"OBRA is dying of its own weight...".

Richard L. Thorpe's main business in life is to help nursing home administrators achieve and maintain a high degree of competence in long-term care management. And when that competence is called into question (as per recent OBRA enforcement surveys), you can be sure that he is in the thick of the profession's response. He bring more to the table, though, than his seven years, experience as top manager of the 6,500-member American College of Health Care Administrators -- the only professional association geared strictly to long-term care administrators. His 24-year career encompasses management of acute care hospitals, as well as long-term care chains and facilities, for such companies as Beverly Enterprises and National Medical Enterprises. And, for eight years, he ran his own long-term care management and consulting firm before joining ACHCA as its CEO. This has given him an unusually broad perspective on the long-term care situation which is in need of acute care itself, some would say), as well as a well-grounded vision of what the future may hold. Recently Thorpe was asked to share his insights in an interview with Nursing Homes Editor Richard L. Peck.

Peck: From your own feedback thus far, how are ACHCA members bearing up under the OBRA surveys?

Thorpe: With great distress. What was already a somewhat oppressive situation has gone out of control. Administrators have noted a dramatic difference both in the survey process and in surveyors' demeanor. And the results have concerned administrators, not only in terms of how they reflect on the quality of their management, but on their careers.

Our focus, in responding to HCFA, has been on how survey results are reported to state authorities, particularly licensing boards. These agencies have been getting information that has not gone through due process or even dispute resolution. In short, what was good legislative intent has become regulatory imposition, and the result is that the intent of OBRA is dying under its own weight.

Peck: Do you agree with the Republicans that the states can do a better job of it?

Thorpe: The timing is ironic in that these survey problems are occurring just when the survival of OBRA itself is being called into question.

Whatever happens, I don't believe that the intent of OBRA will go away. The concept of keeping decisionmaking at the lowest possible level is a good one. Will the states do a better job@ That remains to be seen -- probably not, at first. But, with OBRA, they do have a blueprint to work with, and over time you will see modifications and refinements taking place at the local level, rather than at the Federal level. States will see it in their best interest to continue surveying under OBRA, but they will "cherrypick" the OBRA provisions that work best for them. And states will make a choice of where to spend the most dollars -- on patient care or on enforcement.

Peck: Some would say they're one and the same thing.

Thorpe: I would agree that the industry and the profession have grown more dramatically since OBRA's inception than they would have in the absence of regulation. Historically, OBRA has provided a stimulus to the quality of the industry and the professionalism of administrators. But lately it has become so riddled with flaws that it is driving many of the good people in this profession to abandon it.

Peck: What about the Medicaid block grant concept (which may or may not be alive by the time this interview is published)?

Thorpe: Whatever happens, everyone recognizes that entitlements in general have to be reduced or we'll go broke as a nation. As we speak, the unimaginable $4.9 trillion debt ceiling has just been raised.

Zeroing in on proposed savings from Medicare and Medicaid, I find two things: Medicare has been the most hotly debated of the two, because it affects everyone. Medicaid is perceived as an indigent-related program and thus has been boxed in with the welfare debate. People have the image of the "welfare queens." But when it comes to long-term care, we're not talking about welfare queens -- we're talking about your mother.

If you break it down percentagewise, 70% of the Medicaid dollar is being spent on 30% of the recipients, outside of long-term care; the 30% that ia spent on long-term care covers 70% of the recipients. That statistic alone tells you that there are no savings left to be realized in long-term care, and that providers in this field are providing as good a quality of care as can be expected with those resources.

I don't think most states realize what's in store for them with block grants. Long-term care funding and demographics are moving in opposite directions, and eventually states will either have to raise taxes or cut services. And administrators will continue to be in the middle.

Peck: One "out" for cash-squeezed nursing homes, supposedly, has been subacute care, but budget proposals this year would have severely restricted Medicare funding for nursing home-based subacute units. What is your view of that?

Thorpe: I have a position that is not a very popular one, but I believe it to be true. I think the drive toward subacute care in the skilled nursing home field will slow down and eventually reverse. Don't forget, the acute care market is in even worse shape than we are; 70%. of their revenues come from Medicare, and they chase the Medicare dollar with the same passion we chase the Medicaid dollar.

As a result, hospitals are moving to develop transition units, step-down units, swing beds and anything else that will help maintain census. And they have many advantages in place. they have the physicians, the nurses, the physical plant and, in many cases, a community board, and they can make a case for supporting your local hospital." They're also finding that they can do it less expensively than they originally projected because, after all, a lower daily rate is better than an empty bed.

This means that a nursing home trying to enter this market is going to be up against it. Those skilled nursing facilities that are not already well-established in subacute will end up "back in the cold," trying to preserve their traditional markets.

Peck: And how do you see that market developing?

Thorpe: I think you're going to see a lot of creativity. Managed care will provide some of the solution. Assisted living will expand, and Medicaid financing mechanisms will be developed for it. Intermediate level-type nursing homes will become more like assisted living, and the skilled level facilities will provide specialized long-term medical care or will try to develop subacute where the market permits. Overall, I think we're going to see a lot of exploration of the question as to what constitutes domiciliary care vs. institutional care.

Peck: In light of all this, what are ACHCA members telling you are their greatest educational needs?

Thorpe: First, how to five in a managed care environment -- specifically, how to negotiate with major companies and to market their services to them. It's ironic, in a way, because long-term care administrators may be the best prepared of all health care managers to deal with managed care. For years they've been working under a very tightly controlled "capitation" if you will, under Medicaid. Administrators from other fields are looking at us and asking, "How do you do it?" Nevertheless, the negotiating process is a new approach for our administrators and they want training.

Second, they want more emphasis on executive skill development. In recent years they've been so obsessed with operational concerns under OBRA that they feel in need of development of more management-level skiffs, such as developing and analyzing financial statements and people management. Our educational courses are moving in those directions, as well.

Our Futures Project, which has been underway for several years now, is also working to help administrators understand how the field is evolving and what they can do about it. Our "Shaping Your Future" workbook came out of that.

Finally, our members want to learn how to protect their licenses -- to somehow separate their careers from these industry problems over which they seem to have little control.

Peck: Public perceptions of nursing homes are so crucial these days. What is ACHCA doing about that?

Thorpe: It is a very difficult challenge, because negative perceptions of nursing homes have been built up over generations and they are very difficult to change. For one thing ACHCA is working with the National Citizens Coalition for Nursing Home Reform and Heaton Publishing on material that will help consumers understand and interpret survey results accurately. We're also working with the American Association of Retired Persons on developing intergenerational programs for long-term care facilities, such as day care. In general, though, nursing home administrators just have to keep banging away in the local media and in community organizations to tell their story.

Peck: In the "ideal" system (and that means forget about what we've been talking about thus far), how should long-term care be financed?

Thorpe: I think you have to look at it in both the short-run and the long-run. In the short-run, until some very promising private financing mechanisms cut in, I think we ought to look at carving out the long-term care portion of Medicaid and making it what's been called "Medicare Part C." It would be financed and managed at the Federal level, and -- ideally -- would keep the good parts of OBRA.

But that would work only for the short-term. I don't think that relying on tax revenues over the long-run is a good idea, an acceptable one or even necessary. Private funding mechanisms would be preferable, and there are several that are available.

For starters, we could develop tax incentives for young adults to purchase long-term care insurance for their parents -- that would give the private market a good jump-start. Over time private insurance will grow, as will such mechanisms as medical savings accounts. In short, we should be working toward privatizing the long-term care market.