1. Dually Eligible People With Medicare and Medicaid “The Elderly and Disabled Poor” Sheldon Hersh, MD New Orleans, Louisiana © 2003 National Coalition for Dually Eligible People

2. 2 Table of Contents 1. Dually Eligible People 2. Second-Class Medicare 3. The Nursing Home Burden 4. Possible Solutions 5. Geriatrics — An Ailing Specialty 6. The Past, Present, and Future

3. 3 Section 1. Dually Eligible People

4. 4 Dually Eligible People Have Both Medicare and Medicaid They have Medicare because they worked, paid taxes, and earned their Medicare when they become elderly or disabled. They have Medicaid because they are still so poor that they qualify for their state’s Medicaid program for the needy.

5. 5 Dually Eligible People with Medicare and Medicaid Are: “The elderly and disabled poor” – Senator Breaux Six million of the oldest, poorest, sickest, and most disabled people in the nation Disproportionately elderly, women, minorities, and mentally or physically disabled people The fastest-growing and most expensive Medicare population

6. 6 Dually Eligible People Are Vulnerable and Poor An older, female population with a large percentage of minorities 80% < $10,000/yr, 20% < $5,000/yr 28% under 65 y.o. – the “non-elderly disabled” Live alone, have fewer educational skills, poorer vision and hearing Generally in poor health, have difficulty performing their Activities of Daily Living (ADLs) 25% live in nursing homes

7. 7 Dually Eligible People Have More Chronic Illness Alzheimer’s disease Amputation Arthritis Asthma Chronic renal failure Colitis Congestive heart failure COPD Dementia Depression Diabetes Esophageal disease GI Bleeding Hip fracture Ischemic heart disease Liver disease Mental retardation Myocardial infarction Osteoporosis Parkinson’s disease Psychosis Schizophrenia Seizures Stroke, and More... Source: Perrone. Profile of Dually Eligible Seniors in Mass. 1999.

8. 8 Dually Eligible People Are Frail and Require More Medical Services Hospital Nursing home Skilled nursing facility Home health Emergency room Physician services Prescription meds Physical therapy Rehab services Laboratory services Hospice care Inpatient psychiatry X-rays And More...

9. 9 Dually Eligible People Have More Difficulty Obtaining Medical Care They are less likely to have a primary care physician. They are twice as likely to report difficulty obtaining health care. They are four times as likely to use the emergency room or hospital for their healthcare needs. They are more likely to delay health care due to cost.

10. 10 Dually Eligible People Are Twice as Expensive as Non-Dually Eligible People Dually eligible people comprise Only 17% of the Medicare and Medicaid population. Yet these same people use Almost 35% of of all Medicare and Medicaid money. The cost of caring for these people Totaled $106 Billion in 1995. Source: Breaux, John. Torn Between Two Systems. Medicare Population: ELDERLY or DISABLED Medicaid Population: POOR 17% Medicare $ Medicaid $ 35%

11. 11 Section 2. Second-Class Medicare

12. 12 Insurance Reimbursement Affects Access to Health Care Less $More $ 100% 0%

13. 13 How Crossovers Work January 2000 – With Crossovers 80-Year-Old Woman with Diabetes, Hypertension, Arthritis, Alzheimer’s Disease New Patient – 45-minute Office Visit – Level 4 Medicare Allowed Amount $126 Medicaid Payment $126 Medicare Payment “Crossed Over” Total Payment

14. 14 How Crossovers Work February 2000 – Without Crossovers 45-minute Office Visit for the Same New Patient $126 Allowed $34 Paid 34/126 = 27% Paid 73% LOSS $126 Allowed 101/126 = 80% Paid 20% LOSS Medicare Deductible NOT MetMedicare Deductible Met $101 Paid

15. 15 The Elimination of Crossover Payments for Dually Eligible People is a “Geriatric Penalty” My Response to This Geriatric Penalty: House Calls to New Dually Eligible Patients Geriatric Clinic Hours STOPPED DECREASED BY 10%

16. 16 My New Orleans Dually Eligible Population, 2000 89%African American 79%Women 34%Mentally or Physically Disabled 100%Poor HOME VISITS 100% to Disabled African Americans

17. 17 African-American Population and The “Southern Black Belt” African Americans, as a Percent of Total Population, by County Source: U.S. Census Bureau. Census 2000. 70.0 to 86.5 50.0 to 69.9 25.0 to 49.9 12.3 to 24.9 5.0 to 12.2 1.0 to 4.9 0.0 to 0.9 African Americans Are 12.3% Of the U.S. Population

18. 18 The “Southern Disability Belt” Percentage of People with Any Disability, In the 16- to 64-year-old Population, by State in 1990. Source: U.S. Census Bureau. Census Disability Data. 1998. 15% to 20% 20% to 25% 25% and over

19. 19 Second-Class Medicare Medicare in Louisiana & 2/3 of All States is a Two-Tiered Discriminatory Benefit System Violates the Civil Rights Act & The Americans with Disabilities Act Healthy & Wealthy Seniors Elderly Poor African A mericans & Other Minorities Women Physically Disabled Mentally Disabled Taxes Paid Benefits Four Million Dually Eligible With Medicare & Medicaid Decreased Access To Health Care

20. 20 Section 3. The Nursing Home Burden

21. 21 Most Nursing Home Residents Are Dually Eligible People Percent of Medicare Beneficiaries Living in Nursing Homes Nursing Home Population Dually Eligible ~70% Non- Dually Eligible ~ Source: HCFA

22. 22 Medicaid Payments for Dually Eligible People, 1995 Source: HCFA

23. 23 30% of Medicaid Budgets Is Spent to House Dually Eligible People in Nursing Homes  Dually eligible people consume 35% of all Medicaid money — Senator John Breaux  85% of all money spent by Medicaid on dually eligible people is spent on their nursing home care — HCFA Medicaid Nursing Home Payments for Dually Eligible People All Other Medicaid Services 30% $ for 1.5 Million People (4%) 70% $ for 40 Million People (96%)  Therefore, 85% x 35% = 30% of state and federal Medicaid budgets is spent to house dually eligible people in nursing homes.  Only 70% of Medicaid budgets is available to pay for all other services, patients, and healthcare providers.

24. 24 Second-Class Medicare Louisiana Decreases Home Visit $ by 81% And Saves $108 Pays $26,000/Year When Patient Is Admitted to Louisiana Nursing Home Decreased Medical Access and Increased Nursing Home Costs $26,000/ Year $500 Million Louisiana Nursing Home Bill For 26,000 Dually Eligible People 95-Year-Old Dually Eligible Woman with Alzheimer’s Disease BUT 3% of Total Louisiana Expenditures The State View

25. 25 Second-Class Medicare Decreased Medical Access and Increased Nursing Home Costs $500 Million LA Nursing Home Bill for 25,000 Dually Eligible People 1.8% of Total Federal Expenditures $34 Billion National Nursing Home Bill for 1.5 Million Dually Eligible People $500 Million LA Bill $500 Million Louisiana Nursing Home Bill for Dually Eligible People The National View

26. 26 Medicare-Medicaid Payment Seesaw Medicare Pays for Acute Care Medicaid Pays for Chronic Care Physician Office, Hospital, Home Health Nursing Home 80% Federal Medicare $ 80% Louisiana Medicaid $

27. 27 Medicare-Medicaid Payment Seesaw With Physicians and Crossovers, 1999 The Seesaw Tips to the Left More Federal Medicare $ Less Louisiana Medicaid $ Physician Office, Hospital, Home Health Nursing Home Physician Gatekeeper and Patient Advocate Louisiana Scorecard Patients and Families: Pleased Physicians: Pleased LA Treasury: Pleased

28. 28 Medicare-Medicaid Payment Seesaw Without Physicians & Crossovers, 2001 The Seesaw Tips to the Right Less Federal Medicare $ More Louisiana Medicaid $ Louisiana Scorecard Patients and Families: Displeased Physicians: Displeased LA Treasury: Displeased Physician Office, Hospital, Home Health Nursing Home

29. 29 For Louisiana and All State Treasuries Community Care is a Bargain Nursing Home Care is a Burden Because Dually Eligible People Are Medicare -Medicaid Medicare 80% Federal $ Because Dually Eligible People Become Medicaid -Medicare Medicaid 80% State $ Medicaid 20% State $ Medicare 20% Federal $

30. 30 Effects of a $27 Million Louisiana Nursing Home Raise, 2002 Community Care Would Bring $101 Million Additional Federal Funds Into Louisiana $27 Million Louisiana Medicaid $7 Million Federal Medicare Could Have Purchased $135 Million of Community Services Will Purchase Only $34 Million of Nursing Home Services $108 Million Federal Medicare $27 Million Louisiana Medicaid

31. 31 78% of Nursing Home Costs Are for Custodial Services — Room and Board, ADLs $500 Million LA Nursing Home Bill$34 Billion National Nursing Home Bill 2.4% of All Louisiana Expenditures 1.4% of All Federal Expenditures $390 Million Custodial Services $110 Million Medical Services $27 Billion Custodial Services $7 Billion Medical Services Custodial Care for Dually Eligible People Costs:

32. 32 Section 4. Possible Solutions

33. 33 Escalating Costs for Dually Eligible People $ Billions ?

34. 34 National Coalition for Dually Eligible People A Louisiana Not-for-Profit Corporation Dedicated to Improving Access and Health Care for Elderly and Disabled Dually Eligible People with Medicare and Medicaid — “The elderly and disabled poor” www.nacdep.org

35. 35 Elephant Cartoon “The TV keeps talking about a Healthcare Elephant, but I don’t see any elephant!”

36. 36 Bottom Line for Louisiana and the Nation  Keep Dually Eligible People IN the Community and OUT of Nursing Homes.  Dually Eligible People Need “First-Class” Access to Community Medical Services.  The Medicare-Medicaid Payment Seesaw: For dually eligible people, decreasing community services or payments for physicians, home health, medications, transportation, etc., will increase state Medicaid nursing home costs.

37. 37 Short-Term Solution State Level  Restore Crossover Payments in 2/3 of the States Federal Level  Change the Balanced Budget Act of 1997 – OR –  Pay Crossovers with 100% Federal Funds

38. 38 A “Federal Crossover Program” An estimated $1.5 billion “Federal Crossover Program” may decrease the $34 billion national Medicaid nursing home bill for dually eligible people by improving their access to community healthcare. The federal government is already legally obligated to pay more than one-half of this estimated $1.5 billion Medicaid bill. If the federal government invests an additional $750 million — averaging $15 million per state — in a “Federal Crossover Program” and saves only 2.2% of our national Medicaid nursing home bill, the program would be a social, a financial, and a political success.

39. 39 Medicare Money Saved by Regulating Direct-to-Patient Advertising of “FREE” Geriatric Medical Equipment Could Help Fund A Federal Crossover Program. “FREE” - Scooters and electric wheelchairs “FREE” - Comfort knee supports “FREE” - Heating pads “FREE” - Seat-lift chairs One “FREE” $7,744 electric wheelchair could pay the 20% Medicare coinsurance and improve access for 787 dually eligible people in Louisiana in 2002.

40. 40 Long-Term Solution Dually Eligible People Need an Integrated Healthcare System Which Combines:  Medicare’s Acute and Community Care Programs  Medicaid’s Long-Term Care and Medication Programs  Case Management Tools and Coordination of Services

41. 41 Section 5. Geriatrics — An Ailing Specialty

42. 42 This “Geriatric Penalty” Erodes The Specialty of Geriatrics  “The major reason for the shortage of geriatricians is poor... reimbursement.” — Dr. John Burton, congressional testimony, 2001  No matter how high Medicare raises its rates, geriatricians treating dually eligible people will always be losing a minimum of 20%.  Geriatricians will be financially wise to shun states such as Louisiana that have a “geriatric penalty” in favor of states that do pay crossovers.

43. 43 Making Rounds with Two Louisiana Geriatricians, January 2002 Total Payment for Dually Eligible Patients = $ 351 Total Payment for Non-Dually Eligible Patients = $1,019 $351/$1,019=34%, a Loss of 66% or $668 Physician Services

44. 44 Section 6. The Past, Present, and Future

45. 45 The View From 1978 — Not Much Has Changed In 1978, dually eligible people were older, 71% were female, and “the proportion of... minority races was four times as great... [and] the death rate was 50% higher....” “Perhaps the excess morbidity and mortality of the poor as they enter their senior years, reflect a lifetime of poor nutrition, housing, and other non-medical factors that are believed to influence health status.” Source: McMillan. Health Care Financing Review 4 (1983): 19-46

46. 46 What Causes Healthcare Costs to Increase ? Population growth — 77 million baby-boomers Expensive new technology and treatments “The elderly and disabled poor” Dually eligible people with Medicare and Medicaid This medical-social problem requires more research The “final social safety-net” — long-term care

47. 47 Age at Death Expenditures Per Person Spillman. NEJM 342 (2000): 1409-15 Cumulative Healthcare Expenditures At Age of Death

48. 48 “Racial and ethnic minorities tend to receive a lower quality of healthcare....” — Institute of Medicine, Unequal Treatment: Confronting Racial and Ethnic Disparities in Healthcare, 2003 “Racial and ethnic disparities in healthcare... are associated with worse outcomes... are unacceptable.... [and occur along with] discrimination in many sectors of American life.” “This higher burden of disease and mortality among minorities... results in a less healthy nation and higher costs for health and rehabilitative care.”

49. 49 Dually Eligible People — at the Center of the Next Debate Because of their frailty, their social and racial demographics, their great expense, and their expanding growth rate, dually eligible people — “the elderly and disabled poor” — will occupy a central position in the upcoming debates over national healthcare financing and disparities in health care in the 21 st century.