July 26, 2002
Facing a budget deficit, the state has cut Medicaid spending, a program that covers some of the state's poorest and sickest residents.
The cuts are being felt by a number of providers and services, and critics say the move, which affects home health care and other services, will force some into nursing homes, often a more expensive alternative.
The Rocky Mountain Multiple Sclerosis Center in Englewood runs a day program for people with multiple sclerosis and other acquired neurological disabilities called King Adult Day Enrichment Program, or KADEP. The treatment program, for adults aged 18 to 65, provides therapeutic activities, medical support and a respite for caregivers.
"Those patients that come to us instead of going to a nursing home have a waiver designed to allow them to stay at home but allow their primary care giver to go out and work," said Diane Reeder, the incoming chairman of the Rocky Mountain MS Center's board. "The proposed changes would severely impact KADEP's ability financially to provide services. In other words, it would force them into nursing homes for care if their caretaker had to work."
Multiple sclerosis is a chronic, often disabling, disease of the central nervous system. Symptoms may be mild, such as numbness in the limbs, or severe -- paralysis or loss of vision. People with MS may need help with such basic functions as eating or bathing, and most are diagnosed between the ages of 20 and 40. The unpredictable effects can be lifelong.
A severe disability occurs in one-third of MS cases, and Medicaid serves 77 percent of the young adult participants at KADEP.
There are 119 people in the program; the center sees about 55 a day.
Because of a shortfall of state revenues, reimbursement to KADEP has been capped this year at about $54 per patient per day. It costs the center $75 a day to care for a patient.
"The board is going to need to make that commitment to work harder in the development area to bridge that gap," said Karen Wenzel, program director for KADEP. "We've never been able to run this program even at break even. It's always been necessary to have a lot of activity within our development department to keep this program alive and viable."
Through special programs, MS patients can enjoy activities that otherwise would be off limits, including water skiing and rock climbing. They also take a variety of classes, from poetry to computers.
Even with the recent compromise in which the state restored some services following a protest by certain Medicaid members, the crunch may still lead to more members in nursing homes, Wenzel said.
The number of new clients KADEP can treat may be limited because the state plans to cap enrollment in the program through which the center is paid. Clients may have to get on a waiting list to receive non-nursing home care.
"If you have to go on a waiting list ... then what happens is someone has to be placed [in a nursing home] pending receipt of [community-based] services," Wenzel said.
Wenzel said programs such as KADEP are cheaper than nursing homes and usually a more attractive option for patients and their families.
Report attacks drug company spending
The major pharmaceutical companies spend significantly more on marketing, advertising and administration than they spend on research and development, according to a report released earlier this month.
U.S. drug companies marketing the 50 most-prescribed drugs to seniors spent almost two-and-a-half times as much on marketing, advertising and administration as they spent on research and development in 2001.
The report, compiled by consumer health organization Families USA, was released as the U.S. Senate debates legislation that could add prescription drug coverage for senior citizens.
"The drug industry should stop scaring America's seniors with false claims that drug price moderation will prevent research on new medicines," Families USA's executive director, Ron Pollack, said in a statement. "In light of huge industry profits, enormous executive compensation packages and big marketing budgets, those claims are both irresponsible and wrong."
Information in the report was drawn from the most recent Securities and Exchange Commission filings of nine leading drug companies. It showed the nine spending $45.4 billion on marketing, advertising and administration and $19.1 billion on research and development.
Drug companies defend their record, saying much of their promotion budget includes free drug samples given to doctors who often use them to help needy patients.
Analysts predicting improvements
Analysts reportedly predict that all major publicly traded managed care companies will meet or beat profit projections when they report second-quarter financial results this month.
Dow Jones quoted CIBC World Markets Corp. analyst John Szabo as saying, "It could be the best second quarter we have seen in years."
On July 18 UnitedHealthGroup, the parent company of UnitedHealthcare, reported earnings of $325 million for the second quarter, up 46 percent from a year earlier.
Amy Fletcher covers health care. Reach her at 303-837-3529
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