Long-Term Care: the Economic and Fairness Challenge for Scotland David Bell Stirling Management School University of Stirling

Long-term Care: the Economic and Fairness Challenge The Challenge – Delivery of sustainable care to those in need as efficiently as possible Both providers and workers must have an incentive to stay in the market. Outcomes may be enhanced by reallocating resources from health to care Preventative spending may improve efficiency – Deliver of care as equitably as possible Fairness between different groups of older people Fairness between generations Scottish Care Conference Nov 20112

Long-term Care: the Economic and Fairness Challenge The Barriers – Resources Resources are scarce and economic growth is not certain Both providers and workers must have an incentive to stay in the market. Preventative spending may make the best use of resources Overcoming the bias to acute care – Equity The insurance market has largely failed. Who should pay? - taxpayers or beneficiaries? Scottish Care Conference Nov 20113

Where are we now? Ten years after introduction of free personal care Substantial shift in the balance of care Main demographic effects of population ageing yet to be felt Wide variations between local authorities in levels of provision Evidence base still weak – recent moves to link of social care, housing support and health data may be useful No longitudinal survey of ageing in Scotland – HAGIS – application to National Institute of Ageing in preparation Modest moves towards personalisation – Self-directed support bill to be introduced this session Health spending has been protected (falls by 1 per cent to ). (Scottish Budget and Spending Review 2011) Local govt. experience cuts (falls by 6.3 per cent falls by 1 per cent to ) Our neighbours? Wanless and Dilnot reviews Still not clear that a new policy for funding long-term care will be introduced Funding long-term care still a major source of concern for older people Scottish Care Conference Nov 20114

The Size of the Care Home Market in Scotland Scottish Care Conference Nov 20115

Care Home Stays and Charges Scottish Care Conference Nov Modal stay = 2 years At average cost of £550 per week Average cost = £57,200

Care home costs and household incomes Scottish Care Conference Nov 20117

Public transfers as a share of the adjusted income of individuals 65 years and over, mid-2000s Scottish Care Conference Nov 20118

Household composition of net-worth Scottish Care Conference Nov 20119

England – solution to LTC funding in sight? Dilnot - Risk Sharing – Individuals’ lifetime contributions towards social care costs should be capped at £35,000. – The means-test threshold, above which people are liable for their full care costs, should be increased from £23,250 to £100,000 – Survey of private operators found that 61 per cent of operators believe insurance is the best solution for funding care in the future – Attendance Allowance and Disability Living Allowance for the over 65s too difficult – Implications for Scotland? Scottish Care Conference Nov

Preventative spend? Scottish Care Conference Nov

Employment in NHS and local authorities (2008=100) Scottish Care Conference Nov “The labyrinthine and outdated nature of social care law, added to but fundamentally unreformed since 1948, certainly offers rich pickings for lawyers” Guardian: Tuesday 15 November 2011 Likely to be pattern of employment change in Scotland for the medium Term at least.

Local authority net spending Scottish Care Conference Nov

Free personal care? Gradually increasing as a share of local authority long-term care spend Scottish Care Conference Nov

Free personal care effect on unpaid care? Scottish Care Conference Nov

Time to recalibrate the forecasts? Scottish Care Conference Nov Range and Capacity Review: Projected costs of care for older people (£m) Growth Actual Growth NHS bed % 53% Private nursing home % 21% 50% Residential care home %51% Sheltered housing---- LA Home care %48%49% Private care % 46% Day care % 47% District nurse % 46% Health visitor % 46% NHS Chiropody % 43% NHS expenditure % 50% LA expenditure ,1341,39221%30%50% Private expenditure % 48% Total expenditure1,4021,6952,0702,53821% 50%

Inter-generational Equity “The strain on public finances imposed by demographic change in the coming decades will amplify threats to the intergenerational contract. By seeking to extend the intergenerational contract through state- funded universal free care, supporters of this model risk stretching it to destruction” Lloyd, J. (2008) “A National Care Fund for Long-Term Care” Scottish Care Conference Nov Increase in population 85+ from 2010 to 2035 = 247%

Further key issues for efficiency and fairness Viability of sector Adaptation to personalisation Workforce recruitment and training Reform to welfare benefits Reforming the means test Changing housing market Care provision in rural areas Support for unpaid care Care standards regime in a very tight spending environment Interaction of health and social care (eg Highland) Effective information systems to map the client journey and calibrating preventative interventions Systems for maximising efficiencies and spreading best practice Scottish Care Conference Nov