INSTITUTIONAL BIAS

A Report Examining the Politics of Long-Term Care Reform, A Joint Report of WDC and AARP

May 24, 1999

INTRODUCTION

This report is intended to provide key information about the status of long-term care reform in Wisconsin. It examines the efforts to change the way long-term care is delivered and the influence that lobbying and campaign contributions from reform opponents have, and may continue to have in the future.

Generally, the phrase “long-term care” refers to a broad range of health and social services provided for an extended period of time for someone who is unable to take care of themselves due to age, chronic illness or disability. It is likely that a large percentage of people will need long-term care at some point in their lives. For instance, state figures show that 3 percent of all people age 65 to 84 live in nursing homes. For people age 85 and older, that percentage increases to 25 percent.

Long-term care can be provided in a variety of settings. In addition to nursing homes, those settings include a person’s home, a group living center or an adult day care center. The range of services can vary widely depending upon individual circumstances. The health and medical services can include providing emotional and physical support and supervision, administering medication, taking blood pressure readings and providing occupational, speech and respiratory therapies through skilled and intermediate nursing care. The social support and “living” services include personal care duties such as meal preparation, personal hygiene, exercise, dressing and getting in and out of bed. These services can be provided by friends, relatives, private agencies and public programs.

The cost of long-term care may vary greatly depending upon the length, setting and level of care that a person needs. State figures for 1996 show the daily cost for a private pay nursing home can reach $118. Home health visits by a registered nurse can cost $96, and personal care services provided by an agency can cost $53 an hour. For many people, long-term care is paid for out-of-pocket, sometimes to the point of depleting all of their resources and resulting in the need for Medical Assistance. Other payment sources include Medicare, veteran’s benefits and insurance. About 74 percent of Wisconsin’s 43,000 nursing home patients receive some type of assistance - usually through Medicaid or Medicare - to pay for long-term nursing home stays.

THE GOAL OF LONG-TERM CARE REFORM

The goal of long-term care reform is to maximize consumer choices for the elderly and people with disabilities. A plan offered by the Thompson administration seeks to pool all of the state and federal funds allocated to community-based residential and service programs and nursing homes. Those funds would be used to create a single entry point in each county where prospective clients could be assessed and assigned the living arrangements and services that they need. The funds would follow the clients. Money would be directed to pay for services provided to clients, rather than be allocated to service programs and the nursing home industry based on estimated need and on politics.

Some observers believe this approach could be a boost for the Community Options Program (COP), which connects elderly and people with disabilities with the services they need to remain in their homes. Currently, there are more than 10,000 people on COP waiting lists. Critics have long charged that the governor and the Legislature have delivered millions of dollars worth of increases in state aid to nursing homes despite an increase in empty beds in recent years. Meanwhile, COP has not received the increases it needs to meet new-client demand, even though it can provide services at a lower cost than nursing homes, and allows people to remain in their homes longer. In his proposed 1999-2001 budget, the governor has proposed a $38 million increase in the Medicaid reimbursement formula to nursing homes, despite a 4 percent reduction in the nursing home population from 1991 to 1997. Meanwhile, the COP budget proposal calls for a $3.9 million increase each year to pay for an expansion of the program that was approved in the last budget bill. This means the program will not be expanded further in the next two years because the money in the proposed 1999-2001 will be used to pay for the previous COP expansion.

LONG-TERM CARE IN 1997-1998 AND NOW

A comprehensive plan for statewide long-term care reform called “Family Care” has not moved forward. The proposal was unveiled in 1997 and then quickly withdrawn by Health and Family Services Secretary Joe Leean. The plan was withdrawn after there was no consensus on numerous issues, including acute care, and redrafted. Later, the Legislature approved a 1997-1999 state budget provision that created the five-county pilot program to test Family Care for future statewide expansion.

In February 1999, Governor Tommy Thompson proposed spending $11.3 million in state money and $35 million in federal funds in his 1999-2001 state budget to expand all or part of the Family Care pilot program to 13 counties and the Oneida Indian tribe. The budget proposal provides the language to implement a statewide long-term care program. It appears likely to many that reform opponents will seek to remove all or part of the proposal from the budget. Numerous political observers believe that a main stumbling block to comprehensive reform has been that key supporters of long-term care reform have not united behind a plan. Critics again cited funding and public and private sector competition to administer the plan as the major problems.

THE PLAYERS - OPPONENTS AND SUPPORTERS

The chief opponents of long-term care reform are nursing homes. Nursing homes are represented by two lobbying groups at the State Capitol. The Wisconsin Health Care Association represents for-profit nursing homes and the Wisconsin Association of Homes and Services for the Aging represents non-profit nursing homes. The two groups often work together to support or oppose legislation that affects the industry. During the last legislative session, the groups spent $243,769 to lobby on legislation that dealt with nursing home standards, staffing levels and patient care, among other items. The two organizations spent more than environmental, agricultural and dozens of other special interests, but not as much as teachers, big business and others. Key observers and lawmakers say this industry is influential because there are 449 nursing homes that care for about 44,000 people throughout Wisconsin. In many communities, nursing homes are also major employers with an impact on local economies. Their geographic distribution and local economic impact make grassroots lobbying a very effective tool for this industry.

The chief supporters of long-term care reform are the elderly, the people with disabilities and the counties. The Coalition of Wisconsin Aging Groups, AARP, Wisconsin Retired Educators Association, Wisconsin Coalition for Advocacy and the Wisconsin Counties Association have a larger and more widespread constituency than their opponents. However, it is difficult to evaluate the effectiveness of their grassroots lobbying ability and member participation in legislative activity because it varies from issue to issue. Groups that represent the elderly and people with disabilities spent about $500,000 on lobbying numerous issues. The Counties Association spent about $1.2 million to lobby health care and dozens of other issues of concern to counties. However, the conflicting goals of these organizations and the cost of long-term care redesign have hurt efforts by these three diverse interests to unite behind a single legislative plan.

CAMPAIGN CONTRIBUTIONS

The following analysis of campaign contributions deals primarily with the opponents of long-term care reform. Most nursing home owners and employees can be identified because the occupations and employers of contributors who give more than $100 must be disclosed on state campaign finance reports. However the contributions from reform supporters are more difficult to identify because age, advocacy and county government service are rarely identified on campaign finance reports. This situation makes it impossible to determine how much money supporters of long-term care reform contribute to campaigns. The nursing home industry may not contribute as much as other powerful special interests, but they target their contributions effectively. The nursing home industry has contributed at least $124,639 to the governor, lieutenant governor and legislative candidates from 1993 through 1998. That figure includes at least $90,339 in individual contributions (Table 1) and $34,300 from the industry’s political action committee, the Wisconsin Nursing Home Legislative Action Committee. Seventeen nursing home administrators gave $1,000 or more to the governor since 1993 (Table 2) and five administrators gave $2,000 or more to legislative candidates (Table 3).

Chart: Individual Nursing Home Contributons to Governor and Legislative Candidates

So what are the keys to their influence?

First, tradition and need. For decades, nursing homes were the only sources of care for elderly, people with disabilities or chronically ill people who had lost the physical and economic ability to care for themselves, or whose families were unable to take care of them. The social and economic need for nursing homes as a societal safety net made it incumbent upon government to ensure the industry’s viability throughMedical Assistance and other types of aid and reimbursements for care that many nursing home residents could not afford. Only in the last 15 to 20 years has there been a major effort by advocates and government to enact service and care programs to help people avoid or delay nursing home care.

Second, the nursing home industry uses the same successful combination of targeted campaign contributions and lobbying used by other powerful special interests. They contribute heavily to the campaign of the governor, whose support is almost always necessary for legislation to ultimately become law. In addition, the governor’s state budget is the vehicle that delivers the industry several million dollars a year in Medical Assistance reimbursements and other aid.

They also target most of their campaign contributions to members of the party in control of the Legislature (Tables 1 & 3). Republicans have controlled the Assembly since 1994, and they have traded a slim majority of control back and forth with Democrats in the Senate since 1993.

In addition, the figures also show the nursing home industry targets contributions to key legislative leaders in both parties and to committee chairs who will handle and decide the content and fate of legislation.

For instance, Republican Sen. Gary Drzewiecki of Pulaski received the most contributions of any legislative candidate. This is probably related to the issues he deals with on a daily basis. Drzewiecki is a Republican on the Senate Health Committee, which reviews the bulk of nursing home-related legislation in the Senate. In addition, part of his 30th Senate District includes Brown County, which has the third-highest number of nursing homes - 18 - in the state with a potential of housing up to about 1,600 residents. Only one Democrat, Sen. Rodney Moen of Whitehall, was among the top 20 recipients of nursing home industry campaign contributions. Like Drzewiecki, his district also contains a large number of nursing homes. Moen’s 31st Senate District, which includes all or parts of Eau Claire, Trempealeau, Jackson, Monroe, Buffalo and Pepin counties, is home to about 30 nursing homes that can house up to 2,400 residents. Moen is also chairman of the Senate Health Committee.

Tables

Contributions to Governor and Legislative Candidates
Top Contributors to Governor
Top Contributors to Legislative Candidates

TABLE 1
NURSING HOME EMPLOYEE CONTRIBUTIONS
TO THE GOVERNOR AND LEGISLATIVE CANDIDATES
1993-1998

CANDIDATE PARTY OFFICE* AMOUNT
Thompson, Tommy G R G $49,839
McCallum, Scott R LG $3,750
Drzewiecki R S30 $3,226
Schafer R A68 $2,200
Lazich R A84,S28 $1,925
Krcma R S29 $1,850
Welch R A41,S14 $1,800
Rosenzweig R S05 $1,700
Stefonik R S29 $1,600
Gard R A89 $1,550
Levanetz R S12 $1,275
Handrick R A34 $1,168
Farrow R S33 $1,100
Moser R A87 $1,100
Jacobson R A86 $1,050
Zien R S23 $1,050
Moen D S31 $1,007
Jensen R A32 $950
Stone R A82 $925
Ladwig R A63 $850
Jauch D S25 $600
Republican Assembly Campaign Committee R -- $600
Petak R S21 $600
Foti R A38 $600
Sykora R A67 $525
Underheim R A54 $500
Kreibich R A93 $500
Laufenberg R A68 $500
Ovadal T A80 $464
Darling R S08 $400
Plache D A62,S21 $350
Breske D S12 $350
Panzer R S20 $250
Chvala D S16 $250
Shibilski D S24 $250
Plale D A21 $225
Ellis R S19 $200
Cullen D A13 $200
Seratti R A36 $200
Rozar R A70 $200
Leibham R A26 $200
Barker D A38 $200

Committee to Elect a Republican Senate

R -- $150
Ourada R A35 $150
O’Malley R A81 $150
Brennan, M D S15 $150
Deeken D S05 $135
Assembly Democratic Campaign Committee D -- $125
Adelman D S28 $100
Barry R S27 $100
Swoboda D A01 $100
Travis D A81 $100
Cowles R S02 $100
Kunicki D A08 $100
Notestein D A19 $100
Potter, R D A20 $100
Hauser R A87 $100
Wilder D A67 $100
Marlow R S11 $100
Mistele R S27 $100
Klecker R A81 $100
Staskunas D A15 $100
Rice D A92 $100
Soik R S28 $100
Bergum T A80 $100
Lippert, M R A70 $100
TOTAL $90,339

* “A” means Assembly and “S” means Senate. The figures refers to the district number.

TABLE 2
TOP NURSING HOME INDUSTRY CONTRIBUTORS
TO THE GOVERNOR 1993-1998

CONTRIBUTOR LOCATION EMPLOYER AMOUNT
Dennis L. Heyde Chippewa Falls Heyde Health $5,500
Melvin E. Lynn Park Falls Park Manor $4,650
Thomas Schanke Waukesha Oakridge $3,780
Guy W. Smith Menomonee Falls United Health $3,750
Joy Ann L. Moy Racine Lincoln Lutheran $3,225
Terrel L. Friese Rhinelander Peterson Health $2,500
Stan C. Jones Wausau Wausau Manor $1,750
Patrick Murphy Pewaukee Care-Age $1,750
Abraham Gosman Palm Beach, Fla. NA $1,500
Lawrence J. Kutz Hurley Villa Maria $1,500
Richard J. Rau Cedarburg Mequon Care $1,350
Marvin J. Kramer Cottage Grove Friendship Manor $1,080
Delores M. Moyer Madison Elder Care $1,030
Stewart Bainum Silver Spring Manor Care Inc. $1,000
Tim Rennes Peshtigo Rennes Nursing $1,000
James M. Sharpe Oconto Falls Falls Nursing $1,000
Harold M. Swanto Muskego Muskego Nursing $1,000

TABLE 3
TOP NURSING HOME INDUSTRY CONTRIBUTORS
TO LEGISLATIVE CANDIDATES
1993-1998

Contributor Candidate Party Office Amount
Wanda Preisler
Park Manor, Park Falls
$6,300
  Stefonik R S29 $1,000
Welch R A41,S14 $1,000
Krcma R S29 $1,000
Jacobson R A86 $750
Laufenberg R A68 $500
Levanetz R S12 $500
Schafer R A68 $500
Moser R A87 $500
Jensen R A32 $150
Farrow R S33 $100
Gard R A89 $100
Moen D S31 $100
Rozar R A70 $100
CONTRIBUTOR CANDIDATE PARTY OFFICE AMOUNT
Melvin E. Lynn Jr.
Park Manor, Park Falls
$5,357
  Krcma R S29 $750
Zien R S23 $350
Welch R A41,S14 $500
Moser R A87 $500
Moen D S31 $457
Schafer R A68 $450
Stefonik R S29 $400
Farrow R S33 $350
Jacobson R A86 $300
Jensen R A32 $300
Rosenzweig R S05 $200
Committee to Elect a Republican Senate R NA $150
Petak R S21 $150
Gard R A89 $100
Handrick R A34 $100
Hauser R A87 $100
Marlow R S11 $100
Rozar R A70 $100
CONTRIBUTOR CANDIDATE PARTY OFFICE AMOUNT
Tim & Debbie Rennes
Rennes Nursing Home, Peshtigo
$4,226
  Drzewiecki R S30 $3,026
Gard R A89 $1,200
CONTRIBUTOR CANDIDATE PARTY OFFICE AMOUNT
Dennis Heyde
Heyde Health, Chippewa Falls
$2,475
  Schafer R A68 $1,250
Zien R S23 $500
Kreibich R A93 $300
Sykora R A67 $225
Moen D S31 $100
Wilder D A67 $100
CONTRIBUTOR CANDIDATE PARTY OFFICE AMOUNT
Terrel Friese
Peterson Health, Rhinelander
$2,243
  Handrick R A34 $1,068
Levanetz R 12 $775
Ourada R A35 $150
Cowles R S02 $100
Mistele R S27 $100
Rosenzweig R S05 $50

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