Facing the Flood

Countless lives were touched when the tsunami tragically struck several countries in Asia in December. Many now claim that thousands of lives could have been saved had there been a better warning system in place.

In America, we are fortunate to have plenty of warning about the growing crisis in health care, especially as a potentially devastating “demographic tsunami” of aging Americans begins to roll in. This early warning provides an opportunity to add to the policy debates our unique perspective about the advantages and cost-effectiveness of home care as we prepare for the demographic sea-change already under way.

Americans continue to live longer as our oldest citizens continue to be our fastest-growing population segment. Moreover, the oldest of the 76-million-strong baby boomer generation (born between 1946 and 1964) are now poised for their greatest period of health care utilization. This slow rising tide has far-reaching implications for government programs like Medicare, Medicaid and Social Security.

At the same time, federal budgetary constraints will drive intense fiscal belt-tightening by the Bush administration and 109th Congress, with a strong focus on curbing health care spending. These demands, coupled with the high costs associated with health care, present enormous challenges for the health sector and further underscore the need for solutions like home- and community-based health care services.

Growing Focus on Rebalancing

Against the backdrop of budget deficits, Medicaid and Medicare stand out as targets for policymakers. The threat of shifting costs to state Medicaid programs has prompted a swift response from governors. According to a recent report released by the National Governors Association (NGA) and the National Association of State Budget Officers (NASBO), Medicaid spending now represents about one-quarter of state budgets, with an average growth rate of 11 percent per year over the last 25 years.

Rather than allow further cuts in Medicaid spending, however, governors are uniting in an effort to write their own Medicaid reform plan for Congress. This will include several cost-containment strategies already employed by some states, including rebalancing home and community-based services and institutional care, placing controls on drug costs, reducing or freezing provider payments, and reducing or restricting eligibility.

Other methods for increasing the efficiency of Medicaid have been discussed, such as enabling beneficiaries to use reverse mortgages to pay for their long-term care, promoting long-term care insurance with tax credits and limiting beneficiaries’ ability to transfer or spend down their assets in order to qualify for Medicaid coverage.

Warnings Provide Opportunity

For both Medicaid and Medicare, at state levels and at the federal level, we have a golden opportunity to highlight the benefits of home care — it is patient-preferred, can improve quality outcomes and is cost-effective. By encouraging support of the valuable home care solution to the challenges we face now, we also reinforce a firm foundation for future demands on the nation’s health care system.

Preparing for the Future

As natural disasters remind us in the case of the tsunami, nothing is worse than being caught unaware, unprepared or uninformed. This is where the home care industry has an important story to tell. Local, state and federal representatives need to know how important home care will be to the baby boomer generation and beyond, so as stakeholders, we must produce our own rising tide of concern and advocacy.

Many technologies and hands-on services that are provided by this industry are unique. Within the health care continuum, home care will help stem the tide of overwhelming demands the country’s health care system will face during the years to come.

Kay Cox is president and CEO of the American Association for Homecare, Alexandria, Va. For more information about AAHomecare, visit www.aahomecare.org, or call 703/836-6263.