Long-Term Care: the Economic and Fairness Challenge for Scotland David Bell Stirling Management School University of Stirling

Long-Term Care: the Economic and Fairness Challenge for Scotland

David BellStirling Management School

University of Stirling

Scottish Care Conference Nov 2011 2

Long-term Care: the Economic and Fairness Challenge

• The Challenge

– Delivery of sustainable care to those in need as efficiently as possible• Both providers and workers must have an incentive to stay in the market.• Outcomes may be enhanced by reallocating resources from health to care• Preventative spending may improve efficiency

– Deliver of care as equitably as possible• Fairness between different groups of older people• Fairness between generations


Long-term Care: the Economic and Fairness Challenge

• The Barriers

– Resources• Resources are scarce and economic growth is not certain• Both providers and workers must have an incentive to stay in the market.• Preventative spending may make the best use of resources• Overcoming the bias to acute care

– Equity• The insurance market has largely failed.• Who should pay? - taxpayers or beneficiaries?


Where are we now?• Ten years after introduction of free personal care• Substantial shift in the balance of care• Main demographic effects of population ageing yet to be felt• Wide variations between local authorities in levels of provision• Evidence base still weak – recent moves to link of social care, housing support and

health data may be useful• No longitudinal survey of ageing in Scotland – HAGIS – application to National

Institute of Ageing in preparation• Modest moves towards personalisation – Self-directed support bill to be introduced

this session• Health spending has been protected (falls by 1 per cent 2011-12 to 2014-15). (Scottish

Budget 2012-13 and Spending Review 2011)• Local govt. experience cuts (falls by 6.3 per cent falls by 1 per cent 2011-12 to 2014-

15)

• Our neighbours? Wanless and Dilnot reviews• Still not clear that a new policy for funding long-term care will be introduced• Funding long-term care still a major source of concern for older people


The Size of the Care Home Market in Scotland

LA/ NHS Private Voluntary-25%

-20%

-15%

-10%

-5%

0%

5%

10%

Change in Registered Places 2000-2010

Mar-00

Mar-01

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09r

Mar-10

32,000

32,500

33,000

33,500

34,000

34,500

35,000

Scottish Care Homes: No of Residents

No of Care Home Places at End of 2010

LA/ NHSPrivateVoluntary


Care Home Stays and Charges

% % % % % % %

Less than one

month

1 - < three

months

3 - < 6 months

6 months

- < 1 year

1 year < 3

years

3 - < 5 years

5 years and

above

0

10

20

30

40

Residents by Incomplete Length of Stay

Perc

ent

of T

otal

Publicly Funded Residents - Without Nursing Care

- With Nursing CareSelf Funders

- Without Nursing Care - With Nursing Care

All Funded - Without Nursing CareAll Funded - With Nursing Care

£0£200

£400£600

£800

Weekly Charge 2010

Modal stay = 2 years

At average cost of £550 per week

Average cost = £57,200


Care home costs and household incomes


Public transfers as a share of the adjusted income of individuals 65 years and over, mid-2000s

United States Japan Germany France Italy Sweden0%

10%20%30%40%50%60%70%80%90%

100%Deciles 1 to 5 Deciles 6 to 9 Decile 10

Luxembourg Mexico Netherlands Spain New Zealand United Kingdom

0%10%20%30%40%50%60%70%80%90%

100%Deciles 1 to 5 Deciles 6 to 9 Decile 10


Household composition of net-worth

Canad

a

Finlan

d

German

yIta

ly

Swed

en

United Kingd

om

United St

ates

United St

ates

0102030405060708090

100

Non-financial assets


England – solution to LTC funding in sight?

• Dilnot - Risk Sharing

– Individuals’ lifetime contributions towards social care costs should be capped at £35,000.

– The means-test threshold, above which people are liable for their full care costs, should be increased from £23,250 to £100,000

– Survey of private operators found that 61 per cent of operators believe insurance is the best solution for funding care in the future

– Attendance Allowance and Disability Living Allowance for the over 65s too difficult

– Implications for Scotland?


Preventative spend?

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06

2006/07

2007/08

2008/09

2009/10p

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

Percent of year spent in emergency admission bed

Over 75Over 65


Employment in NHS and local authorities (2008=100)

19992000

20022004

20062007

20092011

60

70

80

90

100

110

NHSLocal Govern-ment

“The labyrinthine and outdated nature of social care law, added to but fundamentally unreformed since 1948, certainly offers rich pickings for lawyers” Guardian: Tuesday 15 November 2011

Likely to be pattern of employment change in Scotland for the mediumTerm at least.


Local authority net spending

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10£0m

£100m

£200m

£300m

£400m

£500m

£600m

£700m

Net Expenditure on Care Older People by Local Authorities

Care HomesCare at Home


Free personal care?

• Gradually increasing as a share of local authority long-term care spend

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Expenditure on FPNC as percentage of Net Expendi-ture on Care Homes for Older PeopleExpenditure on FPC as per-centage of total Net Ex-penditure on Home Care ServicesExpenditure on FPC as share of total Net Expenditure on Care Services


Free personal care effect on unpaid care?


Time to recalibrate the forecasts?

Range and Capacity Review: Projected costs of care for older people (£m) 2004 2009 2014 2019 Growth 2004-9 Actual 2004-09 Growth 2009-19NHS bed 173 214 264 327 24% 53%Private nursing home 438 534 652 803 22%

21%50%

Residential care home 261 320 392 484 23% 51%Sheltered housing - - - - LA Home care 202 243 296 361 20% 48% 49%Private care 162 190 231 278 17% 46%Day care 47 57 69 84 21% 47%District nurse 87 103 125 150 18% 46%Health visitor 5.8 6.8 8.2 9.9 17% 46%NHS Chiropody 24 28 34 40 17% 43%NHS expenditure 318 385 472 579 21% 50%LA expenditure 765 928 1,134 1,392 21% 30% 50%Private expenditure 318 382 464 567 20% 48%Total expenditure 1,402 1,695 2,070 2,538 21% 50%


Inter-generational Equity

• “The strain on public finances imposed by demographic change in the coming decades will amplify threats to the intergenerational contract. By seeking to extend the intergenerational contract through state-funded universal free care, supporters of this model risk stretching it to destruction” Lloyd , J. (2008) “A National Care Fund for Long-Term Care”

2010 2015 2020 2025 2030 20350%5%

10%15%20%25%30%35%40%45%

0%1%2%3%4%5%6%7%8%9%

Ratio of 65+ to Work-ing AgeRatio of 85+ to Work-ing Age

Increase in population 85+ from 2010 to 2035 = 247%


Further key issues for efficiency and fairness

• Viability of sector• Adaptation to personalisation• Workforce recruitment and training• Reform to welfare benefits• Reforming the means test• Changing housing market• Care provision in rural areas• Support for unpaid care • Care standards regime in a very tight spending environment• Interaction of health and social care (eg Highland)• Effective information systems to map the client journey and

calibrating preventative interventions• Systems for maximising efficiencies and spreading best practice

Documents

Long-Term Care: the Economic and Fairness Challenge for Scotland David Bell Stirling Management School University of Stirling