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Bills try to promote, prevent health care spending efficiency

A recent column in the Shreveport Times by a local nursing home administrator expressed the sentiment that, in reference to the next state budget, both nursing homes and community-based long-term health care in Louisiana be “adequately funded [and] must be an essential state and national public policy objective.” The problem is that in this state nursing homes are overfunded and community-based care is underfunded.

Consider the conclusions drawn from the Legislative Auditor’s 2004 report “Medicaid Long-Term Care Options for the Elderly and People With Disabilities: National and Louisiana Statistics:”

  • 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.

    Why are per person costs so much to Louisiana taxpayers? Because nursing homes in this state have one of the lowest occupancy rates in the nation. Also keep in mind that this three-quarter of a billion dollar annual industry gets 85 percent of its revenues from taxpayers. These and other facts lead the Auditor’s 2005 Performance Audit Report to conclude 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.

    By contrast, 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, this yearly savings could have paid to wipe out almost the entire backlog.

    Shreveport’s Republican state Sen. Sherri Smith Cheek, who sits as vice chair of the Senate’s Health and Welfare Committee, could spearhead a move to realize these efficiencies. Instead, Cheek is trying to perpetuate the present inefficiency, with her introduction of SB 613. It closely tracks her SB 253 from last regular session which attempts to write into law the wasteful formula rewarding empty beds, leading to the low occupancy rates.

    More helpfully, with her SB 537, Democrat Sharon Weston Broome does a better job on this account. This bill softens the blow from a hard choice the state must make affecting Bossier City’s Northwest Louisiana Developmental Center.

    The Center houses developmentally disabled individuals and is scheduled for closing under the proposed budget of Gov. Kathleen Blanco because of cost pressures, even as it appears closure of the facility, relative to the alternative of closing others across the state, was decided more on the basis of its cost rather than its cost effectiveness. Nonetheless, as advocates of the disabled rightly point out, it also follows the institutionalization model, which is more expensive and less necessary than home- or community-based care for many the state wishes to serve.

    (This point may be lost on local and state politicians wanting to keep the facility open, such as Bossier City councilman David Jones declaring “this budget is picking a fight with people that can't take care of themselves,” when they may not realize the fight many families would like to pick is with the state to get it to help their loved ones live at home or in the community instead of warehousing them.)

    Certainly the state should review this decision on the nature of the population served and alternatives to that service rather than simply trying to plug a budgetary hole. But if a more cost-effective and client-oriented way is found than leaving it open, Broome’s bill would mandate that the money saved be used to fund home- and community-based care – definitely a step in the right direction for those who want the state to save money and to provide improved quality of life to those and their families who must live with disability.
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