inancing aged care: Swimming against the tide? F inancing aged care: Swimming against the tide? Toni Ashton Susan St John

“Older people with high and complex health and disability support needs will have access to flexible, timely and co-ordinated services and living options that take account of family and whanau carer needs.” Health of Older People Strategy 2002 The Vision

Financing of residential care  Tax funded + patient contributions  Subsidy is income and asset-tested  To be eligible for subsidy must –Be NZ permanent resident aged 65 + –Be assessed as in need of care –Have assets less than $150,000

Top-up subsidy State pension Subsidy Other Income State pension only High income State pension State pension Other income Subsidy Some other income Sources of funds DHB Contract price for rest homes

The Asset Test YearsSingle person Married couple with one in care Married couple, both in care 1998 – 2005$15,000$45,000 + house etc$30,000 From July 2005 $150,000$55,000 + house etc or $150,000 total $150,000

Raising the threshold is popular with voters but….. How about a divorce, honey? All this And $55,000 too! ….Favours non-income-earning assets

Costly…so less funds available for increasing the price of services Source: Max Robins, HealthCare providers, NZ

Ministry of Health 2005 “ Providers consider funding has consistently and increasingly lagged behind costs …. leading to business failures, service cuts, suppression of wage rates, high labour turnover, inadequate return for risk and investment, and inadequate investment in workforce development. The problems are of such a magnitude that they cannot be resolved by small injections of funding.”

The demographic tidal wave is approaching……… 2005 Is “ageing in place” the solution? 2005

Residential Care 62.6% Carer Support 4% Environmental Support 3.1% Carer Support 2.4% Residential Care 54.7% Home Care 9.4% Home Care 11.1% Environmental Support 5.5% NASC 1.5% Respite care 1.4% Government expenditure on long term care long term care 1998/ / / /04 Assessment & rehab 11.2% Other 12.3% Assess & rehab 21% Other 9.4% Expenditure on home care services increased from 15% to 21%

% of people in aged 65+ in long term residential care

Current obstacles  Level of home support services currently inadequate and make clients devalued (Parsons, Dixon et al, 2004)  Low paid, unskilled workforce  Problems of isolation, elder abuse  Lack of adequate support for carers  Difficult to monitor quality of home care  Home care not cost-effective for levels of dependency

Cost-effectiveness of hospital care versus hospital-at-home Objective: To compare: (a) Usual hospital care (b) Early discharge + intensive home management by Quick Response Team (QRT) Harris, Ashton, et al. The effectiveness, acceptability and costs of a hospital-at-home service compared with acute hospital care. Journal of Health Services Research and Policy, 2005.

Method  Quick response team of –4 - 6 registered staff nurses, medical registrar, social worker,home support workers, other health professionals as required –Provided intensive home support and rehab, inc up to 10 hrs nursing, 7 days per week  285 patients randomised to receive either standard hospital care or hospital-at-home care  Patients assessments at 10 days, 30 days and 90 days

Measures of effects and costs Costs  Hospital costs –individual treatments –per day hospital costs –overheads  Community services –Quick Response Team –GPs, meals-on-wheels, community health services, home agency services, etc  Patient costs –GP and other fees –carer’s lost income Effects  Measures of patient health –SF36 –cognitive function –daily activities, etc. etc  Patient satisfaction  Carer’s satisfaction  GP satisfaction

Results Effectiveness:  No significant difference in almost all of the measures of health outcome  Scores for patient satisfaction, relative satisfaction and carer strain index generally favoured QRT. Average episode costs: Hospital care = $3,498 Hospital-at-home = $6,904!!

Why was the hospital-at-home so costly?  New service –operating below full capacity –conservative approach  Very comprehensive service inc. 24 hr cared if needed  Some patients had high readmission rates – inappropriate placement??

Study conclusion  Hospital-at-home services can be safe and effective BUT….  Can be very costly for highly dependent patients  Further work required to examine how costs of these services can be reduced without undermining safety and acceptability

Swimming against the demographic tide…  Demand is increasing –Larger percent of residents now eligible for subsidies –Cost to government of raising asset threshold will increase

BUT….Supply is decreasing  Cost of service provision is increasing  Providers are leaving residential sector  Care facilities concentrated in high income urban areas  Home care services currently inadequate  Smaller DHBs likely to have difficulty managing funding pressures

Conclusion  Tax-funding alone for long term unlikely to be sustainable  Recent changes to asset test have exacerbated the problem  The “Vision” of the Health of Older People Strategy unlikely to be achieved  Proposed government review should include: –Inequities in asset testing –Funding options that spread costs more widely across working and older population –Comprehensive review of funding across whole spectrum of long term care

Thank you!