The Demographic Reality

By the end of this century, nearly 40 million Americans will be age 65 and older. By 2011, some 77 million baby boomers born between 1946 and 1964 will begin to turn 65 and then join Medicare, putting more pressure on the system.¹ Between 2010 and 2030, nearly one in five Americans will be over the age of 65.²

Today, the 12 percent of the population over age 65 accounts for about one-third of the nation’s $1.1 trillion health care bill.³ The Bipartisan Commission on the Future of Medicare predicts that an even greater percentage will be age 65 and over by 2030, when care of the elderly may account for more than half of the nation’s medical expenditures.⁴

Because it finances a majority of health care services used by older Americans, the federal government has a major role to play in shaping how this care is delivered. The $225 billion and growing Medicare program pays about nearly half of the health care costs for the elderly; low-income elderly who are dually eligible for Medicaid account for about 16 percent of the Medicare population but about 30 percent of the program’s expenditures.⁵ In addition, a significant number of the nation’s 9.3 million elderly veterans are provided care in the Veterans Administration health system, which spends $17 billion on medical care each year.⁶

Although the growing numbers of Americans 65 and older will put pressure on the system, coping with the rapidly increasing frail elderly population will present some of the greatest challenges. The number of persons age 85 and over is expected to expand nearly five-fold by 2050—from about 4 million today to 19 million.⁷ The Veterans Administration estimates that the number of oldest-old veterans is expected to jump nearly 600 percent by 2010, to 1.3 million. Since they have the highest rates of disability, nursing home use, and multiple chronic problems, the oldest old will be at greatest risk for use of high cost health services.

In addition to age, the health system will have to gird for a more racially and ethnically diverse population of elderly patients and thus become more culturally sensitive. The numbers of ethnic minority older Americans are growing faster than the burgeoning elder population as a whole. By 2030, elders from groups classified as ethnic minority will comprise one-fourth of all older Americans, up from 14 percent in 1990. In California—the state with the largest number of older adults—41 percent of the over-65 population will be ethnic minority by 2020, up from 21.5 percent in 1990.⁸

Minority elderly tend to have higher rates of functional impairment, poverty, poor education, and malnutrition, as well as have more trouble navigating the health care system. To treat them effectively, experts believe, doctors and other practitioners will need to be sensitized to the way older minority patients view health care, taking into account such things as cultural beliefs, utilization patterns, views on dying, and in some cases responses to treatment.

The challenges of delivering high-quality, cost-effective care to a graying population are formidable, demanding examination of current policy and health system approaches. Although advances in medical science have shed much light on the aging process and the prevention and management of chronic illness, that knowledge has yet to be widely spread among the health care workforce.

Why Geriatrics is Unique

While it is highly likely that elderly patients will increasingly be cared for by a multidisciplinary team of providers, this issue brief will focus primarily on the role of the physician. Nevertheless, many of the issues raised can be applied to nurses, social workers, and other allied health professionals who treat older patients.

The elderly most often see general internists and family physicians, most of whom provide adequate care to these patients. But the vast majority of physicians and health care practitioners with older patients have not been trained in geriatrics and the special needs of the elderly because it has until recently been a low priority for medical schools. As a result, practitioners often treat a 70-year-old patient the same way they would a patient of 35. As the population ages and health needs become more complicated to treat, those gaps in training could cause problems.

Geriatricians are physicians who are expert in aging-related issues or gerontology. Most often they are primary-care based practitioners, board-certified in family practice, internal medicine, or psychiatry, who have completed additional years of fellowship training. Geriatricians have to pass a certifying exam and a recertifying exam every 10 years to assure competency.

Geriatric training can provide health care professionals with the skills and knowledge to recognize special characteristics of older patients and distinguish disease states from the normal physiological changes associated with aging. Additionally, geriatricians focus on maintaining and improving functional status, providing early intervention and continuity of care, examining co-morbidities, and fostering optimal outcomes.

Although a range of practitioners will be called on to deliver care to the majority of the elderly, many experts agree that a sufficiently large core of geriatricians or “aging specialists” will be needed to provide care for the 15 to 20 percent of the elderly who are the oldest and most frail. They also will be needed to advise and train the doctors, nurses, and other health care practitioners who have had little or no geriatric training but who treat large numbers of elderly patients.

Says one geriatric expert:

It’s not that we have to train 100,000 geriatricians to take care of the soon to be 70 million people over 65, but rather we need to be sure that the physicians who are allowed to take care of the most challenging people in the population have the knowledge and skills to do it.

Medicare Payment Shortfalls

Making the specialty more appealing would likely require significant reforms, particularly in the way Medicare pays for training and reimbursing care to geriatricians. Although legislation introduced in recent years would boost Medicare graduate medical education (GME) payments for geriatric medicine and psychiatry, thus far Congress and the administration appear reticent about instituting such sweeping reforms.

Unlike internists or family physicians—who depend on a variety of third-party payers for their revenues—geriatricians are almost entirely dependent on Medicare by virtue of their patient caseload. But low Medicare reimbursement for complex, prolonged evaluation and management of conditions has been cited as one of the major barriers to drawing and retaining recruits into the geriatric field. The complaints parallel those made by primary care doctors about a payment system that rewards procedures instead of management.

The lack of a code for comprehensive geriatric assessment has made it difficult for geriatricians to be reimbursed fully for their services. A typical physician office is geared to see four to six patients an hour, assuming the physician treats only one symptom for each patient. A geriatrician gets paid less for spending time with families, counseling patients, and doing an evaluation to avoid hospitalization than for removing a number of small skin lesions or warts.

Visits and consultations, however, represent most of what geriatricians provide. Medicare’s resource-based relative value scale system was meant to level the playing field so that payments for overvalued services would be reduced, while undervalued procedures would be more fairly compensated. But that has yet to occur; although the Medicare Payment Advisory Commission reports that payments for evaluation and management services have been steadily rising since 1991, surgical services are still reimbursed at a disproportionately higher rate. Because Medicare’s physician payment policy is essentially still procedure-oriented (paying per procedure delivered), the program does not reimburse for the extra time and resources it takes to evaluate and manage older patients—most of whom present with multiple problems—during an office visit.

Medicare also does not reimburse for the cost of interdisciplinary teams of professionals necessary to deliver the spectrum of medical, psychological, and social services many elderly patients require. Thus, elderly patients are often hospitalized for conditions that could more appropriately be managed at home or in a nursing home.

Nor does Medicare adjust for the age or medical complexity of geriatric patients in its reimbursement system. As a result, geriatricians have had relatively lower incomes compared to other physicians because they tend to specialize in care of the frail, chronically ill elderly, who usually are sicker and require more health care resources.

The disincentives in reimbursement extend beyond practicing doctors. Physicians-in-training, who quickly see that procedural and acute care skills are more valued by payers, are unwilling to specialize in a field that requires time-consuming efforts that basically go unpaid. For training institutions, the costs and rewards of training geriatricians do not favorably compare to fees received for preparing residents in surgery, for example.

To better manage frail, chronically ill patients, many recommend that Medicare be refined to recognize the social as well as medical components of elderly health care. The fragmented Medicare fee-for-service system impedes physicians from delivering a set of comprehensive services to elderly patients, particularly the frail and chronically ill. But those who have been trying to get Medicare to pay extra for case management services say it has been an uphill battle. Because it fears that providers will game the system, the Health Care Financing Administration (HCFA) has been reluctant to have Medicare cover this service. HCFA officials argue that case management is difficult to monitor, hard to target, and is easily abused. The agency also is not convinced that evidence exists to show that case management and coordination can reduce costs.

The agency, however, is interested in offering a way to both alter practice patterns and improve efforts to increase patient compliance with medication, diet, and activity regimens. Consequently, it is in the process of developing a demonstration to test effective ways to coordinate care delivered to seniors with chronic illnesses enrolled in traditional Medicare. Given the higher average monthly fee-for-service costs for persons with one or more chronic conditions, HCFA says the goal of the project is to “improve the quality of items and services provided to targeted individuals” as well as “reduce expenditures under Medicare” for these services.

The VA’s Role

The Department of Veterans Affairs has played a major role in developing the geriatrics field for more than 20 years. While 13 percent of the total U.S. population is 65 years of age or older, slightly more than one-third of the nation’s 25 million veterans are in that age range, according to the VA. By 2020, 51 percent of the veteran population will be 65 years and older. With the veteran population aging more quickly than the population as a whole, the VA health system decided early on to implement strategies to address such changes. These include the establishment of a Geriatric Research Education and Clinical Centers program in 1975 and development of the VA’s Geriatric Medicine Fellowship program in 1978. Both have been supported and expanded over the past two decades.

The training of health care students and professionals in geriatrics and gerontology has been a priority for the VA. Of the more than 100,000 health profession students who get clinical training experiences in VA facilities each year, many get their geriatric experiences by rotating through the VA’s geriatrics and extended care clinical programs. The VA had one of the first physician fellowship programs in geriatric medicine and it has the largest single program of geriatric fellowship–trained physicians in the United States, graduating 275 physicians between 1978 and 1992. The number of resident positions in the VA’s advanced geriatric training program continues to grow each year, increasing from 41 in 1991 to 92 to 160 in 1998. Nearly half of all the graduates from the VA’s advanced geriatric medicine training program hold academic appointments and have become educators of future geriatricians.²⁴

The Impact of Managed Care

With its emphasis on wellness, prevention, and team delivery, managed care is helping to integrate geriatrics into mainstream practice. HMOs and other managed care systems are ultimately designed to integrate a variety of health care services and promote population-based strategies. Geriatrics appeals to managed care organizations, which argue they want to promote care management while simultaneously equipping practicing physicians, nurses, social workers and others on the health care team with the skills to better treat the elderly. Many plans have physicians on staff who understand how to care for the elderly and have put geriatricians in leadership roles to better define systems of care.

Under a capitated rate, Medicare HMOs have the opportunity to develop systems for the chronically ill that include routine assessments, geriatric expertise, interdisciplinary delivery, preventive and educational interventions, psychosocial support, and regular follow-up care. Under a fixed rate, health plans and medical groups have the flexibility and incentive to spend Medicare dollars on both medical and social services provided by a multi-disciplinary team of practitioners, including basic nutrition, vision and hearing aids, or transportation. Geriatric experts say that this strategy should guide future reform of Medicare, adding that “selected” nonmedical services, such as social work or transportation, are inextricably linked with successful medical outcomes.

Already a number of managed care plans with experience treating the chronically ill understand that nonmedical services need to be linked with medical care. Many of these plans provide transportation services, work with patients and their families to make sure seniors’ homes are safe to protect against falls, and provide relief to informal caregivers.

Early findings of a care management program run by Group Health Cooperative of Puget Sound and Pacifi-Care reveal that targeted health promotion and illness management interventions by geriatric nurse practitioners resulted in fewer hospitalizations and increased activity. Kaiser Permanente in San Diego also has a program in which seniors with special health and medical needs are identified and referred to receive case managed, coordinated care services. The plan also has recently begun proactive screening to identify the frailest of its members so it can develop case management strategies for these patients.

The federal government’s PACE project is an example of a managed care model that cares for an exclusively frail elderly population. The “Program of All Inclusive Care for the Elderly,” or PACE, pays providers a capitated rate and advocates a multidisciplinary approach to treatment that meets both medical and social needs. Begun as a demonstration in 1990, PACE was a replication of On-Lok, an expensive, day-care model that began in San Francisco in the 1980s and that most experts say could not be replicated by managed care plans. Nonetheless, PACE is now being tested at 14 sites around the United States and, in 1997, Congress enacted legislation that gave permanent status to the project, allowing programs to exist without a federal waiver.

PACE serves a population that is hard to treat. In order to participate, patients must be eligible for nursing home care. The average age of a PACE enrollee is about 80; they average five to six diagnoses and are usually on 10 to 12 medications. About 90 percent of PACE enrollees are dually eligible for Medicaid and Medicare.

PACE’s goal is to keep frail elderly patients in the community for as long as possible, so they can function outside of expensive nursing homes. Based on an adult day-care model, PACE provides a range of services that Medicare would not necessarily cover, including prescription drugs, transportation services, and even home modifications to prevent falls. Essentially, the program covers what is needed within reason to keep a patient at home. It also features a coordinated team to provide services. Patients come to a specific location to receive medical, nutritional, therapy, or social work services. They also can see a specialist or primary care doctor at this site. But the jury is still out on whether it can serve as a model for managed care because it is highly localized and covers a small population of patients.

HCFA has started a routine system for identifying Medicare+Choice enrollees who are at high risk for adverse health outcomes. As of January 1999 HCFA will begin requiring all Medicare+Choice plans to conduct high-risk screening on new enrollees within 90 days of enrollment. This screening process is seen as an important tool for better geriatric care and can be applied easily by all physicians. The tool is a way to get physicians to recognize geriatric syndromes in frail elderly and set up a system of care for those patients. From the plan’s perspective, the health risk assessment tool is a way to focus on identifying those elderly patients who are eligible for disease management and preventive health programs that can reduce the use of expensive hospital and nursing home care. These patients can then be handled by a case manager (usually a nurse), who coordinates the patient’s health and social needs.

Geriatricians say instituting an assessment and case management program can help the physician do a better job. “There are specialized needs of the geriatric patient that the average physician does not have time to deal with but if they do not deal with them it leads to bad outcomes,” says one physician. “Case managers serve as a resource for developing and implementing the team approach to patients.”

A number of plans, for example, have designated physicians who want to serve the frail elderly and team them with nurse practitioners (N.P.s) having backgrounds in geriatrics to provide ongoing primary care and to meet with the family. United Healthcare’s EverCare program relies on geriatric nurse practitioners as case managers who make regular visits to patients in nursing homes to detect problems that may go unnoticed by the nursing home staff. By working with EverCare physicians and other practitioners, N.P.s, who in many states are authorized to prescribe medicine, can handle problems in the nursing home instead of transporting the patients to expensive emergency rooms or hospitals. Kaiser Permanente in San Diego has a similar program that provides primary care to nursing home residents and patients in subacute settings. The plan has a group of physicians who work in the community, rather than in the office, caring for elderly patients in skilled nursing facilities and making visits to hospice patients.

Other plans have set up group clinics for elderly with chronic illness. At the Kaiser Permanente plan in Colorado. this effort has produced enhanced patient satisfaction, lower use of nonprimary care services, and higher member retention rates.

Many health plans also have set up pharmacy programs, asking elderly members to bring in their medications and prescriptions for review. This so-called “brown bag” review helps plan doctors assess whether the medications conflict with each other, have expired, or, in the case of a covered benefit, are being filled. This kind of program can change physician behavior; according to one managed care plan, 45 percent of doctors said that, as a result of the medical review, they changed their patients’ prescriptions and about 25 percent took patients off all unnecessary medications.

The Blue Cross and Blue Shield Association and its 55 plans believe they, too, have a role in helping to integrate geriatrics into primary care practice. In 1997, the national association, along with the American Geriatrics Society (AGS), started the National Blue Initiative for Quality Senior Care. Neeraj Kanwal, M.D., Anthem Blue Cross and Blue Shield’s executive medical director for senior markets, says many of the primary care physicians his plan worked with acknowledged their lack of skill in caring for elderly patients and were willing to accept help to become better at geriatrics.

Working with AGS, the Blues plans put together resources designed to help physicians in their day-to-day practice with senior patients. The program provides physicians with practical tools to use in practice, such as workbooks, charting aids, guidelines, and pocket reminder guides. Doctors also earn continuing medical education credits.

Kanwal says the goal is to change the medical rubric of primary care physicians, moving them away from “episodic” care to focusing on managing their elderly patient’s health and social needs. The group has produced a self-study curriculum that summarizes key components of practicing clinical geriatrics and offers guidelines on specific conditions, such as geriatric psychiatry, malnutrition, dementia, falls, pain management, and urinary incontinence.

So far, Anthem, which provides Medicare HMO coverage to 61,000 beneficiaries, has distributed information to 2,000 physicians in Connecticut, Kentucky, Ohio, and Indiana. Kanwal says that because his plan is voluntary it does not know how many doctors are using it or whether it has led physicians to modify how they practice. While they intend to survey physicians in the next year to assess the utility of this effort, Kanwal admits that changing physician behavior is difficult.

As the number of older Americans continues to grow, policymakers, health plans, and providers have increasingly become aware of the special needs of caring for this population. This Forum session will bring together a panel of experts to discuss the status of geriatric care today as well as Medicare incentives and disincentives for training health care professionals and for providing comprehensive, all-inclusive care to the elderly.

The Forum Session

Christine K. Cassel, M.D., M.A.C.P., chairman of the Department of Geriatrics and Adult Development of Mount Sinai Medical Center, will open the session with a discussion of the benefits of geriatric medicine, academic training issues, and how Medicare payment policies impact the delivery of health care to older Americans. Dr. Cassel is a leading expert in geriatric medicine and has published numerous books including Geriatric Medicine (first published in 1984 and now in its third edition). Prior to her current position at Mount Sinai, Dr. Cassel served for ten years as Chief of Internal Medicine at the University of Chicago, where she was professor of Medicine and Public Policy Studies, director of the Center on Aging, Health, and Society, and director of the Center for Health Policy Research, among other positions.

Richard D. Della Penna, M.D., physician-in-charge for Continuing Care Services, Home Health, and Hospice for the San Diego Kaiser Permanente Medical Group, will discuss his experience delivering geriatric care in a managed care environment. In addition, Dr. Della Penna serves as the principal investigator for the Hartford Foundation’s project on Implementing Geriatric Interdisciplinary Team Training for Practicing Professionals. Dr. Della Penna also serves as the regional elder care coordinator for the Southern California Permanente Medical Group and on Kaiser Permanente’s national Interregional Committee on Aging.

Finally, Mathy Mezey, Ed.D., director of the John A. Hartford Foundation Institute for the Advancement of Geriatric Nursing Practice at New York University (NYU), will discuss the role of nurses in improving care received by older adults. Prior to her position at NYU, Dr. Mezey was a professor at the University of Pennsylvania School of Nursing, where she directed the geriatric nurse practitioner program and was director of the Robert Wood Johnson Foundation Teaching Nursing Home Program, a program to link schools of nursing and nursing homes.

The discussion will focus on the following policy questions:

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How should Medicare be revised to better promote care management services for chronically ill beneficiaries, in both a fee-for-service and a managed care environment?

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What are the prospects of refining the fee schedule to attract physicians and other professionals to careers in geriatrics? What are the legislative and financial hurdles ahead?

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Should the federal government provide incentives for medical schools and professional schools to incorporate geriatrics into training programs? Does the private sector have a role?

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Should there be more incentives for current practicing professionals to take geriatrics continuing medical education? Can the government via Medicare provide those kinds of incentives?

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What has been the impact of some of HCFA’s demonstrations (for example, PACE and On-Lok) that are designed to promote interdisciplinary care for chronically ill patients?

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Are these cost-effective or are they too expensive to institute nationally? Are they relevant models in today’s health care environment?

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What evidence is there that geriatrics skills really produce better outcomes? Should the Institute of Medicine or appropriate entity examine this issue to influence policy in this area?

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What can the private sector do to better integrate geriatrics practice?