"Nursing homes should reach out...." (interview with Sheldon L. Goldberg)(Interview)

Demands are up but the financing is shaky -- "and we're tring to break into a new environment of services." That's Sheldon L. Goldberg's snapshot of the nursing home industry as of mid-summer, 1995. From his perspective as president of one of the nation's two major nursing home organizations, Goldberg can observe long-term care's cutting edge -- and a messy cut it is. Though its goal and direction appear obvious, how facilities will get there is by no means clear. Goldberg knows how far many have come -- as AAHSA president since 1982, Goldberg has increased the Association's financial and credentialing support for its 5,000 non-profit members, enhanced their presence in long-term care policy development, and recently become chairman of the Leadership Council of Aging Organizations. Along the way he has developed firm ideas on how nursing homes and senior living facilities can realize their very promising future. Goldberg elaborated in an interview with Nursing Homes Editor Richard L. Peck.

Peck: Earlier this year, AAHSA seemed to take a very strong anti-regulatory stance. Now that we've begun a new era of OBRA regulation, what do you think?

Goldberg: I have sensed that HCFA shares some of the same concerns that we've had -- that a constructive system be developed that encourages nursing homes to improve and recognizes them for doing so, rather than emphasizing a punitive, "long arm of enforcement" approach -- an approach that so many in our industry have found to be destructive. We would like to work with HCFA as partners in developing such a system.

Peck: Now that the July 1 deadline for the survey enforcement regulations is a few months behind us, how has it worked so far?

Goldberg: It is too early to say. Our chief concerns have always been with the consistency and quality of the local surveyors. We didn't think they had been sufficiently trained to implement the new regulations, and I know of state agencies that expresssed similar concerns. We're concerned, too, that "severity" judgments are too subjective; the standards are not fully understood and there is tremendous confusion. However, based on HCFA's close involvement in monitoring the process, I would say that there is reason for optimism. It is time that we providers got beyond complaining and criticizing, and continue to work to achieve the goals that we all share. Not all regulations are bad, but the approach to them is critical.

Peck: But aren't there other regulations that you would like to see removed or revised?

Goldberg: I think that the Clinton Administration's proposed modification of the PASARR reviews for mental health patients -- a very expensive proposition for nursing homes -- is a good idea. And we continue to urge OSHA to hold off on its ergonomic regulations, believing that staff protection along these lines is a matter for individual facility training. There is no question that the cost impact of all new regulations these days has to be looked at very closely because of the financial situation confronting many nursing homes.

Peck: Speaking of which, your views on Medicaid block grants?

Goldberg: In a word, devastating. They would mark an abandonment of the Federal government's responsibilities to frail, elderly people who have outlived their means to pay for their own long-term care. How dare they call this "welfare"? People who have built this country, paid their taxes and now have outlived their resources, and we call this welfare? Block grants will put the most financial pressure on the states that can least afford it -- and there are already states that are failing to finance long-term care anywhere near appropriately. The whole thrust of block grants defies a national trend -- sicker patients in the fastest growing segment of our population needing more services.

One thing I have observed in my years in Washington is that the designation of "block grant" is a signal to start cutting; that is how it has worked out, historically. That is why block grants would be devastating not only to nursing homes, but to community-based services as well.

Peck: What about the argument that, with block grants, states will have the flexibility to be more creative, and that nursing homes will be closer to the decisionmaking authorities?

Goldberg: States already have these capabilities with the 1115 Medicaid waivers. Under President Clinton, and his predecessor as well, these have become relatively easy to get and are very flexible.

Peck: Wouldn't it be preferable, as the American Health Care Association has suggested, that there be a specific Federal government program for financing long-term care?

Goldberg: Over the long run that is what we'll need. But no one will take it seriously if you propose it in today's political climate. That is why I think we should do all that we can, right now, to expand access to private long-term care insurance. We need to get the tax treatment revised, and we should be encouraging public/private partnerships, not shutting them off.

Peck: Isn't it true, though, that most observers believe that, even at best, private long-term care insurance will control no more than 25 to 30% of the market for long-term care services?

Goldberg: If I had told someone 20 years ago that 85% of the elderly would have Medigap insurance, I would have been laughed out of the room. But that is today's fact. I think the private long-term care insurance market will be larger than many today predict. The pricing has been coming down dramatically as the market grows, and companies are becoming more creative and aggressive in their marketing of these policies as they grow more comfortable with the concept. It is possible that they could occupy 40% or more of the market down the road.

Peck: Shifting gears a bit, what do you see as nursing homes' role in the evolving continuum of long-term care?

Goldberg: All nursing homes are caring for much sicker populations than they did in the past. I haven't been to one that says its resident population has been static over the past five years. They're doing tube feeding, IVs, respiratory care -- in general, things they've never done before. Fortunately, nursing homes have shown themselves to be very cost-effective performers for this level of care.

But there are other directions, as well. Assisted living is, in my view, a natural development for nursing homes. They're experienced in organizing and providing all levels of services to the elderly; some of our members have done it for decades and longer. But they must open themselves up to these new directions. The writer John Nesbit once noted that, at the turn of the 20th century, most of the railroads thought they were in the train' business, when in fact they were in the transportation business. Nursing homes are in the long-term care business, and that's how they have to see it.

Peck: With all this potential growth and with financing being so tight, some say that the small operator is on the way out -- either out of business or sold to a larger entity, such as a chain. Do you agree?

Goldberg: Things ebb and flow. The small corner grocery store that went out of business is now a "7-Eleven." Let's face it, health care will always be a local issue; most people attend to their health care needs within a 25-mile radius of their homes. Small operators will of course have a role, but they must look at themselves in a broader context than just "being in the nursing home business." They will have to reach out -- to look at cooperative arrangements with other levels of care, and build networks and systems offering a variety of carefully coordinated, monitored and marketed services. In a sense, they will have to reinvent themselves as key players in networks. Those that are able to accomplish this will do fine.

Peck: Speaking directly to our readers' interests, what do you think administrators' greatest needs will be in encountering this new era?

Goldberg: I must admit, I've encountered a few who've said, "Gee, I only have ten years to retirement. If they could only hold back the clock." That isn't going to work. They're going to have to develop a tolerance for change and willingness to work with it; otherwise they're going to experience a very painful transition.

For example, they're going to have to acquire an understanding of today's information needs and technology, and they're going to have to get it fast. They're going to have to understand their costs in new and detailed ways -- for example, per diagnosis. They have to understand the new approaches to communication -- I'm not particularly computer-literate, but I have a computer on my desk, and I know how vital it is to my being able to communicate.

I think, too, administrators are going to have to be "hands-on" with their marketplace, if they're not already. They're going to have to understand consumers' needs and wants in detail, and work hard to satisfy them. They're going to have to motivate staff to perform these tasks and develop an ethic of teamwork. Staff turnover rates of 100% a year or more are no longer acceptable or workable.

Peck: What about DONs?

Goldberg: The same advice applies. They're also going to have to become more comfortable with higher-acuity levels of care. They are the ones, too, who are directly responsible for involving the entire staff in quality improvement.

Peck: Any parting words?

Goldberg: Nursing homes will be seen differently in the future-their new image will be associated with optimism and with resident improvement. Along with this they will, and already do, attract high-quality physicians, nurses and administrators, to the point where nursing homes can no longer be viewed as health care's "second-class citizens." We are trying to break into a new environment of system-based care, and there are great opportunities.

But the financial situation -- especially with block grants on the horizon -- is very questionable. I'm still not sure how generally understood this is, both by Congress and by the public at-large. And that's what scares me.