Archive for May, 2010|Monthly archive page

Healthcare Reform and the “Long Goodbye”; The costs that Healthcare Reform forgot to Calculate

In Executive Leadership, Healthcare, Human Capital Trends, Published articles or white papers on May 20, 2010 at 7:03 pm

Published June 2010, The National Healthcare Reform Magazine:

As the aging of America continues on a trajectory never seen before, led by the Baby Boom phenomenon, there is a cost that Healthcare reform fails to recognize as this enormous shift in US population occurs. A recent report by the Alzheimer’s Association, Changing the Trajectory of Alzheimer’s Disease: A National Imperative, indicates that the cost for caring for Americans with Alzheimer’s disease will increase five fold by 2050 to $1.08 TRILLION per year unless action is taken to prevent the onset of this disease.  This number does not include the costs of care do not include individuals under 65 and does not include the value of unpaid care provided by families and other care givers. Healthcare reform takes on major assumptions built upon “today’s” models and demographics – not calculating the affects of dementia related disease, such as Alzheimer’s disease, often referred to as the “long goodbye”. According to the published study, approximately 5.1 Million Americans 65 and older have Alzheimer’s disease – this number will grow to 13.5 million by 2050, or roughly 16 percent of the 65 and older population.

Healthcare reform is needed in this country on many levels. Costs need to be reduced; access to healthcare made accessible and affordable to those who want it. Healthcare reform should have built in benchmarks for treatment advances that will ultimately drive down cost and impact patient outcomes. According to aforementioned study, about half of all residents in nursing homes are people with Alzheimer’s disease and rely on Medicare to help pay for care, currently estimated at $30B. Without a treatment breakthrough the trajectory of these costs will increase to $150B by 2050. The institute of Medicine (IOM) report on the aging population, Retooling for an Aging America, found that the future healthcare workforce will be “woefully inadequate in its capacity to meet the large demand for healthcare services of older Americans.” This is especially true in our nursing homes that house a disproportionate amount of Alzheimer’s patients. Many of the models used in the current Healthcare reform bill use baseline scenarios that do not build any change in per capita healthcare utilization patterns or human capital productivity requirements. This is understandable as Healthcare reform models would have difficulty making it past the American public with a five fold increase in costs.  Healthcare reform costs in the US should be calculated with models that reflect current population and disease trends. Reform should seek to encourage cost removal, rather than cost shifting, with special emphasis on treatment and patient engagement.

There is hope that treatment breakthroughs that could delay the onset of Alzheimer’s disease would change the trajectory that we are currently on. A treatment that delayed the onset of Alzheimer’s disease would reduce these overall healthcare costs immediately, would save billions over time, and make a positive difference for those that have been affected by this disease, both patients and care givers alike.