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Put The LTC Policyholder In The Driver's Seat

The following is an excerpt from an article which appeared in the December 14, 1998 edition of National Underwriter:

Put The LTC Policyholder In The Driver's Seat

By Samuel X. Kaplan

What cutting edge products should the insurance industry introduce in order to make the long-term care insurance product a true benefit? 

Let's look at the real needs of LTC policyholders and their families, not the needs of the insurers, and find ways to shape benefits to meet these requirements. 

I am suggesting this, because any discussion of innovation in product development should take into consideration the market the product is intended to serve. 

Too often, the customer gets lost in the shuffle. 

The development of a true "cutting edge product" begins by enabling insurance policyholders to be directly involved in managing the services they require. 

They should have direct control over the selection, supervision or severing of the services of any provider. 

Here are some "cutting edge" LTC ideas that should allow policyowners to do just that: 

Offer a "parental assignment benefit."
This would allow policyholders to assign a percentage of their own LTC benefits (say, 50 percent) to parents or stepparents (say, two parents) who are identified as eligible at the time of underwriting. 

This would be a true "peace-of-mind" benefit, because the policyholder knows that if one or both parents have a LTC need, the care is covered. 

Also, because it allows policyholders to arrange for the LTC needs of eligible family members in the event of sudden need, it gives the family time to consider making other arrangements for their parent(s) or to make changes in their parents' existing LTC plan. 

Allow access to care.
Here, the only benefit trigger required to receive unskilled home care services (e.g., cooking, cleaning, shopping) would be a deficiency in one of six "instrumental activities of daily living," supported by medical necessity. 

No benefit trigger would be required to enter a nursing home. This would give policyholders easy access to LTC when needed and cover what consumers believe they need to retain quality of life. 

Offer a "home care maximizer."
Many times during the first month home after hospitalization, costs incurred for services (e.g., 24-hour care) far exceed the monthly benefit allowed. 

A "home care maximizer" benefit could help pay this by covering a multiple of the monthly home care benefit (say, up to two times the monthly limit). This would be an additional benefit, not offset against the policy's lifetime maximum, and could be used at any time, until exhausted. 

Example: If the monthly benefit is $4,000, an additional $8,000 would be available. 

This would be another peace of mind feature, enabling policyholders to have the temporary additional care required, without expending personal resources, at a time when the insured is most vulnerable. 

Credential the facilities.
Perhaps the best way to put policyholders in the driver's seat is to provide them with the information they need to make informed decisions. The credentialing and publishing of reports concerning LTC facilities is a major step in this direction. 

Onsite credentialing initially requires determining areas to be reviewed—such as treatment observations, patient satisfaction, assessment of pharmacy, and administrative practice review. 

Then, develop protocols to measure quality in these areas. (For more discussion of quality credentialing, see "The Missing Link in Long Term Care," National Underwriter Oct. 12, 1998.) 

Require facilities to assess and manage residents' pain.
This would require a protocol for pain assessment, something that is currently lacking in nursing homes. 

I believe that, during the credentialing process, the facility's medical director and director of nursing should be queried regarding their background and experience with pain management and the possible lack of pain recognition by nurses and attending physicians. 

If this training is lacking, education in this area should be instituted as part of the quality monitoring process. 

Obtain feedback from the policyholder and family.
Perhaps the most overlooked area in LTC policies is obtaining feedback from policyholders and their families concerning the care they want, the care they are receiving, and their opinion of quality of care. 

As I see it, the policyholder should be an integral part of the care assessment process. 

This means that policyholder surveys are extremely important to the ongoing improvement of care and overall level of satisfaction.

Through features and processes such as those mentioned here, LTC insurance companies can put the policyholder in the driver's seat—and build a better engine for the future. 

That's because true "cutting edge" products emerge when insurers listen to what customers say they need to retain quality of life. 

Yes, there will be a cost associated with adding these features, but the overall cost of care will be less than they are today—because people require less long-term attention and care when their needs are met. 

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