Hartford Business Journal

20 Hartford Business Journal • July 13, 2015 www.HartfordBusiness.com OPINION & COMMENTARY EDITORIAL Home care: A smart way to deal with CT's aging population C onnecticut policymakers often get a bad rap, sometimes deservedly so, for their inability to properly manage the state's affairs. The recent state budget that raised taxes by $1.3 billion, for example, cast a dark shadow of discontent over Hartford's Golden Dome. One area, however, where state government is actually on the right track is dealing with its aging population. Specifically, the state's focus on moving older residents into homecare settings, rather than much higher cost institutional care, is smart policy and should continue and even be expanded. As Hartford Business Journal has been reporting in recent weeks, Connecticut is one of the 10 oldest states in the country, and its population is getting grayer by the day. In the next 15 years, more than 247,000 Connecticut residents are expected to move into the 65-plus age group, repre- senting a 45 percent increase compared to 2013, according to the U.S. Census Bureau. That will usher in an era of higher demand for healthcare services, and unless the state figures out ways to keep seniors healthy and rein in costs, the financial burden will be overwhelming. Home care is a logical way to keep costs in check. The median annual cost for home health aide services in Con- necticut, for example, is $50,336, versus $66,900 for an assisted-living facility, according to the Genworth 2015 Cost of Care Survey. A semi-private room in a Connecticut nursing home costs about $146,000 annually, while a private room goes for $158,775, the survey said. As HBJ's Matt Pilon reports in this week's issue, state policymakers between 2008 and 2015 leveraged the federally-funded "Money Follows the Person" program to transition 2,974 nursing home patients into community settings. The state's goal is 5,000 by next year. We encourage the state to meet that benchmark and set even more aggressive goals in the future. We understand, however, that home care is not a panacea to easing the cost burden of the state's graying population. There are many elderly residents who need round-the- clock, more advanced care that nursing homes offer. Institutionalized care still must be part of the equation, just less so than it is now. There is also a major concern about the long-term health of the homecare industry, which has warned that inadequate Medicaid reimbursements make it hard to attract and retain low-wage personal care aides. Meantime, the Department of Labor predicts the state will need 9,000 more personal care aides by 2022, creating a potential workforce shortage. It's unlikely state government will dramatically boost Medicaid reimbursements, so personal care will remain a low-wage industry for the foreseeable future. That could be a threat to the industry's talent recruitment. Even still, home care must remain a viable option for Connecticut's burgeoning class of seniors, allowing more elderly residents to remain in the comforts of their own home and the state and federal government to rein in healthcare spending. n RULE OF LAW Overregulation hurts CT businesses By John Horak I f nothing else, the agony of this year's legis- lative session brought into sharp focus the issue of Connecticut's business climate — which is affected not only by tax rates but also by the extent to which the state's regu- latory agencies impose and enforce a wide variety of licensure, reporting, permitting and other obligations on business and nonprofit organizations. Of course, mem- bers of the business community frequent- ly complain about "excessive" regulation and the chilling effect it has on the business climate. Similarly, there is a well-worn contrary opinion. State Sen. President Martin Looney was quoted in the June 27 edition of the Hartford Courant to the effect that complaints about the state's business climate are "overblown." I realize that public sound-bites like "exces- sive" and "overblown" are part of the rhetori- cal currency used to sway public opinion, but maintain that if we undertake a reasoned anal- ysis of the facts and the law, it becomes clear that complaints about excessive regulation are well founded. First, reasonable people should agree about two things: Regulatory oversight is necessary for many self-obvious reasons (to prevent law break- ing, protect the inter- ests of the public and the like), and a robust business sector is a necessary condition to the state's livelihood. Business regulation is not a zero-sum game, and everyone wins if, as Goldilocks would say if she were a regulator, the degree of regulation is not too hot, not too cold, but just right. Second, I suspect that most people would agree in principle that regulations and legal actions to enforce them should be tested against a common sense and simple cost-ben- efit principle. The practical utility or benefit of a regulatory matter should be greater than the cost of regulatory compliance to both the state and the regulated entity. I am not saying that we can reduce this question to a math- ematical expression, but regulatory action should be based on a reasoned case state- ment that the cost is justified by the benefit. Let me provide an example. In the 1960s, the Connecticut River and its tributaries were terribly polluted. I grew up near one of the tributaries and in hot summer months its stench permeated the neighborhood. The massive changes in environmental law and accompanying regulations in the interim paid great dividends when you look at the recreation- al uses we make of these rivers today. In contrast, there are the Department of Energy & Environmental Protection's chari- table car wash guidelines. They provide that there "are no licensed or approved products that may be used to wash vehicles outside" … [and] that for "fund-raising car washes, the first consideration should be to find an alter- native activity to earn money." As a practical matter I have to believe that the personal ben- efit youngsters obtain from working together to wash a few cars with some dish soap far outweighs the risk to the environment and whatever costs DEEP incurs pursuing envi- ronmental scofflaws in little league uniforms. Third, any regulatory agency action that exceeds the legal authority of the agency is excessive per se. Unfortunately, this self- obvious point needs to be made because the evidence suggests that agency personnel have either not been properly schooled in the law, or have simply pushed the legal envelope incre- mentally beyond the breaking point without being called on the carpet for doing so. Here is an example: Last year a state social services agency issued directives telling non- profits it funded how to constitute their govern- ing boards and requiring that certain profession- al staff positions not be filled until candidates were interviewed by the agency. I urged clients to resist these directives because the agency did not have the legal authority to intervene in these internal matters. In subsequent conversations I was told that senior agency officials believed they could do whatever they wanted unless the General Assembly by statute had specifically denied them the power. Any first year law student will tell you that the law is the exact oppo- site. Regulatory agen- cies have only those powers delegated to them by the General Assembly. Fourth, the bal- ance of power favors the agencies because they have no financial "skin in the game." They have salaried state staff attorneys to bring their cases, and pay no penalties if they lose. On the other hand, regulated businesses must pay out-of-pocket legal fees regardless of the outcome. The imbalance encourages businesses to settle even when they are right because they cannot afford the cost of the fight. An example: In my February 2 column I discussed DEEP's appeal (still pending) of a lower court decision in its favor (people usu- ally appeal losses, not wins) against a family- owned junk yard because, in DEEP's opinion, the lower court did not impose a large enough penalty on the junk yard. The owners of the business are paying legal fees for appellate litigation because of DEEP's desire to cre- ate judicial precedent more to its liking (and which costs DEEP nothing). Let me close by repeating my first point — state regulation is necessary for self-obvious rea- sons. However, regulation is an activity ancillary to the preservation of a fair business climate, and not an end unto itself. The degree of business regulation is excessive and the concerns of the business community are not overblown. n John M. Horak has practiced law at Reid and Riege P.C. in Hartford since 1980. The views expressed are his own. HARTFORDBUSINESS.COM POLL Would a merger of leading health insurers benefit consumers? ● Yes ● No ● Maybe To vote, go online to HartfordBusiness.com. Last week's poll results: What percent of your workforce is aged 55 or above? 33.3% Less than 25% 42.4% 25-50% 18.2% 51-75% 6.1% More than 75% John Horak ▶ ▶ Business regulation is not a zero-sum game, and everyone wins if, as Goldilocks would say if she were a regulator, the degree of regulation is not too hot, not too cold, but just right. ▶ ▶ Home care must remain a viable option for Connecticut's burgeoning class of seniors, allowing more elderly residents to remain in the comforts of their own home and the state and federal government to rein in healthcare spending.

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