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Dear Dr. Dimkoff:

I am a practitioner in the long term care industry as well as a Master’s of Public Administration graduate of GVSU. I am currently the COO of Pilgrim Manor, a retirement community in Grand Rapids. I also serve on the board of directors for the Health Care Association of Michigan and I serve on two committee of the American Health Care Association at the federal level.

I read, with interest, your article “Is America Doomed” in the May 16th edition of MBiz. I whole heartedly agree that this country’s debt must be dealt with immediately and the ridiculous rhetoric of some of our elected officials at the national level has caused us to reach an inexcusable level of gridlock with regard to the debt issue.

However, it should come as no surprise that I fundamentally disagree with your solution that significant cuts be made to our “sacred cows” (as they were referred to in the article): Social Security, Medicare, and Medicaid.

Social Security and Medicare are not “entitlement” programs as our government is so fond of telling us. Both of these programs have been funded by payroll taxes paid by the employer and the employee over a lifetime of work. That portion which the government is responsible for funding is a “trust” program and that trust has been or is being violated at present. Cuts to these programs only create additional violation of trust. These are not bank accounts for which the government can tap into because they refuse to make cuts elsewhere that should be made, continue to knuckle under to powerful interest groups, refuse to consider responsible tax reforms and/or increases, or reject the idea of giving up their tax payer funded perks.

On March 30 and 31, I attended the Health Care Association of Michigan’s (HCAM) Spring Leadership Conference. Our keynote speaker for one of the sessions was American Health Care Association (AHCA) President and CEO Gov. Mark Parkinson. The title of Gov. Parkinson’s presentation was “Promoting Sustainability in Long Term Care” and he made some very good remarks I offer here in paraphrased format for understanding:

The long term care industry (this does not include hospital acute care settings also funded by Medicare/Medicaid) has a tremendous opportunity in that, by 2050, the largest group of people in this country will be women over the age of 85 years. Many more people will need our services than need those services today. These individuals have spent a lifetime paying into a system with a promise from the government that their money will be there for them when they need it. They have no other option for financing their care. Therefore, we must demonstrate to policymakers that our industry is part of the debt solution. We must be assertive in showing these individuals that we are the best cost and quality solution for aging Americans throughout the country and that we are a viable option.

Operating in long term care means providing three distinct services: hospital care, hotel/concierge services, and restaurant services. If one analyzes 30 days of acute long term hospital care versus the same care provided in a skilled nursing facility like Pilgrim Manor, the following data shows very clearly that we are the cheaper option for the same hosptial rehabilitiation level of care:

This data denotes patients who had short-term stays and returned to their home setting.

While the “joe community” perception of long term care continues to be one of negativity, we provide some of the best care in the industry at a lower cost and we must do a better job of getting that data out to the public.

Further, we must shift our thinking from assuming politicians get what we do in long term care and hope for the best. Clearly this is not the case as the negative perception of our work prevails with them as well. It is simply too easy to cut the “entitlements” because we’re “bad.” Medicaid (as opposed to Medicare) is an entitlement program. It is a payer source of last resort and only available once all other financial resources have been exhausted. As seniors live longer due to significant medical advances, they are running out of resources to provide for their care. Currently, the average age of a resident at Pilgrim Manor is 90 years. We have five residents over the age of 100. We have one resident who is approaching her 109th birthday. Imagine living as long in retirement as you worked in your career!!! These are real numbers and care, when it is needed, cannot be provided for free. Beginning Jan. 1, 2011, some 7,000 Americans per day have or will turn 65 everyday for the next 15 years.

Let’s shift a minute to focus on jobs and job creation. Long term care in Michigan employs 139,860 employees caring for 40,000 elderly adults. Long term care in Michigan is the 10th largest employer in the state and generates $5.5 billion in revenue to the state each year. 60% to 70% of our cost is in labor which we squeak to the bone due to Medicare and Medicaid reimbursement shortfalls. The Michigan Economic Growth Association (MEGA) just granted Spartan Motor Chassis $8.8 million to add 450 jobs to their organization. Certainly, these jobs are important but providing for the needs of the state’s most vulnerable citizens is as well. As an industry, we don’t need $8.8 million to create 450 jobs. But we do need to be paid for the care and services we are providing and are being required to provide. We also provide valuable employment with health benefits that cannot be replaced by automation.

My generation, i.e. those still working for a while yet, must do a much better job of planning for our retirement care needs. Whether that is buying long term care insurance, making better investments, taking fewer vacations or doing without something to fund better options, whatever it is- we must do it now. We do not have the luxury of thinking Social Security and Medicare benefits will be there for us as we are paying for those on it now. Any future legislation, I believe, needs to compel us to be responsible planners if we’re not willing to do it on our own.

But for those needing these benefits now, the suggestion of significantly cutting benefit services is too broad and is too easy to put out there as a solution to the problem. As a high school student in the 1970s, I remember hearing the discussions about the baby boomers and how to pay for them in 30 years when they all started to retire and apply for their benefits. Well, we’re here and no one in a position of responsibility along the way was interested or; perhaps, brave enough to take this issue on. However, now that we are here, cutting alone is not, at the very least, the ethical answer. I would argue that we need to be more efficient and productive. I would argue that we need to coordinate our care and services much better across service lines. I am frustrated with the lack of communication among care providers in our industry. It is costly, wasteful and does not benefit the person receiving the services. I am frustrated with insurance companies practicing medicine, creating wasteful and inefficient care delivery. Finally, I am tired of the lack of free market competition among health insurance providers that would be a catalyst in controlling escalating costs. I submit cutting Social Security and Medicare is fundamentally and ethically wrong. Can we all do a better job with the money we do have available to us…you bet! But let’s be real careful about not putting a band-aid on a much bigger wound that needs immediate attention. Are we prepared to have Mom or Dad live at home with us because there is no other option? Food for thought…

Respectfully,

Karen J. Messick, MPA, LNHA
Chief Operating Officer
Pilgrim Manor Inc.
Grand Rapids
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