here for PDF format
for participants responses to this interview.
of Discussion with LaRhae Knatterud, Mick Finn, and Eric Schubert
Civic Caucus, 8301
Creekside Circle, Bloomington, MN 55437
Friday, August 14,
Verne Johnson (Chair); Janis Clay (phone), Bill Frenzel (phone), Paul
Gilje, Jim Hetland (phone), Jan Hively, Dan Loritz, Tim McDonald, Stacia
Smith, Bob White
Context of the meeting—
Because of the importance of long term care to the state, the Civic Caucus
has been urged for some time to get more into the issue, which is today's
Welcome and introductions—We
have with us today three highly qualified people to talk about the
challenge of providing long-term care to the people of Minnesota.
is director of Aging Transformation at the Minnesota Department of Human
Services. She has been at the Department since 1994. While there she has
done extensive work on the changing demographics of the state, including
staffing the state’s long-term care task force from 2000-2003. She has
written reports for the legislature, and presents regularly to groups
around the state. She is presently staff leader for the department’s
Transform 2010 project, preparing the state for the shifting age of the
leads Ecumen’s senior housing and services operations throughout much of
the Midwest. Before Ecumen he was vice president of customer operations
for UCare Minnesota, and senior vice president of public affairs for the
Minnesota Health and Housing Alliance. He served as assistant commissioner
of health in the administration of Governor Perpich.
Vice President for Communications and Public Affairs for Ecumen. In 2006
he directed the Ecumen Age Wave Study, the largest survey ever of
Minnesota baby boomers’ views on aging. He also blogs about innovation
related to aging at Ecumen’s “Changing Aging” blog. In 2007 he was named
as one of the Twin Cities’ top leaders under age 40 by the
Minneapolis/St. Paul Business Journal.
LaRhae will set the
stage for the discussion, laying out data and providing background on
demographic changes taking place. Mick Finn will talk about the practical
side of providing care, and Eric will add from his experiences.
Comments and discussion—During
comments by Knatterud, Finn and Schubert and in discussion with the Civic
Caucus the following points were raised:
1. Summary of the problem in long term care---Schubert
outlined the heart of the problem as follows:
A critical leadership
opportunity for Minnesota's next Governor and the citizens of Minnesota is
to transform how we pay for long-term care and empower people to get the
right services and care in the right place at the right time. To enhance
Minnesotans' quality of life and fiscal health, we must innovate in this
public policy area:
a. Impact of baby
largest growing demographic segment is residents 50+, with the fastest
growing segment Minnesotans 85+. In 2020, we'll have more seniors than
children, a Minnesota first. With people living longer with chronic
conditions, need for long-term care services - from home services to
transportation to assisted living to intensive care will increase.
b. Projections of future expenses are beyond
our capacity to finance--
Government spends more than $1 billion today on long-term care in
Minnesota, which today does not pay for the real costs of providing that
care. If the status quo remains, government will spend at least $20
billion in Minnesota by 2050, crowding out other investment needs.
c. Small current use
of long term care insurance-- Medicare does not pay for
long-term care, and only about 10% of Minnesotans have private long-term
care insurance. The remainder of care is provided by family members or by
Medicaid after a person impoverishes him or herself.
d. Decline in
availability of family care giving--
The availability of family caregivers is declining due to smaller family
size, family members separated by long-distance and families having heads
of the household working fulltime. Every 1% decline in the percent of
eldercare provided by families in Minnesota costs the public sector an
additional $30 million per year.
e. Higher costs to businesses--It
costs U.S. businesses $33 billion in lost productivity due to employees
having to miss work to provide care and services to family members.
f. Less availability of family resources—Prior
to the recession, approximately 30% of Minnesotans born between 1936 and
1964 were at "very high risk" of having inadequate retirement income and
unable to afford health and long-term care costs.
2. Demographic change: an aging population--Knatterud
handed out a report she drafted for the Legislature in 2005 (“Financing
Long-Term Care for Minnesota’s Baby Boomers”) on the challenges of
financing long term care. One pair of statistics: The next 25 years will
see a doubling of the state’s population of people over age 65, and a
tripling for those over 85.
be tempered by growth in the population as a whole, the chair pointed
out—to which Knatterud agreed, but said that there is still a shift from
12.5 percent of the population presently over age 65, to 25 percent.
About 30 percent of the boomer generation don’t have children.
said that the notion of ‘productive aging’ is picking up currency, and
that society may become—will need to become—healthier as it ages.
agreed, “The goal is to live to 100, and die of nothing.” (quote from Tor
Dahl, health economist)
resource persons noted that a contributing factor to the need for long
term care is whether people are caring for themselves---such as avoiding
3. Who provides care for the elderly--The
vast majority of long-term care—91 percent—is provided by family; either a
spouse or adult children. This is down 6 percent from two decades ago.
There are possible explanations for this, Knatterud said. Families are
trending smaller, women are working, the role of churches in assisting
families is decreasing. Knatterud estimates that family-provided long
term care is worth about $7 billion annually in Minnesota, which is vastly
higher than the government investment in long term care in the state,
about $1 billion annually. Even a small percentage drop in
family-provided care will have major expense implications for government,
“This is a
major public policy issue,” she said. As the trends pan out, and the
population ages while the role of the families decreases, something will
need to fill the void. “If families don’t provide the care, we will need
to pay for it somehow.” She has a few ideas:
credits for people who care for a dependent adult
Services: respite, basic supports, professional advice
purchasing of long-term care insurance
There is a
high demand for services, she noted. Many people want and need to care for
elderly in their families and would benefit greatly from a professional
coming into the house periodically or daily to provide advice, perform
functions of care, “and just to give you a break so you can have a life.
It can be all-consuming caring for someone.”
said that there is a federal strategy to address some of these points
floating around the health care bills presently in the works. Legislation
being considered in the House and Senate is The CLASS (Community Living
Assistance Supportive Services) Act, which provides a national insurance
trust that offers voluntary participation. .
matter of long-term care insurance, Schubert argued that it should be a
standard policy that people own, but as it is only about 7 percent of
adults have one. People don’t purchase for a number of reasons, including
assuming Government will pay for care, they don’t understand the policies
or trust that they’ll be there for them when they need the benefit, they
don’t want to think about aging or end of life, it’s not a priority, or
they can’t afford it. The percentage in Minnesota is slightly higher,
about 10 percent.
4. Who pays for long-term care?--The
speakers said that first a person’s private resources are exhausted.
Anyone on public assistance must first have utilized all their personal
assets. This is why long-term care insurance is so important. Families put
in an average of $300 of their own money, monthly.
average assets of a middle class person at the end of their life are
$100-200k, usually in the form of their home. This is exhausted quickly.
Public assistance in the form of Medicaid only comes in at the very
bottom, and doesn’t cover costs. “Many more people die with nothing than
it is commonly believed.”
disconnect has significant ramifications for the public coffers and the
public good, Schubert said. On top of it, we continue to make
breakthroughs on treatment of chronic illnesses that, while extending
life, are entering a realm of long-term care that we haven’t seen before.
“This is a
huge women’s issue,” a member added. “Women leave the workforce to care
for spouses or family members and it affects their pensions, their pay for
5. Advice to gubernatorial candidates: We need
chair asked the speakers what advice they might provide to gubernatorial
candidates on long-term care. Schubert had some good thoughts:
them, ‘You’ve got to get hip to the age wave.’ Everything the Civic Caucus
talks about is tied to health care, and long term care—transportation,
education —all of this is interconnected and affected by what it will take
to finance long-term care.
about innovation in transportation and education; innovation is needed
also in health care or else the whole system will be overwhelmed."
need to pay attention to this, too, the speakers agreed. As the population
ages and more workers find themselves needing to care for family members,
employers will need to provide flexibility to ensure productivity. “Soon ½
of workers will be caring for someone,” Knatterud said.
6. Opportunities for innovation--Finn
said that his role in this is to look for viable innovation opportunities
as the need for care expands. It is possible to meet needs, at a much
lower cost than we are used to. He laid out three:
Extend assistance with minimum leverage. Provide something between
all-or-nothing care; something between staying home with no help, or going
into a full-service nursing home. At-home visits, for example. At-home
rehab, support. This is cheaper both for the people who then get to stay
in their homes, and for the state.
b. Chronic Care:
There is tremendous opportunity to rethink how we provide chronic care.
Continuous, arduous, expensive volleys between home and the emergency room
are not good for anyone. Opportunities exist for new types of
collaboration between hospitals and senior care providers to provide more
integrated, cost-effective care and preventive services while creating
truly integrated local care networks.
c. Provide live-in care
options that are less like nursing homes and more like apartments.
In Minnesota you don’t need to be in a licensed facility to receive public
support.. That enables flexibility for customers and providers, and a
reduction in reliance on cost-intensive institutional nursing homes.
to change the way people age,” Finn said. “An arrogant claim, in ways, but
it's what Ecumen tries to do.
reduced the number of beds in nursing homes by providing alternative
living and service options. People don’t want to be in nursing homes, and
they are financially inefficient the way Minnesota currently utilizes
them. .” He continued:
to be that for the frail, elderly, poor the only option outside of the
home was a skilled-nursing facility; a nursing home. That is a very
expensive proposition, and states are applying it frivolously—or at least
more than we need to. The costs of physical construction are double in a
skilled nursing facility than assisted living. The costs of operating it
are four times higher. They impoverish people. And government
reimbursement for care provided doesn’t cover costs.
is to provide services that substitute for nursing homes,” Finn concluded.
“We can put up a wood-framed apartment cheaper than a cinder block
institution We can hire people to provide assistance well at a rate lower
than a staff comprised entirely of RN’s and focus RN’s on where they’re
asked Finn about the revenue model of their services. “We maintain about a
70/30 private/public split in sources of revenue,” Finn said. “As the
public rates for reimbursement go up or down, that relationship changes.”
long-term care as a growth area, so long as providers continue to find new
ways to meet needs. “We can see a business future in this kind of
environment,” he said. “And, we can have our own vision of aging. When
someone comes into one of our homes we hammer out a contract with their
family. We call it a Lifestyle Covenant. What kind of services do they
need? Do they just want to live there, with no services and retain
complete control? Do they need something more? We let them define it
themselves, and revisit the contract every year.”
concurred that this is a good approach. “From the state’s perspective, we
do prefer community-based care,” she said.
7. Change in the function of nursing homes--Finn
emphasized that major changes in the role of nursing homes are occurring.
About 60 percent of nursing home residents don't need such a high level of
care. He prefers the term skilled nursing facility (SNF) rather than
nursing homes. Average stay is now about 27 days. It's extremely
expensive to care for someone in a traditional nursing home. Long term
care is being provided more and more in assisted living and independent
living apartments where people would rather live.
the state is raising the level of need to qualify for Medicaid, which pays
for SNF (nursing home) care for people who have exhausted other resources,
which will have the effect of reducing the number of people in an SNF.
8. Shift in emphasis to chronic disease care in
the SNF (nursing home)--More
and more, Finn said, the SNF is concentrating on dealing with chronic
disease (e.g. asthma, diabetes, congestive heart failure) management, a
service that's not provided by hospitals. If you walk into a SNF at 10
p.m. any night, the facility will look more like a general ward in a
hospital, he said. The objective of a well-run SNF is to help manage the
chronic disease so the resident/patient can be sent back home as quickly
9. Does Minnesota need 300-plus nursing homes?--Referring
to the 2010 campaign, Schubert said that candidates for Governor and
Legislature need to address whether the state still needs 300-plus nursing
homes. The word "home" ought to refer to the place where someone wants
to live. More emphasis is needed on assisted living and in-home care.
More emphasis is needed on personal responsibility.
10. Support a broad integrated approach---Knatterud
highlighted "Transform 2010", a joint venture of the Minnesota Department
of Human Services, the Board of Aging, and the Department of Health, to
prepare Minnesota for a coming age wave of baby boomers and a permanent
shift in the age of the state's population. Five themes are central to
Transform 2010, Kantterud said:
a. Redefining work and retirement--Minnesota
should encourage individuals to continue working in both paid and non paid
roles beyond traditional retirement age.
b. Supporting caregivers of all ages--Minnesota
needs to slow the decline of family care giving by offering elder care in
all work places and redesigning services to wrap around family care.
c. Fostering communities for a
lifetime--Communities should be good places to grow up and grow old, and
offer physical, social and service features for residents of all ages.
d. Improving health and long-term care--We must
transform health care, promote good health for all, improve chronic care
and intensify long-term care reform.
e. Maximizing use of technology--We should use
technology to maximize the benefits and minimize the hazards that
accompany a permanent age shift.
For more discussion of
"Transform 2010" go to: http://www.dhs.state.mn.us/main/idcplg?IdcService=GET_DYNAMIC_CONVERSION&RevisionSelectionMethod=LatestReleased&dDocName=id_054450.
11. Possible incentives for people to save for
long term care?--It was suggested that perhaps Minnesota ought
to adopt a form of incentive said to exist in the United Kingdom where
people are given prizes for setting aside savings.
12. Thanks--On behalf of the Civic
Caucus, Verne thanked Knatterud, Finn, and Schubert for meeting with us