EASPD CONFERENCE 2006 FINANCING STRATEGIES AND THEIR EFFECTS ON EQUITY, CHOICE, EFFECTIVENESS AND...
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Transcript of EASPD CONFERENCE 2006 FINANCING STRATEGIES AND THEIR EFFECTS ON EQUITY, CHOICE, EFFECTIVENESS AND...
EASPD CONFERENCE 2006EASPD CONFERENCE 2006
FINANCING STRATEGIES AND THEIR EFFECTS ON EQUITY, CHOICE,
EFFECTIVENESS AND SUSTAINABILITY
RAPHAEL WITTENBERG
8 JUNE 2006, GRAZ
ACKNOWEDGEMENTS
• STUDY FOR DEPARTMENT OF HEALTH– ADELINA COMAS-HERRERA– DEREK KING– JULIETTE MALLEY– LINDA PICKARD
• STUDY FOR JOSEPH ROWNTREE FOUNDATION– BLEDDYN DAVIES– CAROLINE GLENDINNING– ADELINA COMAS-HERRERA– LINDA PICKARD
LONG-TERM CARE
• INFORMAL (FAMILY) CARE AND FORMAL SERVICES
• SOCIAL CARE, HEALTH, HOUSING AND OTHER SERVICES
• HOME-BASED AND RESIDENTIAL CARE SERVICES
• CASH AS ALTERNATIVE TO CARE
FINANCING STRATEGIES COVER:
• THE WAY RESOURCES ARE RAISED– GENERAL TAXATION, – INSURANCE CONTRIBUTIONS, – USER PAYMENTS;
• THE WAYS RESOURCES ARE SPENT– ELIGIBILITY CRITERIA, – CASH PAYMENTS OR SERVICES.
KEY POINTS
• DIFFERENT COUNTRIES HAVE ADOPTED DIFFERENT APPROACHES TO FUNDING LONG-TERM CARE
• A KEY ISSUE IS THE BALANCE BETWEEN PRIVATE FUNDING AND PUBLIC FUNDING FROM TAXES OR SOCIAL INSURANCE.
• FINANCING ARRANGEMENTS CAN BE ASSESSED IN RESPECT OF THEIR LIKELY IMPACT ON EQUITY, CHOICE, EFFICIENCY AND SUSTAINABILITY.
RISING DEMAND: EXTERNAL DRIVERS OF DEMAND
• DEMOGRAPHY: RISING NUMBERS OF OLDER PEOPLE
• DISABILITY: UNCERTAIN TRENDS
• AVAILABILITY OF INFORMAL CARE: CONCERN ABOUT POSSIBLE DECLINE
• REAL UNIT COSTS OF CARE: RISING
OTHER DRIVERS OF DEMAND
• EXPECTATIONS OF FUTURE COHORTS OF OLDER AND YOUNGER DISABLED PEOPLE
• FUTURE PATTERNS OF CARE
• FUTURE FUNDING ARRANGEMENTS
PROJECTIONS OF LONG-TERM CARE FOR OLDER PEOPLE, UK
YEAR %GDP2002 1.5%2012 1.6%2022 1.9%2031 2.3%2041 2.7%2051 3.1%ON BASE CASE ASSUMPTIONS ABOUT TRENDS
IN DRIVERS OF DEMAND
AIMS OF THE WELFARE STATE
• INSURANCE AGAINST RISKS• REDISTRIBUTION TOWARD THOSE WITH
GREATER NEEDS• SMOOTHING RESOURCES OVER THE
LIFE CYCLE• STEPPING IN WHERE THE FAMILY FAILS
Source: Hills et al, 1997
ROLE OF INFORMAL CARE
• MOST CARE IS PROVIDED BY UNPAID FAMILY CARERS
• SOME COUNTRIES STRESS PRIMARY RESPONSIBILITY OF FAMILES
• OTHER COUNTRIES STRESS SOCIETAL RESPONSIBILITY
DIFFERENT COUNTRIES HAVE DIFFERENT FUNDING SYSTEMS
• SOCIAL INSURANCE –– GERMANY, NETHERLANDS
• TAXATION AND MEANS-TESTED CHARGES– USA, ENGLAND
• TAXATION– AUSTRIA, DENMARK, SCOTLAND
• TAXATION AND SOCIAL INSURANCE – JAPAN
BALANCE OF FUNDING
A KEY ISSUE IS THE BALANCE BETWEEN – PRIVATE FUNDING, FROM PEOPLE’S OWN
RESOURCES OR PRIVATE INSURANCE, AND– PUBLIC FUNDING, FROM TAXES OR SOCIAL
INSURANCE.
MODELS OF FINANCING
• PRIVATE SAVINGS
• PRIVATE INSURANCE
• PRIVATE INSURANCE WITH PUBLIC SECTOR SUPPORT
• TAX-BASED PUBLIC SECTOR SCHEME
• SOCIAL INSURANCE
CRITERIA FOR EVALUATION
• EQUITY
• EFFICIENCY AND EFFECTIVENESS
• INDEPENDENCE, DIGNITY, CHOICE
• AFFORDABILITY, SUSTAINABILITY
PRIVATE INSURANCE
• ADVERSE SELECTION
• RISK UNCERTAIN
• EXPENSE
• INADEQUATE INFORMATION
• LOW UPTAKE IN MOST COUNTRIES
TAX-BASED PUBLIC FUNDING SYSTEM
• PROGRESSIVE, DEPENDING ON TAX SYSTEM
• WIDE RISK POOLING, DEPENDING ON MEANS TEST FOR USER CHARGES
• HYPOTHECATION UNLIKELY
NATIONAL ELIGIBILITY CRITERIA OR INDIVIDUAL NEEDS ASSESSMENTS
• NATIONAL ELIGIBILITY CRITERIA– CONFER ENTITLEMENT TO CARE– MAY CREATE DIAGNOSTIC INEQUALITIES– MAY DISADVANTAGE THOSE ON THE MARGINS
• INDIVIDUAL NEEDS ASSESSMENTS– MAY NOT CONFER ENTITLEMENT TO CARE– MAY LEAD TO LOCAL VARIATIONS IN ACCESS– MAY BE MORE FLEXIBLE IN MATCHING
RESOURCES TO NEEDS
CASH OR SERVICES: CONSUMER DIRECTED CARE
• CASH BENEFITS– OFFER MORE USER CHOICE IF SUPPLY AND
INFORMATION AVAILABLE
– MAY CONTAIN EXPENDITURE
• SERVICES IN KIND– MAY REDUCE PRESSURES ON INFORMAL CARERS
• INDIVIDUAL BUDGETS– INTERMEDIATE APPROACH – ENGLISH PILOTS
INFORMAL CARE
• MOST CARE IS PROVIDED BY UNPAID FAMILY CARERS
• CASH BENEFITS PROVIDE AN INCENTIVE TOWARD INFORMAL CARE
• IMPORTANCE OF SUPPORT FOR CARERS• TENSION BETWEEN PROMOTING
INFORMAL CARE AND PROMOTING LABOUR MARKET PARTICIPATION
USER CHARGES
• USER CHARGES MAY CONTAIN DEMAND OR RAISE REVENUE
• DIFFERENT RULES TEND TO BE APPLIED FOR DIFFERENT SERVICES
• CHARGES MAY TAKE VARIOUS FORMS:– WEALTH TEST - CAPITAL LIMIT– DISPOSABLE INCOME CONTRIBUTED– COPAYMENTS– TOPPING UP OF PUBLIC FUNDING
WANLESS SOCIAL CARE REVIEW
WANLESS REVIEW EXAMINE THREE APPROACHES IN DETAIL:
• MEANS-TESTED SYSTEM (POSSIBLY WITH LIMITED LIABILITY)
• FREE PERSONAL CARE• PARTNERSHIP, UNDER WHICH USERS
MAKE 50% COPAYMENTS FOR SERVICES ABOVE A FREE MINIMUM
FREE PERSONAL CARE
• WIDER POOLING OF RISKS THAN MEANS-TESTED SYSTEM
• PROMOTES DIGNITY• POTENTIALLY COSTLY, DEPENDING ON
IMPACT ON DEMAND• BENEFITS WEALTHIER PEOPLE AND
THEIR HEIRS RELATIVE TO MEANS-TESTED SYSTEM
PARTNERSHIP
• WIDER POOLING OF RISKS THAN MEANS-TESTED SYSTEM
• PROMOTES CHOICE• LESS COSTLY THAN FREE PERSONAL
CARE, POTENTIALLY MORE AFFORDABLE
• BENEFITS WEALTHIER PEOPLE BUT LESS THAN FREE PERSONAL CARE