Long-Term Care Reforms in OECD Countries

Cristiano Gori, Jose-Luis Fernandez, Raphael Wittenberg, Gori, Cristiano, Fernandez, Jose-Luis, Cristiano Gori, Jose-Luis Fernandez, Raphael Wittenberg

• Publisher: Policy Press
• Year: 2016
• Print ISBN: 9781447305057, 9781447305057
• eBook ISBN: 9781447334644
• Edition: 1
• Topic: Scienze sociali
• Subtopic: Metodologia e ricerca nelle scienze sociali

Since the early 1990s, long-term care policies have undergone significant transformations across OECD countries. In some countries these changes have responded to the introduction of major policy reforms while in others, significant transformations have come about through the accumulation of incremental policy changes.

The book brings together evidence from over 15 years of care reform to examine changes in long-term care systems occurring in OECD countries. It discusses and compares key changes in national policies and examines the main successes and failures of recent reforms. Finally, it suggests possible policy strategies for the future in the sector.

With contributions from a wide range of experts across EECD countries, this book is essential reading for academics, researchers and policy-makers in the field of long-term care policy.

Part One

Funding

TWO

Demand for care and support for older people

Raphael Wittenberg1

Introduction

This chapter considers the drivers of demand for care and support for older people and trends in those drivers in developed countries. It concentrates especially on trends in disability, as the key indicator of need for care and support, and trends in household composition, as an indicator of the availability of unpaid care by family members. This chapter sets the scene for discussions in later chapters.

Understanding the drivers of demand is crucial in the context of policy concerns about the future affordability of care and support for older people. Projections of likely future demand are required to ensure that policy decisions are based on evidence, and projections in turn require clarity about the factors that can be expected to have an impact on demand and the likely trends in those factors.

Care and support – often referred to as social care or long-term care (LTC) – aim to help people with personal care and domestic care tasks. The July 2012 White Paper on care and support in England, for example, defines social care as ‘care and support [which] enables people to do the everyday things that most of us take for granted: things like getting out of bed, dressed and into work; cooking meals; seeing friends; caring for our families; and being part of our communities’ (HM Government, 2012, p 13). The Organisation for Economic Co-operation and Development (OECD) has similarly defined long-term care as ‘a range of services required by persons with a reduced degree of functional capacity, physical or cognitive, and who are consequently dependent for an extended period of time on help with basic activities of daily living (ADL), such as bathing, dressing, eating, getting in and out of bed or chair, moving around and using the bathroom’ (OECD, 2011, p 14).

Unpaid carers, also referred to as informal carers, provide the majority of care and support for older people. These comprise in particular spouses/partners and adult children/children-in-law of the person needing care, but may include other relatives, friends or neighbours. Since unpaid carers provide so much care and support, relatively small changes in the availability of unpaid care may have relatively large impacts on demand for formal care services.

LTC services include residential care in care homes, day care, a range of home-based care services, professional support services such as social work and occupational therapy and aids and adaptations. They include support for unpaid carers as well as services for those with care needs. The precise boundary between LTC/social care and acute health care varies between countries, as does the terminology, with international literature generally referring to ‘long-term care’ rather than ‘social care’ or ‘care and support’.

There has been a long-standing policy in most if not all OECD countries towards home-based care rather than residential care, as older people generally prefer to remain in their own homes as long as possible. There is also a developing policy in many OECD countries towards consumer-directed care, known in the UK as ‘personalisation’. This may involve accounts or vouchers, such as personal budgets in the UK, which care users may draw on to fund care. Or it may involve cash payments in lieu of care services, such as cash payments under the German long-term care insurance scheme. Recipients may be required to use these accounts or payments for purposes related to their assessed care needs under a care plan, or may be free to use them as they please, including to employ family carers. These changes in the balance between residential and home-based care and in the balance between services and vouchers or cash payments may have an impact on demand, especially if people needing care have strong preferences.

LTC services are by their nature highly labour-intensive. The costs of care are mainly staff costs, especially in the case of non-residential services. The workforce consists in most if not all countries of a minority of highly qualified social workers, nurses or other professionals and a majority of carers who tend to have limited, if any, specialist qualifications. Much of the workforce is low-paid, part-time and mobile between jobs. In some countries there is considerable reliance on immigrant workers. This means that the unit costs of care such as the cost of an hour’s home care are likely to rise in line with average earnings of relatively low-skilled, low-paid workers.

The extent to which there is a market for care services varies between countries. Some countries, such as Denmark, have a tradition of mainly publicly funded provision. Other countries, such as the UK, have a mixed economy of provision, with mainly independent sector for-profit and not-for-profit provision. Where countries seek to move towards a more mixed economy of care, with a greater role for the for-profit or not-for-profit independent sector, this may have an impact on the range of services available to users and their prices.

There is also a variety of financing mechanisms for LTC services. The systems that OECD countries have adopted to fund care fall broadly into four categories, as follows:

• social insurance, as in Germany;

• taxation and means-tested user charges, such as in the US and the UK (except Scotland);

• taxation without means-tested charges, as in Austria, Denmark and Scotland; and

• social insurance and taxation, such as in Japan.

These differences between countries in terms of funding and provision of LTC tend to reflect different cultures and traditions within the broader welfare state. They need to be recognised when considering factors affecting the demand for LTC, especially where countries reform or consider reforming their financing system.

Factors influencing demand and supply of care and support

The demand for most goods and services is generally considered to be a function of their prices, the prices of close substitutes or complements, people’s incomes and people’s tastes or preferences. The latter may, in turn, be influenced by a range of personal characteristics such as the person’s age, gender, ethnicity or education.

The demand for care and support is clearly a derived demand. People want care and support as a means to the enhanced independence and wellbeing that they can promote: they are sought as the means to the ultimate goal of improved outcomes. This implies that the person seeking care and support perceives a need for care. The person may be unable to perform personal care or domestic tasks without help or may experience considerable difficulty performing them without help. This may be the result of physical or sensory disability, cognitive impairment, mental health conditions or learning difficulties or, especially for people in late old age, a combination of physical and cognitive impairments resulting from a combination of long-term health conditions.

Demand for care and support should be distinguished from need. It takes account of the person’s willingness and ability to purchase care and support. If, for example, a person has considerable difficulty conducting personal care tasks but does not want help to perform them, the person could be regarded as having a need for care but not a demand. There is clearly scope for debate about how to define need for care – health care need is often defined in terms of ability to benefit from treatment. On a similar approach, a person could be regarded as needing care and support if they have difficulty with personal care or domestic tasks and could benefit from help with those tasks, that is, if they could achieve better outcomes in terms of wellbeing as a result of receiving help. Demand would then arise if the person not only needed care and support, but also wanted to receive care and was, if required, able and willing to pay for it (Wittenberg et al, 1998).

These considerations suggest that demand for care and support can be regarded as a function of the following: disability that is likely to be associated with physical and mental health; price of care; income and wealth; and preferences that may vary by age, gender, ethnicity and other characteristics.

Three forms of care need to be distinguished in terms of costs to the care recipient: unpaid care by family and friends, publicly funded care services, and privately purchased care services. Unpaid care generally involves no direct cost to the care recipient, although there may be some reciprocation, possibly in terms of a bequest, but this does involve costs to the carer. The second may also involve no cost to the care recipient where care is free at point of use, but does involve a cost where publicly funded care is subject to user charges. The third clearly involves a cost to the care recipient or their family on their behalf.

To understand the factors likely to influence demand for each of these forms of care, it is important to understand the relationship between them. There are several issues to consider. For unpaid care, it is difficult to posit demand for unpaid care in the absence of potential supply. Since most unpaid help with personal care tasks for older people is provided by spouses/partners or adult daughters or sons, there cannot, in practice, be demand for unpaid care unless the person has a partner or adult child (or, more rarely, other close relative or friend) willing and able to provide care.

Demand for publicly funded care services is likely to be influenced by whether or not the person receives unpaid care, in addition to the factors discussed above. People needing care may have strong preferences between unpaid and formal care. Some may prefer care by close family and seek formal care only if their family cannot provide all the care they need. They may feel that receipt of formal services involves stigma, perhaps especially in countries such as the US and England, where publicly funded care is subject to a means test and intended as a safety-net. Other people may prefer to avoid being or feeling that they are becoming a ‘burden’ on their families, and prefer to receive formal care services.

There has been considerable research interest in the issue of whether unpaid care and formal care are substitutes or complements. Some studies have found that formal services tend not to ‘crowd out’ unpaid care, but may lead unpaid carers to provide different forms of support. Others have found that provision of formal care does tend to lead to a reduction in unpaid care. The evidence suggests that the relationship between unpaid and formal care varies with the type of service, that is, residential care or home-based care, and with the direction of the relationship (Pickard, 2012). Increased provision of unpaid care reduces the use of long-stay residential care, but increases in formal home-based services have little impact on the provision of unpaid care (Pickard, 2012).

The relationship between unpaid and formal care also depends on countries’ policies on eligibility for publicly funded care as well as on the preferences of carers and care recipients. In some countries, including England, eligibility for social care is affected by whether or not the person receives informal care, that is, the system is ‘carer-sighted’. In other countries, including Denmark, the eligibility criteria take no account of unpaid care, that is, the system is ‘carer-blind’ (Eleftheriades and Wittenberg, 2013).

The German long-term care social insurance system does not take direct account of unpaid care when determining eligibility for benefits. It gives beneficiaries a choice between cash or services (or a combination of the two), but the cash benefit is worth only slightly more than half the value of the care package. In France, the availability of unpaid care does not influence into which of the six need categories – Groupes ISO Ressources (GIR) – a client falls, but the availability of unpaid support from the client’s family and social network is considered in determining the size and content of the care plan, subject to the funding ceiling for the GIR category. The Dutch eligibility framework distinguishes between the ‘usual care’ provided by others living in the same house as the client, and support provided by other family members, friends and neighbours living elsewhere. Publicly funded support should not replace ‘usual care’, which includes all domestic tasks and personal care for the first three months of a client’s support needs, unless there is a risk of burnout for the carer (Eleftheriades and Wittenberg, 2013).

Demand for privately funded care can be expected to depend not only on the availability of unpaid care, but also on eligibility for publicly funded care. People who are eligible to receive as much free or subsidised care as they require of the quality they require would not seek to purchase care privately. Private purchase is likely where people are not able to receive sufficient unpaid and/or publicly funded care of the quality they want to meet their perceived needs.

In summary, demand for formal care and support services can be expected to depend on a range of factors including: needs in terms of disability, prices of services, income and wealth, availability of unpaid care, the funding system for public programmes and personal preferences. After a section on population ageing, the following sections concentrate on disability and on household composition and unpaid care as key drivers of the demand for care services.

Population ageing

All OECD countries are experiencing ageing populations: this is due to rising life expectancy and, in many countries, to baby boom cohorts starting to reach old age. The proportion of the population who are aged 65 and over, however, varies between countries, as does the projected growth in the proportion aged 65. The variation is even greater for the current and future proportion aged 80+. It is this oldest old group whose numbers are especially important for social care, since social care in later life is so heavily concentrated on this group.

Eurostat projects that people aged 65 and over will become a much larger proportion of the overall European Union (EU) population over the coming decades, rising from 18 per cent of the population in 2013 to 28 per cent in 2060. The proportion aged 80 and over will increase even more rapidly, from 5 per cent in 2013 to 12 per cent in 2060. Across the EU the numbers aged 65 and over are expected to rise by 59.1 per cent between 2013 and 2060, and the numbers aged 80 and over by 138.4 per cent over this period. Projections for a number of countries are set out in Table 2.1 below.

Trends in disability

The need for social care is related not to age per se, but to disability. While prevalence of disability rises with age, it is by no means the case that the majority of older people are disabled to the extent that they require social care. In Britain, for example, around 22 per cent of the population aged 65 and over cannot perform personal care tasks without help. This rises from around 10 per cent for those aged 65 to 69 to over 50 per cent for those aged 85 and over.

Table 2.1: Projected number of people aged 65 and over (millions)

The most important driver of a need for LTC in old age and at younger ages is clearly disability. A crucial issue is how to define disability for the purpose of ...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of tables and figures
• Notes on contributors
• One: Introduction: José-Luis Fernández and Cristiano Gori
• Part One: Funding
• Part Two: Models of care
• Part Three: Carers
• Part Four: Institutional actors