Are other countries showing the way?
In April, representatives from public and private stakeholder stakeholder n. a person having in his/her possession (holding) money or property in which he/she has no interest, right or title, awaiting the outcome of a dispute between two or more claimants to the money or property. groups met to compile To translate a program written in a high-level programming language into machine language. See compiler. a 12-page report on long-term care long-term care (LTC),
n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. for submission to the 2005 White House Conference on Aging The White House Conference on Aging is a once-a-decade conference sponsored by the Executive Office of the President of the United States make policy recommendations to the President and Congress regarding the aged. , to be held in December. Entitled en·ti·tle
tr.v. en·ti·tled, en·ti·tling, en·ti·tles
1. To give a name or title to.
2. To furnish with a right or claim to something: Establishing a Comprehensive National Long-Term Care Policy, the report offers recommendations on the broad categories of long-term care financing, supportive services, and health and independence (see "Warning Signs for the White House," p. 26).
In the eyes of some, the April "mini-conference" was hardly a breeding ground for well-informed, thoughtful solutions. Conference attendees had fewer than two days to consider solutions to all of long-term care's problems, with little immediate access to substantive, unbiased data. But they did the best they could, offering knowledge and experience from a diverse group of occupations. They were almost universal in agreeing that American long-term care is in crisis.
Not much discussed was the fact that other countries are facing similar crises. For example, while the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. found in its most recent census that roughly 3.3% of the total population is over 80 years old--the "target demographic" for long-term care services--Italy passed the 3.3% mark for octogenarians nearly 15 years ago, and now expects that 30% of its population in 2020 will be over 65 years old. Moreover, nearly 4% of all German citizens are over age 80.
Faced with these kinds of numbers--and economies less robust than some other nations'--several European nations have commissioned comprehensive studies of how their various long-term care financing mechanisms are working. They're looking at "best practices" for funding healthcare for the chronically ill elderly in developed, industrialized in·dus·tri·al·ize
v. in·dus·tri·al·ized, in·dus·tri·al·iz·ing, in·dus·tri·al·iz·es
1. To develop industry in (a country or society, for example).
2. countries, including models that might be instructive in·struc·tive
Conveying knowledge or information; enlightening.
in·structive·ly adv. for our own policy makers.
Some Americans argue that the prevalence of national "socialized medicine socialized medicine, publicly administered system of national health care. The term is used to describe programs that range from government operation of medical facilities to national health-insurance plans. " makes foreign healthcare systems so different from the United States that no useful lessons can be learned. A quick survey of long-term care financing mechanisms in developed countries identifies the major hole in this argument: Most countries generally do not pay for long-term care with funds from the general healthcare financing system. In fact, the United States finances an unusually high percentage of nursing home and other long-term care services from national tax revenue. Most developed countries use some combination of local taxes, dedicated insurance, and copayments for this purpose. Even in Denmark--one of the few countries where tax revenue provides free hospital and clinic care for all residents--consumers pay for nursing home stays and prescription drugs prescription drug Prescription medication Pharmacology An FDA-approved drug which must, by federal law or regulation, be dispensed only pursuant to a prescription–eg, finished dose form and active ingredients subject to the provisos of the Federal Food, Drug, , with government subsidies available only to low-income residents.
Sweden divides responsibility for healthcare among three levels of government. The principal responsibility of Sweden's National Board of Health and Welfare (Socialstyrelsen) is to evaluate healthcare service delivery to ensure that it corresponds with goals of the central government and follows specific guidelines guidelines,
n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. for good medical practice. The actual management of healthcare delivery, however, is vested vested adj. referring to having an absolute right or title, when previously the holder of the right or title only had an expectation. Examples: after 20 years of employment Larry Loyal's pension rights are now vested. (See: vest, vested remainder) in 21 councils governing gov·ern
v. gov·erned, gov·ern·ing, gov·erns
1. To make and administer the public policy and affairs of; exercise sovereign authority in.
2. counties varying in population between 60,000 and 2 million people. But long-term care is a responsibility of local municipalities rather than the county councils, with residents private paying usually to a "spend down," with the municipalities picking up the balance. The tax rates to finance this are at a 30% minimum.
Japan's current long-term care financing system was established in 2000 and combines taxation, mandatory insurance, and copayments. The mandatory insurance is provided by local governments known as prefectures; half of the costs for the insurance are paid by mandatory premiums levied on all residents over 40 years old, while half are paid from tax revenue. This insurance pays for 90% of the cost of long-term care, regardless of whether the level of service provided is housework assistance, home visit outpatient outpatient /out·pa·tient/ (-pa-shent) a patient who comes to the hospital, clinic, or dispensary for diagnosis and/or treatment but does not occupy a bed.
n. care, or residential care. The remaining 10% of the cost of care is provided through a copayment--a built-in incentive for families to opt for relatively less expensive in-home care. Of the total cost of long-term care, 45% is spread among all Japanese between the ages of 40 and 70.
The long-term care financing system of Germany also depends on mandatory universal long-term care insurance, enacted in 1994.* In the German system, employees and their employers each contribute an amount equal to 0.85% of the employee's salary to the LTC LTC
lieutenant colonel insurance program. Government pays contributions for the unemployed; retirees contribute half of their premiums out of pocket, while their pension system pays the other half. In cases in which an employee's family members have either no income or earnings below a defined income threshold, they are covered by the head of household's LTC insurance; LTC coverage for a family with a single wage earner costs the same as coverage for a single worker with similar earnings.
German private-sector insurance associations, called "sick funds," are responsible for collecting enrollees' contributions, determining eligibility, negotiating fee schedules with providers, and reimbursing providers, as well as enforcing quality of care. Insurance portability and an annual open enrollment season are guaranteed by law. Since LTC insurance is linked to the choice of a sick fund, a consumer who wishes to change carriers for one type of insurance must change their enrollment in both.
One German goal (and one often alluded to in the United States) is to prevent unnecessary institutionalization Institutionalization
The gradual domination of financial markets by institutional investors, as opposed to individual investors. This process has occurred throughout the industrialized world. and encourage home-based services. Beneficiaries can select from among three types of benefit payment systems: (1) cash payments to informal caregivers; (2) formal care services at home (payments made directly to providers); and (3) institutional care services (payments made directly to facilities). Individual beneficiaries can expect a copayment co·pay·ment
A fixed fee that subscribers to a medical plan must pay for their use of specific medical services covered by the plan.
n of 25 to 50% for institutional care services.
At least three common themes emerge from this examination of long-term care financing in other countries. First, most national governments play a much smaller role than our own federal government in directly financing or regulating long-term care (European regulations are generally much less onerous on·er·ous
1. Troublesome or oppressive; burdensome. See Synonyms at burdensome.
2. Law Entailing obligations that exceed advantages. or costly). Second, most long-term care systems require copayments, at least for care in an institutional setting. Third, unlike the United States, no country plans to rely on "educating" young people about their future needs to ensure widespread acceptance of LTC insurance coverage. Prior to passage of Germany's Long Term Care Insurance Act, for example, no more than 10% of potential enrollees were covered by voluntary long-term care insurance. The limited appeal of "nursing home coverage" among young Germans had kept premiums high, exactly as we have experienced here. By combining mandatory coverage with copayment disincentives for unnecessary institutional care, and generous coverage for those unable to pay, the Swedish, German, and Japanese systems have made long-term care insurance affordable and universal. For them, at least, the crisis seems to be resolving.
To send your comments to the author and editors, e-mail email@example.com.
*A detailed scholarly discussion of Germany's long-term care system can be found in "Germany's long-term care insurance model: Lessons for the United States," a 2002 article by Charlene A. Harrington, Max Geraedts, and Geoffrey V. Heller in the Journal of Public Health Policy, volume 23(issue 1), pages 44-65.