Building clout on Capitol Hill: an interview with Hal Daub, president and CEO, the American Health Care Association.

Mr. Daub's resignation as AHCA president/CEO was announced as this issue went to press.

Long-term care providers have never been known for being politically shy. Nursing homes have been famously successful at the state level of politics in many states. Their record at the federal level, though, is mixed, at best, with various industry-unfriendly initiatives--OBRA '87, the state survey system, the Medicare PPS, to name a few--coming down hard, and long-term care lobbyists often fighting rearguard actions to prevent the bad from becoming worse. Now with significant change afoot for Medicare and Medicaid, growing apprehension about the aging baby boomers, and constant pressure to deinstitutionalize long-term care, at least one professional association has decided that mixed results are no longer good enough.

Enter Hal Daub, who last fall became president/CEO of the American Health Care Association (AHCA). His principal mission: to strengthen AHCA's Washington presence as a major long-term care policymaker. Daub comes with the credentials for this, having served in the U.S. House of Representatives from 1981 to 1989, much of that time with the House Ways and Means Committee, a power in federal healthcare politics. From 1995 to 2001 he got the local eye-view as mayor of Omaha, Nebraska.

Daub has wasted no time in recent months gearing AHCA up for the political challenges that lie ahead. He recently discussed his methods, goals, and ideas in an interview with Nursing Homes/Long Term Care Management Editor-in-Chief Richard L. Peck.

Peck: Your regime as AHCA leader is putting more emphasis than ever on influencing the powers-that-be in Washington, D.C. Would you comment on that?

Daub: Representing our very diverse membership is the principal value of what we do. We have a bottom-up rather than top-down structure--49 affiliates consisting of nursing homes, assisted living, adult day care, CCRCs, independent living, and hospice, 35% of which are not-for-profit members. Representing their views is quite challenging, but together, we can speak for the depth, breadth, and diversity of long-term care.

[ILLUSTRATION OMITTED]

Peck: In helping the grass-roots organizations speak for themselves on Capitol Hill, what sort of guidance do you provide?

Daub: We want to make sure that our legislators know our people on a first-name basis. We encourage members to visit our facilities, and we bring members to Washington to meet not only with legislators, but their staffs. And these are not only the owners making these visits: administrators, nurses, dietitians, CNAs, LPNs--the faces of long-term care. As for guidance, we suggest a few rules for the visit: First, be on time. Second, don't lose control of the meeting. As a former member of Congress, I can tell you that it's great to see a friendly face from home, but there's a tendency to want to visit and talk about personal matters. Then the buzzer rings for a vote and you're gone. So we suggest asking the member if we can visit a bit more later, after we've discussed the message you came to deliver. Persistence is another rule; hang in there with your message. Offer to walk the member to the floor to have a bit more time.

As for facility visits, we advise members to involve the legislators with their staffs, the local volunteer groups that help out, even their bankers. Show them the faces of long-term care and what we do, that we're not just that long, dark hallway with a funny smell where people go to die. Facilities have changed a great deal in recent years, and we should be proud to show that off.

Peck: Aside from time-challenged congressmen, what are the obstacles that facilities encounter in trying to get their messages across?

Daub: Two words: lousy press. I remember seeing a Detroit Free Press headline recently about how 11,000 Michigan residents had died in nursing homes between 1999 and 2002. The article itself was quite good, but the headline played on that old image--nursing homes as a place to die. But today our facilities are places where people go to live to the best of their abilities. The average stay is less than 60 days. And for the frail elderly averaging 86 years of age and having four ADLs, there are those great stories of four million people going to work every day to help them to live out their days as well as they can. These are the stories that need to get out to the public.

Peck: There's been a trend in federal and state policy making toward moving away from long-term care facilities toward home- and community-based care. What's your view of that?

Daub: I'm very supportive of the idea of the appropriate care setting, and of giving people a choice. But when we talk about taking people out of nursing homes to put them in "cheaper settings," let's talk about quality, appropriateness, and giving the right outcome at the right price. Home- and community-based care may not be cheaper, although it might give the right outcome. I would challenge someone to study nursing homes today, though, and pick out a significant number of residents who should be in home- and community-based care instead. Simply forcing people into a less expensive setting may simply mean lower-quality care. And that, in the long run, drives the cost of care higher. All settings have their place, but they have to match up with consumers' needs.

Peck: What is your view of the latest Washington developments on Medicare and Medicaid?

Daub: We had been warning about the caution needed on the Medicaid budget since last November without much effect, but we kept building coalitions and asking for grassroots dialogue until the message started getting through to Congress this spring. We now have a compromise we can work with--a $10 billion reduction that we think moves appropriately in the direction the President was asking for and a commission to review Medicaid financing in-depth. We wish that $10 billion was zero, and in fact it is for 2006, but the commission will give us the opportunity to influence how future outlays are adjusted. We need to address drug costs, asset transfers, and the role of private long-term care insurance, and we know that providers aren't immune to the need for change. But Medicaid already underfunds us by an average of $12.50 per patient day, and that's a reality. So, at first blush, a little bit more is coming out of our hide, but the tsunami of aging that's coming soon will provide enough business for everyone if we plan for it appropriately.

[ILLUSTRATION OMITTED]

As for Medicare, we're finally seeing the growth of a bipartisan network of congressional members and staffs who recognize the relationship between Medicare and Medicaid in financing long-term care--that, for example, in a nursing home with 100 beds, 10 Medicare beds might subsidize the loss occurring on the 70 or 80 Medicaid beds. We have the lowest net after-tax margins of any providers in the healthcare market--about 2.8% profit versus the double-digit profits in other healthcare fields. If you take $32 to $38 a day out of RUG adjustments, that will tip the scale back to instability, uncertainty, and layoffs, no matter what you do. At a time when the profession was recently being praised by then HHS Secretary Tommy Thompson and CMS Administrator Mark McClellan for the progress it has made in quality of care, these proposed reimbursement cuts seem to fall disproportionately on long-term care. That's what this particular fight is all about.

Peck: In trying to restore some balance, you're working vigorously to strengthen AHCA's political action committee [PAC]. What are your goals in this?

Daub: We've always had a fairly decent PAC, ranking about 19th overall in size. When you look at our profession's reliance on Medicare and Medicaid and the tremendous regulatory burdens it bears, you realize that members of Congress influence this funding support for elderly, frail, and disabled care. They have to run campaigns and they run them like businesses, just like nursing homes do. So you help to raise money with a PAC. While you don't get votes with a PAC, you do get access to the members and get your story told.

So our goal is to beef up PAC contributions to $2 million this congressional cycle, and up to $10 million in the following six years, both hard and soft money and presidential. We're thinking long term here, realizing that a number of healthcare PACs are already in the $3 to $5 million a year range and are pretty effective. I admire their organization.

Peck: It was interesting to see Rep. William Thomas, chairman of the House Ways and Means Committee, issuing statements recently that the real financial solution for the aging baby boomers is not just Social Security reform or tinkering with Medicare and Medicaid, but extends across all retirement security programs, and this requires some unified thinking. You came out foursquare in support of that view. Care to elaborate?

Daub: There's no question that Social Security reform is an important piece of this, but there's a larger retirement security picture, and it goes beyond Medicare and Medicaid, too. Chairman Thomas is right, this is not something that we should be trying to solve piecemeal. Let's look at the facts: FICA is a flat 12.4% tax that, for 90% of Americans, represents more than they pay in federal income tax. Then you have a dedicated tax for Medicare Part A Hospital Insurance, plus Part B [supported by 75% general revenue and 25% copay by beneficiaries] for physician reimbursement, you have SSI coming from general revenues, a new Part D drug benefit from the same, and the roughly 60-40 split with the states for Medicaid funding. This stuff all fits together, but it just isn't being looked at that way.

I will say this: The great thing about today's budget deficit environment is that it forces people to come to grips with issues like this. It's healthy to hear people say that we need big, long-term strategies. Quite frankly, when I was in Congress 17 years ago, I assumed we'd have all this put together and the state survey system converted to measuring outcomes by the turn of the century. It's an eerie feeling that virtually nothing has changed in all those years, but I sense now that people are starting to focus on the demographic realities of aging in this country, and there are some good things in the cooker that will affect our kids positively in the future.

Peck: It's difficult to conclude an interview like this without asking about the current relationship of AHCA and the American Association of Homes and Services for the Aging [AAHSA] and your own personal thoughts on the for-profit versus not-for-profit concept.

Daub: AAHSA President/CEO Larry Minnix and I lunch together monthly and our staffs work closely together. We're collaborating on the Center for Excellence in Assisted Living [CEAL], the National Long-Term Care Commission, and the Sioux Falls group of long-term care leaders that focuses on CMS regulations and processes, and we're pushing CMS to get out the necessary program memoranda to implement the Medicare Part D drug benefit--although we're getting a little nervous about that one, because there are so many questions unanswered.

Obviously, we have both for-profit and not-for-profit models in long-term care, and both structures perform well but with somewhat different objectives and cultures. I think it's healthy for the market to have a choice between them. I don't find the comparative quality studies of the two models to be definitive. Some people work better in a more structured for-profit environment, others in a not-for-profit environment which, in some cases, can be better structured than some for-profits. Both models can adopt Green House or Pioneer approaches, and both support Quality First. I also know this: You can be either for-profit or not-for-profit, but neither is for loss. Certainly, Medicare and Medicaid funding doesn't differentiate between business models.

Peck: Any final thoughts on long-term care policy development?

Daub: [Laughs] We need to get some positive role models out there, some celebrities, in support of long-term care, and maybe a catchy tune to spark things up. We definitely have to stop the bashing that goes on, that's for sure.

To send your comments to the editors, e-mail [e-mail]. For reprints in quantities of 100 or more, call [phone].