Engelberg Center for Health Care Reform

Achieving Better Chronic Care at Lower Costs Across the Health Care Continuum for Older Americans

Improvements in the efficiency and quality of care delivered by the U.S. health care system is largely dependent on reforming the way that care is supported, reimbursed, and delivered to older Americans, who often have multiple chronic illnesses and are in need of long-term services and supports (such as home and community-based services, intermediate care facilities for people with mental retardation/developmental disabilities, or nursing homes). Our rapidly growing older Americans population, which is expected to double by 2030, faces unique health care challenges, making this population among the most expensive individuals in the health care system. Individuals with multiple chronic illnesses warrant particular attention: while they represent only 20 percent of Medicare beneficiaries, they account for approximately 80 percent of Medicare spending. In addition, many older Americans require long-term services and supports (LTSS). Payers like Medicare, Medicaid, older individuals and their families, and private plans spend over $200 billion a year on LTSS (over 10 percent of U.S. health expenditures). LTSS costs are expected to double in the next 30 years.

The recently passed health care reform bills – the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act (ACA) – include a range of new payment and delivery system reforms designed to improve the overall performance of the health care system and contain the costs of expanding health insurance coverage. Initiatives in the law reflect considerable evidence that addressing the overuse, underuse, and misuse of medical therapies can help “bend the curve” of rising health care spending. The legislation addresses how payment reforms should incorporate long-term care delivery. Future payment and delivery reforms can make a big difference in helping individuals with multiple chronic diseases that face many preventable complications and duplicative or poorly coordinated services.

This paper addresses many of the challenges facing individuals with chronic conditions and functional impairments and identifies new opportunities for the integration of medical services and social supports tailored to older Americans and supported by new payment designs.