Historically, one of the most vital arguments against cuts in health and human services has been that it “throws granny out of the nursing home.” Today, the Associated Press reports that some Texas lawmakers are beginning to say just that.
Typically, this argument is less than substantive and aimed more at halting debate on health and human services spending than solving problems. Because of restrictions placed on states by ObamaCare and by the stimulus bill that limit the states flexibility to deal with Medicaid costs, most of the cuts in Medicaid are made up through provider rate reductions -one of the few significant options left to legislators.
Essentially, the reimbursement rate for nursing homes, as well as other providers, would be reduced by 10 percent under the provisions of the bill currently being debated. Many of the long term care providers, including nursing homes, operate on profit margins lower than 10 percent. A reduction of this size could push some into the red. But that doesn’t mean there aren’t cost savings to be found in long-term care.
Long-term care funding has a number of areas where reforms could yield big savings. For instance, State Supported Living Centers operate at three times the cost of their community-based counterparts, have a history of abuse and neglect, and the U.S. Department of Justice is moving towards shutting them down nationwide. Several other states have already accomplished the task with proven savings and quality care. Texas stands to save hundreds of millions of dollars by moving SSLC clients into community-based alternatives, a policy we advocate. These savings could be used to partially offset the provider rate cuts.
Also, primary home care is significantly less expensive than nursing home care and is often preferred. The average monthly cost for a Medicaid nursing home client was $2,568 in 2007, but a client receiving Community Based Waiver services had an average monthly cost of $1,286. The state should look for opportunities to encourage those currently in institutional care to choose community care when possible to save money while providing quality care. This scenario would be much more possible if the state adopted reforms outlined in the Foundation’s report Medicaid Reform: Constructive Alternatives to a Failed Program.
Long-term care spending reductions are a bit more nuanced than the scare tactics let on. Long-term care funding is not, and should not be, immune to spending reductions. So dont stop the debate. Instead, do the hard work of looking for ways to cut unnecessary programs or provide services more efficiently. It can and should be done.