The Columbus Dispatch had an interesting report on the excessive cost of nursing home care.

When Teresa Horstman of Madison County in Ohio was concerned about her father who she says “lived his life with dignity” and was then suffering from dementia, she wanted him to have the highest quality of life. This prompted her to upgraded his assisted-living room to the most advanced care option offered at Springfield nursing home. However, Teresa feels that for the high price she was paying, her father was not getting the improved quality of care that he should. “Attention from the staff was lacking, she said. And, she recalls, a physician who made rounds there failed to respond to her repeated requests that Mr. Horstman receive a clinical evaluation of his condition.”

She says that her father worked his entire life, along with raising nine children and now his life savings are almost exhausted paying for a poor level of care. “He had to sell his belongings. Here we were draining his bank account so he could sit around at a home in poopy diapers.”
Nursing homes defend their prices saying since most resident require help with at least four or more daily activities including bathing, feeding, toileting, and transferring they receive a lot of services that are well worth the price. However, many nursing homes claim their prices are justified by the level of care they provide, however it is important to consider if residents are actually receiving the care they pay for.

Nursing homes say that due to a bad economy and a growing number of elderly individuals that are choosing to receive in-home care rather than move to a facility, the market is very competitive and they cannot continue to raise prices.  Rather than increase the price and risk losing customers, nursing homes are finding other ways to cut cost such as cutting staff, often at the expense of their residents.  Nursing homes decease their staff size and cut employee benefits to save money which compromises the level of resident care. This hurts residents who are not receiving the level of care they pay for since employees who are overworked and under compensated cannot preform their duties.

Kaiser Health News reported that Medicare could earn up to $111 million annually if it limited insurers’ ability to retain investment earnings on the billions they are paid through the prescription drug program, according to a government report out.  Medicare prepays the private insurers approximately 20 days before the insurers pay their pharmacy bills and does not require them to return any of the interest they earn while holding that money, says the report by the Office of the Inspector General for the Department of Health and Human Services.

That contrasts with how the government treats insurers in the Federal Employees Benefit Program, which provides health coverage for federal workers, the report said. The auditors recommend that CMS pursue legislation to change the timing of payments so insurers pocket the money only briefly before they pay their bills. If the government had such a rule in effect in 2009 – the year the auditors studied – the Medicare Part D trust fund would have earned $111.2 million in interest.

The report  was given to the Centers for Medicare & Medicaid Services (CMS) and to members of Congress in hopes they would fix this loophole.


The Pittsburgh Post-Gazette reported that the sequester may cause Pennsylvania nursing and long-term care homes stand to lose about $37 million this year. The nursing home reductions are from a proposed 2 percent cut in Medicare funding, amounting to $11 billion this year alone affecting hospitals, primary care clinics and other specialty providers, but nursing homes receive Medicare funding, as well.

According to a 2012 analysis by Avalere Health and the Alliance for Quality Nursing Home Care, the sequestration-related Medicare cuts to skilled nursing facilities would total $782.5 million in year one, and $9 billion over 10 years, nationally.  In 2012, skilled nursing care facilities saw an 11.1 percent — or $3.87 billion — cut in Medicare funding. CMS said that was actually a “claw back,” designed to combat unintended increases in therapy billing costs.

“On top of that, nursing homes could see other sequester-related reductions — a possible 5.1 percent cut in housing funds for low-income seniors, and another 5.1 percent for Meals on Wheels funding. Both cuts originate from the estimated reduction in Older Americans Act funding, also contained in the sequestration package.”

Nursing homes nationwide that were not meeting even basic requirements to look after their residents charged taxpayers billions of dollars.  The Department of Health and Human Services’ inspector general said Medicare paid about $5.1 billion for patients to stay in skilled nursing facilities that failed to meet minimum quality of care rules in 2009, in some cases resulting in dangerous and neglectful conditionsOne out of every three times patients wound up in nursing homes that year, they landed in facilities that failed to follow basic care requirements laid out by the federal agency that administers Medicare, investigators estimated.


By law, nursing homes need to write up care plans specially tailored for each resident, so doctors, nurses, therapists and all other caregivers are aware how to help residents reach the highest possible levels of physical, mental and psychological well-being.  This is not done. Neglect is rampant.  Investigators estimate that in one out of five stays, patients’ health problems weren’t addressed in the care plans, falling far short of government directives.

The government spends taxpayer money on facilities that actually endangers people’s health. In other cases, residents got therapy they didn’t need, which the report said was in the nursing homes’ financial interest because they would be reimbursed at a higher rate by Medicare.




The New York times reported that millions of poor and elderly Americans may have to contribute more for health care under a proposed federal policy that would give states more freedom to impose co-payments and other charges on Medicaid patients. Under the proposal, a family of three with annual income of $30,000 could be required to pay $1,500 in premiums and co-payments.

The 2010 health care law extended Medicaid to many childless adults and others who were previously ineligible. The Supreme Court said the expansion of Medicaid was an option for states, not a requirement as Congress had intended.  Hoping to persuade states to expand Medicaid, the Obama administration is allowing state Medicaid officials to charge higher co-payments and premiums for doctors’ services, prescription drugs and certain types of hospital care, including the “nonemergency use” of emergency rooms.

With patients paying more, the federal government and states would pay less than they otherwise would.


NPR reported the hidden costs of raising the age eligibility for Medicare from 65 to 67.  Tricia Neuman, senior vice president of the nonpartisan Kaiser Family Foundation and director of its Medicare Policy Project contends that “while federal spending will go down, costs to others will go up. In fact, total spending will rise” because if you lower costs for one group, you almost always raise them for another.

“Let’s focus on those 65- and 66-year-olds. In Medicare, they’re currently the youngest and healthiest people. So by delaying their entry into the program, says Neuman, you raise costs for everyone else already there.”  The result would be that “people on Medicare pay higher premiums,” she said. “That’s because you’re taking the healthiest people out of the Medicare risk pool, leaving sicker people to pay higher premiums.”

At the same time, those same 65- and 66-year-olds would be the oldest and, likely, among the sickest people remaining in the insurance pools of the working-age population. “That means that they are raising the average risk of people in the exchanges, so that younger people in the exchanges, everybody in the exchanges, will see premiums rise, but especially so for those who are younger,” Neuman says.




The Florida Times Union reported that Florida’s Republican Tea Party Governor Rick Scott will cut Medicaid.  Nursing home industry and patient advocates agree that the cuts will harm nursing home residents.  Scott’s plan includes Medicaid rate cuts of $429 million as part of a budget-cutting exercise. Though state economists’ early projections show a $71 million budget surplus going into 2013-14, Scott required all state agencies to submit an initial budget plan that would cut spending by 5 percent.

“More than 60 percent of that cut — $274 million — would be shouldered by nursing homes under the proposal presented this week by the Agency for Health Care Administration.”  This will clearly affect staffing and the care of the residents.


“Two-thirds of my costs are people,” said Marty Goetz, CEO of River Garden Hebrew Home in Jacksonville. “If that level of cut happens, I will have to reduce staff, salaries or hours.”



“During the spring legislative session, lawmakers cut $38 million from nursing homes, and $49 million for hospital outpatient services. The latter would see another $119.4 million reduction as part of the agency’s proposal.”


Jena Ellis asked us to share an article that they just posted on her own blog called “7 Myths About Medicare”.

1.  Medicare is an unearned entitlement:   American employees “earn” the entitlement of Medicare by paying in to social security during their working years. Interestingly, this form of so-called “socialized” health care works exactly like private insurance: some customers pay more than they receive back, others get back more than they pay in.

2.  Medicare’s budget is out of control:   Medicare’s spending growth rate through 2019 is projected at 3.1%, more or less matching the growth of the U.S. economy, while spending by private insurers will increase 4.9%. In addition to being run more efficiently than private plans, Medicare spends much less on administrative overhead, including fighting fraud and abuse.

3.  Medicare costs are out of control: Medicare has always and is projected to continue to cost significantly less per beneficiary than private insurance. While it is true that Medicare spending will increase as the number of senior citizens in the U.S. continues to grow, the program is expected to remain remarkably cost-friendly.

4.  Market competition brings down the cost of private plans administering Medicare: Medicare Advantage is offered by private providers who are paid by Medicare as well as premiums and co-payments. It was believed that market competition among Medicare Advantage’s participating insurance providers would bring down the costs of health care plans, but anyone 65 or older will tell you that definitely did not happen.

5.  Medicare is government healthcare:   A socialized health care system would mean the government paid for all health care, employed all health care providers, and ran all of the country’s health care facilities. But the health care providers, pharmacies, and nursing homes that fall under Medicare’s coverage are all privately owned.

6.  Medicare is going to be broke in 2024:   While insolvency has been predicted for the Medicare nearly every year since 1972, various acts of congress and revisions to the program have managed to keep it solvent including the Affordable Care Act which keeps Medicare financially stable through 2024, and funding sources are in no danger of suddenly disappearing.

7.  Repealing the Affordable Care Act will save Medicare:  The Affordable Care Act greatly expands health coverage for Medicare beneficiaries.  Repealing the Affordable Care Act will only send Medicare back to square one and take the latest life-saving benefits away from millions of Americans.


Federal civil jury trials may be significantly delayed due to Congress failing to reach a budget deal with $600 billion in automatic spending cuts kicking in next year.  The federal judiciary’s share of the cuts would be more than $500 million.   One federal judge is speaking up.  Chief Judge David Sentelle of the U.S. Circuit Court of Appeals for the District of Columbia said “Civil jury trials would probably have to be suspended due to a lack of funding,” following a meeting at the Supreme Court of the Judicial Conference, the judiciary’s policy-making arm led by Chief Justice John Roberts.

The probation system, border courts, courthouse security, and payment for defense lawyers could be affected.


The San Francisco Chronicle reported that governor Rick Scott of Florida has decided to dump more than 3,300 children with disabilities into adult nursing homes because the state is slashing nursing and other services that would otherwise keep them at home with their families.  A lawsuit was filed to stop the transfers.  The lawsuit mirrors a letter sent this week by federal officials to Florida Attorney General Pam Bondi alleging the state is violating federal law by allowing more than 200 children with disabilities and even babies to be kept in nursing homes, often for years.

Children languish in facilities, sharing common areas with elderly patients and having few interactions with others, rarely leaving the nursing homes or going outside.  Investigators noted the children are not exposed to social, educational and recreational activities that are critical to child development.  Educational opportunities are limited to as little as 45 minutes a day, according to a detailed letter by U.S. Department of Justice officials.  Investigators also said Florida is violating the federal Americans with Disabilities Act and is infringing on the children’s civil rights by segregating and isolating them. The average length of stay is three years.

These kids who are institutionalized in geriatric nursing homes are receiving less services than kids in prison,” said Paolo Annino, a law professor at Florida State University.

The state turned down nearly $40 million in federal dollars for a program that transitions people from nursing homes back into the community. The state has also been paying community-based providers less, reducing payments by 15 percent last year because of legislative budget cuts. Yet the state implemented policies that expanded nursing home care, by offering facilities a $500 enhanced daily rate for caring for children, which is more than double than what the state pays for adults.