Part One of this series laid out the cashflows draining middle-class estates in the final years of life into the “eldercare industry.” In my view, this is a significant contributor to rising income inequality. Middle-class wealth in the U.S. does not get passed on to the next generation, leaving that group to start over from scratch. My own children’s generation will likely not see the rise in wealth that my own “boomer” generation did, and they will perhaps even see a net decline in their household wealth over the previous generation.
In this second part, I will look at some possible ways to moderate this transfer. We know that this is possible because other countries do it. It is that simple.
Better ways to do healthcare
I still hear people who have rarely been outside the U.S. brag about how the U.S. has “the best healthcare system in the world.” While perhaps true for upper-middle-class people and richer, this is just a patently false statement when it comes to the majority of Americans. Many other countries now have quantifiably better healthcare outcomes and availability at lower costs per citizen than in the American system, while also reaching near-universal coverage of their populace.
When you bring up alternatives to the American healthcare system, naysayers inevitably first bring up the British or Canadian systems as examples of why we can’t have better, more universal healthcare in the U.S. Much of their “knowledge” is incorrect, but I prefer to note that there are several healthcare systems in developed countries around the world, which I have detailed in the past, that are much closer to the U.S. system in terms of payment methods and privatization than the in U.K. or Canada, but still do a better job at delivering more effective and affordable healthcare to more people.
And so, in order to address the “cash suck” of eldercare in the U.S., we first need to address the larger “cash suck” from middle-class of Americans into the healthcare system in general. The correlations are clear; the countries that have better, more universal healthcare systems also tend to better address the needs, both physical and financial, of their elders. How do they do that?
Proactive and preventive health care. Healthy seniors are more likely to stay out of long-term care facilities. While Medicare provides for some regular preventive services, the U.S. still has a long way to go to proactively meet the medical needs of seniors. Access to medical providers remains difficult in too many areas, and many communities don’t even know who their in-need seniors are.
The system in the Netherlands provides an interesting contrast to the American model. It is focused on a large number of visiting nurses who have responsibilities for canvassing their communities for health needs, especially by seniors. Forbes recently outlined the Dutch approach:
“The homecare organizations strove to provide assistance, but only when individuals could not manage on their own. The nurses look first at a person’s capability to care for him or herself. Next, the nurses look to the neighborhood and what help neighbors might provide. Then the nurses reach out to relatives to see if they can be of assistance. As a final step, the nurses provide care.”
Just one day for a senior in a hospital that could have been prevented can pay for several days of, and multiple patient contacts by, visiting nurse services. In addition, an expensive ambulance ride and an emergency room experience likely precede many seniors’ hospital admissions. Both are often unnecessary.
Non-profit community health centers and county health departments, if properly staffed and managed, could potentially fill much of this eldercare gap in the United States. And the funds are likely already there, just used in the wrong places.
Aging in place. These services are all part of a larger viewpoint of the best northern European systems, which is to provide direct services to seniors in their homes as long as possible. Managed through local municipalities but funded nationally, Sweden, for instance, focuses on keeping over 94% of people over 65 years old in their homes.
Long-term care insurance policies in the U.S. have improved their options for in-home care over residential care in recent years, but private payment for these services remains out of reach for most seniors without governmental assistance. Ironically, if you don’t have any money, then you are more likely to get your healthcare needs serviced in an expensive hospital emergency room rather than at home, or even in a local clinic. Much of that scenario happens when the at-home needs of the senior were not met, and which could have been done at a much lower cost.
As noted in Part One, the point where seniors are forced out of their homes is often the icing on the big expensive cake of healthcare for an aging citizenry. This is where the reverse mortgage people come in to finance the nursing home stay, and you can pretty much write off any family estate passed on to the heirs at that point.
The “fightin’ word” of collective responsibility.
Few words get a rise out of conservative Americans more than proposing “collective” solutions. And yet, they are all around us, and effective. We all shoulder the cost of the fire department, and likely would consider it crazy to force only those who have a fire to pay a pro rata share of the entire department.
However, we increasingly ignore that lesson in healthcare in a push for profit-making user fees. As I detailed a couple of years ago, short ambulance rides are now getting billed at $2000 or more precisely because we have begun laying the entire cost of 24/7 ambulance service onto just those people who need it today. The rest of us get a “free ride” economically until we need one physically. We need to return to a system where we are all responsible as a community for 24/7 emergency health services.
And so it is also with many eldercare services. Instead of collectively supporting a more comprehensive visiting nurse or nurse-practitioner model of aging-in-place eldercare, we wind up spending more money per capita than other countries do, and for poorer care. And in the process, the savings of the elderly are sucked out into the capital holders’ pockets because we have privatized what should be community services.
As noted in Part One, there are real societal costs when private equity drains the “cash cow” nursing homes. A recent New York Times story cataloged repeated incidents of nursing home owners ousting unwanted, low-reimbursement Medicaid residents under the guise of hospital-based mental health consults. However, while the patients are gone, they then moved in higher-reimbursement short-term Medicare patients. The “community” then no longer has a place for high-need seniors, because it is literally not seen as a community problem, rather high-need seniors are seen as a “profit drain.”
I have visited some fine eldercare facilities. One of my favorites recreates a “street” of “old hometown” fake facades in hallways to give memory-care seniors a comfortable, spotlessly clean, and lower-stress “new home.” But most Americans can’t afford that place unless they hand everything over to the reverse mortgage industry.
And if that money runs out…well, I have spent more time than I care to think about in those places as well. Even if your religious tradition does not have a doctrine of purgatory, we humans have nonetheless created a new, artificial “halfway place” between life and death that can last for a decade or longer. And that is not one of our better innovations.