Healthcare issues for the aging population

¶ … health care to the elderly.

In the next several years, many commentators argue that population aging will considerably affect the federal budget. When one turns sixty-five, his or her cost of care doesn't abruptly increase. However, the cost of healthcare to the federal government will go up since at that age Medicare usually becomes the main or primary insurer. According to studies by the CBO (Congressional Budget Office), over the next two decades, population aging will account for over fifty percent spending growth on various government healthcare programs (What Is Driving U.S. Health Care Spending? America's Unsustainable Health Care Cost Growth). As the baby boomers age, the population will lead to a higher percentage of seniors, which will in turn lead to an overall increase in per capita spending. Studies indicate that over the next decade or so, the aging American population will contribute to the increase in healthcare spending by at least 0.5% per annum. As of 2014, over half of the costs of long-term care (institutional) for the elderly were covered by Medicaid funds. These studies and statistics show the current situation in the country. It is obvious that more and more public funds are going to caring for the healthcare needs of the elderly and something has to be done about it to reduce the increasing costs but at the same time ensure that the health care needs of the elderly are well taken care of.

Solutions

Medicare reimburses medical doctors for all the eligible services provided. This situation somewhat creates an incentive for doctors to over-utilize the program. Also, the PPS (Prospective Payment System) designed to control expenses by paying healthcare facilities a prospective fee per DRG (diagnostic-related group) episode, is also prone to waste. While PPS promotes efficient care, and has led to considerable reductions in time spent at health care facilities by patients compared to cost-based payments, the system unfortunately encourages a reduction in basic care, resulting in increased readmissions and negative short-term health outcomes (REDUCING COSTS AND IMPROVING THE QUALITY OF HEALTH CARE). A better way to reduce costs would be through introducing bundled reimbursements or payments. A bundled payment is a fixed amount payment for comprehensive healthcare facility services and/or post-acute services, plus any services rendered in case of readmissions. Changing the system of payments from individual payments for various services to a bundled payment for sets of services across healthcare providers and different care settings will promote integration and increase coordination of care between health care facilities, leading to increased quality of care and a decrease in readmissions. Over 467 health care facilities across forty-six states are already trying out the bundled payment initiative and the results are encouraging to say the least. This payments system could reduce the growth in healthcare spending for the elderly.

Solutions into Policy

One of the best examples of initiatives used to reduce the cost of care for the elderly is the approach implemented by the Senior Health and Wellness Center owned by Peace Health System in Eugene, Oregon. The center utilizes a creative multidisciplinary approach to care for its clients. The Center has brought together various caregivers with the aim of providing comprehensive and effective care. This has increased the Center's ability to coordinate care, considerably improved health outcomes and reduced overall costs of care (Barr). This multidisciplinary approach combined with bundled payments could reduce the public cost of care for the elderly. Many policymakers are already calling for structural changes in the Medicare system. Some are suggesting that the insured should contribute more while others are proposing an increase in eligibility age. What is clear is that we can no longer continue working with the system the way it is. Comprehensive reforms should be passed to make the system more coordinated, to improve care and to cut costs.

Barriers to Implementation

Calling for baby boomers to pay more will likely not be much helpful. Studies have shown that baby boomers have less money than was initially believed. Studies such as that conducted by Pew Charitable Trust reveal that in the economic recession of 2008, individuals born between 1946 and 1955 lost twenty-eight percent of their net worth as a group. So, increasing the cost of health insurance for enrollees won't likely result in any significant change. Also, increasing structural changes to the Medicare will require extensive negotiations in congress that would likely water down any positive effects that could have been achieved if any proposed amendments were passed as is.

Public and Private Funding