The Trend Towards Adult Day Care

A recent article in the New York Times describes a trend where elderly patients can be treated through a home based managed care model, rather than in a nursing home.  This model is generally referred to as “adult day care”.

It’s about time!  Why should patients be required to spend their entire existence in a nursing home, at much higher cost, when they can live in their own homes and receive visits from medical professionals and other caregivers?  Moreover, it has long been known that people much prefer to be cared for in their own homes, including during their final days- yes, people prefer to die at home than in an impersonal institution.

The luxury of being treated (and dying) at home has long been reserved for the well-off, who can afford private nurses and all of the related home-based equipment.  The thinking has long been that if the government is paying (Medicaid), then you need to be in an institution.

Too bad that it has taken a financial crisis- state budgets under pressure, led by Medicaid costs- to get state programs to relent and allow people to be cared for in an environment that is less expensive, more comfortable and inherently safer- the home.

A Brief Comment on the Ryan Medicare Plan

Medicare is too expensive and becoming more unsustainable every day.  Congress has also demonstrated that they will bow to special interests before implementing what they have already passed- the so-called “doc fix”, whereby reimbursement cuts to physicians that are already mandated by law are deferred, year after year.

One approach is the Ryan plan, named after Representative Paul Ryan of Wisconsin.  Without delving into the details of the plan, which are debated hotly by very partisan commentators, one great flaw in the plan appears to have escaped comment:

That is, the notion that physicians will compete for patients, thereby reducing costs.

This assumption is deeply flawed for one simple reason- there is a well documented shortage of physicians.  Economics 101, and the basic law of supply and demand, teaches us that if the supply is low, the price is correspondingly high.

Physicians will never have to compete aggressively for patients (the Ryan Plan assumes that they will) as long as there is a shortage of physicians.  Rather, patients will have to chase physicians and endure long wait times to get an appointment.  Physicians will continue to raise fees, not lower them, and they will threaten to stop seeing patients whenever their fees are reduced- hence the “doc fix”, which happens year after year.

If Medicare is changed to a voucher system, as Rep. Ryan proposes, seniors will be at the mercy of physicians, who are in short supply, and who will retain any negotiating leverage as long as there is a shortage of physicians.

Until we are able to address the shortage of physicians (train more and/or allow the greater use of nurse practitioners, midwives, pharmacists and other “physician extenders”), it is wrong to place seniors in this ruinous position.