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Long-Term Care: Priate Markets Or Public Policies?

1990, Health Affairs

AI-generated Abstract

This review discusses the implications of demographic shifts, particularly the aging baby boomer population, on long-term care policies and practices in the United States. It highlights the limitations of existing public and private mechanisms for long-term care funding, emphasizing the need for a more equitable approach to care for not only the elderly but also younger individuals with chronic conditions and disabilities. The critique of the collection of essays edited by Marion Ein Lewin and Sean Sullivan underscores the failure to adequately address intergenerational equity and the complexities of integrating care funding across different populations.

BOOK REVIEWS The฀experience฀of฀the฀kidney฀dialysis฀selection฀committees฀in฀the฀late฀ 1960s,฀which฀ Callahan฀discusses,฀is฀instructive.฀"The฀committees฀literally฀had฀to฀make฀ life-and-death฀ decisions,"฀he฀writes.฀"They฀reported฀themselves฀unable฀to฀make฀meaningful฀ comparisons฀and฀ choices฀ The฀ same฀experience,฀ now฀writ฀large,฀is฀likely฀if฀the฀political฀process฀ is฀ left฀ to฀ make฀ the฀ decision฀ [about฀ health฀ care฀ priorities]฀ but฀ given฀ no฀ moral฀ standards฀ to฀ help฀ guide฀ it."฀ Callahan's฀ vision฀of฀the฀health฀ care฀system฀suffers฀ from฀ the฀same฀problem:฀it฀may฀be฀a฀moral฀vision,฀ 197 but฀ it฀ is฀just฀ one฀ of฀ an฀ infinite฀ number฀ of฀ visions,฀and฀on฀what฀basis฀do฀we฀choose?฀ Yet฀ despite฀ this฀ inherent฀ weakness,฀ of฀ which฀the฀author฀is฀well฀aware, What Kind of Life฀is฀an฀important฀contribution.฀It฀lays฀bare฀ the฀ bankrupt฀ assumptions฀ of฀ the฀ current฀ health฀care฀system,฀and฀it฀serves฀as฀a฀ forceful฀ reminder฀of฀the฀trade-offs฀ both฀within฀ our฀ health฀care฀system฀and฀between฀health฀and฀ other฀ societal฀ values.฀Most฀ importantly,฀ it฀ requires฀us฀to฀confront฀ the฀role฀that฀ health฀ plays฀ in฀ our฀ lives฀ and฀ in฀ our฀ society.฀ The฀ choices฀are฀ours฀to฀make.฀ Long-Term Care: Private Markets Or Public Policies? by Mark Schlesinger The Care of Tomorrow's Elderly Marion฀Ein฀Lewin฀and฀Sean฀Sullivan,฀ editors฀ (Lanham,฀Md.:฀American฀Enterprise฀ Institute,฀1989),฀208฀pp.,฀$26.50฀ socially฀valued฀outcomes.฀Because฀the฀costs฀ and฀ benefits฀ of฀ each฀ potential฀ change฀ are฀ inextricably฀linked฀to฀the฀others,฀it฀is฀difficult,฀ and฀ almost฀ certainly฀ unwise,฀ to฀ consider฀these฀in฀isolation฀from฀each฀other.฀ From฀ this฀ perspective,฀ there฀ is฀much฀ to฀ When฀the฀baby฀boom฀is฀transformed฀ into฀ recommend฀ in The Care of Tomorrow's Elthe฀elder฀ boom฀ over฀ the฀ next฀thirty฀years,฀ derly.฀Although฀ the฀ book฀ is฀ intended฀ to฀ American฀ society฀ will฀ confront฀ questions฀ focus฀ primarily฀ on฀ issues฀ related฀ to฀ the฀ about฀a฀variety฀of฀public฀policies฀and฀private฀ "long-term฀needs฀of฀the฀elderly,"฀its฀editors,฀ practices฀that฀ have฀ become฀ established฀ so- Marion฀Ein฀Lewin฀and฀Sean฀Sullivan,฀have฀ cial฀institutions.฀These฀ will฀ include฀ the฀ re- assembled฀a฀set฀of฀papers฀that฀are฀strikingly฀ distribution฀ of฀ income฀ from฀ working-age฀ wide-ranging฀in฀both฀ their฀ topics฀and฀ their฀ Americans฀to฀the฀retired฀under฀the฀auspices฀ methodological฀approaches.฀(Indeed,฀unless฀ of฀ Social฀ Security,฀ employer฀ practices฀ that฀ one฀reads฀the฀"overview"฀by฀the฀editors,฀the฀ encourage฀ early฀ retirement,฀ societal฀ norms฀ reader฀ is฀likely฀ to฀ puzzle฀ through฀ the฀ first฀ that฀ motivate฀elders฀to฀remain฀ in฀the฀same฀ half฀ of฀ the฀ book฀ looking฀ for฀ a฀theme;฀it฀is฀ homes฀in฀which฀they฀have฀raised฀their฀fam- not฀ until฀ the฀second฀ half฀ that฀ any฀real฀disilies,฀ government฀ policies฀ that฀ encourage฀ cussion฀of฀long-term฀care฀actually฀appears.)฀ private฀ health฀ insurance฀ to฀ be฀ provided฀ The฀chapters฀range฀in฀content฀from฀ internathrough฀ the฀ workplace,฀ and฀ public฀ pro- tional฀comparisons฀of฀health฀care฀systems฀to฀ grams฀ that฀ pay฀ for฀ the฀ costs฀ of฀ long-term฀ trends฀ in฀ retirement฀ by฀ older฀ (increasingly฀ care฀only฀after฀those฀in฀need฀have฀exhausted฀ middle-aged)฀ workers฀ to฀ the฀ prospects฀ for฀ their฀ income฀and฀ financial฀ assets.฀Whether฀ private฀ insurance฀ for฀ nursing฀ home฀ care.฀ we฀should฀or฀can฀change฀these฀arrangements฀ They฀range฀in฀style฀from฀the฀quantitative฀to฀ is฀a฀ matter฀ of฀ considerable฀ debate.฀ But฀we฀ the฀ philosophical฀ and฀ in฀ focus฀ from฀ those฀ will฀ inevitably฀ be฀ forced฀ to฀ consider฀ such฀ that฀look฀back฀in฀history฀to฀those฀that฀look฀ changes฀and฀to฀try฀to฀predict฀their฀effects฀on฀ forward฀ to฀the฀demographic฀transition฀ that฀ will฀occur฀over฀the฀next฀half-century.฀ Mark Schlesinger is assistant director of the This฀ breadth฀ is฀ refreshing.฀ It฀ leads฀ the฀ Center for Social Policy at Harvard Universit's authors฀to฀consider฀issues฀that฀are฀not฀ norJohn฀E Kennedy School of Government and mally฀within฀ the฀ purview฀ of฀ policy-related฀ assistant professor of health policy at Harvarddiscussions฀of฀long-term฀care.฀It฀highlights฀a฀ number฀ of฀ broad฀ societal฀tensions,฀ includMedical School. Downloaded from HealthAffairs.org on October 15, 2021. Copyright Project HOPE—The People-to-People Health Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at HealthAffairs.org. 198฀ HEALTH฀AFFAIRS฀ |฀ Fall฀1990฀ ing฀emerging฀questions฀of฀ intergenerational฀ equity,฀which฀until฀recently฀have฀been฀given฀ too฀ little฀ attention.฀ Though฀ the฀ chapters฀ vary฀in฀quality,฀each฀raises฀some฀interesting฀ and฀useful฀perspectives฀on฀elders'฀needs฀and฀ roles฀in฀American฀society.฀ But฀ though฀ the฀ book฀ benefits฀ in฀ some฀ ways฀from฀this฀sort฀of฀breadth,฀it฀also฀carries฀ some฀ liabilities.฀ This฀ is฀ a฀ slim฀ volume,฀ so฀ that฀covering฀a฀wide฀range฀of฀topics฀necessitates฀leaving฀something฀else฀out.฀This฀leads฀ to฀ at฀ least฀ three฀ serious฀ limitations.฀ First,฀ though฀the฀book฀does฀well฀by฀setting฀longterm฀ care฀ issues฀ in฀ a฀ broader฀ context,฀ it฀ reduces฀the฀issues฀involved฀in฀long-term฀care฀ to฀ almost฀ exclusively฀ financial฀ terms.฀Second,฀ if฀the฀ book฀ is฀broad฀ in฀ methods,฀it฀is฀ extremely฀ narrow฀ in฀ philosophy—most฀ of฀ the฀ authors฀ take฀ care฀ to฀ toe฀ the฀ relatively฀ conservative฀party฀line฀of฀the฀American฀Enterprise฀Institute฀(AEI).฀Finally,฀though฀ the฀ book฀is฀broad฀in฀scope,฀the฀individual฀chapters฀are฀ often฀ lacking฀ in฀ depth,฀ addressing฀ issues฀without฀adequate฀reference฀to฀the฀existing฀literature฀and฀without฀adequately฀exploring฀the฀issues฀that฀they฀raise.฀ Financial฀Questions฀ The฀ first฀ of฀ these฀limitations฀ is฀reflected฀ by฀ the฀ book's฀ rather฀ inappropriate฀ title.฀ There฀ is฀very฀little฀here฀about฀ "caring"฀ for฀ tomorrow's฀ elders,฀ in฀ either฀ the฀ sense฀ of฀ establishing฀emotional฀bonds฀with฀elders฀or฀ the฀sense฀of฀providing฀services฀to฀meet฀their฀ long-term฀ care฀ needs.฀Virtually฀ everything฀ about฀long-term฀care฀is฀reduced฀to฀financial฀ questions:฀ Can฀ we฀ afford฀ to฀ pay฀ for฀ the฀ services?฀ Do฀ elders฀ pay฀ their฀ fair฀ share?฀ Could฀ they฀ pay฀ more฀ themselves฀ or฀ work฀ longer฀ so฀ that฀ society฀ could฀ pay฀ more?฀ These฀ are฀ certainly฀ important฀ questions.฀ But฀viewing฀them฀apart฀from฀a฀discussion฀of฀ service฀ needs฀ or฀ the฀ relationship฀ between฀ long-term฀ care฀ and฀ housing฀ leads฀ one฀ to฀ overlook฀ some฀ important฀ interactions฀ between฀financing฀and฀service฀provision.฀ For฀example,฀the฀authors฀of฀several฀of฀the฀ chapters฀ assert฀ that฀ choice฀ is฀important฀ to฀ individuals฀and฀that฀this฀means฀that฀private฀ insurance฀ is฀preferable฀ to฀ public฀ programs฀ to฀pay฀for฀long-term฀care.฀Inarguably,฀choice฀ is฀important฀to฀many฀chronically฀ill฀Americans.฀ But฀ the฀ choice฀ that฀ matters฀ most฀ to฀ them฀is฀likely฀to฀be฀that฀among฀service฀providers฀ and฀ settings฀ for฀ care,฀ not฀ in฀ their฀ insurance฀ coverage.฀ Indeed,฀ private฀ insurance฀plans,฀which฀increasingly฀use฀managed฀ care฀arrangements฀and฀selective฀contracting฀ with฀ a฀ limited฀ number฀ of฀ providers,฀ are฀ more฀ likely฀ to฀ limit฀ choice฀ when฀ enrollees฀ actually฀ seek฀ services฀ than฀ would฀ a฀ public฀ insurance฀program฀that฀covered฀all฀providers฀nationwide.฀ Public฀And฀Private฀Responsibility฀ The฀philosophical฀narrowness฀of฀this฀volume฀is฀perhaps฀to฀be฀expected฀from฀ a฀work฀ in฀ which,฀ in฀ the฀ editors'฀ words,฀ "many฀ of฀ these฀ authors฀ are฀ AEI฀ scholars."฀ Not฀ surprisingly,฀the฀authors฀place฀a฀strong฀emphasis฀on฀ individual฀ choice฀ and฀ favor฀ private฀ markets฀ over฀ public฀ policies,฀cash฀ benefits฀ over฀service฀benefits,฀ and฀ government฀ programs฀that฀are฀narrowly฀focused฀on฀the฀poor฀ over฀broader฀entitlement฀ programs.฀A฀ case฀ can฀clearly฀be฀made฀for฀each฀of฀these฀points.฀ But฀ the฀ counterarguments฀ are฀ also฀ plausible,฀and฀it฀ill฀serves฀the฀reader฀to฀have฀these฀ arguments฀ omitted฀ or฀ cast฀ as฀ weak฀ straw฀ men,฀as฀they฀are฀here.฀ Such฀ a฀ one-sided฀ political฀ perspective฀ also฀leads฀to฀analysis฀that฀ is฀less฀than฀ completely฀convincing.฀Consider฀ several฀examples.฀Several฀of฀the฀authors฀"point฀toward฀a฀ redefined฀ role฀ for฀ the฀ federal฀ government฀ with฀ respect฀ to฀ the฀ needs฀ of฀ older฀ Americans"฀that฀ would฀ replace฀entitlements฀with฀ programs฀targeted฀to฀the฀"most฀needy."฀Yet฀ this฀ is฀ precisely฀ the฀ role฀ that฀ the฀ federal฀ government฀ has฀ played฀ in฀ financing฀ longterm฀ care฀ over฀ the฀ past฀ twenty-five฀ years.฀ This฀track฀record฀has฀been฀sufficiently฀ uninspiring฀that฀ it฀seems฀curious฀to฀have฀policy฀ analysts฀ suggest฀ that฀ it฀ be฀ replicated฀ for฀ other฀health฀and฀income฀support฀programs.฀ Universal฀ entitlement฀ programs฀ for฀ longterm฀care,฀such฀as฀its฀inclusion฀under฀Medicare,฀ are฀ never฀ even฀ seriously฀ considered.฀ This฀too฀seems฀curious,฀since฀public฀opinion฀ polls฀suggest฀that฀between฀70฀and฀80฀percent฀ of฀the฀American฀people฀would฀favor฀such฀a฀ program,฀and฀one฀version฀was฀incorporated฀ Downloaded from HealthAffairs.org on October 15, 2021. Copyright Project HOPE—The People-to-People Health Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at HealthAffairs.org. BOOK REVIEWS into฀the฀recent฀report฀of฀the฀bipartisan฀Pepper฀Commission.฀ This฀jaundiced฀ view฀of฀the฀public฀sector฀ also฀ leads฀ authors฀ to฀ overlook฀ potentially฀ effective฀solutions฀to฀some฀of฀the฀important฀ problems฀ that฀ they฀ identify.฀ One฀ chapter,฀ for฀instance,฀considers฀options฀to฀"stem฀ the฀ rising฀ tide฀of฀early฀retirement."฀This฀may฀in฀ fact฀ be฀ a฀ legitimate฀ policy฀ goal.฀ But฀ the฀ authors฀consider฀only฀changes฀in฀public฀programs,฀such฀as฀changing฀the฀earned฀ benefits฀ test฀ or฀ age฀ of฀ initial฀ benefits฀ under฀ Social฀ Security,฀though฀ they฀ admit฀ that฀ these฀are฀ likely฀to฀have฀little฀effect฀on฀retirement฀decisions.฀They฀entirely฀overlook฀the฀economic฀ incentives฀ to฀ employers฀ that฀ encourage฀ early฀ retirement฀ because฀ fringe฀ benefits฀ (health฀ insurance฀ and฀ pension)฀ are฀ much฀ more฀costly฀for฀ older฀workers.฀The฀ average฀ health฀care฀costs฀of฀a฀sixty-five-year-old฀ are฀ likely฀to฀be฀ten฀times฀that฀ of฀a฀twenty-oneyear-old.฀ With฀ health฀ insurance฀ representing฀on฀average฀about฀9฀percent฀of฀employee฀ compensation,฀ employing฀ older฀ workers฀ could฀involve฀an฀added฀cost฀of฀as฀much฀as฀25฀ percent฀ per฀ employee฀ for฀ experience-rated฀ (or฀self-insured)฀ employer฀ groups.฀The฀ obvious฀way฀around฀this฀is฀to฀socialize฀the฀cost฀ (or฀ community-rate฀ premiums)฀ of฀ health฀ insurance,฀ but฀ since฀ this฀ would฀ expand฀ rather฀ than฀ contract฀ governments฀ role,฀ it฀ was฀never฀even฀raised฀as฀an฀option.฀ Other Limitations Perhaps฀the฀most฀distressing฀limitation฀of฀ this฀ volume,฀ however,฀ is฀ the฀ failure฀ of฀ a฀ number฀ of฀ its฀authors฀ to฀ fully฀ explore฀ the฀ issues฀ that฀ they฀ quite฀ legitimately฀ raise.฀ Some฀omissions฀run฀ throughout฀ the฀ entire฀ book.฀Long-term฀care฀is฀almost฀always฀portrayed฀ as฀ an฀ issue฀ of฀ the฀ elderly.฀ Private฀ solutions฀are฀seen฀to฀depend฀on฀elders'฀ability฀to฀pay฀for฀insurance฀and฀services;฀public฀ costs,฀on฀the฀demands฀that฀they฀will฀place฀on฀ the฀long-term฀care฀system.฀Virtually฀ignored฀ is฀the฀evidence฀that฀suggests฀that฀40฀percent฀ of฀ those฀with฀ chronic฀ illnesses฀and฀ impairments฀ in฀ the฀ United฀ States฀ are฀ less฀ than฀ sixty-five฀ years฀ old.฀ There฀ is฀ little฀ if฀ any฀ discussion฀ of฀ how฀ methods฀ of฀ paying฀ for฀ long-term฀ care฀ for฀ elders฀ should฀ be฀ inte- 199 grated฀with,฀or฀made฀equitable฀in฀terms฀ of,฀ the฀way฀we฀currently฀pay฀for฀services฀for฀the฀ chronically฀ mentally฀ ill,฀ the฀ developmentally฀disabled,฀patients฀with฀progressed฀cases฀ of฀ acquired฀ immunodeficiency฀ syndrome฀ (AIDS),฀or฀the฀physically฀handicapped.฀ Several฀ authors฀ touch฀ on฀ questions฀ of฀ intergenerational฀ equity—the฀ appropriate฀ balance฀ between฀ the฀ needs฀ of฀ dependent฀ children฀and฀elders฀and฀the฀demands฀on฀the฀ resources฀of฀working-age฀Americans.฀This฀is฀ clearly฀a฀critical฀issue.฀But฀it฀is฀also฀an฀issue฀ with฀ a฀ substantial฀ and฀ growing฀ literature.฀ Readers฀would฀not฀learn฀this฀from฀the฀material฀presented฀in฀this฀volume.฀The฀depth฀of฀ the฀analysis฀is฀aptly฀captured฀ in฀the฀ book's฀ final฀ sentence:฀"It฀is฀as฀if฀we฀were฀to฀say฀to฀ ourselves:฀Ask฀not฀what฀our฀children฀can฀do฀ for฀us,฀but฀what฀we฀can฀do฀for฀our฀children."฀ This฀is฀a฀charming฀sentiment฀for฀a฀presidential฀address,฀but฀one฀that฀offers฀neither฀great฀ insight฀nor฀any฀means฀for฀resolving฀the฀inevitable฀ tensions฀ that฀ will฀arise฀around฀ these฀ issues฀of฀intergenerational฀relations.฀ The Care of Tomorrow's Elderly฀ is฀thus฀ a฀ book฀ that฀ sacrifices฀ depth฀ and฀ balance฀ for฀ breadth.฀It฀stands฀as฀a฀useful฀ position฀statement฀from฀one฀side฀of฀the฀political฀spectrum฀ about฀the฀financial฀aspects฀of฀long-term฀care฀ policy.฀But,฀ironically,฀it฀does฀not฀give฀readers฀the฀range฀of฀perspectives,฀evidence,฀and฀ argument฀ that฀ would฀ allow฀ them฀ to฀ make฀ their฀ own฀choices.฀A฀ previously฀ published฀ volume฀by฀the฀same฀editors,฀The Economics and Ethics of Long-Term Care and Disability, struck฀ this฀ balance฀ more฀ successfully.฀ The฀ two฀volumes฀should฀be฀read฀together.฀Even฀ better,฀ they฀ should฀ be฀ supplemented฀ by฀ published฀perspectives฀that฀do฀not฀bear฀the฀ rather฀heavy฀imprint฀of฀an฀AEI฀publication.฀ Downloaded from HealthAffairs.org on October 15, 2021. Copyright Project HOPE—The People-to-People Health Foundation, Inc. For personal use only. All rights reserved. Reuse permissions at HealthAffairs.org.