Why Does Biden invest $400 Billion in Eldercare?
May 23, 2021
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Author: Yoko Marikawa - Japanese Expert in Eldercare & Healthcare
Opinion: Biden's $400 Billion investment in eldercare is a long-term investment and task. If the investment plan is implemented well, it will definitely improve the quality of nursing services and ultimately benefit the elderly. At the same time, increasing the salary of nursing workers will help attract new people to join, increase the number of nursing workers, and alleviate the serious shortage of nursing workers. This has a positive impact on the healthy development of elderly care services and the elderly care industry.
One of the big investments of US President Biden's GoBig is the $2 trillion infrastructure investment, which includes two parts: one is to invest in domestic manufacturing, R & D, caring economy, climate infrastructure and roads, bridges and railways; the second part is childcare, health and education infrastructure. Among them, the second part of the investment is the most criticized by the Republican Party for “having nothing to do with infrastructure.” In response, the Democratic Party invented a new word to refute it - "human infrastructure". This "new concept" quickly became popular with the interpretation and promotion by media and politicians, because this investment is for children, the elderly and education, which is related to the interests of every family and is of course welcomed by the public.
The author is most concerned about what is included in the US$400 billion "health" investment bill, what problems it can solve, and what impact it will have on American eldercare services.
The US $400 billion investment, which has set a record in the history of the United States, is mainly allocated to homecare nurses, eldercare, and care for the disabled. In the next eight years, it will be invested in "long-term care for the elderly and the disabled, focusing on family- and community-centered care", with the purpose of promoting and improving "home health care services".
Why are we so anxious to put eldercare ahead of childcare? Why is it specially noted that it is limited to family- and community-centered care for the elderly and the disabled, and does not include nursing services in nursing homes or welfare homes?
In the fiscal year 2019, Medicare (the U.S. government’s health insurance for poor seniors over 65) spent $644 billion in total expenditures, accounting for 14% of the federal government’s total expenditures, an increase of 6.7% over 2018, while Centers of Medicare and Medicaid Services (CMS) expects that this expenditure will continue to increase at an annual rate of 7.6% during the ten years from 2019 to 2028, which is the fastest growth rate. At the same time, data released by CMS shows that the medical expenses of the elderly over 65 are more than five times that of children and three times that of the labor force. It can be seen that the cost of nursing care for the elderly is too high and the growth rate is too fast, which puts increasing pressure on the government. The Democratic Party believes that in terms of funding or the quantity and quality of nursing services, the United States is simply not prepared for the next surge of elderly population.
During the COVID-19 pandemic from 2020 to present, more than 170,000 elderly people living in nursing homes and nursing facilities have died of COVID infection, which has exacerbated Americans’ distrust of nursing homes. The main conclusion reached by a majority of Americans is that we can’t just rely on eldercare institutions. The second option in place instead of eldercare institutions is to allow the elderly to live at home while getting the nursing services they need. Therefore, in response to the voice of the public, the U.S. government decided to invest $400 billion to improve and enrich the quality and quantity of home-based long-term care services, hoping to effectively encourage eldercare at home, or at least delay their stay in nursing homes.
The purpose of this reform is to separate long-term care services from eldercare institutions, reduce the degree of dependence of the elderly and the government on eldercare institutions, weaken the pricing power of eldercare institutions, and contributing to reduction in prices and improvement of service quality in these eldercare institutions.
What's in the $400 billion investment bill? To put it more accurately, it is home long-term care services. This is a special fund that will be used to increase the quantity of home care services provided, increase compensation items, strengthen the training of nursing workers, increase the salaries of nursing workers, and improve the quality of nursing services. The contents included is still being refined. At the end of March, Biden announced that he would expand Medicaid (a public medical assistance system for people under 65) to include family medical care.
The content of home care service mainly includes: nurses or physiotherapists visiting home, helping individuals with life assistance services, such as eating and bathing, etc.; getting help from case managers; participating in adult daycare center to help do housework, including cooking, washing and cleaning; assisting in travels; helping to repair or transform elderly homes; helping to purchase medical equipment, such as wheelchairs or oxygen tanks; and coverage of services offered as a home care option will continue to increase.
How much is the demand for home care for the elderly in the United States? Statistics show that 70% of the elderly in the United States will need some personal services for 2 to 4 years of their lives, such as cooking, dressing, bathing and toilet, mobile, personal financial management, housework, etc. With the rapid aging rate of the population in the United States, it is estimated that there will be 74 million old people by 2030 and another 40 million by 2050, and the total number of people over 85 will be three times that of today. Coupled with the disabled population, the current number of nursing workers and the quality of nursing services cannot cope with this huge demand. According to data released by DHHS (U.S. Department of Health and Human Services), in 2018, a total of 820,000 elderly people in 41 states were on the "waiting list" waiting for applications for home care services, with an average waiting time of 39 months. Obviously, the huge demand for home care services and the insufficient supply of services are imminent.
The United States does not have a Japanese-style nursing care insurance. Only a very limited number of long-term care services are included in Medicare, and the rest are at their own expense. According to statistics in 2018, 3.4 million elderly people received home care services through Medicare and received service fees, which accounted for 57% of the country’s total long-term care service fees. However, the current home care services that can be claimed are limited to home visits by nurses and physiotherapists, and the 24-hour service is not compensated; the compensation for the elderly living in nursing homes only covers up to 100 days of physiotherapy services, which is completely unsatisfactory for the needs of the elderly and for people with disabilities.
According to the data released by AARP (American Association of Retired Persons), 53 million family members in the United States currently provide nursing services for their own elderly or disabled people. They are not only unpaid, but also pay an average of $7000 per year out of their own pocket. Even so, it is cheaper than employing nursing services. Because the salary of a home health care worker is $24 an hour, the average annual cost of living in an auxiliary residential center is $51600, and the average annual cost of living in a nursing home, even the most basic semi-private room, is $93075, it can be seen that the current care for the elderly and the disabled is well above the affordability for ordinary families.
The main challenge facing this reform is that the follow-up and improvement of relevant laws and regulations must not only protect the rights and interests of family caregivers, but also protect the rights and interests of the elderly and the disabled who use the services, such as how to supervise or complain, etc. In addition, because most of the home care workers are independent workers, they do not have the status of corporate employees, and there is no labor union - how can they be paid? One of the latest proposals is to implement a registration and filing system for homecare workers, classify employees as public service employees, who should paid directly by government departments.
What will be the effect of this $400 billion investment? Of course, the professionals in the pension sector give positive expectations, to this long-term investment and task. If the investment plan is well-implemented, it will certainly improve the quality of nursing services and ultimately benefit the elderly; at the same time, increasing the salary of nursing workers is helpful to attract new people to join, increase the number of nursing workers, and alleviate the serious shortage of nursing workers, which has a positive impact on the healthy development of eldercare services and pension industry. From the government's point of view, the increase of home-based care population can not only alleviate the problem of bed shortage in nursing homes, but also create many new employment opportunities. It can also reduce the total cost paid by the government to nursing homes. In the long run, it is an investment with positive social and economic benefits.
The author Yoko Marikawa is an expert in the elderly care industry in Japan and a pioneer in the elderly care industry. She has long been committed to ensuring and improving the well-being of the elderly by improving the management of nursing homes and the quality of elderly care services. In recent years, in order to find effective solutions to the problems of poor medical services for the elderly, elder abuse, the surge of elderly dementia patients, and the shortage of eldercare workers, Yoko Marikawa has devoted a lot of energy in researching how to use high technology to help solve these serious and urgent social issues, including the use of nursing robots, quantitative management and monitoring systems, etc. This article is an article in Yoko Marikawa's newspaper column "Yoko Marikawa Talks about Eldercare".
Yoko Marikawa
Japanese expert in Healthcare & Eldercare industry; Founder and Chairman of YOKO Management Consulting; United Nations Representative; Scholar & columnist; Former Chief Officer at World Blockchain Organization.
Yoko is an advocate for healthcare and eldercare, elderly wellbeing, senior care service, nursing home management, and medical care technology. Recently, she is focusing on implementing advanced technology to improve senior care service and nursing home management quality. She is an active columnist, enriching the knowledge of the eldercare industry and contributing to the academic field.