Stuart Ho [Honolulu Star-Advertiser (HI)]

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Stuart Ho wants you to know that Hawaii is likely in for a rough ride: A wave of seniors who will increasingly need long-term care is about to crash on its shores, and a commission legislatively created in 2008 that he chairs believes we are not prepared to handle its consequences.

Ho, 76, is not a newcomer to the Hawaii business or political scene. After graduating from Punahou School here and Claremont McKenna College in California, serving in the U.S. Army, and earning a law degree from the University of Michigan, Ho worked as a deputy corporation counsel for the city, served in the state Legislature, and eventually succeeded his father, Chinn Ho, as chairman of the family business, Capital Investment of Hawaii. His father's accomplishments included converting the Ilikai into a hotel and condominium, developing the Makaha Inn & Country Club, owning the Hawaii Islanders baseball team, owning the Honolulu Star-Bulletin, and much more.

When the newspaper was sold to Gannett Corp., Stuart Ho became chairman of Gannett Pacific Co. Later he served as president and chief executive officer of the Rehabilitation Hospital of the Pacific, before retiring from the business world five years ago.

Ho's children include Bank of Hawaii President Peter Ho and restaurateur Cecily Sargent. His other daughter, Heather, was a chef who died in the 2001 terrorist attack in New York.

Ho is a former University of Hawaii regent, a past president of the Waialae Country Club, a past trustee or director of various businesses and community groups, and still a trustee of the UH Foundation. He also is current president of AARP Hawaii, which led him to become chairman of the 20-member Hawaii Long-Term Care Commission.

Ho said the group "scraped together" some $600,000 from interested parties -- "not one dollar of which was out of the state" -- to pay for its work, which included hiring Joshua Wiener of RTI International in Washington, D.C., "one of the best experts on long-term care in the United States."

Ho said the idea for the commission was "born in the Senate ... with some collaboration by AARP."

Ho, who lives in Waialae-Kahala with his wife, Elizabeth, an area field service director for AFSCME, said he hopes to retire from AARP someday soon, but meanwhile he wants to help Hawaii prepare for the long-term care problems being created by its shifting demographics.

Question: Who is conducting the hearing on Jan. 6 at the Capitol at which the public is invited to comment on the recommendations of the Hawaii Long-Term Care Commission?

Answer: We are, the commission is. Specifically, we hope to elicit comments from the people who are the so-called stakeholders -- those who are either in social service organizations that deal with long-term care, consumer groups or whatever -- to get a sense of whether we're on the right track.

Q: Will any legislators be in the house?

A: They are certainly welcome to show up as part of the public, but they're the ones that will be receiving the report.

Q: And that would be finished by ... ?

A: That will be delivered to the Legislature on Jan. 19, which is the day after they convene.

Q: Do you think the public has had enough time to think about this?

A: Well, the people who are most familiar with long-term care were included in a survey we did some time ago, so people know in the long-term care industry. And the makeup of the commission includes sort of a Noah's Ark kind of thing. You know -- one guy from here, one guy from there ...

Q: Would you say business is adequately represented?

A: We tried to be broadly representative. (Commission member) Chuck Sted, of course, is the chief executive officer of Hawaii Pacific Health. Robin Campaniano when we began this was president of AIG Hawaii, and now he's with the Ulupono Initiative, the nonprofit ...

Q: I ask that because one of the proposals is that there be a mandatory long-term care insurance program. Have you run that by any business groups?

A: No, we have not. Had we the time, we probably should have. But businesses have an important enough stake in long-term care. ... I mean, when you start wondering where your employees are at 3 o'clock in the afternoon, it will become very apparent to them.

Q: I was wondering if this is just one more cost businesses can't afford, especially smaller companies.

A: There are two ways to answer that. No. 1 is the way long-term care is trending. ... People who are 85 and older are, even 75 and over, the people who have problems, are becoming an ever-larger part of the population. And the people who usually service them, their caregivers, are becoming an ever-smaller proportion of the population. It's like the Gulf Stream meeting the Atlantic -- something is going to have to give.

And in a town where you have two-income households, and in a town where increasingly kids are leaving and going off to the mainland, you can see the problem there. It's going to result in issues of productivity, or lack of it, and there's got to be a solution that makes better sense than trying to find your missing employees at 3 o'clock in the afternoon.

Q: Are you talking about employees rushing home to take care of their parents or something?

A: Somebody's got to watch them. If they are (watching) full time, then you have other kinds of problems: Where do you find the income while you're home watching your parents?

But there's the other side of the issue, and that is, we were asked to identify if there are any risks to the general population. And, basically, we felt that the population was at risk. ...

We then also were asked to provide solutions. We did the process of elimination. You know -- what are the possible solutions? We knew that the federal government was an unlikely candidate to bail out our long-term care problems. We also concluded that the state, given its fiscal condition, was not a likely candidate to do that either. We looked at the ability of the people themselves to pay for their long-term care needs. We knew that was a nonstarter. Then we looked at the ability of savings -- you know, what they had in their hip pocket -- to deal with. That didn't look very bright either.

So what we did was we offered the only logical solution, and that was long-term care insurance, but only for the working population, because we didn't want a tax. We wanted to craft a solution that may not solve the entire problem but at least would try to put a dent in the problem.

So while we may have provided a logical solution, we recognize it may not be a political solution.

What we're saying is, look, this problem is not going to go away. It's going to get worse. We've gone through the exercise of what a practical person would go through, and we've come up with this, what we think is a logical solution. But we frankly admit that this is something that may not, in the opinion of the Legislature, be a political solution.

Q: What typically happens now if someone needs long-term care?

A: Let me describe it this way: There are actually two worlds out there. You have the world of the poor, and these people have Medicaid they can rely on. There's a program called Quest Expanded Access, which basically is a fancy word for Medicaid. There are 43,000 people enrolled in that program, of which 27,000 are 65 and older. That program consumes, in both federal and state monies, $600 million a year. The rest of the population -- basically 1.4 million, less that 43,000 -- what these people have to face, basically, is that if they run into a long-term care problem, if they go to a nursing home in Hawaii, that's going to cost them, in 2010, $130,00 a year. That's for a private room. Even a semi-private room you're going to be over $100,000.

We did a survey of the public -- a pretty good response rate -- and three-fifths of respondents said that they could not afford to pay any of the cost of a year in a nursing home, or for 24-hour home care. So there's that alternative. The other alternative, of course, is that you're rich. There's a third alternative, and that is that you have long-term care insurance.

Now, the interesting thing about that is that AARP just surveyed its membership in Hawaii -- they have 150,000 members -- and 29 percent of the respondents said they thought Medicare was going to take care of their long-term care needs. Wrong. I mean, absolutely dead wrong.

So there's a lot of misinformation out there, and there's a lot of thinking that it's going to happen to the other guy but it's not going to happen to me.

And yet you got this national statistic that 70 percent of people who turned 65 in 2005 are going to have some long-term care needs before they die. And 35 percent of them will spend some time in a nursing home before they die.

So there you are. This is a population that's on its own.

Q: What would be the easiest to accomplish of the recommendations that the commission made?

A: None of the recommendations are easy. I'm serious. Because one of the biggest problems with long-term care is that problem right there in front of your face, but the level of public awareness is extremely is low.

Q: One of the recommendations is that there be an education program.

A: We educate them about the risk of methamphetamines. Why not the risk to them of their long-term care problems? At least give them a sense of reality that they can't rely on Medicare.

Q: Did you have in mind a particular budget?

A: There has to be political will before you get into minor things like budgets. I mean, the Legislature has got to decide they want to do this.

Q: In terms of encouraging individuals to buy long-term care insurance, what's wrong with tax incentives, which the commission opposed? Even if only rich people buy it, at least they wouldn't be a burden on the system, if they ever need it.

A: Well, we thought that if there was going to be a benefit, that it should benefit the population as a whole.

Q: The commission also said tax credits would result in a substantial loss to the state treasury, which would have to be made up by tax increases or cuts in state spending. But if the credits result in the purchase of long-term care insurance, wouldn't that reduce the need for the state to spend money?

A: One thing we've noticed, notwithstanding that in other states tax incentives did not increase the purchase of long-term care insurance, is that there's got to be something basic.

Q: What about making it easier to become a long-term care provider as a business? Do you think there are a lot of roadblocks there?

A: There are. Hawaii is one of the most expensive places to open up a long-term care bed. Just ask any acute-care hospital administrator. They're screaming and climbing the chandeliers because they can't get people out of their acute care beds and into long-term care beds. None exist.

Q: This idea of somehow converting life insurance policies to help pay for long-term care, isn't that kind of what they used to do for AIDS patients? They knew they were dying, so why not let them tap into it now?

A: The closest thing that we were able to identify, next to the idea of having a long-term care option in the insurance policy, was something called an accelerated death benefit.

What happens there is that when a doctor tells the insurance company, "Hey, my patient is in a terminal situation," many life insurance policies have accelerated death benefits, a provision, where they will start to pay out during that person's life.

It's just an idea we were throwing out, and that came from the working group that included the insurance commissioners.

Q: The commission also talked about reforming the regulation of the various kinds of facilities that provide long-term care.

A: The biggest criticism we ran into in talking to stakeholders out there was that the state's approach to long-term care was fragmented. So if the state, as a government -- recognizing that basically they have a long-term care problem on their hands, dealing with virtually all of the population, and that the kinds of dislocations that could result from an unimproved long-term care situation would really adversely affect the state's economy -- then they might be thinking about a more unified management over long-term care problems, which they don't have now.

THE HAWAII LONG-TERM CARE COMMISSION'S PROPOSALS

These are the eight recommendations by the Hawaii Long-Term Care Commission in its draft final report:

-- Conduct a long-term care education and awareness campaign.

-- Do not enact tax incentives for the purchase of private long-term care insurance.

-- Encourage life insurance as a source of private long-term care funding.

-- Support funding for Kupuna Care.

-- Establish a limited, mandatory public long-term care insurance program in Hawaii.

-- Reform regulation of domiciliary care facilities ...

-- Consolidate state departments responsible for long-term care into a single agency or department ...

Public comment is invited from 2 to 4 p.m. on Friday, Jan. 6 at the state Capitol, Room 229. The full report can be viewed online at http://www.publicpolicycenter.hawaii.edu/ltcc.html.

Credit: Mark Coleman