When it comes to improving life's quality in the golden years, both society and the elderly have responsibilities. Elders' responsibilities are discussed in the next panel. Society's role is spelled out in programs like Social Security (1935), Medicare (1965), and the Older Americans Act (1965). This panel looks at Medicare.
The access to medical care that Medicare guarantees to the elderly, especially low- income beneficiaries, has improved their quality of life immeasurably. Medicare is one of our most popular and expensive entitlement programs, and it becomes more popular and more expensive as the elderly population grows. Today, Medicare serves about 39 million people (34 million seniors and 5 million others), about 14% of the total population.20
The chart shows major services that Medicare covered from 1980-2000.21 About 12% of the elderly are hospitalized each year, so it is not surprising that hospitals received the lion's share of Medicare benefits —$22.8 billion in 1980, rising to $86.5 billion in 2000.
Services covered by Medicare may change depending on how the political winds blow or how the budget balances. When the public outcry for government action is loud, or when special interest groups prevail, Medicare is amended or reformed.22 This is evident in the ebb and flow of payments to nursing homes, home health agencies, and Health Maintenance Organizations (HMOs, a k a managed care). The chart shows that managed care was not even an option before 1980 but by 2000 was number two in line for Medicare payments. Payments to HMOs rose from $2.3 billion in 1990 to 21 billion in 2000.
The chart shows that from 1980 to 1990 skilled nursing facilities (nursing homes) were third in line for Medicare payments but were overtaken by managed care and home health care (then home health care declined in the 1990s). Nursing homes are a phenomenon of the second half of the twentieth century. Most elderly people used to live either with their families or in boarding houses, where landlords might provide rudimentary assistance. Legislation passed in 1950 forbade Social Security payments to residents of institutions (including boarding houses) if the institutions did not provide health care. Encouraged by this and by Medicare/Medicaid, nursing homes gradually became the primary institutional setting for the care of the elderly.
Medicare Benefits: 2000
When prescribed by a physician, Medicare will pay for a short stay in a nursing home after a hospital stay. Medicare payments to nursing homes rose from $392 million in 1980 to $13.8 billion in 1998, then fell to $10.6 billion in 2000. Why the decline? The 1997 Balanced Budget Act (BBA) reduced the Medicare budget by $115 billion over five years. Payments to allhealth care providers were reduced.
Elderly people would rather be cared for at home by family, friends, or volunteers than be confined in institutions. In the last few decades, in the face of hugely rising Medicare costs and horror stories about the dehumanizing care in nursing homes, there was a shift in thinking about how elder care should be delivered. It is now generally accepted that public monies ought to be concentrated on home- and community-based services (e.g., adult day care, respite care, transportation services, and meals-on-wheels), rather than on institutional care. This shift in thinking is reflected in the chart data showing a rise in Medicare payments to home health agencies,23 from $524 million in 1980 to $8.9 billion in 2000. Peter Uhlenberg wrote: "The rapid expansion of home-care services reflects demographic change (increasing number of disabled persons), technological change (in- creasing feasibility of delivering services within the home), and public-policy changes (increasing willingness of Medicare and Medicaid to pay for home health care."
The chart shows that between 1990-1997, there was a huge rise in payments to home health agencies, from $3.2 billion to $17.9 billion. In 1998 payments fell to $14.1 billion, because the BBA required beneficiaries to assume part of the cost of some home health care services. The George Washington University Medical Center reports: "Medicare home care beneficiaries generally are sicker, older, and poorer than Medicare beneficiaries in general…. The reductions in care … [under the BBA] potentially could affect their health status."
Other ways to approach the delivery of elder care are suggested by Uhlenberg, who contends that alternatives such as assisted living, group homes, and rehabilitation are not as plentiful as they should be "due to misguided public policy"; namely, too much government support of nursing homes (a multibillion-dollar industry with a powerful lobby).
Doctors are seeing more and more elderly patients and geriatricians are in short supply. With the focus now on the elderly, some hospitals and clinics are working to enhance quality of care. For example, some offer geriatric evaluation and management units (GEMU) and clinics (GEMC), where teams of medical professionals address the particular physical and emotional needs of the 20% of the elderly who are frail. Drug companies are doing their part too, seeing a profit to be made on treatments for urinary incontinence (it has been associated with depression) and other conditions of the elderly.
Sources: Chart : Statistical Abstract of the United States, 2001, Table 135. Administration on Aging, "Older and Younger People With Disabilities," http://www.aoa.dhhs.gov/factsheets/disabilities.html. Peter A. Corning, The History of Medicare, http://www.ssa.gov/history/corning.html. Medicare Basics, The Century Foundation, http://www.medicarewatch.org/Basics/MedicareBasic.pdf. Joseph V. Agostini, M.D., et al., "Geriatric Evaluation and Management Units for Hospitalized Patients," http://www.ahcpr.gov/clinic/ptsafety/chap30.htm. Peter Uhlenberg, "Replacing the Nursing Home," Public Interest, No. 128, Summer 1997. George Washington University Study's Executive Summary, http://www.nahc.org/NAHC/NewsInfo/99nr/gwexecsum.html.
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