Today's post highlights the first three of five policy issues confronting and/or caused by the Baby Boom. These issues will significantly impact all 77 million Boomers, their children their grand children and the fiscal viability of the American Republic.
A GREATER GENERATION?
(Part 2) See previous posts for background
In brief, here are the challenges:
1. Completely Re-Think Long-Term Care
Putting mom or dad in a “home” after they have lived a lifetime at home is a decision that usually causes immense family heartache, anger, guilt and division. Do you want to live in a nursing home? Deborah Chase certainly didn’t. Statistics indicate that you and Deborah probably will spend some time there at the end of your life—unless we begin changing policy and nursing homes now.
There is a reason that nursing homes are so universally feared; it’s because they are rarely good places to finish out a meaningful life. Nursing home owners and managers will likely take exception to this viewpoint. Many of these professionals are devoting their careers to making their nursing home(s) the exception to the rule. However, you know what is said about pigs and lipstick. You can gussy up an institution with flowers, homey furniture, sun rooms or allow pets and it’s still an institution. It is not and will not feel like home.
America’s institutional nursing homes develop rapidly in the mid-20th century in response to the fact that Americans were beginning, in large numbers, to live beyond their ability to live independently. Not only was advanced old age a new norm for America, it was new to mankind, thanks to better health care and new medicines. American politicians did their best to resolve this challenge and passed appropriate legislation to encourage (through financial incentives) the creation of beds to serve this growing infirm population. In the 1950’s this new industry borrowed the clinical hospital model as the template for building. There was no other model that seemed to fit.
Today there are better alternatives (many involving staying at home or moving into a truly home-like setting) and, here’s the promising part, these alternatives are budding just as the old institutional nursing home infrastructure is aging and crying out to be replaced. However, without the right incentives and public demand, the private sector will likely just tear down the old nursing home and put up a new, bigger institution. If so, one of those oxymoronically named “semi-private” rooms will be waiting for you and Deborah Chase, whether you want to live there or not.
Creating ways for people to age in-place--in their homes, or in a home-like setting--requires that we (1) provide more substantive support and tax relief for family caregivers, (2) re-direct public funds from institutional care to in-home care, (3) be creative and sensible in using the equity value of home mortgages so that the costs of in-home care do not translate into a higher tax burden for subsequent generations, (4) provide incentives for long term care facility providers to expand on a building model that mirrors a home environment and (5) insist that long term care insurance (including Medicaid) not be skewed toward institutionalization, as it is today.
2. Re-Design Social Security, Medicare and Medicaid
Any talk of trimming the big three entitlement programs makes politicians grow pale and wet themselves. They react thus because, once a benefit is established, it’s political suicide to suggest taking any of it away, even if the original benefit no longer makes any sense in a dramatically changed demographic and financial environment. As a result, we now have a Social Security system designed to serve the conditions of a 1935 America when there were 16 wage earners supporting one pensioner. Today, the ratio is about 3 to 1 and about to get worse.
Politics has generated a popular Medicare system that focuses on cure but shifts the cost of long-term care to the family. It is a program that is an unwilling and unhappy passenger on a run-a-way health care cost inflation bus. And, although it is arguably the nation's most efficient and fastest payer of claims, it is rife with fraud primarily because of this efficiency. No good deed goes unpunished.
Politics has also given us a Medicaid system that steers elders to nursing homes in many states (once beneficiaries can prove themselves penurious) and too often discourages care solutions that favor aging at home. Medicaid is another unhappy passenger on the health care cost inflation bus.
The conventional wisdom is that if law-makers tinker with the nature and intent of these entitlement programs, voters will relieve them of their power. Touch the entitlement “third rail” and you will be political toast. George W. Bush tried to tweak Social Security during his second term and was resoundingly booed off the stage. Although, he did manage to add an unfunded drug benefit to Medicare while big pharma cheered and waved pom-poms on the sidelines. Adding stuff is way more popular than subtracting stuff.
The consequences of maintaining the status quo of these programs makes for a grim financial picture. In fact, the status quo is unsustainable; period. No kidding. If the Baby Boom wants to make a reasoned and reasonable sacrifice for the common good of the country, amending these entitlement programs is the opportunity. If, however, the entire Baby Boom demands these entitlements in full, as currently constructed, the Boomers will eventually be hoist by their own petard. If Boomers fail to help adjust these programs now, their children and grandchildren will have less reason to remember “Grammie” fondly.
The fixes for these entitlement programs require political will, an attribute currently in short supply in Washington and State Houses around the country. Boomers must provide the backbone and leadership on these issues because the politicians have proven themselves unable to lead, time after inglorious time. We must insist that lawmakers grab the “third rail” and make sure that the entitlement train is headed in the right direction, not just in our direction. The fiscal viability of America depends on it.
3. Expose and Eliminate the Hidden Costs of Growing Old
Fraud. Unless you have had first-hand experience or have made it your business to explore the ways in which the unscrupulous relieve the elderly of their money, you probably have but a cursory idea of the problem. The scamming of the elderly has become--thanks to sophisticated data base mining, improvements in telephone technology and the Internet--an international industry. The perpetrators are often beyond the reach of local law enforcement, highly mobile and relentless. Deborah Chase meant well, “Dr. Someone” did not.
Even more frequently than strangers, known caregivers financially abuse the elderly. These caregivers are often relatives but also include hired help such as aides or professional advisers. These financial losses often go undetected and/or unreported. It is a difficult problem because of privacy and autonomy issues. This hidden cost will significantly balloon with the aging of the Baby Boom, a generation that has more assets than any before it.
America needs to put a much higher priority on catching and meting out deterring punishment to those who take financial advantage of the vulnerable elderly.
Medication Mismanagement. Another cause of unnecessary spending can be found in the medicine cabinets of the elderly: rows of medications, some current, many out of date and most of them potent. Without a reliable means of assessing the possible interactions or a foolproof way to manage their proper use, the aged too often end up in the emergency room because of over dose, under dose or drug interaction.
Beyond the problem of medication mismanagement, medication overload becomes problematic as the elderly expand their coterie of medical specialists, many of whom have neither the time nor inclination to conduct a thorough inventory of their patient’s medication regimen. In addition, few of these medical providers have even basic training in geriatrics. Boomers should take the lead in demanding that the health care industry find a workable solution to medication management, a problem that silently leeches away billions in private and public funds every year.
Corporate Inefficiency and Family Costs. According to a 2006 MetLife study, the annual inefficiency cost to American businesses for the “under the radar” elder care responsibilities shouldered by employees was $33 billion. These corporate costs come from (a) unexpected turnover, (b) absenteeism, (c) workday interruptions and (d) diverted attention on the job because of the employee’s need to provide care for an elderly relative. It’s conservative to estimate that this inefficiency cost now exceeds $40 billion every year.
These figures do not include the out-of-pocket expenses incurred by employees, which, especially for the long distance caregiver, can easily be thousands of dollars per year. Deborah Chase’s children spent thousands for travel alone. Layered on to these dollar costs are the emotional and physical tolls that elder care can extract from family caregivers, most of whom have jobs and many with children still at home. American business leaders and government policy makers need to bring elder care out of the shadows, relieve it of its stigma in the workplace and help caregivers find affordable solutions. Not only is it the right thing to do, it is the economically sensible thing to do.
Observoid of the Day: 43.7% of all statistics are made up on the spot.