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Reform of Long-Term Care System Could Save Billions
Date:4/21/2009

WASHINGTON, April 21 /PRNewswire-USNewswire/ -- The federal government could save upwards of $35 billion over ten years if it enacted a policy proposal to reform financing of long-term and post-acute care, said Avalere Health in a new report released today.

Avalere built a new proprietary model to assess the federal costs of change in long-term care policy, using methods and assumptions similar to those employed by the Congressional Budget Office. Using the model, Avalere assessed a proposal developed by the American Health Care Association, the National Center for Assisted Living, and the Alliance for Quality Nursing Home Care. The focal points of the proposal are:

  • Creation of a new, site-neutral Medicare payment system for post-acute care based on patients' conditions and medical needs. Decisions would be based on more evidence using a standardized patient assessment tool.
  • Creation of a fully federalized, voluntary, catastrophic long-term care (LTC) benefit. Medicaid would no longer pay for LTC for seniors.
  • An increased amount of private funds used for long-term care services. Individuals would share the cost burden of the new LTC benefit in the form of a personal responsibility allowance, scaled to income.

Reforming the Medicare post-acute payment system in this way would likely generate $81 billion in savings over 10 years of operation due to more cost-effective placement of Medicare patients in post-acute care settings. Those savings would offset the new costs of launching a consistent federal LTC program, which by Avalere estimates would cost $46 billion over 10 years. The total 10-year program savings is $35 billion. A full set of assumptions and methods is published in the report.

Current Medicare payments for post-acute medical care -- the kind of care given immed
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SOURCE Avalere Health
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