The Public Management Simulation (PMS) was conceived as a unique way to combine teaching and research in, public administration. The ideal of combining teaching and research all too often finds its expression as a classroom lecture on somebody's pet study or as the lonely process of grinding out a dissertation or thesis. While both of these methods have undeniable merit, they tend to lack the vitality and challenge that comes from working with a group of intelligent and informed people to understand complex social phenomenon. PMS provides an alternative that utilizes the students as policy researchers with the added stimulus of an adversary setting. In this instance the PMS was used to develop alternatives for government funding of Long Term Care.

In the Summer of 1979 Profs. Robert Guhde and Ed Downey of the Department of Public Administration at the College at Brockport offered a special seminar to consider ways to deal with rising health care costs with a focus on long term care. The seminar called Public Management Simulation included a competition among MPA students from Brockport, Syracuse University, and SUNY Albany to see who could come up with the best solutions. The seminar and competition were funded by a grant to the Department of Public Administration from the 1979 Title IX Higher Education Act. Papers from the students were edited and published as a book entitled: Who Will Take Care of Me in 2020? A Speculative Look at Government-Funded Long Term Care. Prof. Guhde submitted the paper written by the Brockport students (Laura Volk, Jeanne B. Hutchins, and Jean S. Doremus) to the Public Administration Review, where it won the prestigious Garvey Award and was published in the Sep. – Oct. 1980 edition of the journal. This work is of interest today because it chronicles earlier attempts to deal with rising health care costs and provides insight into some of the policy and administrative remedies under current discussion.

This chapter presents an argument for the federal domination of Medicaid Administration. Unlike the other chapters, this one includes no counterpoint, no position paper exploring state control of Medicaid Administration due to one participant's inability to sufficiently research the area. While we consider the omission a serious one, there are a few mitigating circumstances. First, the state control perspective is essentially an argument for the status quo which suggests that little which is fresh or innovative would be included. Second, the system of state control for large federally-funded programs that provide local services has been extant in this country for the past decade. Two notable examples, the Comprehensive Employment and Training Act (CETA) and Community Development Block Grants, have long provided us with state control management models.

Consumers of long-term care are primarily the elderly, whose numbers are approaching 25 million; they comprise almost eleven percent of this nation's population.1 They experience higher incidents of chronic disease and long term illness, with the most serious health care problems occurring in those over 75.2 These health care problems are usually costly because of the need for hospital and nursing home care, as well as other forms of intervention, and the unavailability of suitable, less costly alternatives, particularly in rural areas. In addition, these problems are compounded by lack of mobility, poor nutrition, lack of primary care and other elements often related to limited financial resources.

Two arguments, one for full Federal funding and one for a continuance of state - Federal funding of long term care, are made in this chapter. Both arguments have one important area of agreement; they both set forth cost containment as a primary objective of any funding scheme. Furthermore, both suggest that this can best be achieved through some form of prospective reimbursement. Under the present system of retrospective reimbursement Medicaid pays, without limit, for all eligible services provided. This, many believe, encourages the provision of unnecessary services which results in an unnatural escalation of costs. Prospective reimbursement simply means forecasting service needs for some future period (usually one year) and then determining how much will be paid for those services. This would establish a limit or "cap" on Medicaid expenditures which would presumably have the effect of containing run-away costs.

The time to consider our futures, who will care for us when we are the sick and the aged, is now! Today, the answer to that question is often the skilled nursing facility, the most expensive way for society to bundle off the chronic health problems associated with aging. As the elderly increase as a portion of the population, the increase in payments for LTC will cause a massive redistribution of wealth, far outstripping inheritance taxes and other mechanisms for transferring wealth from one generation to another. It will eat away at our national savings and the domino effect it generates may affect the housing industry, industrial investments and other forms of industry reliant upon a ready supply of capital.

A growing public concern about the high cost of Medicaid reimbursement for Long Term Care (LTC) has created the need for careful analysis of the causes & consequences of past public policies and to develop strategies that provide solutions to identified problems. Guiding the team through the assigned simulation, that reflects a serious public concern, were our stated political values serving to shape our policy proposals. Using a systems approach, we analyzed current public policy and explored alternatives. We considered the forces that operate in the environment producing demands on the political system, pressing for allocation of resources toward desired objectives. An integral part of the medical inflation picture, Medicaid reimbursement costs reflect the system's failure to create a cost-effective balance between supply and demand, government and the private sector, quality and price, provider and consumer, flexibility and control.