Emerging Area for Health Care Entrepeneurs

I spent last week in Washington DC leading about 20 MBA and 5 MPP students during a “Week In DC” associated with the Duke Fuqua Health Sector Management’s class HLTH716 “Health Systems and Policy” (the course-work was in the Fall semester). I did my first ever twitter interview via Direct Message on the way home (I wasn’t driving) about the course, that is captured by Duke’s Office of Federal Relations.

The week in DC was interesting, great fun and I learned a lot. I have one overriding impression from the week: one of the hottest potential business opportunities in the next few years may be to identify ways to keep vulnerable groups (elderly, living alone with low income) out of the hospital, most typically by triaging problems with housing and/or substandard community based long term care arrangements, and/or connecting such vulnerable persons with the correct resources. Several points on this:

  • Most such interventions of this type will likely be low cost, and based on sending relatively low wage/low skilled persons to people’s homes. There is a potentially high gain from avoiding hospital readmissions. The key is figuring out who will pay for this value added?
  • Often the problems identified will not be “medical” in nature. Readmissions because of infections from bad insulin….call for a refrigerator that works, and so on. Not health care. But, cheaper than a readmit. Integrated delivery systems who are on the way to taking on more risk for more lives (in Medicare and Medicaid) would be where I would go to try and sell this type of service first.
  • From my own families experience of seeing my mother in law go from 3 hospitalizations in 44 days, to none in the last 366 days after a huge long term care change, I recall that the primary intervention was the same social worker seeing my mother in law and my family on all 3 admits. During the first 2, she asked my wife “can you care for your mother at your home safely?” The last time, she changed it ever so slightly, but forecefully to “it is clear that you cannot care for your mother in a safe way in your home.” A very low tech intervention.
  • In my mother in law’s case, Medicare has saved from the pace of readmits that we ended 2012 with, but the costs of increased (explicit) long term care costs were simply shifted to the family and private insurance company. The key for a business is adding value like this to the health system, but finding a way for LTC to work in a fragmented system in which most don’t have the mix of insurance and resources that my mother in law has. In her case it really included assisted living or a nursing home, but there will be some lower hanging fruit.
  • You could try 9 or 10 low investment companies using different angles on reducing readmissions in the time that you could try and bring a single drug or a device to the point where someone might be ready to pay something for it (a more traditional MBA Health Sector Management route). Only one of these has to take off……and you could be a part of truly transforming the health care system.

Get busy.

Do you want to know the future?

That is the big question being considered in this long read about the direct-to-consumer genetics firm 23andme and one mother’s struggle to make sense of (and peace with) a $99 genetic profile she got of her 5 year old adopted daughter. I was interviewed for this story because of my work on the use of genetic markers as potential risk adjustor/underwriting variables for private long term care insurance and the fact that the author’s daughter was found to have the e4/e4 variant of APOE-4 which confers increased risk of Alzheimer’s disease.

The author of the story (it is published under a pseudonym) and I talked for a long time, and her anxiety about her daughter getting Alzheimer’s disease was palpable, a result to which she had locked onto. My advice to her was this:

But I appreciate the advice from Duke’s Don Taylor most. “It’s possible the best thing you can do is burn that damn report and never think of it again,” he said. “I’m just talking now as a parent. Do not wreck yourself about your 5-year-old getting Alzheimer’s. Worry more about the fact that when she’s a teenager she might be driving around in cars with drunk boys.”

It is not that AD is not a terrible disease, and goodness knows our nation’s long term care system is messed up, but you can only worry about so many things at once. There must be good uses of such genetic profiles, but it seems easier to get it wrong than right. And coming up with a coherent long term system is not important because a given person is at increased risk of AD, but because we know for certain that many of use now alive will contract the disease, it is just not clear who.

A Long Term Care Story, ctd.

I wrote this post around two years ago about our family preparing to move to a new house into which my mother in law could move with us because she could no longer live alone. Thinking back, to say that I had no idea what was about to happen to my family is one of the great understatements of my life.

I have come to know that long term care transitions are exceedingly difficult. Moving my mother in law into our house, moving her from a hospital to a rehab facility after a fall last January, and then moving her from rehabilitation to an Assisted Living Facility were very difficult. At each of these transitions, the level of increased confusion and symptoms (wandering, anger, aggression; she has frontal-temporal dementia, a rare form of the disease that greatly impacts behavior before complete memory loss) as she moved from one place she used to hate but that had become where she felt secure, has been jarring and unsettling. At no point in all of this have we felt certain that we were doing the right thing.

My wife is a nurse, I am supposed to be an expert in long term care, and we are doing this with ample resources (my mother in law has a very robust private long term care insurance policy, and extra resources as well)….I have no idea how families survive this experience with less.

We are now undertaking another transition, from Assisted Living to dementia/memory care, as the Assisted Living facility feels they can no longer care for my mother in law safely. To provide a sense of the financial magnitudes, the assisted living facility in which she now lives costs around $6,000/month as a base price, with full care about $85,000 annually. For the past 5-6 weeks, we have been paying for private sitting care 24/7 on top of Assisted Living, as we tried to determine if she would stabilize and be able to remain in her current assisted living sitting. That private sitter care has cost around $3,000/week (not reimbursable by insurance), on top of the assisted living fees.

The supply of memory/dementia care beds in Durham/Chapel Hill is quite tight and she is on the waiting list at the facility linked to her Assisted Living location, but she will almost certainly have to move prior to a spot there becoming open. So, we are looking at multiple locations, including in Raleigh, and Burlington. The price of a private dementia/memory care bed ranges from around $6,000-$11,000/month in these markets.

Our family is blessed with reasonable resources to deal with these difficult issues for my mother in law, but many are not. There is no more important issue that receives less policy and political attention than long term care. That is a bad thing that does and will cost our country dearly.

CBO on Long Term Care

CBO released a great report on Long Term Care for the elderly (what is now most typically being called long term services and supports). Several key figures/graphs. The first shows that most people receiving LTC do not live in Nursing Homes, but in the community.

ScreenHunter_01 Jun. 27 17.18

A little over half of LTC care (in terms of its economic value) is provided by families and others on an informal, unpaid basis.

ScreenHunter_02 Jun. 27 17.20

So, when you see this break down of payments for LTC by type of payer, remember that over HALF of the total economic value of all LTC is not accounted for in the graph below, but is paid for implicitly by family members.

ScreenHunter_03 Jun. 27 17.24

Two quick policy take home points:

  • When evaluating a long term care proposal of any type, the correct cost to compare it with  is not zero; the default costs are huge, it is just that many of them accrue silently via informal care.
  • The lack of a coherent LTC system is causing problems in all sorts of other policy areas. Just two examples are in hospice policy, where long stays are likely driven at least in part by persons seeking care in a way that has turned hospice in some areas into a back door long term care benefit. Similarly, hospital re-admissions are at least partly driven by LTC break downs that are beyond the scope of any hospital-based program to address.

The hope for coherent policy making in this area is negligible in the near future.

What do re-admission rates measure?

Austin Frakt has a post on a paper noting that re-admission rates are not strongly correlated with mortality or process measures of quality of care.

At least some hospital re-admissions are related to problems with the long term care system available to patients; this reality should be added to the readmission mix, especially the discussion about what we are measuring, and what might be done about readmissions? Readmissions as imperfect measures of hospital quality became clear to me from the recent experience that my family has had in providing care to my mother-in-law. The short version is that she was admitted to the hospital 3 times in 40 days in late 2012-early 2013, and all of them were directly related to long term care issues, particularly our inability to successfully deal with wandering in a person with  escalating dementia, but who retained fairly robust lower-body mobility. The readmissions had little to do with the hospital in question, if anything at all.

One note however. A key 3 minute conversation between my wife, myself and a hospital social worker during the last inpatient stay was very important. After the first two admissions, my wife was asked by soical workers/discharge planner types: “can you safely care for your mother at home?” During the last admission, the social worker said: “it is obvious to me that you can no longer care for your mother safely at home” which in many ways “allowed” my wife to say that we had to seek institutional long term care, which we did. In any event, expansion to include the long term care system should be added to the discussion of readmissions as measures of “hospital quality.”

The counterfactual in long term care

I was looking at assisted living facilities for my grandmother yesterday and then beginning to navigate the ongoing family discussion about what is best for her (age 89; she still lives alone but has been hospitalized 5 times in recent months) and my mother (age 70), who is increasingly feeling unable to navigate the current situation. There are of course many other people involved: my sister (who lives near both my grandmother and my mother), my step dad, and my uncle who lives about 50 miles from my grandmother. I have become “expert” at assessing such facilities, and have devoted a great deal of my finite creativity over the past 18 months to navigating complicated family long term care situations. I put expert in quotes, because for all that I know about long term care, mixed now with personal experience, it is a truly difficult decision to decide what is best. In large part, this is because there are so many people involved and affected, along with the existence of many sources of uncertainty.

One thing has become clear

  • most people reflexively compare the (truly) high cost of something like assisted living to a cost of zero. “Oh my goodness, that is expensive!” is a correct statement, but it wrongly implies that the default, or current arrangement has a cost of zero.

The costs of the current living/long term care arrangement for my grandmother or anyone else can be difficult to estimate

  • explicit costs such as paying for walkers, home modifications and paying helpers is straightforward
  • implicit costs to caregivers are harder to estimate: the value of time, missed work, worry/anxiety/depression, feeling like you cannot travel, other health impacts, etc.

There are benefits of caregiving, such as connection with loved ones and of course the preferences of my grandmother are important. All of the costs and benefits must be netted out to make a decision. As with the societal level decision of what to do about long term care, having straight the counterfactual is the first step to making the best decision you can.

FTD (not the flower company)

About 18 months ago I shared the news that my family was moving to another house so that my mother in law could move in with us.

This move took place about 16 months ago, my mother-in-law’s house sold about a year ago and she moved into our new house last Summer. Her physical and cognitive decline since that time has been pronounced, and she was hospitalized 3 times in 40 days from Thanksgiving to Christmas; the last hospitalization occurring when she wandered from our house during the night for the third time that last 10 days she was with us. She fell in a ditch by a road near where we live, was found by a runner just before dawn, and was “Jane Doe” for around 4 hours in the ER before we realized that she was gone.

From the hospital she went to rehab in a Skilled Nursing Facility (SNF) for around 30 days, and moved into an Assisted Living Facility in Chapel Hill in early February. I came to understand the concept of ‘sandwich generation’ one day in January as I visited Assisted Living facilities while trying to help my daughter decide whether to apply to any more Universities just before the January 15 deadline; the juxtaposition of helping to plan and experience these two trajectories has been poignant and jarring.

It is difficult to say when our role as ‘caregivers’ for my mother in law really began. I have picked her Part D and Medicare Advantage plans for a while, and helped with financial decisions for many years. We had multiple middle of the night drives to her house across town to help her off the floor during 2011 that precipitated her moving in with us, and an increasing need for basic care that increased when she lived with us. I am unclear if she was simply in need of more care than we knew before she moved in with us, or if her decline has simply been that precipitous.

This past week, she received a formal diagnosis of frontotemporal degeneration (FTD), behavioral variant which is a form of non-Alzheimer’s dementia, that is fairly rare (~30,000 persons in USA with one of the variants of this disorder, which used to be more generally called Pick’s disease). Many persons who arrive at this diagnosis are misdiagnosed as having persistent mental illness, as many of the behaviors are similar to that observed in a person with bipolar disorder or a borderline personality disorder. Behavioral disturbances come first with FTD, then language and gait changes (and falls) onset before memory impairment is severe and full care needed, leading to this misdiagnosis which was the case in our experience.

If you want to wander around the ugly, fragmented side of the health system, you could pick mental health or long term care. Bouncing between the two has been quiet agony for all those involved.

Medicare pays for very little long term care (it did pay for the rehabilitation stay following the fall; 100% for 30 days, then with a $158/day deductible for the next few days, ending at 100 days). Home health is available, but has increasingly become medicalized over time though some of the eligibility rules have been lessened. Of course, Medicare paid for all 3 hospitalizations for my mother-in-law, all of which were really signals of a break down in the long term care system (her living with us) that we had put into place. It was a social worker changing the question from ‘can you keep doing this?’ to ‘you cannot keep doing this’ that was the trigger for the move to Assisted Living.

My mother in law is now living in an Assisted Living facility that has shown great care and flexibility in trying to adapt to the realities of a resident with this dementia variant. The cost is around $75,000/year and dementia care at the sister facility to which she will likely move sooner rather than later costs around $90,000/year, none of which is paid for by Medicare. The family is responsible for all of this cost, and in our case we are blessed that the resources to provide for this care were arranged for by my deceased father in law. Most families cannot arrange for such care and would have many fewer options than we have had (it is hard enough with resources). Of course, Medicaid sits as an ultimate backstop and once an individual’s assets have been eradicated, care in a Nursing Home (not the type of place where she now lives) is paid for until death.

I still note in many circles people noting the demise of the CLASS provisions of the ACA as a joke or a political scalp of sorts. This really pisses me off. I guarantee anyone viewing it that way hasn’t navigated long term care for a loved one. We as country desperately need to wrestle with the questions of the best way to insure Long Term Care.

Some version of this story comes for many of you, too.


Genetic Nondiscrimination Act of 2008 and LTC Insurance

NPR has a story on the legal (h/t Brad Flansbaum) use of genetic information to discriminate (underwrite, set premiums) in the private Long Term Care (LTC) insurance market. I am the first author of the paper that Bob Green (the P.I. of the underlying study) is discussing in the NPR piece and I have blogged about its findings here and here.

The basic story of the paper in Health Affairs is that persons with at least one copy of the e4 variant of the APOE-4 genotype were found to be both more likely to move to a nursing home in a community cohort of elderly persons living in 5 N.C. counties, as well as being found in the REVEAL II study to alter their behavior upon finding out they were at increased risk of AD, including making changes such as buying Long Term Care Insurance. In short, this is adverse selection whereby consumers have information that companies do not, a story that likely keeps insurance executives up at night.

The biggest news of the segment was the report that Genworth, the largest seller of LTC Insurance in the U.S. acknowledged that the The Genetic Nondiscrimination Act (GINA) of 2008 does not ban the use of genetic markers to underwrite their product, and they stated they wished to keep this option available to do so (some states have moved to do so). I blogged at some length on this back on October 2011 (that it was allowed for LTC Insurance), but I have never heard anyone from the LTC Insurance industry acknowledge they wanted to keep this option.

I think it is a mistake to take a reflexive “see the insurance companies are bad” response to this story, and that in Long Term Care especially, we need some renewed thinking about what ‘fairness’ means.

The general idea behind GINA 2008 is that you cannot pick your genes, so to discriminate against someone on that basis is unfair. This makes general sense to me, and likely to most people. However, in a private insurance market with very low penetration (~less than 7-10% of persons in age ranges to consider such products buy them; this post highlights the many reasons) what constitutes fairness is not as clear. An average risk person who wants a LTC policy because they have no children, for example, yet who ends up paying a higher than warranted premium due to adverse selection in the market (those with higher risks signing up) could also be viewed as being harmed in an unfair manner.The chart below lays out how different scenarios of who knows genetic information in LTC could influence uptake and premiums. The table is meant as food for thought.

ScreenHunter_01 Jan. 18 09.54

The bottom line answer to planning for LTC is risk pooling, and if ever there were a risk distribution that called out for social insurance it is LTC. That seems impossible politically at this time. However, the LTC system in this country is a patch work mess that is in need of some sustained policy efforts. This post has a weeks worth of links on planning for LTC, from both an individual and population basis if you want more. Long Term Care is always the forgotten topic until someone in your family needs it.

New book on Long Term Care

Howard Gleckman brings attention to a new book on Long Term Care, that can be downloaded for free. As readers know, LTC is a near and dear topic to this blog (a recent post), and I will look forward to integrating this book into my teaching. This recent post highlights lots of LTC issues.

Long term care is something easily thought about “tomorrow”….but we need to be thinking about constructing a coherent LTC financing and provision system today. The problems won’t just go away.

Long Term Care problems won’t go away

Busy week and little time to blog, but a quick note on this Kaiser story reporting on a SCAN Foundation poll on long term care needs/perceptions/preparations in California, sent my way by Brad Flansbaum. The article nicely summarizes the surprise many families receive when it comes time for a loved one to need LTC:

Long-term care costs can surprise many families who expect Medicare to cover their needs. After a hospital stay, Medicare will pay for 100 days of nursing home care, but after that, families are on their own or are forced to spend down their assets to become poor enough to qualify for Medicaid.

Only 35% of Californians correctly understood that Medicare does not pay for extended nursing home care and only 1 in 5 understood the Medicare home health benefit (they think it is more generous than it is). So, Medicaid is the default nursing home payer in the U.S. and the program pays around half of the nation’s nursing home bill. Block granting Medicaid in a way that reduces fairly costs for the program will pit LTC services for the elderly and disabled against the need for acute care insurance for children and pregnant women, and say to states “tag; you’re it!”.

We desperately need a more coherent LTC policy in this country. Private LTC insurance offers no hope of a population based answer. Families are left to stand in the breach, doing the best they can. As I have said before, one of the worst outcomes of the ACA debate was the demise of CLASS in a way that treated those provisions only through the lens of deficit reduction. Deficit accounting is important, but cannot answer all important policy questions.

CLASS wasn’t a deficit gimmick, it was an attempt to set up a self sustaining LTC insurance benefit that could have helped people age in their homes and delay NH admission. Like so much of health reform, critics know far more about what they are against than what they are for.

The question remains: how will our country insure against the need for LTC?


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