2% of its Medicaid long-term care funds on institutional care.

Louisiana ranked 1st in the nation in the number of Intermediate Care Facilities for the Mentally Retarded (ICF/MRs) per 100,000 people as of June 30, 2002, and 2nd in the nation for per capita expenditures for ICF/MRs in federal fiscal year 2001. Louisiana spent $79.57 per person for ICF/MR care in comparison to $32.00 nationally and $33.95 for the Southern Regional Educational Board (SREB) states.

Louisiana ranked 4th in the nation in per capita expenditures for nursing facilities in federal fiscal year 2001. Louisiana spent $259.43 per person for nursing facility care in comparison to $148.70 nationally and $129.10 for the SREB states. Louisiana also ranked above both the nation and the SREB states in the number of nursing facilities per 100,000 people for calendar year 2002.

They are a fine example of everything that is wrong with government financing of anything, because they have removed themselves from the marketplace, which they cannot manipulate and forces them to provide efficiently and safely, and instead can control government to expropriate wealth from the state while forcing many people into nursing homes who could live with dignity outside of them. This was a point made by the Legislative Auditor’s recent Performance Audit Report in its “Summary of Matters for Legislative Consideration:”

The legislature should consider:

DHH’s plan for equitable funding of a full array of long-term care services

Repealing the Facility Need Review Law or amending it to eliminate problems and allow for open market competition among Medicaid long-term care providers (emphasis mine)

In this report, the auditors found that the state could have saved as much as $97 million by having a uniform assessment process that would place those with long-term care needs in their most efficient setting and by adjusting the reimbursement system to be in line with other states. As of the end of 2003, fewer than half of the eligible people that could receive community-based services did receive them (a gap of 11,338). If it costs for one year $7.2 million to create 800 more slots, these savings could have paid to wipe out almost the entire backlog.

In other words, the only thing standing between Louisiana providing almost every eligible person with long-term care services, in more appropriate environments, with no reduction in quality, is simply to change these standards noted in the report. And the nursing home industry is doing almost everything it can to prevent his from happening!

What we have to understand is that funding woes in Louisiana health care are not some insoluble dilemma – a problem that will only get worse given the next year $400 million will be yanked from the state’s Medicaid allocation short of an act of mercy by Congress. It just takes the simple will to pass the necessary legislation and the fortitude to stand up to those forces that, out of their own greed, don’t want this to happen. Gov. Kathleen Blanco has said she is going to change this system. This legislative session would be a great time to start.