1. Long-term care: trends and challenges in OECD countries
Francesca Colombo
Head, Health and Social Policy Asian Outreach, OECD
Seoul, Minister for Health, Welfare & Family Affairs

2. Today’s presentation
Trends and factors affecting the demand for, and supply of, long-term care (LTC)
Challenges for LTC systems
Conclusions

3. 1. Factors affecting the demand for and the supply of LTC care
1.1 Demography
1.2 Disability trends
1.3 Rising expectations and income of the elderly
1.4 Reduction in supply of informal care

4. 1.1 Increasing share of population 80+, due to rising life expectancy and declining fertility,%
Source: OECD Demographic and Labour Force Database

5. … but non-demographic variables also matter
The increasing number of elderly people affect LTC demand and spending…
Source: OECD Health Data 2008 and OECD Demographic and Labour Force Database
Data refer to 2006
… but non-demographic variables also matter

6. 1.2 No general pattern of improvement in health/disability status of the elderly
Falling disability: Denmark ( ), Finland ( ), Italy ( ), Netherlands (1991/ /3), US ( , ).
Stable disability: Australia ( ), Canada ( ).
Rising disability: Belgium ( ), Sweden ( ,following a decline between )
Source: Lafortune and Balestat, 2007, OECD HWP 26

7. 1.3 Growing expectations for on care services: Poverty risks constantly falling for the elderly and shifted to younger people:
Source: OECD 2008, Growing Unequal? 7

8. 1.3 Changing societal models: Informal care remains the main source of LTC, but supply care might be declining
Size of the family is declining.
Composition of the family is changing in all OECD countries.
A growing number of older parents leaving alone.

9. Rising female participation in the labour market
Labour force females % of pop (female)
Source: OECD.Stat

10. 2 - Challenges for LTC 2.1 Healthy ageing
2.2 Care quality and responsiveness
2.3 Access
2.4 Cost and financial sustainability
2.5 Value for money and efficient provision

11. 2.1 Healthy ageing
Need for cost-effective policies that may mitigate the potential impact of ageing on health-care costs.
Healthy life-styles (healthy eating, physical exercise).
Adapting health care systems to the needs of the elderly (e.g., reducing falls, care coordination, environment supporting independent lives.
Improved integration of older persons in the economy and into society (maximising work, preventing isolation). 11
Source: Oxley (2008) 11

12. 2.2 Quality of care delivered to dependent elderly depends upon
The adequacy of the medical and care assistance relative to assessed needs
The availability of technological and medical development
The availability of support services and respite care for informal caregivers
The degree of privacy in nursing homes
The supply of adequately trained caregivers

13. 2.3 Access Public support for LTC varies across OECD countries.
Some OECD countries rely on social-assistance programmes, targeting public support to the poorest and/or most needy.
Universal social insurance schemes for long-term care introduced in Austria, Germany, Luxembourg, Japan, Korea.
Other countries are considering new social protection models (e.g. idea of a “5th risk” in France)

14. Universal government schemes for funding LTC are spreading
Growing number of countries with universal LTC social insurance schemes (Austria, Germany, Japan, Luxembourg, Netherlands, Korea)
..providing coverage to the whole population
..and reducing the need for social assistance and means-testing.
Universal schemes are driving the growth of private provider markets in some of these countries.
Other countries provide universal coverage through public services (e.g., Norway, Sweden).

15. Other factors than model of LTC coverage affects access
Degree of private financing of LTC cost; it varies across countries, but it is generally higher than in health care
Level of private cost-sharing, the type of services covered by the public system, and the extent of targeting will have implications for access as well as cost-sustainability: Trade-offs?

16. 2.4 Cost sustainability challenges
The need for improving the quality of LTC services will drive future cost.
Several countries start from low levels of public provision of services; cost for “catching up”.
Family care will remain an important but declining source of support.
Concerns about staff shortages raise questions about sustainability of current remuneration levels  pressures on wages and salaries

17. By 2050, doubling and possibly tripling of the share of GDP allocated to public LTC spending in 2005
In 2005, public spending on LTC in OECD countries was 1.1% of GDP.
OECD projects that, under alternative scenarios, public long-term care spending will rise to at least 2.4% and perhaps to 3.3 % of GDP, on average across OECD countries.
Projections vary a lot across countries; they are also very sensitive to different assumptions.

18. Dramatic increase in health and long-term care spending in Korea, 2005-2050
Source: Oliveira Martins and de la Maisonneuve, 2006

19. 2.5 Efficient provision and value for money
Ensure care co-ordination & continuity of care
Discourage cost-shifting across agencies
Empowering users and consumer-directed care –> this supports informal care giving, but unclear effects on cost
Discourage unnecessary institutionalisation and costly ‘social hospital admissions; encourage home care

20. Conclusion 1: Better evidence
Need to invest in data systems and indicators for monitoring the sector
Need to foresee growth in LTC and plan accordingly

21. Conclusions 2: What services?
Need the right mix of services to ensure high-quality/ services (e.g., home care/institutional care; LTC providers; geriatric care)
Need right level of services (fixed minimal level for all, more based on need) to ensure affordable services
Need to focus on regulation of care quality and minimal standards

22. Conclusions 3: How to achieve cost efficiency and sustainability?
Need to maintain incentives for informal care
Need to co-ordinate different actors’ roles and incentives (e.g., health care and social care)
Need to combine public and private sources of financing -- even in universal systems (e.g., cost-sharing with catastrophic limits)
Need to consider best funding mechanism for social LTC insurance: Partial or fully-funded basis? Or, alternatively, maintain a broad contributory basis, including seniors?

23. Thank you! FURTHER READING www.oecd.org/health/longtermcare
Healthy ageing – A review of policies (forthcoming)
Long-term care workforce – Overview, responses to shortages and selected policy challenges (forthcoming)
Conceptual Framework and Methods for Analysis of Data Sources for Long-Term Care Expenditure
Trends in Severe Disability Among Elderly People: Assessing the Evidence in 12 OECD Countries and the Future Implications (OECD Health Working Papers No. 26)
OECD Health and Long-term Care Expenditures: What are the main drivers? (Economics Department Working Papers No.477)
Long-term Care for Older People, (OECD, 2005)
Consumer Direction and Choice in Long-Term Care for Older Persons, Including Payments for Informal Care: How Can it Help Improve Care Outcome, Employment and Fiscal Sustainability? (OECD Health Working Papers No. 20)
Dementia Care in 9 OECD Countries: A Comparative Analysis (OECD Health Working Papers No. 13)
Stroke Care in OECD Countries: a comparison of treatment, costs and outcomes in 17 countries (OECD Health Working Papers No. 5)
Policies for an Ageing Society: recent measures and areas for further reform (Economics Department Working Paper No. 369)

24. Some extra slides if participants asked during questions’ time

25. Significant gains in life expectancy at older age groups, 1970-2006
% gains in years of life expectancy,
At Age 80
At Age 65
Source: OECD Health Data, 2008

26. Countries showing the largest increase in life expectancy at age 65, 1970-2006
Years
Source: OECD Health Data, 2008.
Countries ranked from the highest female life expectancy at 65

27. Declining fertility rates
Source: OECD Health Data, 2008

28. Obesity rates among the 65-85 elderly - selected OECD countries
Source: OECD Project on the economics of prevention, 2008
Note: obesity is defined as having a body mass index (BMI) of 30 kg/m2 or more
Data for Korea are from a small sample. For the years old, statistics show a significant rise in obesity rates (source: Korean National Health and Nutrition Examination Survey” (KNHANES)

29. Ratio of LTC nurses and caregivers in institutions per recipients over 65, 2006
Note. (1) 2003 (2) 2004 (3) 2005
Data on Spain include only nurses. Data on England include only caregivers.
Data on nurses and caregivers could not be separated for Hungary and Canada.
Source: OECD Pilot data collection on long-term care workforce 29

30. Degree of private spending varies but generally higher than in health care
Public and private share of long-term nursing care expenditure as % of GDP in 2006
Note: (a) Data refer to 2005.; (b) Data refer to 1999.
Source: OECD Health Data 2008

31. Shortages may be addressed through a mix of domestic and migrant workers
Growing share of foreign-born among low-educated labour force,
Source: European countries: European Union Labour Force Survey (data provided by Eurostat); United States: Current Population Survey, March supplement.

32. A common goal across countries has been to support home-based care
People aged 65 and over living in institutions and receiving formal care at home as a share of people aged 65 and over, 2006
Source: OECD Health Data 2008