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Health Policy Exam #3

Terms in this set (116)

-Why has private health insurance coverage decreased
over the past decades, creating the uninsurance crisis?
-FACTORS THAT CAUSES A LACK OF INSURANCE (FIRST TWO ARE VERY IMPORTANT):
--1) The skyrocketing cost of health insurance has made
coverage unaffordable for many businesses and
individuals. (INCREASING HEALTHCARE COST)
----From 2000 to 2010, premiums paid by employers rose 114%
---- In 2010, the average annual cost of health insurance, including employer and employee contributions, was $5049 for individuals and $13,770 for families
----Some employers responded to rising health insurance costs by dropping insurance policies for their workers.
----Many employers have shifted more of the cost of health insurance premiums and health services onto their employees, resulting in employees dropping health coverage because of unaffordability.
----Low-income workers are hit especially hard
by the combination of rising insurance costs and
declining employer subsidies
--2)During the past few decades, the economy in the
has undergone a major transition and the number of highly paid, largely unionized, full-time manufacturing workers with employer-sponsored health insurance has declined, and the workforce has shifted toward more low-wage, increasingly part-time, nonunionized service and clerical workers whose employers are less likely to provide insurance (CHANGING OF THE LABOR FORCE)
--3) The unstable nature of employment
----People who are laid off from their jobs or who leave
jobs because of illness may also lose their insurance.
----Family members insured through the workplace
of a husband or wife may lose their insurance
in cases of divorce, job loss, or death of the working
family member.
----People who leave their employment may be eligible to pay for continued coverage under their group plan for 18 months, as stipulated in the Consolidated Omnibus Budget Reconciliation Act of 1985, with the stipulation that they pay the full cost of the premium; however, many people cannot afford the premiums, which may exceed $1000 per month for a family
ATTEMPT AT A SOLUTION:
- The expansion of public insurance coverage through the Medicaid and SCHIP programs.
----Without these changes, many more millions of
Americans would currently be uninsured.
PROBLEM WITH THIS SOLUTION/MEDICAID:
-The often transient nature of employment-linked
insurance is compounded by difficulties in maintaining
eligibility for Medicaid.
-Small increases in family income can mean that families no longer qualify for Medicaid.
- The net result is that millions of people cycle
in and out of the ranks of the uninsured every month.
- 87 million, 29% of the entire US population went without health insurance for all or part of the 2-year period 2007-2008
- Health insurance may be a fleeting benefit.
-Having insurance does not guarantee financial access to care
- Many people are UNDERINSURED meaning that their health insurance coverage has limitations that restrict access to needed services
-Underinsured = health insurance coverage is limited
----Coverage limitation impacts access to care- 20% of adults ages 19 to 64 were underinsured (2007)
CATEGORIES OF UNDERINSURED IN US:
-Limits to insurance coverage
- Insurance deductibles and copayments
- Gaps in Medicare coverage
- Lack of coverage for long-term care
LIMITS TO INSURANCE COVERAGE
- In 2007, 71% of privately insured people with low incomesand substantial medical expenses were underinsured
- In 2007, 62% of bankruptcies were caused by inability to pay medical bills (Healthcare is the #1 reason for filing bankruptcy) and 75% of these people had health ins at the beginning of their illness
INSURANCE DEDUCTIBLES AND COPAYMENTS
Just because you have ins, doesn't mean that you are covered 100%
-From 2006-2010 the deductible of $1000 or more for SINGLE coverage increased from 10% to 27% of individuals
-In 2010 average insurance deductibles for FAMILIES was $3500 plus cost of premiums and copayment
GAPS IN MEDICARE COVERAGE
- You have ins, but it may not cover what you need
-Underinsured and more likely to skip recommended tests or follow-up visits (because of $$)
----Fail to fill prescriptions
-Medicare covers about 48% of healthcare expenses in 2006
-In 2004, for 5% of medicare beneficiaries with the poorest health, average uncovered costs was $7646 (up 48% from 1992)
- Medicare Part D donut hole- these pts pay a lot out of pocket for meds (it was expected to improve w/ ACA)
LACK OF COVERAGE FOR LONG-TERM CARE
- Medicare paid only 20% of the elderly's nursing
home bills in 2009, and private insurance policies
picked up only an additional 8%
- Many elderly families spend their life savings on long-term care, qualifying for Medicaid only after becoming
impoverished
LACK OF PROMPT ACCESS
-Medical practitioners fail to provide care when needed and has gotten worse with the growing shortage of PCP
-31% private insured pts has a delay in obtaining an appointment
- There are more numbers in the book
-Unnecessary ED visits are growing for lack of PCP care
-Fewer PCP are taking Medicaid
GENDER AND ACCESS TO HEALTH CARE
-Women are 50% more than men are more likely to leave a doctor because they are dissatisfied
-Women are patient-centered when communicating with MDs
- Women twice as likely to report being talked down to or told its all in their head
- Female Dr's are more pt centered and spend more time w/ their pts
- In a study of patients with insurance coverage
for Pap smears and mammograms, the patients of
female physicians were almost twice as likely to receive
a Pap smear and 1.4 times as likely to have a mammogram than the patients of male physicians
-Women more likely than men to have a chronic disease
- Physcians are less likely to counsel women than men
about cardiac prevention—diet, exercise, and weight
reduction.
-After having a heart attack, women are less likely than men to receive recommended diagnostic tests and are less likely to be prescribed recommended aspirin and beta-blockers
-Women more likely to be Medicaid recipients
-Access to abortion clinics limited
RACE AND ACCESS TO HEALTH CARE
-Latinos and African Americans less likely to have regular care
----Receive fewer services i.e. pain control
- Minority groups have higher numbers of uninsured, Medicaid coverage, or are poor and for this, these groups have amplified access problems
-African Americans and Latinos in the United States are less likely to have a regular source of care or to have had a physician visit in the past year
-There are disparities in quality of care i.e. looking at 38 measures of quality for such conditions as diabetes, asthma, HIV/AIDS, cardiac care, and cancer, African Americans receive poorer quality of care than whites for 66% of these quality measures, American Indians and Alaska Natives and Latinos also have lower quality indicators
-Minority neighborhoods have fewer physicians practicing in the area and the dr's that do are usually black or Hispanic
-EXPLANATIONS FOR DISPARITIES IN RACIAL/ETHNIC GROUPS
---Cultural differences may exist in patients' beliefs about the value of medical care and attitudes toward seeking treatment for their symptoms.
---Ineffective communication between patients and caregivers of differing races, cultures, and languages.
-----African Americans are more likely than whites to report that their dr did not properly explain t
-----Communication problems for Latinos big because Spanish is the primary language (but this is not all cases)
---Racism may also contribute to these patterns
-----Many hospitals, including institutions in the North, were for much of the 20th century either completely segregated or had segregated wards, with inferior facilities and services available to nonwhites.
-----Explicit segregation policies persisted in many hospitals until a few decades ago.
-----Racial barriers to entry into the medical profession
gave rise to the establishment of black medical schools
such as the Howard, Morehouse, and Meharry schools
of medicine.
-----NOW more insidious and often unconscious forms of discrimination may continue to color the interactions between patients and their caregivers and influence access to care for minorities
- Capitation payments (per capita payments, or payments "by the head") are MONTHLY payments made to a physician for each patient signed up to receive care from that physician—generally a primary care physician
(PCP)
- There is a shift of financial risk from insurers to providers
- Under fee-for-service, pts who require expensive services cost their health plan more than they pay in
premiums and the insurer is at risk and loses money while drs and hospitals that provide the care earn more
money
-Capitation is a 180 degree turn and frees insurers of risk by transferring risk to providers
----An HMO that pays drs via capitation has pays a fixed sum, no matter how many services are provided and the providers earn no additional money, yet spend a great deal of time and incur large office and hospital costs (In the long term, HMOs do want to limit services in order to reduce provider pressure for higher capitation payments.)
METHODS TO MITIGATE FINANCIAL RISK
- Offer fee for service for certain services and called "carve outs" as their reimbursement is carved out ans paid separately (i.e.Pap smears, immunizations, office ECGs, and minor surgical procedures)
- Risk-adjusted capitation will provide higher monthly payments for elderly patients and for those with chronic illnesses
PROS
-Capitation has potential merits as a way to control
costs by providing an alternative to the inflationary
tendencies of fee-for-service payment.
- Have Beneficial influence on organization of care.
- Capitation payments require patients to register with a physician or group of physicians
- The clear list of the population of patients in a primary care practice offers advantages for monitoring appropriate use of service and planning for these patients' needs.
- It explicitly defines, in advance, the amount of money
available to care for an enrolled population of patients,
providing better allocation of resources and innovation in developing better modes of delivering services.
- For a large group of PCPs size of the capitation payments provides influence and flexibility over how to best arrange ancillary and specialty services
All of these principles are interrelated
Four major ethical principles:
-1) Beneficence
----Is the obligation to care for patients to the best of one's ability (this is the principle)
----The obligation of health care providers to help people in need (this is the definition)
-2) Nonmaleficence
----Is the duty of healthcare providers "to do no harm"
-3) Autonomy
----Is the right of a person to choose and follow his or her own plan of life and action
----Autonomy is founded in the desire of most human beings to control their own destiny, to have choices in life, and to live in a society that places value on individual freedom.
----In medical ethics, autonomy refers to the right of competent adult patients to consent to or refuse treatment.
----While the physician has an obligation to respect the patient's wishes, he or she also has a duty to fully inform the patient of the probable consequences of those wishes
----For children and for adults unable to make medical decisions, a parent, guardian, other family member, or surrogate decision maker named in a legal document becomes the autonomous agent on behalf of the patient
-4) Justice
----Treating everyone in a fair manner
----In medical ethics people are treated justly
when they receive what they deserve i.e. it is unjust not to grant a medical degree to someone who completes medical school and passes all the necessary examinations.
----Justice refers to universal rights:
------To receive enough to eat, to be afforded shelter, to have access to basic medical care and education, and to be able to speak freely
----Justice connotes equal opportunity:
------All people should have an equal chance to realize their human potential.
---- Justice might be linked to the golden rule:
------Treat others as you would want others to treat you
-Ethical dilemmas are situations in which medical/healthcare provider is forced to make a decision that violates one of the four principle of medical ethics (beneficence, nonmaleficence, autonomy or justice) in order to uphold other principles
----Example: Jehovah's witness (Beneficence versus autonomy)
- Ethical dilemmas always involve disputes in which both sides have an ethical underpinning to their position.
-Financial conflicts of interest on the part of physicians, in contrast, pit ethical behavior against individual gain and are NOT ethical dilemmas.
-The principles that take priority in ethical dilemmas depend on each individual case
----i.e. If the pt were a child without sufficient knowledge or reasoning capability to make an informed choice, the physician would not be obligated to withhold transfusions, even if the family so demanded
- Although pt autonomy allows the right to refuse treatment, it does not include the right to demand a harmful or ineffectual treatment.
-The traditional dilemmas are those that feature beneficence or nonmaleficence in conflict with autonomy.
TWO FAMOUS ETHICAL DILEMAS
--1) Karen ANN QUINLAN
----Young woman with severe brain damage (persistent vegetative state) asked that physicians discontinue a respirator
----The Quinlan decision promoted the right of patients or their surrogate decision makers to withdraw treatment, even if the treatment is necessary to sustain life.
--2) NANCY CRUZAN
----A young woman with severe brain damage (persistent vegetative state) asked that physicians discontinue a feeding tube
----The outcome of the Cruzan case placed limits on autonomy by requiring that life-supporting treatment can only be withdrawn when a patient has stated his or her wishes clearly in advance
--Both cases were adjudicated in the courts.
TERRO SCHIAVO
--Was in a persistent vegetative state for 15 years
--In spite of multiple decisions of state and federal courts—up to the Supreme Courts of Florida
and the United States—supporting the right of TERRI SCHIAVO'S husband to discontinue her feeding tube, the US Congress, encouraged by President George Bush, passed legislation reopening the option of reinserting the feeding tube.
--Eventually, based on the precedents of the Quinlan and Cruzan cases, the courts prevailed and Ms. Schiavo died
*Overall, medical ethics has moved in the direction
of giving priority to the principle of AUTONOMY OVER BENEFICENCE*
NEW GENERATION OF ETHICAL DILEMMAS
- Started in the late 20th century
-Moved beyond the individual physician-patient relationship to involve the broader society.
-These social-ethical problems derive from the new reality that money may not be available to pay for a reasonable level of medical services for all people.
-When money and resources are bountiful, the issue of distributive justice refers to equality in medical care access and health outcomes
-THIS NEW FISCAL REALITY HAS SPAWNED TWO RELATED DILEMMAS
----1)A conflict between the duty of the physician to follow the principles of beneficence and nonmaleficence and the growing sentiment that
physicians should pay attention to issues of distributive
justice.
----i.e. In a case of twins who need surgery where one twin has better survival rate than the other, a dr uses the principle of beneficence to perform the surgery even if only one twin will survive RATHER THAN saying the money will be better spent on a pt with a higher chance of survival
----2) The conflict between the individual patient's right to autonomy VS society's claim to distributive justice.
-Physicians practice medicine with a recognition that they have a duty to help and not harm their patients.
----i.e. In the above twin scenario, the parents of the twins could have decided that spending $1million of societies money on <1% survival chance would be excessive. But then again, most parent would do the same.
- Dr's become dr's with the recognition that they have a duty to help not harm
- Individuals claim a right to health care and do not want others to restrict that care.
-*Yet the principle of distributive justice (recognizing that resources for health care are limited and should be
fairly allocated among the entire population) might
lead to physicians denying legitimate services or
patients setting aside rightful claims to treatment.*
-The BASIS for the principle of justice is the desire
shared by many human beings to live in a civilized society, in a state of harmony where each person must balance the concerns of the individual with the needs of
the larger community.
-When health resources are scarce, the principle of justice creates ethical dilemmas that touch many people beyond those involved in an individual physician-patient relationship
-The imperatives of cost control have thrust the principle of justice to the forefront of health policy in the debate over rationing.
-While fiscal scarcity is the more common form of
resource limitation, commodity scarcity provides an
instructive example of the interaction of ethics and
rationing
-In 1951, the first kidney transplant was performed
in Massachusetts.
-In 1967, when Dr. Christiaan Barnard sewed a living heart into the chest of a person suffering end-stage cardiac disease
----This is when modern medicine fully entered the age of transplantation.
-In 2010, 17,000 kidney, 2300 heart, 6300 liver, and
1800 lung transplants were performed in the US
-70-80% of pts receiving heart, liver or kidney transplants survive at least 5 years after transplantation
- Transplants is both medical and ethical concern
WHO SHOULD RECEIVE ORGANS SHORT IN SUPPLY?
-The number of persons on the national waiting list
for organ transplants rose from 16,000 in 1988 to
111,000 in 2010, yet the pool of potential organ donors
has been estimated at 14500 (the number of organs donors falls short of the number of that require an organ)
-Transplantation presents a classic case of COMMODITY SCARCITY:
---There is insufficient supply to meet demand.
--- Explicit rationing, is inevitable, which is a system that
determines who gets organs and who does not
---For heart, lung, and liver transplants, rationing is all or nothing in that those who receive organs may live, while those who do not will die.

-In the early 1980s, the major heart transplant center at STANFORD UNIVERSITY excluded people with "a history of alcoholism, job instability, antisocial behavior, or psychiatric illness," and required transplant recipients to enjoy "a stable, rewarding family and/or vocational environment."
----Stanford's recipients had a better than 50% chance of surviving 5 years, signifying that acceptance or rejection from the program was a matter of life and death.
----The US Department of Health and Human Services was concerned about Stanford's selection criteria, which favored those middle-class or wealthy people with satisfying jobs and the > $100,000 cost restricted heart transplants to those with insurance coverage or ability to pay out of pocket.
----Both the social and economic criteria for access to this lifesaving surgery raised serious issues of distributive justice.
-The National Organ Transplantation Act of 1984 led to the federal government designated the United Network for Organ Sharing (UNOS) as a national system for matching donated organs and potential recipients.
-According to the Task Force on Organ Transplantation (1986), organ allocation should be governed by MEDICAL CRITERIA with the major factors being urgency of need and probability of success.
----The Task Force recommended that if two or more patients are equally good candidates for an organ according to the medical criteria, length of time on the waiting list is the fairest way to make the final selection.
HOW UNOS WORKS AND WHO RECIEVES ORGANS?
-Overall, UNOS follows these recommendations,
placing potential recipients of organ transplants on its
computerized waiting list.
-Recipients are prioritized according to a point scale based on severity of illness,time on the waiting list, and probability of a successful outcome
-Problems have developed with the UNOS system, as patients with similar characteristics may have considerable variation in access to organs, but overall, a serious attempt has been made to allocate scarce organs on the basis of justice criteria.
- ETHICAL DILEMMA in the prioritization process is
the issue of ability to pay.
--- In 2008, the average heart transplant cost $259,000, kidney transplant $51,000, and liver transplant $534,400.
----Transplant centers require recipients to pay cash in advance or show proof of insurance coverage.
----Currently, Medicare, some Medicaid programs, and a number of private insurers pay for needed transplants.
----The uninsured usually have no access to transplantation
- Rationing medical care nationwide presumes a mechanism that redirects savings from interventions not performed toward more cost-effective services (This does NOT exist nationwide)
- Only in specific medical care programs do we find a decision-making apparatus for allocating expenditures i.e. The Oregon Health Plan
-In 1994, Oregon added 100,000 poor uninsured
Oregonians to its Medicaid program and to control costs, a prioritized list of services was developed, and the state legislature decided how many services would be covered.
-The PRIORITIZED LIST was based on how much
improvement in quantity and quality of life the treatment was likely to produce.
---The final list contained 745 condition-treatment pairs, and the State of Oregon paid for items above line 574 on the list, while conditions below that line were not covered
ETHICAL IMPLICATIONS OF THIS PLAN:
--1) The plan was more than a rationing proposal and its chief feature was to extend health care coverage to
100,000 more people.
----That aspect promotes the PRINCIPLE OF JUSTICE
--2) Another positive feature of the plan was its attempt
to prioritize medical care services on the basis of
effectiveness, which, if rationing is needed, is a reasonable method for deciding which services to
eliminate
NEAGTIVE IMPACT OF THE PLAN ON DISTRIBUTIVE JUSTICE OR EQUAL ACCESS TO CARE W/OUT ABILITY TO PAY
--1) In 1996, 12% of beneficiaries reported being denied
services because they were below the line on the priority list and of those, 78% reported that the denial had worsened their health
----Medical services were rationed for Oregon's poor
but not for anyone else.
--2) The plan targeted beneficial medical services in a
state with considerable medical waste.
----In 1988, many areas of Oregon had average hospital occupancy rates below 50%.
----The closing of unneeded hospital beds could have saved $50 million per year, enough to pay for some of the treatments eliminated in the plan
---- Oregon DID NOT exhaust its options for painless cost control before proceeding to potentially painful rationing.
-By 2004, the Oregon Health Plan had unraveled
and the state entered a period of budgetary woes, new premiums and copays were instituted, and Oregon Health Plan enrollees responded by dropping out of the program.
-The rate of uninsurance climbed from 11% to 17%, but the bold experiment in rational rationing remains alive in the minds of health care policymakers.
-In 1989, an individual mandate came about, which was a new species of national health insurance
appeared, sponsored by the conservative Heritage
Foundation: a
-Just as many states require motor vehicle drivers to purchase automobile insurance, the Heritage plan called for the federal government to require (or mandate) all US residents to purchase individual health insurance policies.
- Tax credits would be made available on a sliding scale to individuals and families too poor to afford health
insurance premiums
- Under the most ambitious versions of universal individual insurance proposals, neither employer-sponsored group insurance nor government-administered insurance would continue to play a role in financing health care.
----These existing financial models would be dismantled and replaced by individual mandate programs
- Ironically, the individual insurance mandate shares at least one feature with the single-payer, government-
financed approach to universal coverage: Both would
sever the connection between employment and health
insurance, allowing portability and continuity of coverage as workers moved from one employer to another or became self-employed.
-With individual mandate health insurance, the tax
credits may vary widely in their amount depending on
characteristics such as household income and how
much of a subsidy the architects of individual mandate
proposals build into the plan.
- In a generous case, a family might receive a $10,000 tax credit, subsidizing much of its health insurance premium.
- If the family's tax liability is less than the value of the tax credit, the government would pay the family the difference between the family's tax liability and $10,000.
- A related version individual mandate is a VOUCHER SYSTEM
---Instead of a tax credit, the govt will issue a voucher for a fixed dollar amt that could be used toward the purchase of health insurance
----A tax-financed voucher system would completely replace existing insurance program directly administered by govt as well as employer-sponsorship of private insurance
-Another version of health insurance expansion is that proposed by the President George W. Bush
---Individuals would not be required to purchase individual insurance, but would receive a tax credit if they choose to purchase insurance
The level of tax credits in the Bush plan and similar proposals have been small compared to the cost of most health insurance policies, with the result that these voluntary approaches if enacted would have induced very few uninsured people to purchase coverage.
This was the 1st state w/ universal health coverage
- Almost 20 years after the Heritage Foundation's proposal for an individual mandate, Massachusetts enacted a state-level universal health coverage bill implementing the nation's first legislated individual mandate.
- It was enacted under the leadership of Republican Governor Mitt Romney
- This Plan mandates that every state resident must have health insurance coverage meeting a min standard set by the state
- Individuals are required to provide proof of coverage at the time of filing their their annual tax return, and face a financial penalty for failing to provide evidence of coverage
- The state provides subsidies for purchase of private insurance to individuals with income <300% the federal poverty level if they are not covered by the state's Medicaid program or through employment-based insurance.
- Like Nixon's employer mandate proposal, this individual mandate does NOT eliminate govt ins plans, but extends the reach of private ins through govt mandate
- The state govt would provide an income-adjusted subsidy for individual coverage for people not eligible for employer-based insurance and limits the degree to which private ins can experience- rate their premiums
- This plan allows insurers to offer policies wiht large amts of cost-sharing in the form of high deductibles and coinsurance
- This plan also includes a weak employer mandate where employers w/ >10 employees will have to contribute to ins coverage or pay into the state fund that underwrites public subsidies for the individual mandate and related programs
BENEFIT OUTCOMES:
- In 2006, it reduced uninsurance rate among nonelederly adults in Massachusetts from 13% in 2006 to 5%in 2009
NEGATIVE OUTCOMES:
- Some people still have trouble affording private insurace even with state subsidy
- The high levels of cost sharing allowed under the min benefit standard leave many insured people w/ substantial out of pocket payments
--In 2008, 18% of the low income people in Massachusetts reported unmet health needs due to costs(copay, deductible, uncovered services)
-20% experienced difficulty in accessing a PCP due to PCP shortage
KNOW THIS WHOLE SECTION IN BOOK- ON EXAM!!
FOUR MAIN COMPONENTS TO ITS REFORM ON HEALTH CARE FINANCING:
-1) Individual mandate (Beginning in 2014)
---Requires most U.S. citizens and legal residents to have health insurance coverage meeting a federally determined "essential benefits" standards.
---This standard would allow high-deductible plans to qualify, with out-of-pocket cost-sharing capped at $5950 per individual and $11900 per family in 2010 dollars
---EXAM: Those who fail to purchase insurance and do not qualify for public programs (i.e. Medicare, Medicaid, Veterans health care, etc) must pay a tax penalty of $695/ YEAR per individua and up to $2085 per family OR 2.5% of the household income
---Individuals and families <400% poverty level are eligible for income-based sliding scale federal subsidies to help them purchase the required health insurance
-2) Employer mandate (Beginning in 2014)
---Employers with 50 or more full-time employees face a penalty if their employees are not enrolled in an employer-based health care plan meeting the "essential benefits" standards and any of their employees apply for federal subsidies for individually purchased insurance
---While this measure does not technically mandate large employers to provide health benefits to full-time employees, it functionally has this effect by penalizing the employers who leave their employees to fend for themselves and comply with individual mandate
-3) Medicaid Eligibility Expansion: (effective 2014)
---Under ACA, traditional Medicaid eligibility is eliminated and allows states to make all US citizens and legal residents below 133% of the Federal Poverty Level are eligible for Medicaid.
---In 2011, 133% of the Federal Poverty Line was $14,484 for a single person and $29,726 for a family of 4
---Under ACA, the Federal Government pays states 100% of the Medicaid costs for beneficiaries under ACA's Medicaid expansion from 2014 to 2016, with states contributing 10% after 2016
---Benefits are similar to the current Medicaid
-4) Insurance market regulation (Implemented 2010)
---ACA imposes new rules on private insurance companies
---Private health plans must allow young adults up to the age of 26 to remain covered under their parents health plans as dependents
---Eliminates caps on total insurance benefits payouts, prohibits denial of coverage based on pre-existing conditions
---Limits the extent of experience rating to max of 3 to 1 ratio between a plan's highest and lowest premium charge for the same benefit package
---Also establishes state-based insurance exchanges to function as a clearing house to assist individuals looking for health insurance coverage to shop for ins plans meeting the standards
---The benefit packages vary depending on what the insurance marketplace offers different types of plans
-----Low-premium Bronze plans will have high out of pocket costs
-----High premium Platinum will have will have low out of pocket costs
-----Intermediate Silver and Gold plans
---These above Mandates were deemed essential for fairness and feasibility
-If ACA is implemented to its fullest extent:
---32 million of the 51 million uninsured Americans will be covered under ACA
---An estimated 16 million will be covered through Medicaid expansion
---Another 16 million would be covered through the individual mandate
-None of ACA's coverage would benefit undocumented immigrants (they will not be eligible under federal premium subsidies from individual mandate nor Medicaid except for emergency care)
-ACA is expected to cost $938 billion over 10 years, with most of its costs expected associated w/ Medicaid expansion and individual mandate subsidies
-ACA FINANCED BY:
---ACA is financed through new taxes and fees and also by cost savings in the Medicare and Medicaid programs
---Individuals w/ earnings > $200,000 and married couples with earnings > %250,000 would pay more for Medicare Part A
--- Health Insurance companies, pharmaceutical firms, and medical device manufacturers would pay yearly fees
--- Medicare advantage insurance plans and hospitals would receive less payment from Medicare programs
- The Congressional Budget Office estimated that the new laws would reduce federal deficit by $124 billion in 10 years, though CBO progression not universally accepted.
- ACA has come under political and judicial threats since enacted
---One of the first acts passed by the House when Republicans gained majority again was to repeal ACA
-----This attempt was not successful because the Senate, with Democratic majority did not vote to repeal
---Republican Governors and Attorney generals in many states filed suits against ACA challenging the constitutionality of requiring purchase of health insurance and in June 2012, the Supreme Court upheld the constitutionality of the individual mandate, but ruled that state participation in Medicaid expansion must be on a voluntary basis
-----Because many states are not planning on implementing Medicaid expansion, more Americans will remain uninsured than initially projected
-During this time period, independent hospitals and small private physician offices populated the U.S. health delivery system
-Some large institutions combined hospital and physician care (i.e. Kaiser-Permanente system, Mayo Clinic, and urban medical school complexes), but htese were the exception
-Competition among health care providers was minimal because most geographic areas did not have an excess of facilities and personnel.
- The health care financing system included hundreds of private insurance companies, joined by the governmental Medicare and Medicaid programs enacted in 1965.
-Health care inflated at a rapid rate since reimbursement rules were formulated by physicians, hospitals, and Blue Shield
-Medicare and Medicaid programs (enacted in 1965) had the same reimbursement provisions as private patients during this period.
-The United States had a relatively dispersed health care industry
BLUE-CROSS SECTION WAS EMPHASIZED FOR EXAM
- A defining feature of the healthcare industry at this time was an alliance between insurers and providers.
-The provider-Insurer pact was created when Blue Cross and Blue Shields formed an alliance.
---Blue Cross was formed by the American Hospital Association and Blue Shield was run by the state medical societies affiliated with the American Medical Association.
- In the case of the Blues, the provider-insurer relationship was more than a political alliance
----It involved legal control of insurers by providers.
-Commercial insurers usually played by the reimbursement rules already formulated by the physicians, hospitals, and Blues, paying for medical services without asking providers to justify their prices or the reasons for the services.
- By the 1960s, the power of the provider-insurer
pact was so great that the hospitals and Blue Cross virtually wrote the reimbursement provisions of Medicare and Medicaid, guaranteeing that physicians and hospitals would be paid with the same bountiful formulas used for private patients
-With relatively open-ended reimbursement policies, the costs of health care inflated at a rapid pace.
-The disinterest of the chief organized purchaser
(i.e., business) stemmed from two sources:
--1) The healthy economy and
--2) The tax subsidy for health insurance
-From 1945 through 1970, US business controlled
domestic and foreign markets with little foreign competition.
- Labor unions in certain industries had successfully
gained generous wages and fringe benefits, and business could afford these costs because profits
were high and world economic growth was robust
- The cost of health insurance for employees was a tiny fraction of total business expenses and payments by business for employee health insurance were considered a tax deductible business expense, thereby cushioning any economic drain on business
-For these reasons, increasing costs generated by the
providers and reimbursed by the insurers were passed
on to business, which with few complaints paid higher
and higher premiums for employees' health insurance,
and thereby underwrote the expanding health care system.
-No countervailing forces "put the brakes" on the
enthusiasm that united providers and the public in
support of a medical industry that strived to translate
the proliferation of biomedical breakthroughs into an
improvement in people's lives.
-RESULTS:
---The development of many independent hospitals and many small private practices
---Many private insurers
---Providers tended to dominate the insurers
---Purchasers had little power
---Reimbursement for providers was generous
BOOK
-Late 1980s produced a severe shock:
----The cost of employer-sponsored health plans increased 18.6% in 1988 and 20.4% in 1989
----Between 1976 and 1988, the percentage of total payroll spent on health benefits almost doubled, from 5% to 9.7%
----Large corporations began to self-insure so rather
than paying money to insurance companies to cover
their employees, employers increasingly took on the
health insurance function themselves and used insurance companies only for claims processing and
related administrative tasks.
-Self-insurance placed employers at risk for health care expenditures and forced them to pay more attention to the health care issue.
-These three developments (i.e., a troubled
economy, rising health care costs, and self-insurance)
catapulted big business into the center of the health
policy debate, with cost control as its rallying cry.
-BUSINESS, the major private purchaser of health care,
became the motor driving unprecedented change in
the health care landscape
----Business threw its clout behind managed care, particularly HMOs, as a cost-control device
----By shifting from feefor-service to capitated reimbursement, managed care could transfer a portion of the health expenditure risk from purchasers and insurers to providers
-INDIVIDUAL health care consumers, in their role as
purchasers, also showed some clout
----Because employers were shifting health care
payments to employees, labor unions began to complain bitterly about health care costs, and major strikes took place over the issue of health care benefits. ----More than 70% of people polled in a 1992 Louis Harris survey favored serious health care cost controls ----The growing tendency of private health insurers to reduce their risks by dramatic premium increases and policy cancellations for policyholders with chronic illnesses created a series of horror stories in the media that turned health insurance companies into highly unpopular institutions.
-During the 1980s, the government was facing the
tax revolt and budget deficits, and it took measures
designed to slow the rising costs of Medicare and Medicaid, with limited success.
-The 1983 Medicare Prospective Payment System (diagnosis-related groups [DRGs]) reduced the rate of increase of Medicare hospital costs, but outpatient Medicare costs and costs borne by private purchasers escalated in response.
- In 1989, Medicare physician payments were brought
under tighter control, resulting in Medicare physician
expenditures growing at only 5.3% per year from
1991 to 1993, compared with 11.3% per year from
1984 to 1991
-Numerous states scaled back their Medicaid programs, but because of the economic recession and the growing
crisis of uninsurance, the federal government was forced to expand Medicaid eligibility, and Medicaid costs rose faster than ever before.
-Governments began to experiment with managed
care for Medicare and Medicaid as a cost-control
device.
-*The most significant development of the 1980s was
the growth of selective contracting*
----Purchasers and insurers had usually reimbursed any and all physicians and hospitals, but under selective contracting, purchasers and insurers choose which providers they will pay and which they will not i.e. in 1982 California passed a law bringing selective
contracting to the state's Medicaid program and to private health insurance plans. The law was passed
because large California corporations formed a political
coalition to challenge physician and hospital interests,
and because insurers deserted their former
provider allies and joined the purchasers (Bergthold,
----The message of selective contracting was: purchasers and insurers will do business only with
providers who keep costs down.
-----This development, especially when linked with capitation payments that placed providers at risk, changed the entire dynamic within the health care industry.
----For patients, it meant that they had lost free choice of physician because employers could require employees to change health plans and therefore physicians.
----For the health care industry, selective contracting meant fierce competition for contracts and the crumbling of the provider-insurer pact.
-As a result of the PURCHASERS' REVOLT managed care became a burgeoning movement in US health care
-By 1990, 95% of insured employees were enrolled in some form of managed care plan, including fee-for-service plans with utilization management, preferred provider organizations (PPOs), and HMOs.
- The growth of managed care plans, especially HMOs, competing against one another for contracts with business and the government, changed the entire political topography of US health care
PPT
-Reduction in heath costs through:
---Medicare DRGs (1983)
---Fee schedules
---HMOs (Managed care plans become dominant)
---Selective contracting by purchasers and insurers
-During the 1990s, many areas in the US experienced
upheavals of their medical care landscape.
-Independent hospitals began to merge into hospital
systems.
- In the most mature managed care markets, three or four health care networks were competing for those patients with private insurance, Medicare, or
Medicaid.
-Selective contracting allowed purchasers and insurers to set reimbursement rates to health care providers.
---HMOs that demanded higher premiums from employers did not get contracts and lost their enrollees. ----Providers who demanded higher payment from HMOs were cut out of HMO contracts and lost many of their patients.
----Selective contracting tended to disorganize rather
than organize medical care patterns i.e. physicians were
forced to admit patients from one HMO to one hospital
and those from another HMO to a different hospital; i.e. Laboratory, x-ray, and specialist services close to a
primary care physician's office were sometimes not
covered under contracts with that physician's patients'
HMO, forcing referrals to be made across town.
-The 1990s was a period of purchaser dominance
over health care.
-The federal government stopped Medicare inflation in its tracks through the tough provisions of the Balanced Budget Act of 1997.
- The average annual growth in Medicare expenditures declined from 12% in the early 1990s to zero in 1999 and 2000.
- On the private side, employers bargained hard with
HMOs, causing insurance premium annual growth to
drop from 13% in 1990 to 3% in 1995 and 1996. In California, employer purchasers consolidated into coalitions to negotiate with HMOs.
----Pacific Business Group on Health (negotiating for 400,000 employees) and California Public Employee Retirement System (CalPERS, representing a million public employees) forced HMO premiums to go down during the 1990s
-Enrollment in HMOs grew rapidly in the 1990s,
expanding from 40 million enrollees in 1990 to 80 million in 1999
BOOK
-Rising tensions among purchaser, insurers and providers spilled over to healthcare's major supplier: the pharmaceutical industry
- In 1988 prescription drugs accounted for 5.5% of national health expenditures, 71% of drug costs were paid out of pocket by individuals, and only 18% paid by private insurance plans, these costs had little impact on insurer
-By 2009, prescription drug costs had risen to 10.1% of total health expenditures, with only 21% paid out of pocket, the rest covered by employers, insurers, and governmental purchasers
-The growing costs of drugs for the elderly became a major national issue
---Because of its unaffordable prices and high profits, the pharmaceutical companies became enemy #1
-In the U.S. drug companies are very profitable and earn net profits after taxes close to 20% of revenues compared with 5% for all Fortune 500 firms
-Pharmaceutical companies argues that their high drug prices are justified due to the cost of research and development of new drugs, but the National Science Foundation estimates that R&D spend half of what they claim
-R&D for the largest drug companies consumed
only 14% of revenues in 2002, while marketing and
administration accounted for 33% and after-tax net
profits 21%
-Unlike many nations, government in the United States does not impose regulated prices on drugs
----As a result of drug industry lobbying, the Medicare prescription drug coverage law passed in 2003 forbid the government to regulate drug prices
----Government regulations in the US serve mainly to reduce competition through a system of patent protection.
-Companies developing a new brand-name drug enjoys a patent for 20 years from the date the patent application is filed, during which time no other company can produce the same drug.
-Once the patent expires, generic drug manufacturers
can compete, and do so by selling the same product at lower prices.
-A number of drug companies have waged expensive
legal battles to delay patent expirations on their brand
name products, or have paid generic drug manufacturers not to market generic alternatives
- In addition, the industry attempts to persuade physicians and patients to use brand-name products, spending $30 billion in 2005 on sales representatives' visits to physicians, journal advertising, sponsorship of professional meetings, and direct-to-consumer television ads
-Four out of five physicians have some type of financial relationship with the pharmaceutical industry, ranging from accepting gifts to serving as a paid lecturer on behalf of a company.
- These physician-industry relationships do influence prescribing behavior, in particular influencing physicians to prescribe new drugs that are the most expensive and whose safety has not been adequately evaluated
- The federal Food and Drug Administration (FDA) has sent hundreds of letters to drug manufacturers citing advertising violations including minimizing side effects and exaggerating benefits
- Most trials to determine the efficacy of prescription
drugs are funded by that drug's manufacturer, and trials funded by industry are more likely than those with
nonindustry funding to report results favorable to the
funding company--- YET physicians base treatment decisions on these trials, which inform clinical
practice guidelines.
- Authors of clinical practice guideline have ties to the pharmaceutical industry
- From 2006-2010, 18 new drugs were removed from the markey due to serious side effects, and in some cases the manufacturer knew about this and hid it from FDA or FDA ignored the evidence
-Some members of a FDA committee recommending approval of a drug have ties to that drug's manufacturer, and these members with clear conflict of interest are often not recused
- These revelations have tainted the image of the
pharmaceutical industry in the eyes of the medical profession and the public.
- Private health insurance companies have mounted the most effective response to the drug industry by creating tiered formularies in which generic drugs have lower copayments than brandname drugs.
---As a result, approximately 75% of all prescriptions filled in the United States in 2009 were for generic products.
----However, some brand-name drug companies are starting to produce generics, and the generic industry is
starting to consolidate into fewer and larger companies
----These trends could mean that generic prices may
rise to levels not far below current brand name prices.
PPT
-2009
---Drug companies spent $7 billion on sales representative to visit physicians to persuade them to use brand name medications and not generic equivalents
-The crisis of long-term care is twofold:
--1) Thousands of families each year lose their savings to pay for the chronic illness of a family member
--2) Long-term care often takes place in dehumanizing
institutions that rob their occupants of their last remaining vestiges of independence.
- EXAM: Long-term care includes those health, social, housing, transportation, and other supportive services
needed by persons with physical, mental, or cognitive
limitations sufficient to compromise independent living.
-The need for long-term care services is usually
determined by evaluating a person's impairment of
activities of daily living (ADLs; e.g., eating, dressing,
bathing, toileting, and getting in or out of bed or a
chair) and in instrumental activities of daily living
(IADLs; e.g., laundry, housework, meal preparation, grocery shopping, transportation, financial management, taking medications, and telephoning) (Table 12-1).
- 12 million people in the United States require assistance with one or more ADLs or IADLs, and can therefore be considered as needing long-term care services.
- Projections of growth for the elderly population in
the United States are:
----In 2000, the population 65 years of age and older numbered 35 million and this figure is expected to reach 72 million by the year 2030.
----The number of people 85 years and older will nearly double from 4.2 million in 2000 to 7.3 million in 2020.
----Those 80 years and older are most likely to need long-term care because 57% have severe disability
-As more and more people need long-term
care, the answers to two questions become increasingly
urgent: How shall the nation finance long-term care?
Should most long-term care be delivered through institutions or in people's homes and communities?
-In the United States in 2009:
--$205 billion spent on long-term care services
--22% of patients and their families financed long-term care through out-of-pocket payments
--Typically, a family becomes eligible for Medicaid long-term care after they spend a portion of their life savings on long-term care
--Medicaid pays for 34% of U.S. long-term care
-In 2006, one year of nursing care at home cost an average of $76,000
-INDIVIDUALS
-FAMILIES
-MEDICARE
--Does not cover assistance with ADLs that are considered custodial services
--Medicare only covers or pays for only "skilled care"
----i.e. Registered nurses in a hospital facility, nursing home, or home care services
--RNs provide a wide variety of services i.e. changing wound dressings, taking blood pressures, assessing heart and lung sounds, reviewing patient compliance with medications and providing patient education (diabetes, hypertension and heart failure).
--Usually covers services after an "acute" hospitalization
--Does not cover care for "chronic conditions"
-MEDICAID
--Generally does not pay for around the clock (24 hour) home care of people that cannot take care of themselves
--In 2005, Medicaid spent 35% of long-term care budget on home and community-based care
--Qualifying for Medicaid - Nursing Home Coverage
----Families may be forced to spend their life savings to low levels to qualify for Medicaid benefits
--Increase in Medicaid Coverage of Home Health Services
----As a result of home and community-based care 1915 (c) waivers
--1915 (c) waivers
----Attempts to prevent nursing home admissions by allowing Medicaid recipients to receive more home care services
-PRIVATE LONG-TERM CARE INSURANCE
--Plays a minor role in long-term care financing
--Only 8% of long-term costs are covered by private insurance policies
--Usually have a large deductible
--EXAM:Experience-Rated Insurance
----Results in high premiums for the elderly population because they are at a considerable risk of requiring long-term services
--In 2009, the median income of people age 65 and older was $31,000.00 and due to the median income of people aged 70 to 74 years of age, only 17% of households could afford long-term insurance policies
-Which services provided in a nursing facility or at
home are covered by Medicare?
----The key distinction is between "skilled care," for which Medicare pays, and "custodial care," which is usually not covered.
-A related issue is that of postacute VS chronic care.
-Medicare usually covers services needed for a few weeks or months after an acute hospitalization, but often does not pay for care required by a stable chronic condition.
-Some examples of skilled care VS custodial services
----Registered nurses in a hospital nursing facility, nursing home, or home care agency provide a
wide variety of services, such as changing the dressing
on a wound, taking blood pressures, listening to the
heart and lungs to detect heart failure or pneumonia,
reviewing patient compliance with medications, and
providing patient education about diabetes, hypertension, heart failure, and other illnesses.
----Physical and occupational therapists work with stroke, hip fracture, and other patients to help them reach their maximum potential level of functioning.
----Speech therapists perform the difficult task of teaching stroke patients with speech deficits how to communicate.
----These are all skilled services, usually covered by Medicare.
----Custodial services involve assistance with ADLs and
IADLs rather than treatment or rehabilitative care
related to a disease process
-------These are tasks such as cooking, cleaning house, shopping, or helping a patient to the toilet.
-------These services, usually provided by nurses' aides, home health aides, homemakers, or family members,
are considered unskilled and are often NOT covered
by Medicare.
-Private insurance plays a minor role in long-term care
financing, with only 8% of long-term care costs covered
by private policies (Table 12-2).
-EXAM: Experience rating has had a profound effect on the dynamics of private long-term care insurance.
-The largest market for this type of insurance is the elderly population.
- Under experience-rated insurance, the elderly are charged high premiums because they are at considerable risk of requiring long-term care services.
-The 2009 median income of people over 65 was $31,000
-Only 17% of households with the head of the household aged 70 to 74 years could afford the
average long-term care insurance policy
-The major attractive market for long-term care insurers is the younger employed population, but only a tiny fraction of this group is interested in long-term care
insurance because the prospects of needing such care
are so remote.
-People purchasing long-term care insurance may
find it to be a poor investment.
-Some private policies specify that a policyholder must be dependent in three or more ADLs before receiving benefits for home health services, yet many people with fewer than three ADL impairments need long-term care services
----For these people, their insurance may pay nothing.
-Long-term care policies usually have a large deductible (measured in nursing home days) for nursing home care, and most policies pay a fixed daily fee rather than reimbursing actual charges.
- A typical policy might provide $150 per day after a 90-day deductible.
The 2006 average daily nursing home charge was $220,
meaning that $70 would be the patient's responsibility.
----Thus a year's stay would require out-of-pocket expenditures totaling $39,050 (90 days x $220 = $19,800 plus 275 days x $70 = $19,250) over and above payment of the insurance premium.
- Most policies limit their coverage to a few years, which places a cap on how much the insurance will pay
-INFORMAL CAREGIVERS
--Most people receive long-term care from family and friends
--In 2007, about 52 million people served as unpaid family caregivers
----The majority of these caregivers were women
----For men, their wives usually provide care
----For women, usually their daughters provide care
----A growing number of elderly do not have family living close enough to provide "informal care"
----The lack of "informal care" is a common reason for elderly individuals to move to a nursing home
----On average, informal caregivers provide 20 hours per week of care (equivalent to $375 billion in 2007)
--37% of informal caregivers to people age 50 and older reported quitting their jobs or reducing their work hours to assist family members
--Elderly people with caregivers have:
----Shorter hospital stays
----Fewer hospital readmission's
----Lower inpatient expenses
--Unpaid caregivers are very valuable to the health care system
-COMMUNITY- BASED AND HOME HEALTH SERVICES
--It is long term care delivered through a variety of program i.e.
----Home care
----Adult day care
----Assisted living settings
----Home-delivered meals
----Board and care homes
----Hospice care for the terminally ill
----Mental health programs
--What has lead to changes in community-based long-term care?
----During the 1970s, the independent living movement among disabled people created a strong push away from institutional (hospital and nursing home) care toward community-based and home care that fostered the greatest possible independence (Movement from institutional living to home care from disabled individuals)
----During the 1980s, AIDS activists furthered the
development of hospice programs that provide intensive home care services for people with terminal cancer and AIDS; the home is usually a far more therapeutic, comforting environment than the hospital or nursing home (Development of hospice programs for AIDS patients)
----During the 1980-1997, as a product of the intersection of the popular movement toward home care and the DRG-created incentive to reduce Medicare hospital stays, home health services expanded rapidly
-------This prompted changes in Medicare payment policies to rein in home care expenditures
-------Concerns were voiced about cuts in Medicare program so Medicare instituted a prospective payment system for home care based on the episode-of-illness model
--------HOME CARE AGENCIES ARE PAID A LUMP SUM, (which like DRG hosp payments, vary with severity of illness) for 60 days
- Many categories of health caregivers function in
teams to perform home care including:
----Nurses
----Physical, occupational, speech and respiratory therapists
----Social Workers
----Home Health Aides
----Case Managers
----Drivers delivering meals-on-wheels
---Home care, designed to help fill the once low-tech niche in the health care system that assists the disabled with ADLs and IADLs, has become increasingly specialized i.e.:
----I.V. antibiotic infusions
----Morphine pumps
----Indwelling central venous lines
----Home renal dialysis
----Wound care nurses
----Respiratory therapists
-These developments are a major advance in shifting medical care from hospital to home, but they have not been matched by growth in the paid personal custodial care needed to allow disabled people to remain safely in their homes.
- Similarly, hospice care, while providing excellent nursing services for patients with terminal illnesses, is limited in the ADL support it provides.
- Hospice programs may not accept terminal patients without an informal caregiver at home, thus the people who may need home hospice services the most cannot receive them.
- Assisted Living
---Provides housing with a graded intensity of services depending on the functional capabilities of its residents
----In 2009, the average annual cost $34,000 (mostly out-of-pocket payments)
----Assisted living too expensive for low to middle income families
-Sometimes informal care and home health services are not enough for the elderly/ disabled people
-Elderly needing 24-hour around-the-clock care may be placed in a nursing home with care provided by health
aides and orderlies under the supervision of nurses.
-In 2007, 1.8 million people lived in a nursing home and 67% of nursing home residents are women (who more often outlive spouses)
---- Frequently, after caring for a sick husband at home, women will themselves fall ill and be placed in a nursing home because no one is left to care for them at home
-Individuals who are 65 years have a 40% chance of going to a nursing home at some point in their life
-76% of nursing home residents have cognitive impairment and 93% have restricted mobility
- There are two main differences between the chronically ill inside and outside nursing homes:
--1) Nursing home residents have no family able to care for them
--2) A larger proportion of nursing home patients suffer from dementia, a condition whose care is extremely difficult to provide at home by family members
-EXAM: QUALITY
--Varies greatly from one nursing home to another
--Omnibus Budget Reconciliation Act of 1987 set standards for nursing home quality and mandated surveys to enforce those standards
--In 2005, only 9% of nursing homes had no deficiencies (91% did not meet the standards for nursing homes)
--The most frequently cited deficiencies were:
----Inadequate food sanitation
----Quality of care
----Professional standards
----Accident prevention
----Housekeeping
----Infection control
----Pressure sores
----Dignity
--Hispanics are more likely to be placed in low-quality facilities
--Lower-income individuals often housed in close quarters with several other patients and become totally dependent on an underpaid,
inadequately trained staff
--Many spend hours lying in bed or sitting in a chair watching TV
--While quality of life varies between one nursing
home and another, placement in a nursing home
almost always thwarts the yearning for some degree of independence of action and for companionship and a sense of futility overwhelms many nursing home residents, and the desire to live often wanes.
-Due to cost containment at nursing homes, most care is provided by nursing aides who receive minimal training and are poorly supervised
----The job of the nursing home aide is very difficult, involving bathing, feeding, walking residents, cleaning them when they are incontinent, lifting them, and hearing their complaints.
-In 2005, 66% of all nursing homes were under for-profit ownership, many operated by large corporate chains
-For-profit ownership has been associated with lower staffing levels and poorer quality of care compared
with nonprofit ownership
-Offering a humane existence to severely disabled
people housed together in close quarters is a nearly
impossible task.
- One view of nursing home reform holds that only the abolition of most nursing homes and the development of adequately financed home and community-based care can solve the nursing home problem