Bredesen Cowers to the Nursing Home Industry, Directs cuts at people not facilities.
By Tim Wheat
 (BOULDER, COLORADO, July 30, 2005) Governor Bredesen’s massive TennCare cuts totally ignore the nursing home industry that dominates Tennessee’s Medicaid budget and is one of the largest lobbies in the state. While directing cuts at individuals and medications, the governor fails to reduce the massive long-term care payout to inefficient and undesirable facilities.
Washington, the state next to Tennessee in total population, has state waivers that provide citizens with Home and Community Based Services (HCBS) rather than forcing them into expensive institutions. Tennessee only offers home medical assistance through its large state waivers, which can help people remain in their own home, but are not effective in moving people out of institutions and assisting them to live on their own.
The key is personal assistant services. Although every other US state has used HCBS to save funds, Tennessee has never developed a statewide personal assistant program. Home health and home nursing services often will not provide necessary routine non-medical tasks that will keep a person at home. For example, if someone only needs assistance transferring from bed to a wheelchair, in Tennessee they are likely to end up in a nursing home. In states with personal assistant services, that task may be accomplished by a nursing assistant at a fraction of the cost of a professional home visit by an RN.
As a result, Tennessee serves 5,517 people with medically orientated HCBS waivers at a cost of about $37,668 per person; while Washington serves 50,757 citizens with personal attendant services at about $10,800 a person. The impact on the overall Medicaid long-term care budget is even more outstanding: Tennessee spends over $25,000 per long-term care recipient, while Washington is spending under $17,000.
When the governor complains that Tennessee is offering “premium” services through TennCare, in the area of long-term care that means “expensive.” TennCare’s long-term program did not offer personal assistant services as a cost-saving alternative to institutions and Bredesen has ignored desirable options while he whines about expensive programs. The governor however did not make any real cuts that may impact the powerful nursing home industry’s government subsidy.
 The nursing home industry dominates long-term care funding in Tennessee resulting in poor care to fewer people at a greater cost. Institutions are the least desirable and most expensive form of long-term care, but in Tennessee they receive 99.4% of the long-term care budget. Washington, with a larger population and smaller federal Medicaid match has over one-third fewer nursing home residents.
Washington serves over 70 thousand people with its long-term care Medicaid program; Tennessee serves under 40 thousand. The Tennessee Health Care Association, the state nursing home lobby, keeps the pork flowing into their pockets despite significant failures in quality of care. More than half of the funding for each nursing home comes from taxpayers, and the nursing home lobby works hard to eliminate competition for the public funds.
“Money Follows the Person (MFP),” proposed by Tennessee ADAPT, is a simple bypass of the nursing home industry’s domination of long-term care funds. The proposal is budget neutral, in that people that are headed to expensive institutions may instead choose preferable cost-saving HCBS. MFP is a realistic alternative that can begin the cost savings for Tennessee this year and help to build community options to nursing homes in the state. Texas reported in March 2005 the state had diverted 3,200 people from nursing homes with its version of Money Follows the Person.
The MFP is an example of this failure of Bredesen to use proven cost-saving programs to improve healthcare in Tennessee, or keep his promise to fix TennCare. His Medicaid proposal keeps the public funds pouring into the inefficient nursing home industry while cutting HCBS options to institutionalization. The governor slashed exclusively the benefits to individuals and kept the corporate welfare flooding into the for-profit nursing home industry.
Tennessee was paying nursing homes for the time residents were in the hospital, up to fifteen days. Many Americans are unaware that nursing homes are not hospitals and cannot provide acute medical care. The 1995 Medicare Current Beneficiary Survey found that “twenty-eight percent of … (people in nursing homes) had at least one inpatient hospital stay in 1995 [Health and Health Care of the Medicare Population].
The one change that will impact facilities on August 1, 2005 is that the state will no longer pay to hold a nursing home bed for an individual that is sent to a hospital. Because Tennessee has one of the highest nursing home occupancy rates, this change may actually finically benefit the nursing home industry.
Tennessee nursing homes report to the Center of Medicare and Medicaid Services that 92% of their beds are filled; the national average occupancy rate is 85.7%. With the ability after August 1st to fill beds when a resident goes to the hospital, a for-profit nursing home will be able to discharge expensive and troublesome people to county-run institutions or non-profit facilities. More fluid residency will be a financial benefit with the high occupancy rate in Tennessee.
People overwhelming prefer HCBS, but the forty-year-old federal Medicaid law requires institutional services while HCBS are optional parts of the federal Medicaid program. The Tennessee nursing home lobby has made profitable use of that bias, requiring a statutory increase yearly for facilities and ensuring that cuts are made to HCBS. Individual Tennesseans are facing huge cuts in benefits, but Bredesen makes sure the nursing home industry can expect the same payola.
-Tim Wheat
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