On behalf of the 2.9 million Americans who work in the long term care sector, and the millions of Americans who rely on these compassionate caregivers for essential care and services, the American Health Care Association and the National Center for Assisted Living (AHCA/NCAL) thank Chairman Edward M. Kennedy and all the members of this Committee for focusing today’s hearing on how investing in health information technology (HIT) can assist in our nation’s economic recovery.
Long term care is one of the few growth areas in the U.S. economy, and its stability is vital to serving the health care needs of our aging population as well as the economic health of communities nationwide. In fact, long term care accounts for 1.1 percent of the nation’s Gross Domestic Product [1] (GDP) – $144.3 billion annually.
AHCA/NCAL, which represents nearly 11,000 long term care providers from across the country, looks forward to the passage of economic recovery legislation that we hope will include initiatives that will provide resources to update and make interoperable health information technology (HIT) systems a reality within every care setting, including long term and post-acute care providers. These enhancements are crucial to ensure the most efficient, high quality care possible for our nation’s frail, elderly and disabled for today and the near future, when the need for long term care and services will more than double.
Medicaid is the largest payer of long term care in the United States with nearly 65 percent of nursing home patients and 12 percent of residents in assisted living communities relying on Medicaid to pay for the care they need. Since long term care often represents a significant portion of a state’s Medicaid budget, the sector is vulnerable to cutbacks, a risk exacerbated by the growing gap between Medicaid payments and the cost of care. A recent Eljay, LLC, analysis projected that Medicaid underfunded the actual cost of providing nursing facility care in 2008 by an average of nearly $13 per patient per day - $4.2 billion nationally. In tough economic times states squeeze Medicaid even more by narrowing eligibility, shrinking benefit packages, and slashing or substantially delaying payments to providers. Given this often inadequate and slow financing stream, long term care facilities have few funds to devote to the purchase, procurement, and implementation of HIT, which is why specific federal assistance is necessary to ensure widespread adoption.
Therefore, we recommend the specific efforts be made in any HIT initiatives included in forthcoming economic recovery legislation:
- that all HIT grant or loan programs be made equally available across all care settings – to include long term and post acute care providers;
- that financial incentives under the Medicare program relating to HIT extend to skilled nursing facilities (SNFs); and
- that funding be directed to accelerate the development of standards for HIT interoperability for the Nationwide Health Information Network (NHIN), which is currently underway at the Department of Health & Human Services.
Greater reliance on HIT will foster innovations in care delivery. With close to 70 percent of long term care operational costs labor-related, it is increasingly important to find ways to extend the efficiency and effectiveness of our current workforce. Efforts of this nature are essential given the ongoing nursing shortage.
Simply investing in HIT that allows providers to communicate crucial patient care information across health care settings is not enough. As consumers seek and receive care from physician offices, hospitals, skilled nursing facilities, assisted living communities, and other care settings, HIT interoperability – and specifically ensuring that long term and post acute care are part of such initiatives – is critical.
Any number of studies and analyses have documented that investing in such an interoperable system will reap long term benefits both in improved quality of care, increased patient safety, and reduced costs. We agree that strategic investments today can help to create jobs and rebuild our economy as well as pay dividends far into the future. We also know that part of that investment must include building an integrated health information technology system that specifically includes long term care.
As the demand for long term care services is expected to more than double by 2040, action is needed now to ensure that long term care facilities have the technologies in place to best serve and care for our loved ones at their time of need. AHCA/NCAL stands ready to work with this Congress and the incoming Obama Administration to pass an economic recovery plan now, and construct future legislation that addresses the broad-based health care reforms needed to achieve high quality, person-centered, cost-effective, and sustainable long term care that is an integral part of our nation’s overall system for meeting today’s health care needs, and tomorrow’s expectations.
The American Health Care Association and National Center for Assisted Living (NCAL) represent nearly 11,000 non-profit and proprietary facilities dedicated to continuous improvement in the delivery of professional and compassionate care provided daily by millions of caring employees to 1.5 million of our nation's frail, elderly and disabled citizens who live in nursing facilities, assisted living residences, subacute centers and homes for persons with mental retardation and developmental disabilities. For more information, please visit www.ahca.org or www.ncal.org.
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See The Lewin Group’s report, Long Term Care Facilities’ Impact on Economic Activity in the United States, 2008.