SOCIAL CARE POLICIES, NATIONAL GOVERNMENT AND

PRIVATE INTERESTSJANE LETHBRIDGE

PUBLIC SERVICES INTERNATIONAL RESEARCH UNIT, UNIVERSITY OF

GREENWICH, UK

Objectives

• Changes in national social care policies

• How private interests have become more involved in social care

• Impact of these changes on users of services and workers

• Implications for regulation

NATIONAL TRENDS

Funding

• Taxation

• Long term care insurance

• Co-payments/user fees• Benefits / payments for people to

purchase their own social care services

• Carers’ allowances

NATIONAL TRENDS

Provision

• Changing role of government

• Municipal authorities – commissioning and regulation

• Introduction of business principles to public sector

• Internal market

• Commodification of care

NATIONAL TRENDS

• Move from public sector to private/ NGO sector even if funded by public sector

• Decline in care homes/ increase in home care

• ‘Assisted living’ – accommodation and care

• Individual purchasing of care

CENTRAL/EASTERN EUROPE

Financing

• Financing still from state budgets

• Little long term care insurance

• Some co-payments/ user fees

CENTRAL / EASTERN EUROPE

Provision

• Institutional care

• Long waiting lists for nursing home

• Social model of care – new

• Development of decentralised care

• Local networks of care providers

• Involvement of private sector/NGOs

EUROPEAN UNION

• No specific legislation care of older people but ‘Green Book on European Social Policy’ –role of partnership

• Influence of internal market and competition legislation

• Will social services be defined as a Service of General Interest or Service of General Economic Interest?

NATIONAL CARE MARKETS

• Majority small private providers

• Some consolidation taking place

• Increase in regional consolidation

• Small numbers of multinational companies

• Increased involvement in private equity financing

UK PRIVATE INTERESTS

BUPA Care Services

Non-profit 17,631 beds £357 million turnover

Four Seasons Healthcare group

(2004) Alchemy venture capital group sold to Allianz Capital Partners (part of Allianz insurance group)

15,315 beds £105 million turnover

Southern Cross Healthcare Ltd

2004) Blackstone Group

7,741 beds £105 million turnover

UK PRIVATE INTERESTS

Craegmoor Group Ltd

(2001) Legal & General Ventures – syndicated % interest to group of private equity investors

5,828 beds £125million

Westminster Health Care group

PLC until 1999, since owned by financial institutions

2004 sold by 3i to Barchester Healthcare Group

5,547 beds £142million

FRENCH PRIVATE INTERESTS

ORPEA Dr.Marian 33%

Other founders 25%

Investors 10%

6,541 beds €192 million

Medica France Bridgepoint Capital 70%

Executives 30%

6,332 beds €210 million

MEDIDEP ORPEA 29%

Other shareholders 71%

4,918 beds €250 million

DOMUS VI Yves Journel 68%

Barclay Capital 24%

4,499 beds €150 million

NORDIC REGION

ATTENDO Bridgepoint Capital (2005)

SEK 1,444 million

CAPIO Sold to Attendo August 2004

CAREMA Orkla, Ovriga, Jarla Investeringar AB, and the Saven family

SEK 2,356 million

ISS CarePartner 49% ISS /Mgt buy out

Feb 2005 Joint venture ISS EQT III fund (part of Wallenberg family)

BROADER INVESTMENTS

• ‘Assisted living’ concept – property investment and social care provision

• Alliances public/private/non-profit

• Companies providing range of services – social care, security systems, care monitoring, accomodation

USERS OF SERVICES

Care of older people

• Services started as poverty relief and welfare assistance

• Attitudes towards older people

USERS OF SERVICES

Increased targeting of services to people with high dependency needs

People with low dependency needs receive fewer or no services

Higher income groups - pay for services

Lower income groups – informal care from family – often women

USERS OF SERVICES

• Varying levels of quality - nursing homes and home care services

• Quality of private providers questioned

• Systems of regulation still developing

CARE WORKERS

% of workforce • Denmark 10% • Netherlands 7% • UK 5%• Hungary and Spain 3% Majority workers womenIncreasing ageing of workforceIncreasing use of migrant labour

CARE WORKERS

• Changes in organisation and status of care workers

• Individuals purchasing care – leading in some countries to care as profession

• Privatisation of care homes – workers often have less control over work

CARE WORKERS

• Low pay – variations between countries

• Nordic region – higher pay in public sector

• UK - many jobs part time, temporary, limited benefits

• Recruitment of migrant labour – often exploits skilled labour

• Cash for care work – results in use of undocumented, unskilled labour

CARE WORKERS

• Difficulties in organising home care workers as isolated workforce

• Unionisation often more difficult after privatisation

• Public sector care workers – more likely be organised

IMPLICATIONS FOR REGULATION

• How to protect the older person and assess whether care provided in appropriate and timely way

• How to protect care workers from poor working conditions e.g. domestic settings

• How can governments regulate the ownership of care homes – concept of “responsive regulation” –need better understanding of private companies