Management and Risk in Your Long Term Care Planning

Whether we’re discussing retirement planning, long term care providers, or life in general, management matters—and so does risk. Let’s consider a caregiving organization. 

Management matters. From the day-to-day micro-decisions to the 6-month to 20-year+ strategic decisions. Operations. Policies and procedures. Systems that make it harder to screw up. Monitoring and course-correcting. Hiring the right team and firing when necessary. Inspiring and leading. All these can impact your quality of life when you need care.

Risk matters. Risk is a part of every decision made by strong managers. What if a disaster happens? Or there’s a change in regulation? The risk of a new competitor down the street? What if a key employee takes a job somewhere else, or dies? Every decision can increase—or decrease—risk.

If you’re a typical reader of this newsletter, you most likely understand how managing (instead of avoiding) the risk of needing long term care makes smart sense. You get it.

In early 2020, the U.S. Government Accountability Office (GAO) reported that 82% of nursing homes surveyed were cited for having an infection prevention and control deficiency in at least one year between 2013 and 2017. Did this deficiency contribute to the fact that in the US 35% of coronavirus deaths have involved nursing homes? 

A report in the February 19, 2021 issue of McKnight’s Long Term Care News, highlighted how different management practices resulted in very different Covid-19 deaths in nursing homes as the pandemic took hold last year. After all, in Japan, just 14% of Covid-19 deaths involved nursing homes.

Consider the fact that Japan’s system, “…requires nursing homes to convene infection control committees at least once every three months to prevent outbreaks of infectious diseases. Data from 2019 shows that 99.7% of Japanese facilities had an infection control committee, and 94.2% held infection control training for staff.”

This situation, along with other factors, including the swift decision to lock down Japanese nursing homes very early in the pandemic, is credited with saving resident lives. 

In the U.S., regulation of long term care varies widely. It depends on whether or not the facility accepts Medicare/Medicaid, and is therefore regulated by the Feds CMS. If it does not, then the type of regulation depends on the state in which the provider is located. But regulation is only as good as what is being regulated—and the effectiveness of enforcement.  

Given this reality, from a boots-on-the-ground point of view, much can depend on the managerial ability of the person in charge—whether at a facility or a home care agency. Management matters. Because you may not be able to rely on “the system.”

The long term care provider industry is already being deeply impacted by the pandemic. None of us can know exactly what care options will result. Let’s discuss something you may have not considered before. Consider these non-monetary benefits of an LTC insurance purchase, perhaps now more important than ever: 

• It can enhance the Admission Attractiveness of the insured. When competition for quality long term care solutions is fierce, a ready flow of insurance benefits can make an insured more attractive to a facility with a wait list, or to the best private-pay home care agency in town. The concept of “key money”, the ability to show private pay money to a nursing home, to perhaps jump a wait list, is well established. LTC insurance is the ultimate key money. As opposed to traditional key money, which is gone once it’s spent, long term care insurance benefits last well beyond the first few months of claim. Admissions people know cash can disappear—be transferred or given away to relatives—while LTC insurance cannot. LTC insurance benefits remain available for the use of the insured until exhausted!

• Many policies include a provision for an Alternate Plan of Care. This allows a revision in contracted benefits—but only if the plan is agreed to by the insured’s doctor as well as by the insurance company. As new developments and innovation come about in long term caregiving, this provision could be deployed. Of course, common sense tells us that the insurance company would only agree to solutions that are more cost-effective than what would otherwise be provided. However, let’s not underestimate the flexibility this provision can bring.

• Long term care insurance can also bring a bevy of experts to the insurance purchaser—when and where they’re needed most. For example, some policies include the ability to hire a care coordinator to help navigate and manage care—at time of claim and beyond. This can be of inestimable value, when considering care options at the beginning of a claim, or when you desire a change in caregivers. 

How are these points relevant to you, now, as a person likely years away from needing long term care? I bring this up to highlight the importance of choice that an LTC insurance policy can bring, as well as the ability to make a change in the event any of us feels our long term care is no longer serving us.  

If the need for a change in care arises, I think you can appreciate how difficult the situation can be. Options may be limited, and/or unattractive. As the post-Covid-19 new world develops, we can expect change in long term care. This is exactly the kind of moment where the benefits of long term care insurance can bring caring team members, help, and a certain nimbleness to an otherwise set-in-stone situation. That alone may make an LTC policy priceless.

Please don’t hesitate to reach out to discuss any aspect of long term care planning or long term care insurance you might need more information about. Baygroup Insurance can be contacted at http://www.baygroupinsurance.com/forms/contact-us or call us at 410-557-7907 for more information.