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Brief analytical summaries or syntheses #23

Help Wanted?
Providing and paying for long-term care

Summary

Spending on long-term care in OECD countries is set to double, even triple, by 2050, driven by aging populations. Governments need to make their long-term care policies more affordable and provide better support for family carers and professionals, according to a new OECD report. “Help Wanted? Providing and paying for long-term care” reveals that half of all people who need long-term care are over 80 years old. And the share of the population in this age group in OECD countries will reach nearly one in 10 by 2050, up sharply from one in 25 in 2010. This percentage will reach 17% in Japan and 15% in Germany by 2050.

Background

With population aging, no clear signs of a reduction in disability among older people, family ties becoming looser and growing female labour-market participation, it is not surprising that the need for care for frail and disabled seniors is growing. Growth in the number of old people is the main driver of increased demand for long-term care across OECD countries. Indeed, policy discussion around LTC reforms is often presented as being all about population aging. In fact, this is not the only problem that LTC systems must address.

Analysis and results

Most care recipients are old women living at home, but most LTC cost occurs in institutions. The probability of needing care increases with age. Less than 1% of those younger than 65 years use LTC, while 30% of the women aged 80 years old or over use LTC services, on average. Across the OECD, one in five LTC users is younger than 65 years, while around half of all users are aged over 80 years. In nearly all OECD countries, between half and three quarters of all formal LTC is provided in home-care settings, with a substantial share of these suffering from dementia-related problems.
Very old users are less likely to receive home care than younger ones. Nevertheless, more than half of the care recipients aged 80 years or over receive care at home in most countries, and only a third of all LTC users receives care in institutions.

In contrast, 62% of total LTC expenditure occurs in institutional settings. LTC spending accounted for 1.5% of GDP on average across 25 OECD countries in 2008. Over the coming decades, OECD countries will continue to age, leading to unprecedented shares of their population being 80 years and over. In 1950, less than 1% of the global population was over 80 years old. By 2050, the share is expected to increase from 4% in 2010 to nearly 10% across the OECD.

Between 1% and 2% of the total workforce is employed in providing LTC. In many countries, this share will more than double by 2050. Recruiting and retaining LTC workers may be a challenge and will exacerbate pressure on wages in the sector. Spending on LTC will double or even triple between now and 2050 as a result of growth in the volume and price of formal care, as individuals demand better quality and more responsive, patient-oriented social-care systems.

Conclusion

In many countries, LTC policies are being developed in a piecemeal manner, responding to immediate political or financial problems rather than being constructed in a sustainable, transparent manner. Yet the future of LTC is more demand, more spending, more workers, and above all, higher expectations that the final few years of life must have as much meaning, purpose and personal well-being as possible. Facing up to this challenge requires a comprehensive vision of LTC. Addressing future LTC challenges means focusing on both formal and family care arrangements, as well as their coordination. Going on in a disordered manner is not good enough. This study examines policies for family carers, as well as the formal provision of LTC services and their financing.

Implications and recommendations

Family carers are the backbone of any LTC system. Across the OECD, more than one in 10 adults aged over 50 years provides (usually unpaid) help with personal care to people with functional limitations. Close to two-thirds are women. Support for family carers is often tokenistic, provided as recognition that they perform a socially useful and difficult task. But supporting family carers effectively is a win-win-win solution. It is beneficial for carers. Without support, high-intensity care-giving is associated with a reduction in labour supply for paid work, a higher risk of poverty, and a 20% higher prevalence of mental health problems among family carers than for non-carers. It is beneficial for care recipients, because they generally prefer to be looked after by family and friends. And it is beneficial for public finance, because it involves far less public expenditure for a given amount of care than if care was provided in the formal sector. Governments can support family carers by providing cash, promoting a better work-life balance through more choice and flexibility in care leaves, and providing support services, such as respite care, training and counselling.

Over-reliance on family carers is not desirable, and many countries need to strengthen the formal – highly labour intensive – LTC sector. Some workers get considerable satisfaction from working in the LTC sector. However, relatively low pay and difficult working circumstances discourage many others. High turnover and low retention endanger both access and quality of services. Countries can use the following strategies: improving recruitment efforts by expanding recruitment pools and recruiting migrant LTC workers; increasing retention by valuing the LTC workforce and improving their pay and working conditions; seeking options for increasing the productivity of LTC workers.

Moving towards universal LTC benefits is desirable on access grounds. However, to maintain control over expenditure, it will be important to implement targeted universalism (i.e. target universal care benefits to where needs are the highest), adopt more forward-looking financing policies, facilitate the development of financial instruments, especially to pay for the board and lodging cost of LTC in institutions.

Not enough attention is being paid to achieving value for money. Possible areas for action are to: encourage home and community care, improve productivity in long-term care, encourage healthy ageing, facilitating appropriate utilisation across health and long-term care settings and care coordination, and address institutional efficiency.

Source

Help Wanted? Providing and paying for long-term care