Posts Tagged ‘Wall Street Journal’

Family Care-Givers of Elderly Recognized for Budget Impact

DECEMBER 23, 1996 VOLUME 4, NUMBER 25

National policy considerations regarding long-term care of the elderly and disabled are beginning to be noticed by business and political leaders. When the business-oriented Wall Street Journalwrites about the issue, conservative politicians and policy makers can not be far behind.

In a December 11, 1996, article titled Families of Elders Have a Lot Riding On Budget Debates, the Journal recognizes the profound effect Congressional action can have on the quality of life for elders and their caregivers. Of particular interest is the analysis of the recent Kassebaum-Kennedy law criminalizing some gifts by those facing long-term care expenses (see Elder Law Issues, August 19, 1996). The Journal article refers to the new law as the “throw-Granny-in-jail” law.

Although Medicaid now pays for approximately half of all formal long-term care for seniors and the disabled, the Journal article points out a more profound statistic: as much as 80% of long-term care is provided directly by family members. Nearly all of that care is provided in the home, where Medicaid is the least likely to be considered as a possible substitute.

Government involvement in long-term care has focused primarily on nursing home placement. In the past five years, however, the government’s role has begun to shift. While Medicaid provided $3.4 billion in home care services in 1990, by 1995 the figure had tripled (to $10.33 billion). At the same time, Medicare (which has traditionally provided more home care services than Medicaid, but still has focused on institutional care) increased its home care benefits from $3.66 billion to $14.90 billion, a four-fold increase.

Now Congress is seeking ways to cut the federal budget, and particularly the federal-state commitment to Medicaid care. The “throw-Granny-in-jail” law is an early attempt to restrict payments for long-term care (though some discussion is being undertaken in Congress about repealing the new law altogether). Any significant change in government benefits is likely to have a devastating effect on the ability of families to provide some care to their aging seniors. As theJournal article points out, it could also lead to the paradox of increasing nursing home costs as the family members providing 80% of care find themselves unable to make their care plans work.

1997 Medicare Figures

Beginning with the Social Security checks due January 3, 1997, Medicare premium deductions will increase to $43.80 per month (up from $42.50 per month in 1996). Since the new year also brings a 2.9% increase in the Social Security benefit, most people will still see a larger total check.

Other Medicare figures will also change beginning with the new year. The initial hospitalization deductible increases from $736 (1996) to $760 (1997). Coinsurance (the amount which Medicare beneficiaries must pay for their 61st through 90th days in the hospital) will increase from $184/day (1996) to $190/day (1997). “Lifetime reserve” days will have a copayment increase from $368 (1996) to $380 (1997).

Skilled nursing care copayments will also increase, from $92/day (1996) to $95/day (1997). Since Medicare has no deductible or copayment from the first twenty days of skilled nursing care, however, the copayment amount only applies to the 21st through 100th day of nursing home placement.

Medicare HMO participants will not be affected by the new copayments and deductibles. HMO programs are permitted to charge less than Medicare copayments and deductibles, and most (in the Tucson area, at least) charge only a single per-visit copayment. Similarly, Medicare beneficiaries with Medigap coverage will not be directly affected by the increases.

Singapore’s Legal Laboratory for “Family Responsibility”

SEPTEMBER 23, 1996 VOLUME 4, NUMBER 12

Faced with the high cost of nursing home care for a growing population of elderly residents, several states have flirted with the concept of “family responsibility” laws. Such laws, if enacted, would impose a duty on adult children to support their needy parents, and might be used to reduce both the frequency and cost of nursing home institutionalization.

A small number of states have adopted “family responsibility” laws, or have discussed reactivating old laws. Arizona does not have such a law, and no serious discussion has been heard on the issue. For the moment, federal rules prohibit states from enforcing such laws, but that may well change as Congress moves ahead with its pledge to “end welfare as we know it.”

How would family responsibility laws work in the real world? Would children be obligated to support even parents who had abandoned them? What about children of different means, or living in different states?

Some insight into how such a program might work comes from an unlikely quarter. The country of Singapore is presently conducting just such a socio-legal experiment, and the early results are interesting.

Singapore’s new law went into effect on June 1, 1996. Proponents of the law argued that it was needed for largely symbolic reasons, and that the specially-constituted courts should not expect to see very many cases. To everyone’s surprise, over 100 claims have been filed by (or on behalf of) parents against their children in the first three months.

According to a Wall Street Journal article, Singaporean legislators mostly wanted to provide legal support for traditional Asian values which encourage support of one’s parents. One couple making a claim before the new court, however, complained that their daughter “prefers paying for the living expenses of her dogs than for ours.” Another complainant is the daughter of an 85-year-old woman who argues that her brothers should help provide care for their mother; the two sons claim that the mother should simply be placed in a nursing home.

A third case described in the Wall Street Journal article involves the children from a second marriage seeking support from their father’s children from his first marriage. This case raises interesting legal and philosophical issues, since the support to which the father is entitled may be adjusted for the different treatment he accorded the two families when his children were young.

It is this latter issue which most troubles some Singaporean observers. Since the support to which parents may later be entitled is affected by the way in which they treat their young children, critics worry that parents will be encouraged to quantify every good thing they do for their children, just in case. Opponents argue that the legislation reduces the moral effect of traditional Asian values by converting them into a Western-style legal analysis of rights and responsibilities.

Will similar laws be in Arizona’s (or the country’s) future? It is too early to be certain, but Singapore’s experience may be an interesting precursor to our own.

Family Caregivers: Elder Care in a Post-Federal Era?

APRIL 15, 1996 VOLUME 3, NUMBER 42

Since the adoption of Medicare and Medicaid in the mid-1960s, nursing home placement has become the norm for seniors needing nursing services. Now that legislators are actively working to scale back the cost and scope of both federal and state programs providing elder care, new approaches to caregiving are being considered.

According to a recent Wall Street Journal article, one of those “new” approaches to elder care is decidedly old-fashioned. The article reports on a budding trend toward family members providing care in their own homes.

The article reports on the Bodlander family in Washington, D.C. Mother Lucy Bodlander, 80, requires assistance with activities of daily living, but family members have decided to provide that assistance at home. Mrs. Bodlander’s two children, Deborah and Gerald, alternate caring for their mother, moving her between their homes each month. Along with Mrs. Bodlander’s personal effects, they transfer one other thing each month: a full-time caretaker who lives with Mrs. Bodlander at whichever child’s house she currently calls home. The children also pay the cost for the caregiver, which averages about $2,000 to $3,000 per month.

With federal cutbacks in Medicaid and Medicare, such arrangements may become more commonplace. Currently, elders and their families pay about two-thirds of in-home care costs (up from slightly over half in the early 1980s). Elders, family and friends account for over three-quarters of all long-term care already, much of that through unreimbursed caregiving.

The Wall Street Journal article also reported on several trends which may assist with family caregiving in the future:

  • Better support for caregivers. Government, employers and others are recognizing the importance of family caregiving and the need for support and respite.
  • More flexible long-term care insurance. Home care benefits are becoming more common and more flexible, though the cost of policies remains high.
  • Technology. In-home monitors, telemedicine and other technologies promise to make care more effective and less expensive.
  • Innovative programs. In-home services, ranging from snow removal to home repair, are being developed in select elder markets.

Assisted-Living Facilities Prove To Be Financial Winners

MARCH 4, 1996 VOLUME 3, NUMBER 36

The latest darlings of Wall Street seem like an unlikely industry. According to an article in the Wall Street Journal last week, one of the hottest new financial developments is companies which run assisted-living centers.

In the past year, several companies in the assisted-living business have “gone public,” offering stock for the first time. Now, according to the Wall Street Journal article, early results indicate that the businesses have done very well for themselves.

Among the companies singled out by the Journal as recent winners is the Forum Group, which has seen a 47.2% increase in its share price so far this year. Another standout is Emeritus, which has increased by 67.7% in the same time period.

Why is this industry singled out for such gains? Analysts suggest that there are several reasons for the recent growth in the industry, and that those same reasons predict continued growth. Increasingly, assisted living centers are used as alternatives to nursing home care, at a significantly lower cost.

Average national costs in assisted living centers tend to run in the $55-to-$60-per-day range, while nursing home costs are typically $80 to $90 per day. Given strained government and personal budgets, those savings not only look attractive today, but are likely to be even more attractive in the future.

Most states also make building assisted living centers easier than nursing homes. While certificates of need may restrict the number of new nursing home beds, there may not be such limitations on assisted living facilities. And nationally, most assisted living facilities reach 95% occupancy within 15 months of opening.

Nursing home beds are not increasing as rapidly as assisted-care facilities. Furthermore, the available nursing home beds are increasingly occupied by acute-care patients who have been eased out of hospitals by managed care, DRGs and other trends in health care. These trends have helped fuel the growth in the assisted-living industry.

Most of the principal players in the development of assisted living centers are small, recent start-ups. As a result, they have not yet proven to be very profitable businesses. Most of their income for the near future will be expended on start-up and construction costs, so they may not collectively be profitable for some time to come.

Still, even though the companies have not yet made substantial profits, investors have. In addition to The Forum Group and Emeritus, the Wall Street Journal article singled out Sterling House (which posted a 75.4% gain in share prices so far this year), Assisted Living Concepts (with a 39% gain in price) and ARV Assisted Living (38.3%). One company, Just Like Home, actually posted an 11.1% decrease in share price so far this year.

Jury Awards On Rise For Elderly Victims of Poor Nursing Care

SEPTEMBER 11, 1995 VOLUME 3, NUMBER 11

When Walter Spilman entered the Eastbrooke Health Care Center in Brooksville, Florida, he was terminally ill. At 88, he had been diagnosed as suffering for Alzheimer’s disease and cancer, and he was not expected to live long.

After Mr. Spilman’s death, his estate brought an action against Eastbrooke for the mental anguish he suffered, claiming he was denied the kind of mattress and bedding he required to prevent bedsores, that he was not turned frequently enough, and that he was made to lie in his own urine and feces. Even the attorney for the nursing home conceded at trial that it had violated some of Mr. Spilman’s rights and some verdict should be entered in favor of the estate. One of the points conceded by the nursing home: Mr. Spilman had not been fed for one six-day period.

After a two-day trial featuring photographic evidence of Mr. Spilman’s condition, the Florida jury awarded over $2½ million in damages to his estate. Some jurors indicated they would have gone as high as $10 million.

Previous Elder Law Issues have reported on a trend toward larger jury awards for older plaintiffs in more traditional personal injury cases. Mr. Spilman’s case and a handful of others reflect another recent trend: jury verdicts for negligent nursing care are also on the rise. A recent article in The Wall Street Journal focused on the trend.

According to independent jury research, the mean award in nursing home negligence cases has doubled in the past seven years, going from less than $250,000 to over $500,000. Experts in the field ascribe the increase to a growing public perception that moving to a nursing home need not consign one to oblivion, and that it is both important and possible to die with dignity, regardless of the setting.

One reason cited for the increase in nursing home negligence cases: recent regulatory changes requiring careful documentation of all nursing home problems and regular written surveys. That makes it easy to demonstrate a pattern of abuse or neglect, if one exists. It also makes it easy to demonstrate when a nursing home has failed to take steps to remedy problems with the quality of care in other cases.

In a Cumberland County, North Carolina, case, state surveys were instrumental in securing a settlement of $850,000 for the estate of Easter West. Attorneys for the estate argued that they should be able to use the state evidence of over 200 instances of failure to follow physician’s orders, improper medication administration and failure to assess patients’ needs.

The increase in jury verdicts surprises some who indicate that decline and death are the usual result of institutionalization. The attorney for one nursing home told the Journal: “Guess what? People don’t go to nursing homes to get better and check out. They go there to die.”

Formal Elder Care Programs Not In Most Business’ Future

AUGUST 7, 1995 VOLUME 3, NUMBER 6

When shoemaker Stride Rite, in 1971, became one of the first corporations to offer a sponsored day care program for employees’ children, it was hailed as a futuristic move. Now such programs are fairly common in many industries.

Almost twenty years later, Stride Rite became a leader once again with a program to provide adult day care for employees’ parents and other family members. The move was once again seen as forward-looking and the wave of the future. Now it looks like the future is not shaping up as expected.

This fall Stride Rite will move its corporate offices from Cambridge to Lexington, Mass. When it moves, it will not be recreating the five year old adult day care program.

The company cites low enrollment in explaining its decision not continue the elder care program. In an article in last weeks Wall Street Journal, Stride Rite executives and other experts are quoted as indicating that the anticipated use of elder care programs simply has not materialized, and that employees have consistently demonstrated a preference for other types of assistance with care of elderly relatives.

No one questions the significance of the problem. The costs to employers when staff members must provide care for family members are well-documented and substantial. It turns out that the solutions are probably not in day care programs but in alternative work structures.

Experts list these consistent elements of successful elder care programs run by employers:

  1. Flexible scheduling for employees who need to be available in emergencies.
  2. Resource (information and referral) services available to employees.
  3. Elder-care seminars and other mechanisms to provide information and planning options for employees about to face increased demands for care.
  4. Long-term care insurance options for employees and family members (including, in some instances, parents).
  5. Strong organizational support for caretaking employees and their need for information.
  6. Involvement with community advocacy and care-giving groups.

One example of these strategies in the local market: Hughes Missile Systems Company has provided informative seminars and information-and-referral services to employees for many years. While it is difficult to quantify the financial reward to Hughes from this program, the company believes it has a significant positive effect and is committed to continued support.

ALTCS Eligibility Ordered

APRIL 24, 1995 VOLUME 2, NUMBER 42

Wayne Greer was an Arizona nursing home resident. Since his assets were limited, his wife Janet applied for Arizona’s long-term care Medicaid program, ALTCS.

ALTCS calculated that the Greers’ assets should be limited to $14,148.00. Unfortunately, Greer had an interest in a piece of real property he owned jointly with his brother and sister. The property had been listed for sale since 1987, but had not sold.

ALTCS denied eligibility based on the availability of the jointly-owned property in February, 1993. The final agency decision (after appeals) came in August, 1993. Despite Greer’s death, his widow brought a federal court action to challenge the ALTCS determination.

Last month (just over two years after Greer should have been found eligible) the Federal District Judge ruled in favor of Greer’s estate.

Despite regulations that provide for a new determination of the availability of property that is difficult to sell, the Court ruled that ALTCS is bound to use the same procedure adopted by the Social Security Administration in SSI determinations. Under that approach, the fact that the property had been continuously offered for sale without buyers was sufficient to establish eligibility. Estate of Greer v. Chen, USDistrict Court, Arizona, 3/27/95.

Ed. Note–the same result should have obtained if Greer’s siblings simply refused to sell their interests in the property. This case points out that regulations can be wrong, and even insoluble problems sometimes have more than one legal solution.

Delaying Social Security

Social Security is available, at a permanently reduced rate, to those who decide to retire at 62 instead of 65. Many seniors are confused about whether the early retirement option makes economic sense for them.

A recent article in The Wall Street Journal included a thoughtful economic analysis of the question, with suggestions on how to make the choice. More information is available to Elder Law Issues readers who want details, but the suggested factors to consider include:

  • Whether you are likely to work again.
  • The age of your spouse.
  • Your family health history.

Other available sources of retirement income, and the types of investments you currently have.
The author’s general advice? Despite common notions that it always pays off to delay retirement, for most people the economic considerations make it “pretty much a toss-up.”

Injuries to Nursing Home Aides

MARCH 27, 1995 VOLUME 2, NUMBER 38

While significant attention has been paid to injuries sustained by nursing home residents lately, little has been said about injuries to staff members. A recent Wall Street Journal article described in some detail the kinds of problems aides in nursing homes may face.

According to the WSJ, “nursing homes have become more dangerous to workers in recent years with an increase in residents who are sicker and less independent than in the past.” By far the largest number of injuries are caused by lifting residents to and from their beds, and to and from the bathroom. In many (perhaps most) facilities, aides may perform dozens of lifts a day, often unassisted.

According to Bureau of Labor statistics, “nursing care facilities” average 17.3 injuries per 100 workers per year. The logging and construction industries experience 13.8 and 12.2 injuries per 100 workers, respectively. Industries with higher injury rates than nursing homes include meat processing (27.6) and motor vehicle manufacturing (24.0).

One contributor to the problem, according to the WSJ, is the fact that nursing home aides nationally earn an average of $6.30 per hour. With wages at those levels, aides often feel that they can not afford to skip work to recover from minor injuries.

Many facilities utilize mechanical lifts to reduce the number of back strains. But many in the industry resist the use of machines which are usually viewed as impersonal, and which convey an undesirable factory-like feeling.

In the face of the growing problem, some facilities have developed a comprehensive program to reduce injuries. Such a program may rely partially on mechanical lifts and partly on rules requiring two or more aides to perform a non-mechanical lift. Some facilities have also added provisions for slightly injured workers to perform light duty work rather than be sent home.

One such facility cited by the WSJ, the Kennebec Long Term Care facility in Augusta, Maine, reported a dramatic reduction in its injury rate when a comprehensive program was implemented. Among its 270 workers, Kennebec had lost 573 workdays in 1991 to injuries. After the program was in place, the number of lost workdays dropped to 25 in 1994. But the costs of the program were also substantial; Kennebec paid approximately $60,000 for 12 new mechanical lifts for its 245 residents as part of the program.

Meanwhile, the problem continues to grow worse. Today’s rate of injuries among nursing home aides represents a 55% increase since 1983, and the trend is expected to continue as the number of nursing home residents and the severity of their illnesses increases.

A Tale of Two Trends

JANUARY 9, 1995 VOLUME 2, NUMBER 27

Two interesting articles about trends involving aging appeared in the Wall Street Journal in recent weeks. There is unlikely to be any relationship between the two trends, but:

Bigger Personal Injury Awards

In the January 4, 1995, issue of WSJ, trial lawyers and other experts are quoted as indicating that jury verdicts for elderly plaintiffs are increasing. Of course, jury awards have grown larger (at the same time that smaller proportions of plaintiffs are awarded anything at all) for many years. The “new” trend reported by the WSJ, however, focuses on awards given to elderly claimants.

It has long been accepted legal wisdom that elderly plaintiffs tend to receive smaller awards than their younger counterparts. This has been true for several reasons, including a perception on the part of jurors that the pain endured by an older plaintiff will be troublesome for a shorter lifespan than if the injury occurred while the plaintiff was younger. One of the arguments that seems to win over jurors, says the article, is that the pain may be dis-abling precisely when the plaintiff hoped to enjoy life for a last few years.

The loss of what jurors perceive as golden retirement years may be the reason elderly plaintiffs are faring better in court. That could also explain why the trend seems to be most noticeable in blue-collar areas, where jurors are looking forward to their own retirement years.

More Church

The other trend among the elderly may not come as a surprise. Actually, it should probably be described as the elderly failing to go along with a trend that has developed among younger Americans.

According to a Roper Starch poll reported in the WSJ recently, only 38% of Americans aged 30 to 44 claim to have attended church services during the previous week; this number is down from 42% in 1976.

Among those age 45 to 59, church attendance is also down, from 45% in 1976 to 39% last year. All ages taken together have a 39% rate, compared to 42% in 1976.

But among those over age 60, church attendance is actually increasing over the years. While 23% of the over-60 crowd claimed church attendance during the previous week in 1976, 28% did so in 1994.

By the way, women are more likely to have attended church in the previous week than men; Southerners are the most likely regional group to have been to church. Perhaps surprisingly, white-collar workers, professionals and managers are more likely to have attended church than blue-collar workers.

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