While most physicians build patient partnerships guided by individual patient needs and values, at the system level, we are just now beginning to embrace patient-centered care. As the health system fully considers the comprehensive needs of each patient, we are starting to recognize the critical role that family caregivers play in patient satisfaction and health outcomes. This is especially true for elderly patients that want to age-in-place at home, and depend on support from family members and loved-ones to manage their care. Common sense and an emerging body of evidence tell us that the integration of informal caregivers into the U.S. health system holds tremendous promise for improving the well being of patients while having the potential to reduce costs associated with hospital readmissions and nursing home care.
As individuals age, their need for both medical and nonmedical services and supports increases. Millions of aging Americans receive help with their activities of daily living (ADLs) — such as getting dressed, bathing, and getting around the house. The number of Americans who need help with ADLs and other activities such as paying bills or taking medications (collectively called “long-term services and supports” or “LTSS”) is expected to rise from 12 million today to over 27 million in 2050. According to the Congressional Budget Office (CBO), 20 percent of individuals over age 65 and 41 percent of individuals over age 85 need assistance with at least one ADL.
We recently published a report at the University of Pittsburgh, Addressing the Needs of Caregivers at Risk: The Policy Landscape. In it we review current policies addressing the needs of family caregivers, evaluate emerging evidence on the effectiveness of these policies, and suggest some potential new policy approaches, which we will discuss in the following blog post.
The Cost of Long-Term Care
Daily help with LTSS can come from paid, formal sources, such as a nursing home or home care agency, or unpaid informal sources, such as family members or friends. According to the Institute of Medicine, there are somewhere between 29 and 52 million unpaid caregivers nationally. Long-term care is costly, and assistance from family caregivers helps to alleviate the financial burden for those in need of care.
However, family caregiving can take a large financial, emotional, and physical toll on the caregiver. According to the AARP, the value of informal caregiving provided to adults was approximately $470 billion in 2013. Additionally, close to one out of 10 Americans over the age of 40 are both providing LTSS assistance to a family member and supporting a child. The emotional, social, physical, and financial burden on this “sandwich generation,” is significant.
Few Americans consider their need for LTSS when planning for their financial future. According to recent survey data, only 53 percent of Americans over age 40 believe that they will eventually need some form of ongoing living assistance. A very small portion of the population—only about 5 to 7 percent over age 45—carries long-term care insurance.
Though most Americans prefer to remain at home as they age, the cost of long-term care is high, and can quickly exceed the retirement savings of the average American. The estimated annual cost of nursing home care is $91,250 for a private room and $45,760 for a home health aide. According to a recent study based on data from the Federal Reserve Survey of Consumer Finances, among working age households with individuals aged 55 to 64, the average savings balance was $104,000 in 2013.
The same study found that 45 percent of American households have no retirement savings.
While Medicare provides health care coverage to seniors, many Americans don’t realize that Medicare coverage of long-term care is extremely limited. Medicare only covers a short duration of “medically necessary” home or nursing facility care following an episode of acute illness — it won’t pay for ongoing nursing home care or home health aide services. Given these limitations, many Americans either pay out of pocket for LTSS services, or turn to their family members for assistance. About 20 percent of LTSS spending in the US is out of pocket spending.
In contrast, the Medicaid program, which covers about 70 million children and adults annually, pays for long-term care services in both the home and institutional settings for the low-income elderly and disabled. Medicaid is the largest payer for LTSS in the United States, encompassing over half of total spending. As the population ages, Medicaid will also fund LTSS for individuals who “spend down” into the program. Because so many Americans do not have a plan in place to meet future long-term care needs, those with income that currently exceeds Medicaid qualification may “spend down” into poverty and enter the Medicaid program when they can no longer afford to pay for a nursing home or other LTSS out of pocket.
Because of the potential for spend down, Medicaid serves as a safety net for the entire population. The Congressional Budget Office (CBO) estimates that spending on LTSS as a percent of the GDP could more than double by 2050. Medicaid is a huge line item in state budgets, and increased Medicaid spending can crowd out other priorities at the state level, such as education and economic development.
For many individuals, the alternative to spending down into poverty is to increase their reliance on family caregivers. This strain does not show up in state or federal budget tables, but does impact the caregiver — depleting personal financial resources, interfering with employment, and exacting an emotional and psychological toll. Creating a comprehensive strategy to support family caregivers could help alleviate the burden felt on all sides — both stabilizing the increasing enrollment in Medicaid, and ensuring that family caregivers and those they care for are able to lead healthy and productive lives.
The Impact of CARE
At both the state and federal level, we are beginning to see encouraging signs that caregiving is becoming more central to post-Affordable Care Act health policymaking in the U.S. With the recent passage of the CARE (Caregiver Advise, Record, Enable) Act in Pennsylvania, Michigan, and Virginia, 25 states now require providers to identify and train caregivers during the hospital discharge planning process.
A recently proposed change to the Medicare conditions of participation for hospitals would require that nearly all caregivers receive specific discharge instructions, such as a list of all medications and warning signs to watch out for relevant to the patient’s condition. Under the proposed discharge planning rule, hospitals must consider the availability of family caregivers, their capacity to provide care, and community supports available to the patient. Ensuring that a family caregiver is well-informed and trained to provide appropriate post-discharge care can help avoid re-hospitalizations as well as prevent a decline in the health and functional status of the patient.
Last year, the National Academy of Medicine formed a committee of the nation’s leading experts to conduct a consensus study and make recommendations for public and private sector policies to support family caregivers. The release of this evidence-based study should be an important step forward in accelerating caregiver policy and practice development. Much like we have begun to do with our acute care system, a comprehensive, all-hands-on deck local, state, and federal strategy is needed to incorporate caregivers into the U.S. health system.
Policy Options Going Forward
Our recent report, Addressing the Needs of Caregivers at Risk: The Policy Landscape, covers three key areas:
Alleviating Financial Hardships
Several states offer tax benefits to family caregivers, to compensate for spending on services such as home modifications. However, these tax credits are small, limited in scope, and many individuals are unaware of their existence. The federal Dependent Care Tax Credit helps families with their child care needs, but its application to adult children caring for aging parents is severely limited. One potential approach to alleviating the financial hardship faced by family caregivers is to allow them to claim Social Security benefits in exchange for the time they spend providing care to loved ones.
Promoting Flexible Employment
The Family and Medical Leave Act (FMLA) allows qualified workers to claim up to 12 weeks of unpaid leave to care for a sick family member. The generosity of this benefit varies by state, with a few states offering paid rather than unpaid leave. Existing research shows that the impact of family and medical leave is positive, and in most cases, does not result in any negative effect on the profitability of a business.
Providing Services and Supports
The National Family Caregiver Support Program and Lifespan Respite Care Act provide funding to states to meet family caregiver needs by increasing the availability of respite care, providing resources for education and training, and offering supplemental services such as support groups, home modifications, and supplies. However, these programs are significantly underfunded. Many Medicaid home and community-based service (HCBS) waivers contain a “self-” or “participant-directed” component which allows the waiver recipient to select and pay their own caregivers, including family caregivers. The ability of Medicaid participants to hire and pay a family caregiver using Medicaid funds varies from state to state.
Early caregiver research indicates that systematically incorporating family caregivers into the U.S health system, for example, into discharge planning, could improve the psychological and physical health outcomes of patients, while reducing readmissions and total health expenditures (Rodakowski, et al., Integrating Caregivers of Older Adult Patients into Discharge Planning: A Systematic Review, in press).
The time has come for practitioners, providers, insurers, employers, and policymakers to consider this emerging body of evidence and develop strategies that fully embrace the critical role caregivers can and will play in our health care system.
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Embracing The Role Of Family Caregivers In The U.S. Health System