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Getting ready for the Silver Tsunami
The U.S. workforce is headed into the biggest change in history. The 78-million-strong Baby Boom generation is retiring, and one of the industries that must change is long term care.
Lt. Gov. Yvonne Prettner Solon is leading a state effort to educate Minnesotans about this issue. She and Gov. Mark Dayton sent a letter to every Minnesotan age 40 and up last October urging them to plan for their long-term care needs.
“People are living longer,” Prettner Solon said. “We all need to do a better job at preparing for the situations we’ll face.”
She means both as individuals and as a state. Prettner Solon has taken the lead on senior issues since the Dayton administration began. Long term care isn’t the only emphasis. It couldn’t be. The senior health care issue alone is so enormous it’s hard to know where to start.
The numbers can overwhelm you. Between 2010 and 2030, the population of people age 65 or older is expected to grow 107 percent in Minnesota while the rest of the population should grow a reasonably flat six percent. You don’t need to be an economist to start adding up potential health care costs and see the future problem. Plus, the future may already be here. Some 70 percent of the state deficit is health care costs.
Long-term care is a particularly costly puzzle piece. It’s the name given to both medical and non-medical care for people with chronic illnesses or disabilities who cannot care for themselves over long time periods. It’s a broad definition including dressing, bathing and other basic care. But it increasingly means providing advanced medical care requiring highly-skilled professionals. Services are delivered at home, in the community, in assisted living homes, nursing homes and other facilities.
The difference now is the huge number of patients coming of age. Long term care is expensive. The average cost of a nursing home is $63,000. What’s even more frightening is that the real cost of long-term care isn’t even calculated because the super majority of long-term care is done without charge by family members and friends. But there are fewer people to help with the Baby Boomers. An estimated one-third of Baby Boomers won’t have any children to help.
“This is an issue for all of us,” Prettner Solon said.
It’s a big issue for businesses, which not only need to replace or retrain aging workers but also will need to manage staff needing time off to take care of friends or relatives and who will face an increasing financial strain to pay for care.
Then there are government budget problems. By 2030, public long-term care costs in Minnesota are projected to reach $5 billion.
“Those numbers are not sustainable,” Prettner Solon said. “People often think that Medicaid will pay for these services, but that’s often not the case. People need to have information and resources so they can take charge of these decisions and have the future they want.”
The state launched the “Own Your Future” effort to educate people about long-term care and provide resources to help them make decisions. There’s a website and also a phone line for people to get connected.
Answers need to come from a lot of places with a problem like this, and there haven’t been many upbeat ones from the insurance industry. Long-term care insurance is available and, especially for younger people, can be a good investment. But some major insurance carriers are choosing to leave the market, while rates and eligibility requirement are rising. Insurance company profits are based in part of return on investments, and the likelihood of an expensive event not occurring. Low returns and a huge population likely to need expensive medical care hasn’t exactly made the market attractive.
Still, there are options, and as more attention gets focused on long-term care, more financial product options are likely to emerge. For now, though, the future looks like this: take care of yourself. Don’t depend on anyone to rescue you.
Health care providers are also in the equation. Dr. Michael Van Scoy is medical director of population care management at Essentia in Duluth. He keeps a close eye on how care is delivered to seniors, both now and when the tsunami hits. He sees change occurring in health care delivery and the payer systems, but like everyone else, he wonders if the changes are coming quickly or deeply enough.
“The old fee for service paradigm doesn’t work well for seniors,” Van Scoy said. “To keep costs down, we have to keep people out of clinics and hospitals and still be able to help manage their health.”
That’s possible, and it’s already being done. Essentia Health has experience with programs like Minnesota Senior Health Options, which flips the fee for service method and pays for patient health outcomes. Patients are assigned a care coordinator who helps navigate healthcare and related services. Healthcare providers are using telecommunications and other technology to bring costs down while still reaching for better health results.
“We need care systems that are not clinic visits,” Van Scoy said. “We can still communicate and help patients manage their health in a continuous and personal way.”
So, help people plan for the future. Develop and use existing financial products. Recreate health care delivery and payment models. These are just a couple of the revolutions the Baby Boomers are bringing our way.
Van Scoy is optimistic healthcare companies can adapt. Prettner Solon thinks all must take more responsibility. Everyone needs to think quickly. The numbers of people could swamp our existing systems.
“It cannot be business as usual,” Van Scoy said. “Every year that it’s business as usual is another year we could’ve done better.”
There are 78 million people nationwide who are about to arrive, and they’re going to demand it.Previous BusinessNorth Exclusives Articles:
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