Policy must encourage fewer beds to boost quality

Disappointingly, but perhaps not surprisingly, the long-awaited federal government rating system for nursing homes showed Louisiana had the highest proportion of lowest-rated facilities in the nation. A change in state policy concerning long term care can bring incentives to boost the ratings and probably save the state money simultaneously while serving more of its needy citizens.

The official reason for the high incidence of low-rated places given by the industry itself is that Medicaid reimbursement rates paid by the state make more difficult hiring sufficient staff numbers. The majority of people in nursing homes are supported by and the revenues collected by the industry in the state are provided by Medicaid.

But other states pay lower rates than Louisiana and still manage to do a better job. The reason why is that for decades state policy deliberately has favored warehousing the elderly in nursing homes, as opposed to home- and community-based solutions to which increasing other states have gravitated. So has Louisiana, more slowly and somewhat unwillingly, and largely as a result of the Barthelemy settlement a few years ago, but despite that the state’s facilities proportion of Medicaid revenues are almost double that of the national average.


The problem is, the institutional bias in indigent elderly care has encouraged building more capacity than needed, which also costs the state more as opposed to the other solutions. Artificially made prosperous by this, operators fight constantly through political channels to prevent state policy from making changes that serve to shift funding out of institutionalized care towards the other solutions, even though the state could save considerably (a study a few years ago estimated savings at close to $100 million a year if the state made a few simple procedural changes that would match practices in other states.)

Even with this resistance, the tide slowly is turning in favor of taxpayers and those who would have better quality of life through home- and community-based care as state budgeting is beginning to shift away from the institutional solutions. Accelerating this transition not only provides better service and saves money, but can improve the quality of care in state nursing homes. The state could change its methodology to more tightly define who is eligible to be funded by Medicaid in an institutional setting, steering more people in community programs. Some money saved from this can go to funding these other programs, but some could be retained and used to boost the daily rates paid by the states for institutions. Yes, this would require retrenchment in the nursing home industry but these operators must have known for years and should have been planning for the day the gravy train would end for them.

Gov. Bobby Jindal’s budget-cutting plans in response to the recent shortage at the margins both encourage and discourage this shift, but more needs to be done to implement it as a matter of planned, not emergency, policy. As part of his overhaul of the state’s Medicaid program, Jindal needs to keep this strategy in mind, which will better serve the state’s taxpayers and clients both in and out of nursing homes. Certainly the needs of the state’s people far outweigh those of a privileged special interest.