Elderly care and the market

1. John Lister, Coventry University Elderly care and the market

2. A “triumph” nobody cheered • In 2002 the Second World Assembly on Ageing declared that the dramatic growth in numbers of older people around the world was a “demographic triumph” • Life expectancy on a world scale increased from just 45 (men) and 48 (women) in 1945 to 63 and 68 by 2000. • In the EU it has risen further, from an average of 74.2 in 1980 to 80.3 in 2006. • WHO projections show over 1 billion people aged over 60 by 2020: numbers of the more dependent over-75s are also increasing

3. Too old, too expensive … • In the “club” of richest countries, the OECD, the percentage aged 65 + more than doubled to 13.85 between 1960 and 2005, and is expected to nearly double again to 25% by 2050. • A growing proportion are more dependent people aged over 85, up from 0.5% in 1960 to 1.5% in 2005: expected to hit 5% by 2050. • In England, health resource allocations assume that average costs of 65+are more than double, 75+four times and 85+almost 6 times the health costs of working age 16-44.

4. Too costly to care for? • In Europe, on average, per capita consumption of health services by elderly people is 3-5 times higher than for young people. • A study of 8 OECD countries found that between a third and a half of all health spending was on older people. • In England the over-65s account for two thirds of hospital bed-days. • However sick older people NOT close to death are not more costly to care for than younger patients with similar conditions

5. Increased chance of disease • Longer lifespan can mean a much greater chance of contracting a new and costly disease such as cancer, or degenerative conditions such as arthritis (requiring joint replacements) dementia or Alzheimer’s. • Medical costs will obviously be higher for those who are obese and at increased risk. • A 2007 survey of 20,000 Europeans aged 50+ found that hospital use peaks at ages 75-79. • However age discrimination may help explain the declining access to services

6. Discovering the grey threat • The costs of caring for the health needs of this growing population of older people has long been seen as a threat by bankers • In 1995, when the OECD launched a debate on the implications of an “ageing society” its own researchers pointed out that this was a changed attitude from the early 1980s • This change reflects the rise of neoliberal approaches in the last 30 years

7. Threatening the bankers • In 2003 The European Central Bank Economic Policy Committee warned of the costs of pensions and healthcare, and urged member states to take steps to “limit the public sector’s exposure” to rising health bills though a cap on health spending, greater use of private finance, the use of “market forces” to boost efficiency and restricting public sector health care to “core services”. • Earlier this month, the IMF issued a report claiming that the global financial crisis is caused by rising spending on health care and pensions

8. Make the elderly pay? • The 2003 ECB report went on to suggest that individuals could provide “non-essential health expenditure”: • “Individuals could then decide to what degree they wish to seek insurance cover for such costs. Greater private involvement in health care funding can be achieved, in particular, through patient co-payments, as already implemented in a number of countries.” • The OECD,too,has emphasised private sector solutions and “curbing the growth of spending on state pensions, health and long term care”.

9. Customers who nobody wants • BUT while the ECB and OECD urge older people to seek private insurance, the insurers tend to steer clear of the elderly: they are seen as a high cost (longer stay) and a risk. • In Chile, for example, the private health insurance which covers 12% of the population covers just 3% of over-60s. • Everywhere private health insurance premiums for older people are much higher: many elderly are excluded from insurance through clauses on pre-existing conditions.

10. Why don’t they love the old? • The functional, market-oriented approach to health care sees it in terms of maintaining a healthy workforce. • Even the Millennium Development Goals for health focus almost exclusively on maternal and child health • A year of later life is valued less highly by health economists calculating DALYs • Because the elderly are no longer part of the main workforce: most are seen as economically inactive (their pensions are effectively deferred earnings)

11. Contribution ignored • The active contribution by many older people (childcare, informal/unpaid health care and social care, voluntary sector work and part-time employment) is underestimated. • Older people are seen as a cost, an expense. • The falling birth rate in much of Europe means that the proportion of working age to retired population is falling, and: • “a declining working age population will generate less income for health and pension systems”.

12. One answer: work till you drop • The EU ‘Lisbon Treaty’ proposed to “increase labour force participation by older workers”. • There are EU moves to raise the retirement age: the OECD has suggested a target age of 70 – the retirement age set by Bismarck in Germany. It was seen then as a way to reduce the numbers who live to claim any of their pension. • Pensions have also been a target for austerity measures in all parts of Europe – not least in Britain, where the state pension has been so squeezed that the number of pensioners livingin poverty is among the highest in Europe, and worse than Romania or Poland.

13. Health inequalities • While the level of generosity of state pension payments varies from one country to another, it is generally the case that low income workers inevitablyremain on lower incomes as pensioners. • Health inequalities are also heavily linked with social class and living standards: a lifetime of hard manual work, living in poor quality housing, on poor diet, and using tobacco and alcohol tends to ensure an unhealthy old age, with greater dependency on health services.

14. Cheap and cheerful? • Containing costs has always been a focus of health care strategies for older people, whose health needs never achieved the priority status accorded to acute services for adults or children. • In much of Europe and the US long-term care of the frail elderly has remained semi-detached from mainstream health care, run by private or charitable nursing and residential homes. • In recent years there has been discussion on the possible savings through “community care” (or in the words of the OECD “ageing in place”)

15. Somewhere to send them • In Britain, the state has never supported the majority of disabled and older people. • Long term care was formally separated from the NHS in 1993 as part of the “Griffiths” proposals for “Community Care” (= care in nursing homes): thousands of NHS ‘geriatric’ beds closed • The responsibility for procuring long term care (from a range of private for- profit and non-profit providers) was handed over to local government – where, unlike the NHS, it has been subject to means-tested charges. • The focus has been on speeding the discharge of “bed-blocking” older patients from NHS beds to nursing homes: shorter length of stay.

16. A European pattern? • It appears that systems of care for older people in Europe have been converging on a model in which a relatively low level of state-funded (often privately provided) provision of continuing care is supplemented by low-cost care, mainly delivered by unpaid family members. • This is consistent with studies that show a move away from institutional (residential and nursing home) care towards care in the home. • However a WHO briefing argues that systems which appear more ‘efficient’ may not enhance the quality of life, and the costs and risks of care at home tend to “fall on the care recipients and their carers”

17. Private sector takes over • In the early 1990s EU countries offered a variety of provision ranging from more than 10% of over-65s in hospital , nursing homes or residential homes in the early 1990s to fewer than 3% (in Greece, Italy, Portugal and Spain). • By the early 2000s the highest level of institutional care was 8.5% in Sweden, while only Denmark still had a majority of long term care and home care services provided by the public sector.

18. Healthy ageing? • There is evidence that a combination of good nutrition, hygiene, support withy mobility, help with medication and reduced environmental hazards can help keep people out of hospital. • But in the drive to cut costs by keeping older people out of expensive hospitals and institutional care, there has been a proliferation of less well-grounded schemes for ‘healthy ageing’

19. Unwelcome evidence • However a 2009 OECD survey pointed out that few of them have been properly evaluated on cost-effectiveness: it warns that some may even increase costsand worsen health! • A common feature of many of the more serious proposals for the better management of patients with long term conditions is the integration of services

20. Integration v the market • A WHO Policy Brief stresses that there is a body of evidence showing the value of: • Coordination of care across settings • Promotion of patient self-management • Appropriately trained workforce (mix of skills) • Supportive information systems • “Financing mechanisms that encourage integration rather than fragmentation”

21. Consensus – against markets? • “In Europe, consensus is emerging on the need for radically redesigning services in health and social care towards integrated community-based care”. • However these proposals run counter to competitive market models (such as those emerging in England) which aim to open up greater private sector involvement

22. Care at home? • Better rehabilitation services can enable hospitals safely to discharge patients home, especially if followed up by supportive services at home. • But this requires the development of community based services which may not offer profit margins to attract private providers. • The WHO focus is on “more enabling interventions” such as physiotherapy an d podiatry – which may also be best provided by a public sector geared to need, not profit.

23. Housing issues • If patients are to live at home, “good quality housing and well-designed living environments” are obviously desirable: but where older people have retired they may well be living in deprived areas and houses which are far from ideal. • There will be limits on how far governments and health services could or should intervene to address such problems, even if the result would be improved health status: however in a market-based health and social care system, no intervention would be possible.

24. Comparative problems • Across Europe, the availability of services and the entitlement of an older person to care services varies. • There are also variations within countries: in England as local government cuts spending, some have imposed tighter eligibility criteria than others for social care. • Especially in times of austerity and constraints on government spending, there are debates on whether support for long term care should be universal, or offered only to the poorest pensioners.

25. Regulatory problems • In various countries there have been experiments or discussions on consumer directed payments that allow a service user to purchase care themselves. • However this withdrawal of the public sector does not guarantee an availability or dependable quality of services from private for-profit or non-profit providers. • In a market system, private providers cannot be compelled to deliver services which do not yield profit: the quest for competition makes it impossible to plan, or to match services to needs

26. Not such a bright idea • A major problem with direct payments to patients is that the risk, responsibility and potential extra cost is transferred to the service user • The WHO also points out that “The quality of personal care purchased is uncertain”: patients may even “have a financial incentive to “underuse potentially needed formal professional care that is more expensive” • Consumer-directed payments may also prove expensive and inefficient to run.

27. In conclusion • Those who agree that “care supply should not form the basis of needs assessment” and that “needs assessment must be improved to ensure that clients’ needs are met” are lining up against a market system. • While the wealthy will always be able to command whatever services they wish, the future provision of care geared to the needs of ALL patients regardless of their ability to pay requires a planned, publicly-funded system, which in turn requires the exclusion or marginalisation of the private sector.

28. And finally … • The onward march of market-style reforms, which fragment services and seek to open up certain sectors to private providers, fly in the face of evidence not only on the care of older people, but also on the development and improvement of health care systems. • Experience shows that the most effective way to improve the quality of services is through peer review and pressure, collaboration, and sharing best practice. All of these are outlawed by the rules of a competitive market. • This shows that these proposals are ideologically driven.