Yuki Murakami(OESO)

De meerwaarde van ouderenzorg in België: een profielschets in Europees perspectief

LONG-TERM CARE FOR OLDER PEOPLE

Conference Voka Health Community30th September, 2013

Yuki MURAKAMI OECD

ECONOMIC VALUE AND EFFICIENCY

• Disability numbers mainly predicted by demographic ageing, not risk factors

• How LTC is organised in OECD?

• How will this impact on choice of care settings, unit labour cost and hence expenditure?

• What options are there to gain efficiency?

Topics of discussions

Steep rise in the share of over 80 years old

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

2014

2017

2020

2023

2026

2029

2032

2035

2038

2041

2044

2047

2050-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

EU-27 Japan OECD Key Emerging Countries1 World

1. Emerging economies include Brazil, China, India, Indonesia and South Africa.

Source: OECD Historical Population Data and Projections Database, 2013.

Pop over 80 years + in Belgium will be double by 2050

Source: OECD Historical Population Data and Projections Database, 2013.

Turkey

India

Mexico

Russian Fed.

Estonia

Hungary

United States

Ireland

Luxembourg

Norway

Poland

Sweden

OECD33

Czech Rep.

New Zealand

Portugal

Finland

Austria

Italy

Germany

Japan

0 5 10 15 20

2010 2050

%

Old-age dependency ratio is increasing

0%

5%

10%

15%

20%

25%

30%OECD EU (27) world

Source: OECD Labour Force and Demographic Database, 2010. World population projection estimates based on UN World Population Prospects, 1950-2050 (2006 Revision)

Limitations of daily activities increase with age

Limitations in daily activities, population 65-74 and 75 years and over, 2011

Norway

Sweden

Denmark

Iceland

Luxembourg

Switzerland

Ireland

United Kingdom

Czech Rep.

France

Belgium

Netherlands

Spain

Greece

OECD (25)

Finland

Austria

Poland

Italy

Turkey

Germany

Hungary

Portugal

SloveniaEstonia

Slovak Rep.

Source: Eurostat Database 2013.

0 20 40 60 80

Limited to some extent Limited strongly

% of population aged 75 years and over020406080

Limited to some extent Limited strongly

% of population aged 65-74 years

What do these demographic trends mean?

• Not uniform sign of disability compression

• Multiple co-morbidities

• Preference for home and independent living

• Demand for responsive, patient-centred services

• Diverse user groups with different needs (e.g., Alzheimer; young disabled)

Demand for more and better formal care

Pressure on LTC workforce and financing

• LTC workers will account for a larger share of a shrinking workforce

• Pressure on financing of the welfare state especially if levies on labour income

• Economic and financial crisis

0

4

8

12

16

20

24

28

32

36

2...

Source: OECD Fiscal Consolidation Survey 2012.

Health and LTC: the 2nd largest area of government spending

Structure of general government expenditures, 2007 & 2010 (% of total expenditures)

Source: OECD calculations and 2009 Ageing Report, European Union,

LTC expenditure is projected to at least double by 2050

United States

Germany EU-OECD Belgium Japan Norway Netherlands0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0% Public LTC Expenditure as a Share of GDP

2007 2050 (Low) 2050 (High)

Belgium’s public LTC spending higher than OECD average

Note: The OECD average only includes the 11 countries that report health and social LTC. Source: OECD Health Statistics 2013

Nethe

rland

sSw

eden

Norway

Denm

ark

Finl

and

Belg

ium

Fran

ceJa

pan

Icel

and

OECD11

Switz

erla

ndNew

Zea

land

Canad

aAu

stria

Luxe

mbo

urg

Slov

enia

Ger

man

ySp

ain

Unite

d St

ates

Kore

aIs

rael

Pola

nd

Czech

Rep

ublic

Hunga

ryEs

toni

aPo

rtuga

lG

reec

e

0

1

2

3

4

3.7

3.6

2.4

2.4

2.1

2.0

1.8

1.8

1.7

1.6

1.5

1.4

1.3

1.2

1.2

1.0

1.0

0.7

0.6

0.6

0.5

0.4

0.3

0.2

0.2

0.2

0.0

Health LTC Social LTC% of GDP

HungaryIceland

SwedenGermanyDenmark

NetherlandsCanada

United StatesFinland

SloveniaSwitzerland

AustriaFranceSpain

OECD22New Zealand

PolandNorwayBelgium

Czech RepublicEstonia

JapanPortugal

Korea

-10% 0% 10% 20% 30% 40% 50%

-1.1%-1.1%

2.2%2.4%2.6%3.1%3.1%3.1%3.8%3.8%4.5%4.6%4.7%4.8%4.8%5.1%5.4%5.5%6.8%6.9%

9.1%12.5%

14.4%43.9%

Average annual growth rate (%)

Average annual growth rate (%)

KoreaEstonia

SpainSwitzerland

JapanFranceFinlandNorway

New ZealandOECD19BelgiumPolandAustria

GermanySwedenCanada

DenmarkHungary

Czech RepublicNetherlands

Slovenia

-10 -5 0 5 10 15 20

43.18.7

4.04.0

2.64.7

-4.04.93.94.1

8.111.6

6.01.71.7

3.23.1

-1.68.2

3.54.3

81.716.6

8.07.67.36.96.56.46.4

5.04.84.5

3.73.13.1

2.52.21.91.81.31.0

Average annual growth rate (%)

Annual growth rate in LTC public expenditure 2005-11

Annual growth rate of public LTC institution and home care expenditure 2005-2011

Source: OECD Health Statistics 2013,

LTC spending growing more in home care

OECD countries at different stages of developing of formal LTC workforce supply

1.In New Zealand, Sweden, Spain and the Slovak Republic, it is not possible to distinguish LTC workers in institutions and at home. Source: OECD Health Statistics 2013

Swed

en ¹

Nor

way

Uni

ted

State

sN

ethe

rland

sIs

rael

Den

mar

kSw

itzer

land

Austra

liaO

ECD

15Est

onia

Japa

nC

anad

a

New

Zea

land

¹Spa

in ¹

Ger

man

yIre

land

Korea

Finl

and

Austri

aSlo

veni

a

Cze

ch R

epub

licH

unga

ryFr

ance

Slova

k R

epub

lic ¹

Italy

0

2

4

6

8

10

12

14

12.2

6.5

9.6

6.5

0.7

6.45.7

4.53.6

0.61.5

3.9 4.4 4.3

2.71.5 0.9

3 2.8 2.51.6 1.4 1.6 1.6 1.1

5.6

2.3

4.4

9.3

2.9

2.5

2.83.2

5.9 4

1.4

1.3

1.72.2 0.8 1

Institutions Home% of population aged 65 years and over Institutions + Home

Greater staffing challenges in home care?

Austral

ia

Belgi

um

Nor

way

Japa

n

Luxem

bour

g

New

Zea

land

Germ

any

Net

herla

nds

Switz

erla

nd

Slova

k Rep

u...

Czech

Rep

ublic

05

10152025303540

2.04.7 4.7 5.2

8.012.9 14.5

19.6

33.1

39.2

2.0 3.41.3 2.2 1.3 1.2 2.3 2.4 1.8

9.2

2.2

Users per FTE home care Users per FTE institutional care

Higher ratio of LTC users per Full-Time Equivalent (FTE) worker in home care than in institutions

Source: OECD (2011), Help Wanted? Providing and Paying for Long-Term Care, based on OECD Health Data 2010

Employment opportunities in LTC?

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

50

100

150

200

250

JapanLong-term care Total employment

Index (2000=100)

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

90

100110120

130140150

GermanyLong-term care Total employment

Index (2001=100)

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

90

100

110

120

130

Denmark

Index (2000=100)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

90

100

110

120

130

NorwayLong-term care Total employment

Index (2003=100) change

Source: OECD Health Statistics 2013

Trends in long-term care employment and total employment, selected OECD countries, 2000-11 (or nearest year)

Services related to activities of daily living (help with feeding, bathing, mobility)

Universal coverage within a single programme:

– Tax-funded Nordic system;

– Social LTC insurance in Jap, Kor, NL, Lux, Ger);

– as part of health system in Belgium

MMeans-tested systems

– (England social-care system; US: Medicaid)

Mixed schemes:– Parallel universal

benefits (Scotland, Italy)– Progressive universal

benefits (Israel, France, Austria, Australia)

– Mix universal & means-tested (NK, Canada, Greece)

Basing funding on a wider basis as employee contributions (Japan, Belgium, Luxembourg, Netherlands);

Better distribute the force between generations (the retired pay an LTC insurance premium in Germany and Japan);

Introduce elements of pre-financing: the creation of a financial reserve (eg, private insurance, Luxembourg);

Private insurance with automatic enrollment (Singapore).

Financing Long-term care

Long-term care insurance model in Japan

• Universal care insurance• Who benefits? Elderly dependents over 65 years of age or over

40 years with a disease related to aging (eg, Alzheimer's)• Financing: 25% income tax and 25% local taxes, 50%

dependence insurance contribution paid by people over 40 years• Local variation in individual contributions, because the costs of

services vary between locations.• Individual participation in labor costs being modest increase• Control over payments to providers can keep costs even though

Japan has a institutionalization rate high

Accommodation costs and restore facilityFunding

through participation related to individual resources (Australia,

Nordic countries, Ireland)

Funding through social

assistance, reserved for the poorest (Belgium, Germany,

Italy)

In all countries, a portion of the cost is borne by individuals

• Maximum public contribution capped (eg, Germany, Austria (1), Italy), the public contribution may depend on resources (APA France, Austria (2), Australia);

• "Stay-in-charge" leveled according to individual resources (EUR 180 per month in Sweden, 1 800 EUR Netherlands);

• Co-payment based on the cost of services (Japan 10% Korea, 20% in institutions, 15% at home).

Help users to mobilize their resources to pay part of the costs

Buying bonds or shares of accommodation and other devices interest-free loan (Australia) structures;

Public measures to defer payment of the stay in the institution (Ireland, United States, England)

Private products (reverse mortgage, associants devices and life insurance care insurance)

• Policy on expenses related to the level of income and / or severity of dependence

• Define the level of dependency trigger coverage as resources (Korea);

Direct care benefits to those who need it most

• Enlargement towards universal coverage (Korea, Spain, Czech Republic);

• ... But better targeted support to the most significant risks (Austria, Czech Republic, Sweden, the Netherlands);

• Innovative solutions:– Public-private partnerships (United States - Medicaid, under discussion in England);– Voluntary insurance + automatic subscription (Singapore).

• Reforms based on user choice:– Cash benefits (United States and several European countries);– "Vouchers" / check (Nordic countries).

Four directions of reforms

Irrespective of financing model, moving

towards universal LTC benefits is desirable

on access and affordability grounds…

… the cost associated with high-care need can account for more than 60% of seniors’ disposable income, including for those from relative high income deciles

Low care needs High care needs

Share of adjusted disposable income for individuals 65 years and over in different income deciles, mid-2000s

Source: OECD Secretariat calculation based on the OECD Income Distribution and Poverty Database (www.oecd.org/els/social/inequality).

Quo vadis, long-term care?

The only way to square the circle of higher demand, higher use, higher expectations and higher cost is by improving value for money. Three avenues to explore:

– Allocative efficiency: optimising care settings, care coordination across pathways

– Behavioural efficiency: incentives for providers (e.g., payment; competition) and users (e.g., prevention)

– Technical efficiency: assessing cost & benefits of technology to help managing work processes, reduce errors, improve productivity

• OECD (2013), A Good Time in Old Age? Measuring and Ensuring Quality of Long-Term Care

• OECD (2011), Help Wanted? Providing and Paying for Long-Term Care, Paris

• OECD (2010), Value for Money in Health Spending• www.oecd.org/health/longtermcare

Yuki Murakami: yuki.murakami@oecd.org

Thank you!!