Gunnar Almgren, PhD, LCSW —University of Washington, School of Social Work
Three policy issues related to aging and chronic disease are highlighted and briefly explored: 1) health care inflation and the sustainability of public financing programs for the care of the chronically ill and disabled, 2) the need to transform the dominant paradigm for the organization and financing of health care as pertains to chronic disease, and 3) the persistence of health care disparities within the aged and chronically ill population despite universal insurance coverage under Medicare. Two of these policy issues, the sustainability of public financing of health care for the chronically ill and disabled and the persistence of health care disparities, could in large part be addressed by the transformation of the health care system’s historically dominant “acute care paradigm” to a new structure that is framed by an orientation toward chronic disease management.
Despite all the political and industry rhetoric devoted to the control of health care expenditures, the rate of inflation in health care during 2006 was two times the rate for the economy as a whole (National Coalition for Health Care, 2008). Although the rate of inflation in health care relative to the total economy fluctuates from year to year, it consistently exceeds that for the economy as a whole. As a result, the proportion of gross domestic product (GDP) represented by health care expenditures has grown from 7.2% of the GDP in 1970 to its current rate of 16.0% (Catlin et al., 2008). Notably, this is about twice the proportion of the GDP spent by comparable industrialized democracies like France, the United Kingdom, and Canada (Almgren, 2007). The most pronounced effect of this level of health care inflation is the high cost of health care insurance—whether for working-age Americans and their families or for the elderly. Among working-age Americans, in 2006 the employer-based insurance premiums for a family of four increased by 7.2%, to an annual premium cost of nearly $11, 500 (National Coalition for Health Care, 2008).
The principal health insurance fund for the elderly, Medicare Hospital Insurance Trust Fund, is projected to be exhausted by the year 2019 unless health care inflation retreats or taxes for Medicare are sharply increased (Social Security and Medicare Boards of Trustees, 2008). Although funded from general state and federal revenues rather than as an insurance fund, the Medicaid program is also confronting similar sustainability problems. The Medicaid program accounts for nearly one third of publicly funded national health care expenditures, is subject to the same inflationary pressures as Medicare (Catlin et al., 2008), and every year must compete against education, transportation, law enforcement, and defense priorities for a limited pool of tax dollars. Most significantly, Medicaid is the primary funding source for the long-term care of the chronically ill and disabled (Congressional Budget Office [CBO], 1999).
Although multiple factors contribute to the problem of health care inflation and the sustainability health care financing for the elderly and the poor, among them is the reality that a small proportion of the chronically ill (both elderly and non-elderly) account for a very large share of health care expenditures. The more rigorous estimates suggest that since 1970 about 27% of health care expenditures have been concentrated among the sickest 1% of the population—of which about half are elderly (Berk & Monheit, 2001). Notably, a large share of national health care expenditures (49%) are also concentrated among five chronic conditions, three of which (diabetes, hypertension, and heart disease) are closely linked to the process of aging (Druss et al., 2001). Obviously, to the extent that the aged are an ever larger proportion of the total the population, the most economically costly chronic conditions will also increase in prevalence—thus, both further fueling health care inflation and deepening the crisis in the financing of health care.
Two essential policy alternatives are implied by these worrisome trends in health care demands and expenditures. One entails reductions in expenditures through such cost-cutting measures as reductions in payments to providers and in health care benefits to consumers—reductions that are likely to be disproportionately absorbed by the poor, the chronically ill, and the disabled. The second policy alternative, considered in the section that follows, entails a major shift in the national patient care paradigm.
The U. S. health care system, in both its financing systems and organization of services, evolved primarily during the first half of the 1900s, an era in which infectious diseases and critical short-term illnesses were dominant among causes of death, rather than chronic diseases (Almgren, 2007). The “acute care paradigm” that arose during this period thus placed emphasis on patient care systems that were effective for the treatment of periodic episodes of care over the life course. In like fashion, the prevailing health insurance models were designed to insure patients against the catastrophic costs of episodes of hospital care, and doctors and insurance companies negotiated fee structures that were based on such discrete units of care as doctor visits and specific medical procedures. Implicit in the acute care paradigm was the inflationary assumption that more intensive medical intervention during any given episode was generally better, an assumption that was reinforced by the economic incentives of the “medical free enterprise” model that shaped the American health care system (Almgren, 2007; Starr, 1982).
As noted by Anderson and Knickman (2001), by the year 2020 nearly 160 million Americans will have one or more chronic conditions that in turn will account for 80% of all health care expenditures. Yet, the acute care paradigm continues to reign supreme in the U.S. health care system, with all of its discontinuities and perverse financial incentives for providers. In order for the U.S. health care to turn from collapse toward the path of fiscal sustainability, its primary patient care paradigm must rapidly evolve to a model of chronic disease management (Anderson & Knickman, 2001; Eskildsen, 2007; Master & Eng, 2001; Stuart & Weinrich, 2004; Tilly, Goldenson, & Kasten, 2001).
As suggested by Anderson and Knickman (2001), the shift from a health care system designed around an acute care paradigm to a chronic care system better able to meet the needs of the large share of health care consumers with chronic diseases entails a number of formidable policy challenges. Included among these are 1) the development of clinical information systems better capable of supporting coordination of care, 2) the improvement of ambulatory care management of chronic conditions that contribute to unnecessary hospitalizations, 3) the alignment of physician and other provider payment mechanisms and incentives with disease management over time rather than episodic treatment of acute symptoms, and 4) a shift from specifically disease-focused interventions to interventions that are tied to functional impairments and that integrate informal and formal support systems with medical case management (Anderson & Knickman, 2001).
Of all of these challenges, none is more essential or more difficult than restructuring the Medicare program’s benefits and financial structures to better accommodate a chronic disease management model (Master & Eng, 2001; Williams, 2003). Under the current Medicare structure, all forms of provider care must fit within a very narrow definition of medical services to be reimbursed, a definition of care that excludes the kinds of chronic disease management services and long-term care services that are better aligned with the de facto prevalence of chronic diseases and disability among the elderly (Kane, Kane, & Ladd, 1998; O'Shaughnessy, Lyke, & Storey, 2002).
In fact it is Medicaid, the program that was originally designed as a means-tested health care financing program for the poor, that has become the primary means of funding the kinds of long-term care services that are essential to the holistic management of chronic disease. This structural fragmentation of public funding between the Medicare and Medicaid programs is replicated in the structural fragmentation of health care services—to the detriment of chronically ill older adults, all generations of taxpayers, and other segments of the population competing for a limited pool of federal and state fiscal resources. The innovative local and federal community-based care partnerships that are designed to bring coherence, integration, and cost-effectiveness to the care of the most disabled of older adults, like the federal PACE program (see suggested readings for a description of PACE program), are in serious financial jeopardy—both because states are seeking ways to reduce Medicaid expenditures and because the fiscal crisis in Medicare limits the ability of the Congress to provide long-term care financing subsidies to states.
Perhaps the most compelling evidence of the effects of this structural fragmentation is evidenced in the extent to which the U. S. lags far behind other affluent democracies in reducing premature deaths from diseases that are amenable to timely and effective medical care, despite the fact that the U.S far exceeds all other affluent democracies in health care system expenditures. For example, over the 5-year period between 1998 and 2003, the U.S. had reduced its age-adjusted death rates from such “amenable to treatment” diseases as treatable cancers, diabetes, and cardiovascular disease by only 4%, whereas the reduction among 18 other nations was a robust 17% (Nolte & McKee, 2008). Notably, the U.S. death rates from these “amenable to treatment” diseases were generally higher to begin with, making the lag in the decline both statistically counter-intuitive and deeply troubling. In sum, although these kinds of findings highlight health care system reform as a national policy imperative, the structural reforms in Medicare and in the organization of health care services that are required face formidable political obstacles from various provider groups that have strong economic interests in protecting the status quo (Vladeck, 1999).
The Medicare program provides universal health coverage for older Americans. However, having Medicare health insurance does not assure either equity of access to health care or equity in health care quality. Medicare health insurance coverage reduces the disparities in access and quality of health care that are prevalent across all earlier stages of the life course, but disparities by race, ethnicity, social class, and gender persist throughout the oldest age ranges as well (Agency for Health Care Research and Quality [AHRQ]; 2004, 2005).
Older adults (particularly those with disabling chronic conditions) confront a kind of double jeopardy in their quest for appropriate and equitable care. One form of jeopardy has to do with the ageism and the stigmatization of older adults in the health care system, manifested by such clinical decisions as deferring lifesaving intervention despite otherwise favorable clinical indicators (Hamel et al., 1999) and social policy perspectives that argue for age-based limits on health care (Binstock, 2007).
Social class, race, ethnicity, and gender
The second form of jeopardy arises from the older adult’s ascribed characteristics other than age that are also associated with discrimination in the health care system: social class, race, ethnicity, and gender. A recent multi-dimensional examination of disparities in the U.S. health care system conducted by the Agency for Healthcare Research and Quality, the 2005 National Healthcare Disparities Report, examined disparities in health care among the elderly by three dimensions: prevention, timeliness of care, and access to care. The findings of this report, based on data from the 2002 Medicare Current Beneficiary Survey (MCBS), showed significant disparities in health care by race, ethnicity, and socioeconomic status across all three dimensions considered. For example, the risk of colorectal cancer increases in old age, but if detected early is generally curable. An inexpensive and simple screening tool for the early detection of colorectal cancer is the home fecal occult blood test, which if positive suggests further diagnostic investigation is warranted. However, findings from MCBS show remarkable disparities in this easy form of colorectal screening by race, ethnicity, and income level—despite the fact that all elders sampled by the MCBS were by definition Medicare eligible. It is no surprise that the incidence of late stage colorectal cancer is much higher among those groups that have lower levels of early detection screening (AHRQ, 2005). Similarly, the 2005 National Healthcare Disparities Report finds that elders who are Hispanic, African American, or low-income are far less likely to have a usual source of medical care and, when seeking care, have longer wait times for their medical appointments (AHRQ, 2005). The summary point, from a policy perspective, is that Medicare’s universal health care coverage is insufficient by itself to overcome the deeply embedded disparities in the U.S. Health Care system, and that the eradication of health care disparities throughout the life course must be elevated as a central principle of health care reform.
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