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Insights on
paying for Boomers' Care Needs in 20-40
years helped by new report…Nation's
first comprehensive analysis of major
studies and models on long-term care
financing provides framework for
policymakers and others
ANNAPOLIS, Md., March 27 /PRNewswire-USNewswire/
-- The first comprehensive review and
analysis of research on long-term care
financing for America's elderly is now
available, the National Investment Center
for the Seniors Housing & Care Industry
(NIC) announced today.
This major undertaking, conducted by RTI
International for NIC, involved compiling
and analyzing all major studies and
projection modeling to date on the issue.
The result -- "The NIC Compendium Project: A
Guide to Long-Term Care Projection and
Simulation Models" -- is a body of knowledge
that will help policymakers and others
determine the best combination of public-
and private- sector funding that will be
needed to pay for the nation's growing care
needs, especially when Baby Boomers reach
their 70s and 80s.
"In a short 20 years from now, our nation's
economy will face an enormous challenge,"
said Robert G. Kramer, president of NIC.
"That is, how are we going to pay for the
massive numbers of Baby Boomers who will
move through the long-term care system?"
"The real impact of long-term care needs
won't be felt until 2030-2050," continued
Kramer.
"How much will this care cost? How will the
nation pay for it? And how can policymakers,
seniors housing and care industry leaders,
researchers and other decision-makers agree
on the best plan to meet those needs?
"This
Compendium will focus attention on the need
for long-term care research and help
stimulate a policy debate at the national
level."
The lead author and head of the research
team for the project was Joshua M. Wiener,
Ph.D., senior fellow and program director
for Aging, Disability and Long-Term Care at
RTI International.
His past work includes leading the
development of the first long-term care
financing micro-simulation model, a
predecessor to The Lewin Group's Long-Term
Care Financing Model. Marc P. Freiman,
Ph.D., and David Brown are co-authors of the
report.
Wiener pointed out several significant
findings from the research that formed the
Compendium:
-- The need for long-term care is a "normal" life experience. According to
a study by Kemper, Komisar and Alecxih (2005/2006) among those turning
65 now, nearly 70 percent will need some form of long-term care before
they die, and 20 percent will need it for more than five years. This
includes informal care, paid home care, nursing home care and assisted
living facility care.
-- The number of people with disabilities is likely to increase
substantially, even if disability rates fall. A recent study from
Johnson, Toomey and Wiener (2007) projected that the number of older
people with disabilities will grow from 10 million in 2000 to between
15.1 million and 24.6 million in 2040. As such, policymakers cannot
assume that declines in disability rates will solve the problem of
long-term care.
-- The demand for long-term care services is likely to at least double by
2040. The same Johnson, Toomey and Wiener study projected that the use
of paid home care will increase from 2.2 million people in 2000 to 3.9
million - 6.2 million in 2040, depending mostly on assumptions about
disability rates. During the same period, the number of older people
using nursing care will increase from 1.2 million to 2 million - 3.1
million.
-- The price of long-term care services will have a big impact on the
level of expenditures. A 1994 study from Wiener, Illston and Hanley
found that total expenditures (in 1993 dollars) for older people were
projected to be $134 billion in 2018 if prices increased 4.5 percent
annually; $215 billion, if prices increased 6.5 percent annually.
-- Despite problems with the pension system, the financial status of older
people will improve over time. One report (Knickman and Snell, 2002)
projected that the proportion of older people who would be extremely
likely to use Medicaid to pay for a significant period of long-term
care would decline from 45 percent in 2000 to 29 percent in 2030.
-- Under the current system, most older people will not have private
long-term care insurance in the future. The Wiener, Illston and Hanley
(1994) study projected that no more than 20 percent of older people
would have private long-term care insurance in 2018 because of its high
cost.
The Compendium also pointed out limitations
with current projection models. For example,
they do not address the substitutability of
services, such as home care and assisted
living facilities, for nursing home care.
There is also a lack of data on which to
determine the impact of price changes on the
use of services or "price elasticity." And
younger people with disabilities are not
included as part of the projections, even
though 22 percent of Medicaid nursing home
expenditures in 2003 were for people under
age 65.
"This issue on how we will fund future
long-term care has huge implications for the
seniors housing and care industry, and its
leaders need to work closely with government
and research communities to craft on-going,
relevant research, especially in those areas
that have been lacking in previous studies,"
said Anthony J. Mullen, senior fellow for
NIC, partner with Royal Star Properties, and
one of the leading researchers and analysts
in the seniors housing and care industry.
"In addition to full micro-simulation
models, stakeholders also need to develop
simpler projection models that allow for
easier input of 'expert opinion.' And the
results of government-funded projection
models should be more publicly available."
The Compendium is available for purchase for
$75 in either an electronic or a print
version. Copies are available free of charge
to researchers, academia or policymakers in
long-term care by contacting NIC. For more
information, visit
http://www.nic.org/ (see "NIC
Publications") or call (410) 267-0504.
About NIC
Founded in 1991, the National Investment
Center for the Seniors Housing & Care
Industry is a nonprofit education and
research organization providing information
about business strategy and capital
formation for the senior living industry.
NIC is the leading provider of historical
and trend data on the industry through its
Key Financial Indicators(TM) (KFIs) that
report nationwide statistics and its Market
Area Profiles (MAP(TM)) Data and Analysis
Service that tracks properties in the 100
largest metropolitan areas.
Proceeds from its annual conference are used
to fund research on issues of importance to
the industry, including data useful to
policymakers making decisions about seniors
housing and long-term care. For more
information, visit
http://www.nic.org/ or call (410)
267-0504.
About RTI International
RTI International is one of the world's
leading research institutes with more than
2,600 individuals working in 40 countries.
For almost five decades, the organization's
efforts have earned national and
international recognition, and it has been
credited with achieving major breakthroughs
in scientific and social research.
A major focus of the Institute is
healthcare, ranging from the discovery of
life-saving drugs to healthcare financing.
RTI International has done research and
policy analysis for the Centers for Medicare
& Medicaid, the Centers for Disease Control,
the National Institutes of Health, the
Administration on Aging, the Office of the
Assistant Secretary for Planning and
Evaluation/U.S. Department of Health and
Human Services, the Robert Wood Johnson
Foundation and AARP. RTI International is
headquartered in Research Triangle Park,
N.C.
For more information, visit
http://www.rti.org/ or call (866)
RTI-1958.
Source: National
Investment Center for the Seniors Housing & Care Industry
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