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I’ve never been one to frown on government aid to the elderly, but sometimes even the best of intentions can lead to unintended consequences. The funding mechanisms that fuel the nation’s nursing-home industry, for example, may have contributed to the surge in COVID-19 deaths among its residents. And Washington’s attempts to fix the problem may be making it worse.

For-profit nursing homes live and die at the whim of Medicare and Medicaid payments — especially the extra dough delivered for so-called ancillary services. When the government decides certain offerings are more vital than others, these companies move as quickly as possible to shift their priorities and collect the largesse.

Prior to the pandemic, as Will Englund and Joel Jacobs report in the Washington Post, the Centers for Medicare and Medicaid Services (CMS) paid a premium to facilities providing physical and occupational therapy. In many cases, this had the effect of devaluing the nursing assistants who actually care for the residents. “There were incredible abuses,” recalls Atlanta lawyer Michael Sullivan, who sued one national chain for fraud. “The company wouldn’t hire enough nurses to care for the patients, feed them, or turn them. But there were plenty of therapists running around, even giving therapy to patients in hospice. It was ghoulish.”

When COVID-19 began ravaging the U.S. population, however, the government shifted gears. Suddenly, the big money was in ventilators. Many states designated certain nursing homes as “COVID hubs” and rewarded them handsomely for setting aside rooms and resources for patients suffering from the virus. CMS tacked on an extra $1,500 per week per patient as an incentive.

Trouble is, few of these facilities were equipped to handle these cases while still providing quality care for their non-COVID residents. The Post reporters focus on the case of Mary Catlin, 79, who landed at Medilodge of Livingston, part of a large Michigan chain, after a fall four years earlier. Despite receiving less-than-attentive care, she loved the nursing staff and felt comfortable with her surroundings. When the pandemic struck, though, she was suddenly moved out of her room to make way for coronavirus patients. Medilodge was angling for one of the state’s COVID hub designations — and its generous subsidies — so long-term residents like Catlin became less valuable. As her granddaughter put it, “We felt like Grandma was just a paycheck to them.”

A week or so later, a nurse called one of Catlin’s daughters to report that her mom was running a fever. Days passed, with Medilodge officials refusing to respond to the family’s requests for information. The family eventually learned Catlin had been diagnosed with the virus. Transported to a nearby hospital, she died three days later.

Later that week, Medilodge of Livingston was awarded one of the state’s hub designation: $5,000 per bed; $200 per day per patient — double the typical Medicaid payment.

Six weeks later, the facility had installed 22 ventilators, preparing for a surge of COVID patients. Nineteen eventually landed there, according to a CMS report. Meanwhile, 24 long-term care residents were diagnosed with the virus and 18 died. There’s no way to prove conclusively that the admission of the coronavirus patients led to the transmission of the virus to the other residents, but a subsequent inspection reported lax infection control and sketchy use of personal protective equipment by staff.

Medilodge of Livingston has since lost its hub designation and the state has levied nearly $300,000 in fines against the 49-facility chain, where 248 residents have died from COVID-19.

It’s easy to look at Catlin’s situation and assume she simply fell victim to a poorly run facility, but industry experts suggest it’s a systemic problem. Because the government offers a different reimbursement rate for residents covered by Medicare than for those covered by Medicaid, nursing homes tend to combine the two revenue streams — allocating just enough resources to Medicaid patients to satisfy state health inspectors while shortchanging services for Medicare patients. As Mark Fritz, who runs a chain of rehab centers in Texas, puts it: “We’re robbing those additional dollars from Medicare and giving them to those Medicaid patients.”

And because CMS generally limits payment for Medicare patients to 100 days, facilities tend to list as many chronic conditions as possible for each resident in order to keep them in a bed for the entire payment period, then discharge them as soon as the money stops coming in. “It’s wrong from a human perspective, and it’s wrong according to the law,” says Eric Carlson, an attorney with the advocacy group Justice in Aging. “You should get the care you need.”

The pandemic has upped the ante, as a lack of elective surgeries at hospitals stanched the flow of Medicare-covered rehab admissions, forcing companies like Medilodge to pursue the dollars suddenly allocated for COVID beds.

“The model just doesn’t work,” says David Grabowski, a professor of health care policy at Harvard Medical School. He argues that CMS should adjust Medicare and Medicaid payments to better reflect actual costs, and states should do a better job of enforcing minimum staffing requirements while supporting higher wages for nursing-home workers.

And while experts seem to agree that facilities demonstrating a higher level of infection control should be rewarded for their efforts during — and beyond — the current pandemic, it seems inevitable that politics will intrude. Just last week, the Department of Health and Human Services announced it was distributing $523 million to 9,248 nursing homes that reported infection rates in September that were lower than expected, given the COVID positivity rates in the counties in which they are located.

The formula, as Englund reports, seemed to reward Republican-led states whose officials had generally ignored mask and social-distancing mandates. New Hampshire, which had enacted more rigid pandemic-control measures resulting in lower infection rates among its general population, received an average $21,500 per nursing home. South Dakota, which features one of the highest positivity rates in the country due to its governor’s dismissal of the contagion, reaped nearly $157,000 per facility.

“If you turn your state into a petri dish, you receive the most nursing-home funding? The Trump Administration needs to stop playing politics with lifesaving aid,” argues New Hampshire Health Care Association CEO Brendan Williams. “In New Hampshire, the nation’s best quality nursing homes are being left for dead by the federal response.”

You can debate the political influences that affect government largesse pretty much until the cows come home, but the larger point here is that the business model under which all these facilities operate is fundamentally flawed. And it’s not the nursing homes that are dying as a result. It’s their residents.

Craig Cox
is an Experience Life deputy editor who explores the joys and challenges of aging well.

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PUMPING IRONY: Not the Retiring Type



One of the few prescient insights I can recall from my wayward postcollege days was the notion that a full retirement would surely elude my grasp. Social Security was certain to go bankrupt at some point, I figured, and even if it survived, the paltry income I’d earn as a freelance writer and editor would hardly translate into a monthly government check that would allow much in the way of work-free leisure in my dotage. Better to just grind away in scarcity mode, keep expenses to a minimum, and narrow my horizons. As Thoreau put it, “Simplify, simplify, simplify.”

The intervening 40-odd years have proven that life is complicated. I married, children appeared along with mortgages, car payments, and other financial realities. And, while I eventually began to earn a living wage at a succession of fragile publications, we struggled to put money away for the future. It was only after securing my current position several years ago that My Lovely Wife and I were able to begin building some long-term savings. But, like most of our peers, we’ve invested too little, too late to ensure that at some future date we’ll be able to pay the bills without a steady paycheck.

About 45 percent of our boomer compatriots have no retirement savings, according to a 2019 survey by the Insured Retirement Institute, and Social Security offers scant financial comfort: The average monthly check is only about $1,500. The future is notably brighter for the 31 percent of retirees who receive a monthly pension from their former employers, but that cohort has been shrinking since 1982, when Congress amended federal tax laws to offer fewer incentives for companies to maintain defined benefit plans.

“We’ve probably peaked in terms of retirement security — and it’s not great,” Monique Morrissey of the Economic Policy Institute tells reporter Will Englund in the Washington Post. “And now it’s all downhill. Unless something changes, we’re going to start seeing much more hardship.”

So, I was intrigued by a recent study from Georgetown University’s Center for Retirement Initiatives (CRI) describing the benefits of broadening access to retirement savings accounts for employees at all stages in their working lives. Currently, companies employing some 40 percent of the nation’s private-sector workers — 57.3 million people — offer no way to save. Mandating such options, while exempting small firms and making employer financial contributions voluntary rather than mandatory, would help individuals build their retirement savings over the long term. One model suggests that as many as 40 million more workers would have accumulated retirement funds by 2040 if these accounts were made widely available.

“Addressing the retirement savings crisis can be done in a simple, cost-effective way using private-sector solutions paired with a national requirement for employers to provide options to their employees,” says CRI executive director Angela Antonelli. “Millions of American workers would benefit from universal access to Auto-IRAs, 401(k)s, or other savings arrangements.”

Those benefits would also accrue to the overall economy, Antonelli argues, by adding up to $96 million to the nation’s gross national product by 2040 and reducing federal and state financial assistance to cash-strapped retirees by some $8.7 billion. Ten states have already passed legislation requiring companies to provide these options, she notes, offering ample evidence of its salutary effects. “Our research shows how expanding universal access to the national level can make a profound difference in individual lives and the broader economy in a relatively short period of time.”

I can’t help but applaud Antonelli’s optimistic view, though it’s hard to imagine how folks toiling away for minimum wage at some fast-food joint would find enough surplus in their monthly income to sock anything away in a 401(k). If I’ve learned anything from 50-odd years in the workforce, it’s how hard it is to adhere to a budget — much less save for a rainy day — when the checks barely cover the rent and groceries.

Besides, work isn’t always about the money. My ancient résumé is littered with jobs I sought because they offered a fresh occupational challenge or the opportunity to contribute to some broader social mission. Long-term financial planning was never a primary consideration. As struggling boomer retiree Terry Koch, 69, explains in Englund’s Post feature, for many of our generation it was more about enjoyment than anything else.

“We were a people who said we kind of like to have job satisfaction up front,” he says. “And so we didn’t think about the long run of things. To not be thinking about the future, to be more of a Zen thing. . . . And it wasn’t pure hedonism. There was some purity. And we’re still very much that way. I would rather be happy today than miserable 25 years from now. And so I made choices based on that rather than on the economics, which, you know, one could argue fairly successfully that I made some pretty stupid decisions.”

Forced out of the job market by health issues, Koch and his 70-year-old wife, Nancy, live in a rent-subsidized apartment in West Allis, Wis., and subsist on about $2,500 in monthly Social Security income. About $1,500 of that goes for rent and Medicare supplemental insurance coverage. There’s no savings. Yet, they soldier on more enthusiastically than you might imagine. “You know,” Nancy says, “neither of us thought we’d be alive at this age.”

It’s a sentiment that crosses my mind more than occasionally these days, and it often reminds me of my immense good fortune. A leisurely retirement may not await me in the years ahead, but just knowing I’ve made it through another day sometimes feels like money in the bank.

Craig Cox
is an Experience Life deputy editor who explores the joys and challenges of aging well.

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