Medicare Makes It To 50…Now What?


Jackie Oberst

Good afternoon, ProviderNation.

Today Medicare is now a nifty fifty. Besides being eligible for an AARP card, what does the future hold for this program? Our number-crunching allies at the American Academy of Actuaries, which also turned the big 5-O, today, released three of its Medicare@50 series of papers that are purported to be a CliffsNotes version for “actuarial analyses of public policy issues.”

“With 10,000 Americans now enrolling in Medicare every day, it’s more important than ever to take stock of the program,” said academy Senior Health Fellow Cori Uccello, adding that the series “identifies some of the most fundamental issues that policymakers and anyone concerned with the program’s future should be aware of, such as ‘How serious are Medicare’s financial challenges?’ and ‘What benefits does Medicare provide, and to whom?’ ”

In the first paper, “Is it Sustainable for 50 More Years?” Vicarious Risk Takers and the Academy of Calculating point out that the baby boomers outnumber the current and projected working population, so that “fewer workers will be paying into the system to support the growing number of retirees. In 1980 there were four workers for every Medicare beneficiary; by 2040 that ratio is expected to fall to about two workers for every beneficiary.”

As such, the benefit payments are expected to exceed payroll taxes, threatening the solvency of one of its major trust funds: the Hospital Insurance (HI) trust fund, which primarily pays for inpatient hospital and post-acute care services. Assets in the HI trust fund are projected to be depleted by 2030, according to the Medicare Trustees’ latest report. “Bringing the trust fund back into balance will require cuts in program spending, increased funding, or some combination of the two,” said the paper.

The second paper, “Who are the Beneficiaries?” Medicare is touted as “not a one-size-fits-all program.” There are many flavors of beneficiaries, not just those who turn 65, including younger individuals with permanent disabilities, individuals diagnosed with end-stage renal disease or amyotrophic lateral sclerosis, and those with low incomes who are also eligible for Medicaid (“dual eligibles”).

Medicare spending varies by subgroups. On average it is “higher for disabled beneficiaries than healthier beneficiaries aged 65 and older and for dual eligibles than for non-dual eligibles.” Here are more mind-boggling stats from this paper:

  • The most costly 5 percent of Medicare’s traditional fee-for-service (FFS) program beneficiaries account for nearly 40 percent of Medicare FFS spending.
  • The most costly 25 percent of beneficiaries account for over 80 percent of spending.
  • The least costly 50 percent of beneficiaries account for only 5 percent of spending.

In sum, the paper says, “when evaluating whether and how the program is meeting the needs of the beneficiaries, it is important to consider not just the average beneficiary, but also the entire range of beneficiaries.”

The last paper poses the critical question, “Does it Meet the Needs of the Beneficiaries?” Since Medicare’s enactment in 1965, its traditional fee-for-service benefit package has remained mostly unchanged. However, beneficiaries now are faced with supplemental coverage options (Part D prescription drug plans, MediGap, Medicare Advantage), which can be overwhelming at best.

Medicare does not cover long term care services and supports such as skilled nursing facilities, however. Other services–vision, dental, and hearing care–are typically not covered under the traditional Medicare program either. Again, beneficiaries will need to turn to supplemental coverage options.

Another fatal flaw in the program is that patient “cost-sharing” requirements, such as deductibles, copayments, and coinsurance, do not have an annual limit or cap (as seen in private health insurance programs), which can leave beneficiaries “unprotected against catastrophic health costs.”

“Proposals have been suggested that would combine a new cost-sharing limit with a unified Part A and Part B deductible,” the paper says. “The copayment and coinsurance requirements also could be restructured.”

Essentially, a program that started off as socialistic may be turning more corporate as it ages.

Jackie Oberst is Provider’s managing editor. Email her at Follow her on Twitter, @ProviderMag.

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The Alzheimer’s Hydra…

The Hydra of legend: cut off one of its heads, and it just grows back.

The Hydra of legend: Cut off one of its heads, and it just grows back.

Bill Myers

Washington, D.C.—Good afternoon, ProviderNation. The Alzheimer’s International Conference has come and gone, and my colleague Jackie Oberst (known affectionately ’round here as “The Managing Editor”) has done the hard work for us all.

Oberst, who has her PhD in some kind of science stuff, leads with the new promise of preventative treatments before those ghastly proteins do their dirty work. But her piece also raises a critical, if often unanswered, question: Who gets the check?

As Oberst puts it, “It costs $4 billion to $11 billion to develop one drug and takes an average of 12 years for it to travel from bench to bedside, according to the InnoThink Center for Research in Biomedical Innovation. Only five in 5,000 drugs that enter preclinical or animal testing progress to human testing—of those five drugs, only one is approved, according to the FDA.”

If you think that’s bad, don’t worry, it gets worse. According to “Generation Boomer,” a report by the fine folks at the Alzheimer’s Association, the U.S. government spends more than $6 billion a year on cancer research, $4 billion per year on heart disease, and more than $3 billion for HIV/AIDS. Alzheimer’s research gets $480 million.

It’s notorious that we live in an era of austerity, and not everyone thinks that it’s gummit’s role to pay the bills in the first place. But, if you agree that Alzheimer’s is a public health crisis, then the money has got to come from somewhere.

And here we come to another dilemma. Even if you could turn on the cash spigot tomorrow, there are tens of thousands of families and friends who won’t be able to enjoy a cure a decade from now: They need help immediately, says Dayne Duvall, chief operating officer of the National Certification Board for Alzheimer Care.

“It’s important that the government figures out how to provide care to families who are at the end of their tether,” Duvall tells us. “Families going through the toughest times of their lives aren’t interested in a cure that might be decades away. Not when they can’t find help for their loved one, right now.”

Supporting families and friends doesn’t have to mean advanced training (although that would certainly be a huge help), Duvall says. It can be as simple as giving someone an afternoon off.

But that, too, costs money. And it’s yet another venomous face of the Alzheimer’s hydra.

Bill Myers is Provider’s senior editor. Email him at Follow him on Twitter, @ProviderMyers.

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Want a Better Bottom Line? Think Like a Client.


Enticing the baby boomers requires getting into their mindset and anticipating their needs.

Good Afternoon, ProviderNation. Today we have a guest blog from Peg Black, development director, Cerenity Senior Care.

We’ve long heard the statistics that tell us how rapidly the baby boomers are aging, and these numbers give many senior service providers a feeling that the well can never run dry. The truth is that even though there are plenty of people in the United States who are going to need inpatient and outpatient rehab, home health options, transitional patient options, nursing facilities and more, they do have a choice as to where they’ll go. In order to woo them, you have to be willing to “walk a mile in their moccasins,” as the old saying goes. This means thinking like a client.

When our organization undertook a dramatic five-year renovation, we knew we owed it to both our clients and to our bottom line to start thinking about what future residents and visitors would want and need. This involved examining what might be considered the “little” things. Make no mistake, though: Considering the “little” things can mean big payoffs. When we began to see the world from our clients’ eyes, we saw opportunities to make huge strides toward ensuring our organization would be around and viable for many more years.

We knew we wanted a warm water therapy pool and looked at many styles. We ruled out pools that required patients to walk down steps or to be lifted above the water in slings or contraptions that might be scary to them. A pool with a moveable floor for zero-depth entry made the most sense, especially to bariatric patients who face daily living challenges such as exercise opportunities.

Other options we incorporated included upgrading to newer technologies for the residents. Just because residents may be older doesn’t mean they are ignorant of technology. This translates to everything from incorporating flat screen TVs in our rooms to having Wi-Fi accessibility. Too many facilities ignore these touches, or consider them to be unessential. Yet, to modern seniors, they’re indispensable.

We also conducted a mind meld with our residents and their family members, as well as others (e.g. community neighbors, client families, corporations) over the issue of fundraising. Whether or not you’re a nonprofit like we are, you can often accept donations for specific projects or for a fundraiser. We use online donation calls to action on our website, as well as “old-fashioned” paper requests. These methods remove the barriers to having individuals make contributions, and allow us to keep adding new features and services.

Does this type of client-based way of planning take more time than other methods? Absolutely. However, in a competitive marketplace, it’s vital. If you’re not getting into your clients’ moccasins, you’re missing the whole journey.

Peg Black is a 40-year veteran and development director at Cerenity Senior Care ( in White Bear Lake, Minn. For the past seven years she has assisted with the  fundraising process to support a $15 million capital campaign to build a 40-bed transitional care building, including pool, therapy center, and chapel.

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The Week That Was (And The Months And Years That May Be…)

It was a frenetic few weeks leading up to the White House Conference on Aging. Now, the profession faces new regulations that could have long-lasting implications.

It was a frenetic few weeks leading up to the White House Conference on Aging. Now, the profession faces new regulations that could have long-lasting implications.

Washington, D.C.—Good morning, ProviderNation. Well, that escalated quickly: In a frenetic few weeks, regulators have posted rulemaking notices on bundled payments for joint replacement surgeries, antibiotic stewardship, and a megaton draft that focuses on “competence-based” performance measurements for the nation’s long term and post-acute care centers.

That last item is taking up most providers’ bandwidth, coming as it did on the morning that the fifth White House Conference on Aging got underway. (It’s worth noting, almost pathetically, that as world-shaking as the 400-plus page rulemaking notice might be, it was worth all of 22 words in President Obama’s speech to the Conference on Aging: Small wonder that many providers feel that they’re the Rodney Dangerfields of American health care.)

Among the sections in the competence-based rulemaking notice—which the Obama administration itself advertises as the most “sweeping” changes to care center regulations in 25 years—are a series of questions about whether to band mandatory arbitration agreements. The fine folks at the American Health Care Association/National Center for Assisted Living have long opposed mandatory agreements, but some provider advocates are worried that the language of the rulemaking notice is too vague. And, for a lot of advocates, vagaries are like chum on the water for the trial bar.

In any case, if you’ve got thoughts on the proposed rules, AHCA’s indomitable Lyn Bently would love to hear from you by Aug. 6.

For now, though, the big takeaway from last week’s White House conference is that nothing is written, says Oklahoma’s own Tom Coble, who attended the festivities last week. “There’s just a lot of work that needs to be done,” he says.

Coble says he was impressed by how committed the attendees were to genuine elder care, and he was encouraged at the seemingly universal agreement that Americans have to rethink their prejudices about getting old. But, watching the panels and the discussions, Coble says he’s still struck by the enormity of the problem. “I think the aging of America is something that everyone acknowledges, but until we experience it, personally, it’s just out of sight, out of mind,” he says.

Part of the problem is that too many Americans seems to view elder care the same way they view plumbing. “We all meet the senior care industry when our mothers and fathers enter it,” he says. “Once they’re out of system because they no longer need it or they’ve passed on, then there’s no further interaction with the system. It’s important when you need it, but once you’ve used it, you’re not going to interact with that system for a long time.”

That’s discouraging in one way, Coble says, because it means that it’s difficult to sustain any kind of Big Public momentum for change. On the other hand, it’s a real opportunity for providers to hone their craft so that, when the day comes, they’ll be ready.

“Hopefully, we’re in the right place at the right time as we develop these relationships and have new ideas and new solutions to the problems that will allow us to have an impact on what’s going to happen in the future,” he says. “We have to continue to deliver quality in our centers at home, where our elected officials will encounter our industry and what we do to care for their loved ones.”

Finally, in other news, Pluto.

Bill Myers is Provider’s senior editor. Email him at Follow him on Twitter, @ProviderMyers.

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A Not-So-Stiff Upper Lip…

Parkinson (center) takes in a lovely English garden with Coupe (left) and Hooper (right).

Parkinson (center) takes in a lovely English garden with Coupe (left) and Hooper (right).

American Health Care Association/National Center for Assisted Living (AHCA/NCAL) President and Chief Executive Officer Mark Parkinson has been mixing business with pleasure in his recent adventure abroad to England.

While visiting the former mother country today, Parkinson paid a visit to several Sunrise Senior Living assisted living personal care communities. (Seventy-five Sunrise Senior Living communities are recipients of the 2015 AHCA/NCAL National Bronze Quality Award.) He met Laura Coupe, regional director of 11 Sunrise buildings south of London, Kara Hooper, general manager of Sunrise of Fleet, and Elaine Banerjee, general manager of Sunrise of Bagshot.

“I was impressed by the passion that I saw and how exceptional care has made its way across the ocean,” Parkinson tells Provider. “The same commitment that Sunrise has to quality in the United States is in full force in the United Kingdom.”

Hooper told Parkinson an arresting story of how a church next to one of her facility’s buildings caught on fire. Smoke filtered into the building, affecting several residents. Six employees not on the job saw the event on the local news and raced down to help. Even when the all clear signal was given, the fire officials could not get these six superheroes to leave.

The rapidly increasing costs in the American health care system in recent years have given rise to medical tourism. Some health care analysts predict that long term care will become global, with the United States exporting its field expertise to other countries, such as Denmark, Thailand, and China.

Sunrise Senior Living has 47 UK facilities. Its staff believe “real happiness and joy come from serving others.” According to its website, each Sunrise team member’s responsibilities and personal interactions with residents are guided by five core values: passion, joy in service, stewardship, respect, and trust.

So much for English stoicism… The British Bulldog himself, Winston Churchill, was quite the softie: “We make a living by what we get, but we make a life by what we give.”

Jackie Oberst is Provider’s managing editor. Email her at Follow her on Twitter, @ProviderMag.

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The White House Conference On Aging: The (Almost) Super Bowl of Elder Care…


Washington, D.C.—Good morning, ProviderNation. The White House Conference on Aging may not be the Super Bowl of the elder care world (actually, the Super Bowl might be the Super Bowl of the elder care world, too), but it’s close.

On Monday, President Obama will kick off the annual conference. The fine folks at AHCA/NCAL are hosting their own viewing party, but you and yours can get in on the action, thanks to the beauty of the Interwebs. If you don’t wish to host your own party, you can join others’ parties at the conference’s website.

Your humble correspondent and his cruel bosses will be live-tweeting the event, too, for those whose tastes include all-you-can-snark-buffets.  This year’s conference will cover the waterfront, from health aging to retirement security, but it comes at a critical time.


  • Obamacare has just passed its second crucial test at the Supreme Court, which means—for better or worse—it’s here to stay;
  • With or without Obamacare, federal and state regulators are pushing fee-for-service into its grave and are expanding value-based purchasing models at every opportunity;
  • About 3 million baby boomers will hit retirement age (i.e., Medicare-eligible) every year for the next two decades; and
  • Next year may well be the last time that a baby boomer is nominated from either party (some boomer-Americans like to claim President Obama as their own, but a lot of smart people beg to differ).

All of the above is perfectly obvious to those who work in long term and post-acute care already. But the full weight of the matter doesn’t seem to have caught up with the Big Public. (Just look at the declared presidential candidates’ websites and see where, or if, you can find aging-related matters.)

“Given how rapidly boomers are aging,” says Clif Porter II, AHCA/NCAL’s dynamo lobbyist, “and how rapidly the technology, finances, and even the culture of aging are changing, it would be great to see our nation’s leaders—current and future—giving the issues the respect they deserve.”

So if you’re hoping to get a chance to change Washington’s script about aging, the White House Conference is a great place to start.

If it helps stir up interest in apolitical types among your crowd, try enticing them with that old favorite, Washington bingo. Check boxes for “stakeholders,” “bipartisan,” “anything hyphenated-Americans,” “thinking outside the box,” “paradigm,” “so…” “thought leader,” “proactive” and “anything community.”*

*Were this not a family-valued blog, one might suggest that this could be an excellent drinking game. But not even I hate your liver that much.

Bill Myers is Provider’s senior editor. Email him at Follow him on Twitter, @ProviderMyers.

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Obamacare, SCOTUSCare, Chevron And You…


Hello, ProviderNation. By now, you’ve read (or read about) the Supreme Court’s decision, in King v. Burwell, protecting Obamacare’s health insurance subsidies across the country. As the fine folks at AHCA/NCAL point out, the decision has very little immediate economic impact, since small-business owners had already been subject to the insurance mandate beginning this year; next year, bigger businesses will have to pony up.

“The SCOTUS ruling is a clear signal that the ACA is here to stay, at least for now,” AHCA/NCAL’s inestimable Dianne De La Mare has it. “In other words, it is ‘business as usual’ in all exchanges, whether those exchanges are state-run or federally run. Currently, 34 states rely on federally run marketplaces. Another 13, plus Washington, D.C., have their own state-run exchanges, and three others have state marketplaces but use to determine subsidy eligibility. The court’s decision clarifies that subsidies will continue to be available to any individual who purchases insurance through any exchange (state-run or federally run), and earns between 100-400 percent of the federal poverty level. That means those individuals who previously had tax-credit subsidies in federally run exchanges will keep those subsidies to the extent that they continue to satisfy the subsidy requirements. Those same individuals also will stay insured.”

If some business owners think that Burwell’s endorsement of Obamacare (or, as a rather disgruntled* Justice Scalia put it, “SCOTUSCare”) means the sky is falling, some advocates for front-line care workers clearly see Burwell as manna from heaven. The average direct-care worker earns about $17,000 per year, PHI’s Matthew Ozga writes. That’s way less than the 400 percent of the federal poverty line threshold that would qualify workers for Obamacare subsidies. If owners see Obamacare as bad for business, there might still be a silver lining: Workers who can obtain health care might  just be more willing to stay in their jobs.

Chevron Deference

There’s one other potential message-in-a-bottle from Burwell. You’ll see in reading Justice Roberts’ opinion for the 6-3 majority a reference to the two-pronged Chevron test. Roberts rejects the Chevron logic, but it might be worth exploring the reference because health care observers are likely to hear about it a lot more in the future.

In 1984, energy giant Chevron appealed a lower court decision in favor of a lawsuit originally brought by the National Resources Defense Council. NRDC had gotten the lower court to agree that Reagan-era revisions to EPA’s Clean Air Act regulations were illegal. Chevron appealed to the Supreme Court. In what is a little-known but widely felt decision, the court held that, in instances where legislation was ambiguous, the courts should focus on two questions: first, whether the regulatory action directly contradicts the intent of Congress, and, if not, whether the agency’s action “is based on a permissible construction of the statute.”

“If this choice represents a reasonable accommodation of conflicting policies that were committed to the agency’s care by the statute,” Justice Stevens wrote for the majority, “we should not disturb it unless it appears from the statute or its legislative history that the accommodation is not one that Congress would have sanctioned.”

Ever since, “Chevron Deference” has been the shibboleth of the lobbying American community here in Washington.

*You may think it unfair to refer to Scalia as “disgruntled.” Can we agree, at least, that he was far from being gruntled?

Bill Myers is Provider’s senior editor. Email him at Follow him on Twitter, @ProviderMyers.

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