Providing and financing of long-term care in Croatia and Latvia Johannes Koettl World Bank Sofia, December 9, 2010

Long-term care in Croatia 1. Demographic trends in Croatia 2. The current LTC system in Croatia a) Institutional LTC services b) Non-institutional LTC services c) Financing of LTC services 3. Future policy directions

A shrinking and aging population Source: UN Population Division

A common demographic picture Demographic trend in Croatia mirrors that of most other European countries: an aging population with fewer younger people and a increasing dependency rate. In the next 40 years: year old population will shrink 30 percent 65+ year old population will grow by 41 percent 80+ year old population will double The old-age dependency ratio has increased from 17 percent in 1990 to nearly 26 percent in 2008.

Strong expansion of severely dependent population over the next 10 years and beyond

Already high burden, but inverse dependency ratios will decrease further

Institutional LTC services in Croatia LTC care is provided by the social and the health sector LTC in the hospital sector: estimated 300,000 severely dependent people, but less that 50,000 receive benefits  Gap in coverage filled by informal care, but maybe also by hospitals? Institutional capacity is growing, especially in the local government/private/NGO sector.  Homes for elderly are the fastest growing type of institutional care facilities.  In 2007, 70 percent of beneficiaries were accommodated in non-state institutions.  There are significant differences in the funding sources, capacities and staff -patient ratios between state and non-state institutions.

Non-institutional LTC services in Croatia Social Welfare Homes also provide home- and community- based services. In 2007, an additional 22 percent of beneficiaries were serviced this way. Health visitor services financed by national health insurance. Pensioners associations provide home assistance but there are few data on these services. Foster care for elderly is a unique program in Croatia. Informal care is provided by spouses, friends and neighbors but there are few reliable data on this.

Recent pilot programs Pilot programs by Ministry of Family, War Veterans and Intergenerational Solidarity (MoFVIS) were the first efforts to provide continuous provision of non- institutional care to the elderly.  Day care and home-services were provided by teams of five, including a nurse.  An important outcome of one project was the employment of disadvantaged groups, particularly middle-aged women with low to medium education.  Pilot programs were successful but now must be integrated into the national LTC system.

LTC benefits in Croatia Potential beneficiaries must demonstrate a high degree of disability, lack of family support and lack of income. Only a few informal caregivers receive cash benefits through the nursing and home care allowance system.

LTC financing in Croatia Payment for LTC services depends on the type of service. To receive services in a state owned institution, the patient must use personal resources. Once those are exhausted, the patient must sell their property (if it’s not used by family members). If this does not suffice, the MoHSW covers the difference.

Funding sources for LTC homes Source: Ministry of Health and Social Welfare (May 2008)

LTC expenditures in Croatia Currently there is no system for collecting and tracking data LTC expenditures. Projections based on demographic change predict spending on health and LTC for the elderly will grow to nearly 10 percent of GDP by 2050.

Croatia: future policy directions 1. Urgently re-think financing of LTC services. Regulations for private LTC insurance products 2. Improve coordination of the LTC system to better integrate health and social care components and reduce duplication across sectors (MoFVIS pilots). 3. Avoid focus on institutional care. Recent expansion in LTC services biased towards institutional care (especially private sector). 4. Build on past efforts to expand community-based services, like MoFVIS pilots and foster care

Long-term care in Latvia 1. Demographic trends in Latvia 2. The current LTC system in Latvia 3. Future policy directions

A shrinking and aging population Source: Eurostat

Strong expansion of 75+ population now and during 2020s

Strong expansion of severely dependent population over the next 10 years and after 2025

Already high burden, but inverse dependency ratios will decrease further

Current LTC system in Latvia Health sector Mentally ill More than 25 percent of people with dementia stay in hospital for over 1 year Social sector Social services and social rehabilitation institutions Informal care providers receive training and psychological support Decentralized structure Central government: disabled, mentally ill (orphans, other social cases) Local government: frail elderly and financial support for informal care givers  Wide variation of extent and quality of LTC for the elderly among municipalities  Rural areas strongly disadvantaged

Current LTC system in Latvia Little involvement of private sector 114 institutions in 2007: 78 municipal, 27 state-owned, only 9 private Trend towards more home-based services for elderly: Home-care Beneficiaries8695,0196,1137,553 Institutions Beneficiaries4,7224,4245,2615,723 No. of institutions

Current LTC system in Latvia Entitlements Joint needs assessment by specialized social worker and the patients GP Takes into account medical and social needs as well as family situation and financial situation Changes in status lead to updated assessment  Best practice of care coordination

Latvia: future policy directions 1. Urgently re-think financing of LTC services. Regulations for private LTC insurance products 2. Improve coordination of the LTC system to better integrate health and social care components and reduce duplication across sectors (MoFVIS pilots). 3. Avoid focus on institutional care. Recent expansion in LTC services biased towards institutional care (especially private sector). 4. Build on past efforts to expand community-based services, like MoFVIS pilots and foster care

Current LTC system in Latvia Public expenditures on LTC (LAT) But: strong decrease (on central government level) during crisis in Total59,080,64772,273,275 as share of GDP0.40%0.44% Central government35,046,16541,039,228 as share of GDP0.24%0.25% Local government24,034,48231,234,047 as share of GDP0.16 %0.19%

Latvia: future policy directions 1. Urgently re-think financing of LTC services. Regulations for private LTC insurance products 2. From health to social services: Relative low spending on social services, probably too much LTC in hospitals (high ALOS); resist converting small hospitals into LTC institutions; expand rehabilitation (very low expenditures right now) 3. Care coordination: build on current system; improve on hospital discharge management 4. Improve incentives to involve private sector and charities/NGOs: payment reforms 5. Cash benefits: could help to spur private sector response and support informal care