Disability, Dementia and the Future Costs of

Long-Term CareAdelina Comas-Herrera

In collaboration with Raphael Wittenberg, Linda Pickard, Derek King, Juliette Malley and other colleagues

Personal Social Services Research UnitLondon School of Economics and Political Science

Contact: a.comas@lse.ac.uk

Projecting the costs of long-term care into the future

• We know we will get the wrong answer, unless we manage to develop perfect foresight!

• But it is still useful to make projections:– To understand the drivers of change. – Not all variables involve the same level of uncertainty.

• Sensitivity analysis is vital to understand the robustness of projections. This is particularly important when making projections about different ways of financing LTC that may affect policy decisions.

Funnel of doubt: Long-term care expenditure in the UK as % of GDP

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0.5

1

1.5

2

2.5

3

3.5

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2000 2050

Comparative base case

Using marital statusprojectionsLow Eurostat

High Eurostat

0.5 years delay dep.

1 year delay dep.

Grow th w ith GDP diff .

Wages 0.5% slow er GDP

Wages 0.5% faster GDP

Rise in formal home care

Rise in institutional care

All dependent get formalcare

Determinants of future LTC costs

• Demographic changes.• Trends in functional dependency/cognitive impairment.• Availability (and propensity to provide) informal care.• Structure of the LTC system and patterns of care.• Financing system.• Relative price of LTC and other goods and services.• Economic growth and other macroeconomic factors.• Values and public expectations about the quality, range

and level of care.• Other factors? Quality/adaptability of housing, pensions…

Making projections of future LTC expenditure: the PSSRU aggregate model

• The PSSRU aggregate model aims to make projections of:

– Numbers of disabled older people– Long-term care services and disability benefits– Long-term care expenditure: public and private– Social care workforce

• The results are highly sensitive to changes in the assumptions made about future disability rates.

• What should we assume about future disability rates?

The PSSRU LTC CI model • Based on the England PSSRU aggregate LTC model• Data from MRC-CFAS and PSSRU surveys of residents in care

homes is used to estimate the prevalence of CI and the proportion of care users who have CI.

• Older people and users of services are divided into four disability groups:– No CI or functional disability (FD)– FD but no CI– CI only (used as proxy for mild stages of dementia)– CI and FD (proxy for moderate/severe dementia)

• Simulates the impact on demand of specified changes in demand drivers, or specified changes in patterns of care.

• Makes projections on the basis of specific assumptions about future trends.

See, for example, Comas-Herrera et al., 2007

Key base case assumptions• Numbers of older people change in line with GAD 2006-based

principal population projection.• Age/gender-specific prevalence rates of cognitive impairment

and of functional disability remain unchanged.• Marital status rates change in line with GAD 2003-based marital

status and cohabitation projections.• Constant ratio of single people living alone to single people

living with others.• Proportion of older people receiving informal care, formal

community care services and residential and nursing home care remains constant for each sub-group by age, disability, household composition and other needs-related circumstances.

• Health and Social care unit costs rise by 2% per year in real terms. Real Gross Domestic Product rises in line with HM Treasury assumptions.

Probability of being in an institution for people aged 75 to 84, by gender, household type and

dependency group.Group probability of being in an institution

CI only ADL only ADL & CI

75-84 male Alone 27 38 73

With others 37 49 72

Married 8 7 38

75-84 female Alone 9 26 87

With others 13 36 86

Married 4 3 74

Source: PSSRU CI LTC model estimates (using MRC CFAS data).

Dementia UK

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2002 20310

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2002 2031

Projected total LTC expenditure, at 2002 prices

LTC expenditure as % of Gross Domestic Product

Red – older people with cognitive impairment; Blue - not

Expenditure projections for people with dementia 2002 to 2031

Comas-Herrera et al, IJGP 2007

Assumptions about future disability when projecting future LTC expenditure:

1. Assuming unchanged disability rates 2. Extrapolating from past trends3. Projections based on hypotheses linked to changes

in life expectancy (for example Brookings scenario).4. Asking the experts for their view about the future. 5. Projections using epidemiological models of

chronic conditions and their mortality and disabling outcomes.

1. Assuming unchanged age-specific disability rates

• Seems a reasonable assumption in the context of uncertainty.

• Often criticised by policy-makers who argued this was a pessimistic assumption in the context of increasing life expectancy (this criticism involves an implicit belief that there will be compression of disability).

• Sensitivity analysis showed that LTC expenditure projections were very sensitive to small changes in disability rates.

2. Extrapolating from past trends• A few studies have projected expenditure assuming that past disability

trends would continue into the future. • This approach has been used particularly in countries like the US and

Sweden where disability rates had decreased overy time).

• BUT: Lack of good consistent time series data to estimate past trends in most countries.

• Where consistent data are available, the trends that emerge are often difficult to interpret:

– Different trends observed for different severity levels– Changes in direction (reflecting epidemiological transitions?)– And sometimes different surveys covering the same country and the same

period give contradictory answers (e.g. Great Britain between 1995 and 2001, see LaFortune et al., 2007)

• Is the past necessarily a good predictor of the future?

3. Projections based on hypotheses linked to changes in life expectancy

• Modelling hypothetical assumptions that link the expected rise in life expectancy with assumptions about changes in age-specific disability rates.

• For example, the “Brookings scenario” shifts the rates of age-specific prevalence of disability to higher ages as life expectancy increases. E.g. if life expectancy at age 65 is projected to rise by 3 years between the year 2007 and the year 2030, then the disability rate of a person aged 65 in the year 2007 would be applied to a person aged 68 in 2030.

• More formally: – If D(x) t0 is the disability rate of a person aged x, in the year t0, the disability rate of a person aged x

at t1 would become:D(x)t1 = D(x+)t0 (1)Where = LE(x)t1 – LE(x) t0 With:D(x) = Disability rate for a person aged xLE(x) = Life expectancy at age xt0, t1 = Points in time.

• This method of modelling effectively decreases disability rates and, to a certain extent, can compensate for increases in the numbers of older people when projecting long-term care expenditure

4. Asking the experts about the future

• Normally involves using consensus building methods (s.a. Delphi, focus groups…) to find a set of assumptions about the future that a group of experts agree with.

• Challenges:– difficulties establishing how “representative” the

experts consulted are.– Translating the experts views into future disability

or dementia prevalence rates may not be straightforward

Expert (Delphi) panel on dementia futures

Expert panel: old age psychiatrists, geriatricians, neurologists, public health doctors, basic scientists, health economists, service professionals … (n=26)

Considered various future scenarios. Panel was ‘moderately optimistic’ about impact of scientific advances and changes in risk factors.

Overall scenarios chosen by the panel suggested:– Small reduction in the prevalence of dementia.– A freeze in the numbers of older people in institutions.– An increase in the qualifications and pay of care assistants

that look after older people with dementia.Comas-Herrera et al, Int Psychogeriatrics 2010

Translating the Delphi outcomes into future scenarios

• Methodological issues: we were not able to model scenarios about incidence or duration of dementia as we have a prevalence model.

• Where it was not possible to estimate the scenarios directly, we approximated them as accurately as possible.

• Overall scenarios chosen by the panel suggested:– Small reduction in the prevalence of dementia.– A freeze in the numbers of older people in institutions.– An increase in the qualifications and pay of care. assistants that look after

older people with dementia.

• We had to make assumptions about the size of some of the panel’s suggestions. To illustrate the range of variation due to our interpretation we produced two different interpretations of the panel’s views: a low and a high expenditure scenario.

Impact of experts views on future dementia care and costs projections

2002

2031

% increase between2002 and 2031,

scenario

% increase between2002 and 2031, base case

Low expenditure scenario combination

Numbers with CI only 280,000 590,000 111% 79%

Numbers with CI and ADL 275,000 400,000 47% 88%

All with CI 550,000 990,000 79% 83%

Numbers with CI receiving home-based services 110,000 250,000 124% 96%

Numbers with CI in care homes 205,000 205,000 0% 93%

Total LTC expenditure by people with CI (£bn) 5.4 14.3 163% 214%

LTC expenditure by people with CI as % of GDP 0.60% 0.82%

High expenditure combination of scenarios

Numbers with CI only 280,000 540,000 98% 79%

Numbers with CI and ADL 275,000 460,000 67% 87%

All with CI 550,000 1,000,000 82% 83%

Numbers with CI receiving home-based services 110,000 255,000 129% 96%

Numbers with CI in care homes 205,000 205,000 0% 93%

Total LTC expenditure by people with CI (£bn) 5.4 16.6 205% 214%

LTC expenditure by people with CI as % of GDP 0.60% 0.96%

5. Projections using the outputs of epidemiological models of chronic conditions and their mortality and

disabling outcomes.• As part of the MAP2030 project the PSSRU aggregate LTC

model was linked to the SIMPOPGENDER model (Carol Jagger, Newcastle, Ruth Matthews and James Lindesay, Leicester).

• SIMPOPGENDER looks at the future pattern of disabling diseases and the implications for the numbers of older people with disability and disability-free life expectancy (DFLE) to 2030.

• builds on a previous model developed for Wanless Review of Social Care.

• The age-specific prevalence of disability from the SIMPOPGENDER model are incorporated in the PSSRU model for all projection years.

See: Jagger et al. Age and Ageing 2009;38:319–25

Epidemiological model scenarios (provided by SIMPOPGENDER, based on literature review for specific

conditions)Scenario 1: Central Health Scenario• Age-specific prevalence of diseases, incidence & recovery rates all remain the

same.• Mortality rates continue to fall according to levels set by GAD principal

projectionScenario 2: Current trends in health continue• Prevalence of arthritis, stroke, CHD and cognitive impairment INCREASED by 2%

every 2 years from 2012• Onset of disability INCREASED by 10% from 2012 in those with arthritis, stroke

and CHD• Mortality from Stroke, CHD and mild cognitive impairment REDUCED by 5%

from 2012Scenario 3: Improving population health• Prevalence of arthritis, stroke, CHD, and mild CI REDUCED by 2% every 2 years

from 2012• Onset of disability REDUCED by 10% in those with arthritis, stroke, CHD and mild

CI from 2012• Mortality REDUCED by further 5% in those with stroke, CHD and mild CI from

2015

Projections of future use of social care and associated expenditure under different assumptions about disability.

England, 2007 - 2032

2007 2032

ConstantDisabilityprevalence

“Brookings” scenario

ConstantIllnessprevalence

Improvedhealth

Continuationof previoustrends

Home care 298,000 514,000 413,000 543,000 530,000 560,000

Institutional care 332,000 609,000 365,000 800,000 715,000 896,000

Total LTCExpenditure(£billion) 17.5 49.8 35.5 59.1 54.9 63.8

LTCExpenditureas% of GDP 1.4% 2.7% 1.93% 3.2% 3.0% 3.5%

Comparison of Base and MAP2030 scenarios

Total expenditure on long-term care, England 2007-2032

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15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

60,000

2007 2012 2017 2022 2027 2032

Expe

nditu

re (£

m)

BaseMAP2030

Public expenditure as % of GDP, England 2007-2032, under alternative socio-demographic

assumptionsPublic expenditure as a percentage of GDP, England 2007 to 2032

1.00%

1.20%

1.40%

1.60%

1.80%

2.00%

2.20%

2.40%

2.60%

2.80%

2007 2012 2017 2022 2027 2032

Expe

nditu

re a

s a

%ag

e G

DP

England regime current England regime current + MAP2030 Comprehensive Comprehensive + MAP2030

Conclusions• Projections of the future affordability of alternative financing regimes are

very sensitive to the assumptions made about future disability rates.• The PSSRU model’s former base case scenario of constant age-specific

disability prevalence requires (in the context of increased life expectancy) a decline in the prevalence, the disabling consequences and/or duration of chronic illnesses.

• Unless there is strong evidence that points in the direction of such declines, constant age-specific prevalence of disability is an optimistic (instead of neutral) assumption.

• Improvements in the future health of older people will have a substantial impact on future care needs and associated expenditure.

• The underlying causes of disability are changing, and we know the care needs of people with different chronic conditions are very different (even if they have the same number of ADLs). We need to develop more sophisticated models that link better care needs and use of services.

References• Comas-Herrera A, Northey S, Wittenberg R, Knapp M, Bhattacharyya S, Burns A. (2010).

Future costs of dementia-related long-term care: modelling scenarios about the future. International Psychogeriatrics (first view available online).

• Comas-Herrera, A., Wittenberg, R., Pickard, L., Knapp, M. and MRC-CFAS. (2007). Cognitive impairment in older people: its implications for future demand for services and costs. International Journal of Geriatric Psychiatry, 22: 1037-1045.

• Jagger C., Matthews R., Comas-Herrera A., Wittenberg R., Pickard L., Malley J., King D., and MRC CFAS. (2009a). Disability in later life: causes, consequences and future prospects. Presentation given at a London School of Economics seminar, 15th September 2009.

• http://www.lse.ac.uk/collections/MAP2030/Seminars/Disability_seminar/MAP2030%2015%20Sept%20Handout.pdf

• Jagger C., Matthews R., Lindesay J., Robinson T., Croft P., Brayne C. (2009b).The effect of dementia trends and treatments on longevity and disability: a simulation model based on the MRC Cognitive Function and Ageing Study (MRC CFAS). Age and Ageing 38 (3): 319-325.

• Wittenberg R, Pickard L, Comas-Herrera A, Davies B and Darton R. (2001) Demand for long-term care older people in England to 2031, Health Statistics Quarterly 12, 5-17.