A National Long-term Care Program for the United States; A Caring Vision
Public insurance programs are far more efficient than private plans. Administration consumes 5% of total Medicaid spending24 and only 2% of the Medicare budget. In contrast, in 1986 Blue Cross/Blue Shield and self-insured plans had overhead of 8%, prepaid plans averaged 11.7%, and commercial insurers averaged 18.9%.52 Many Medicare supplemental policies (medigap insurance) have notoriously low payout ratios, 60% or less.58 Payout rates for private LTC insurance are low10 and virtually unregulated. According to the General Accounting Office, of the 33 states with minimum payout ratios for general health insurance, most do not report benefit and premium data separately for LTC insurance, only 20 states even monitor payout ratios, and 12 states have established minimum LTC insurance payout ratios.13
The multiplicity of public and private insurers in the United States results in exorbitant administrative costs. Health insurance overhead alone costs $106 per capita in the United States (0.66% of gross national product) compared with $15 per capita (0.11% of gross national product) in Canada.59 Additional unnecessary administrative costs accrue to providers who must determine eligibility, attribute costs and charges to individual patients and insurers, and send and collect bills for myriad insurers and individual patients.60 Overall, administration accounts for almost one fourth of US health spending, but only 11% in Canada.60
Finally, public opinion strongly supports public financing of LTC. Eighty-seven percent of Americans consider the absence of LTC financing a crisis, the majority prefer public over private funding, federal administration is favored over private insurance programs by a 3 to 2 margin, and two thirds believe that private insurance companies would undermine quality of care because of their emphasis on profits.26 While respondents want a federally financed program, they support the administration of such a pro- gram at the state level.26
The oft-stated view that the public wants LTC coverage but is unwilling to pay for it is inaccurate.61 The 1987 poll conducted by the American Asso ciation of Retired Persons and the Villers Foundation found that 86% of the sample supported government action for a universal LTC program that would finance care for all income groups, and not just the poor. Overall, 75% would agree to increased taxes for LTC.26 A 1988 Harris poll reached virtually identical conclusions.62
In summary, we recommend that LTC be incorporated into a publicly financed NHP. We urge that a comprehensive public model be adopted as a single mandatory plan for the entire population and that new public revenues be combined with existing public program dollars. This approach would ensure universal access, comprehensive benefits, improved quality, and greater cost control. Most important, the financial costs would be spread across the entire population rather than borne by the disabled themselves. Our nation has the resources to provide better care for the disabled and elderly, and it has a responsibility to develop a reasonable system of LTC. The public supports this type of approach. Health and human services professionals and the makers of public policy need the vision and courage to implement such a system.
The reader is referred to the May 15, 1991, issue, which was dedicated to caring for the uninsured and underinsured.
This proposal was drafted by a 17-member Working Group, then reviewed and endorsed by 415 other physicians and other health professionals from virtually every state and medical specialty. Members of the Working Group were Charlene Harrington, RN, PhD, San Francisco, Calif; Christine Cassel, MD, Chicago, III; Carroll L. Estes, PhD, San Francisco, Calif; Steffie Woolhandler, MD, MPH, Cambridge, Mass; and David U. Himmelstein, MD, Cambridge, Mass, cochairs; and William H. Barker, MD, Rochester, NY; Kenneth R. Barney, MD, Cambridge, Mass; Thomas Bodenheimer, MD, San Francisco, Calif; David Carrell, PhD, San Francisco, Calif; Kenneth B. Frisof, MD, Cleveland, Ohio; Judith B. Kaplan, MS, Cambridge, Mass; Peter D. Mott, MD, Rochester, NY; Robert J. Newcomer, PhD, San Francisco, Calif; David C. Parish, MD, MPH, Macon, Ga; James H. Sanders, Jr, MD, Brevard, NC; Lillian Rabinowitz, Berkeley, Calif; and Howard Waitzkin, MD, PhD, Anaheim, Calif.
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