Hostname: page-component-586b7cd67f-vdxz6 Total loading time: 0 Render date: 2024-11-25T16:43:01.909Z Has data issue: false hasContentIssue false
  • English
  • Français

The role of care home fees in the public costs and distributional effects of potential reforms to care home funding for older people in England

Published online by Cambridge University Press:  02 April 2012

Ruth Hancock ,
Juliette Malley ,
Raphael Wittenberg ,
Marcello Morciano ,
Linda Pickard ,
Derek King  and
Adelina Comas-Herrera
Ruth Hancock*
Affiliation:
Health Economics Group, Norwich Medical School, University of East Anglia, Norwich, UK
Juliette Malley
Affiliation:
Personal Social Services Research Unit, London School of Economics, London, UK
Raphael Wittenberg
Affiliation:
Personal Social Services Research Unit, London School of Economics, London, UK
Marcello Morciano
Affiliation:
Health Economics Group, Norwich Medical School, University of East Anglia, Norwich, UK
Linda Pickard
Affiliation:
Personal Social Services Research Unit, London School of Economics, London, UK
Derek King
Affiliation:
Personal Social Services Research Unit, London School of Economics, London, UK
Adelina Comas-Herrera
Affiliation:
Personal Social Services Research Unit, London School of Economics, London, UK
*
*Correspondence to: Ruth Hancock, Health Economics Group, Norwich Medical School, University of East Anglia, Norwich Research Park, Norwich NR4 7TJ, UK. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

In England, Local Authorities (LAs) contribute to the care home fees of two-thirds of care home residents aged 65+ who pass a means test. LAs typically pay fees below those faced by residents excluded from state support. Most proposals for reform of the means test would increase the proportion of residents entitled to state support. If care homes receive the LA fee for more residents, they might increase fees for any remaining self-funders. Alternatively, the LA fee might have to rise. We use two linked simulation models to examine how alternative assumptions on post-reform fees affect projected public costs and financial gains to residents of three potential reforms to the means test. Raising the LA fee rate to maintain income per resident would increase the projected public cost of the reforms by between 22% and 72% in the base year. It would reduce the average gain to care home residents by between 8% and 12%. Raising post-reform fees for remaining self-funders or requiring pre-reform self-funders to meet the difference between the LA and self-funder fees, reduces the gains to residents by 28–37%. For one reform, residents in the highest income quintile would face losses if the self-funder fee rises.

Type
Articles
Information
Health Economics, Policy and Law , Volume 8 , Issue 1 , January 2013 , pp. 47 - 73
Copyright
Copyright © Cambridge University Press 2012

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Barr, N. (2010), ‘Long-term care: a suitable case for social insurance’, Social Policy and Administration, 44(4): 359–374.CrossRefGoogle Scholar
Brodsky, J., Habib, J., Hirschfeld, M., Siegel, B.Rockoff, Y. (2003), ‘Choosing Overall LTC Strategies: a Conceptual Framework for Policy Development’, in WHO (ed.), Key Policy Issues in Long-Term Care, Geneva: World Health Organization, 245–270.Google Scholar
Care Quality Commission (2010), ‘Statistics on Registered Providers’. Available at http://www.cqc.org.uk [28 April 2010].Google Scholar
Cohen, J. W.Spector, W. D. (1996), ‘The effect of Medicaid reimbursement on quality of care in nursing homes’, Journal of Health Economics, 15: 23–48.CrossRefGoogle ScholarPubMed
Colombo, F., Llena-Nozai, A., Mercier, J.Frits, T. (2011), Help Wanted? Providing and Paying for Long-Term Care, OECD: Health Policy Studies, OECD Publishing.Google Scholar
Comas-Herrera, A., Wittenberg, R.Pickard, L. (2010), ‘The long road to universalism? Recent developments in the Financing of long-term care in England’, Social Policy and Administration, 44(4): 375–391.CrossRefGoogle Scholar
Comas-Herrera, A., Wittenberg, R.Pickard, L. M. (2011a), ‘From Commission to Commission: Financing Long-Term Care in England’, in C. Courbage and J. Costa-Font (eds), Financing Long-Term Care in Europe: Institutions, markets and models, Basingstoke: Palgrave Macmillan.Google Scholar
Comas-Herrera, A., Butterfield, R., Fernandez, J-L., Wittenberg, R.Wiener, J. M. (2011b), ‘Barriers and Opportunities for Private Long-Term Care Insurance in England: What Can We Learn from Other Countries?’, in J. Costa-Font and A. McGuire (eds), Edward Elgar Handbook of Health Policy, Cheltenham: Edward Elgar.Google Scholar
Commission on Funding Care and Support (CFCS) (2011), ‘Fairer Care Funding: the Report of the Commission on Funding Care and Support’. Available at http://www.dilnotcommission.dh.gov.uk/2011/07/04/commission-report/ [9 September 2011].Google Scholar
Community Care (2011), ‘One-fifth of social care providers expect to close next year’, 16 February, -next- http://www.communitycare.co.uk/Articles/16/02/2011/116286/one-fifth-of-social-care-providers-expect-to-closeyear.htm [17 December 2011].Google Scholar
Department of Health (2003), ‘Fairer Charging Policies for Home Care and other Non-residential Social Services: guidance for Councils with Social Services Responsibilities’. Available at: http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/documents/digitalasset/dh_4117931.pdf [2 January 2011].Google Scholar
Department of Health (2010), ‘Charging for Residential Accommodation Guide’. Available at http://www.dh.gov.uk/prod_consum_dh/groups/dh_digitalassets/@dh/@en/@ps/documents/digitalasset/dh_115533.pdf [1 January 2011].Google Scholar
Department for Work and Pensions (2010), ‘The Family Resources Survey United Kingdom, 2008–09’. Available at http://statistics.dwp.gov.uk/asd/frs/2008_09/frs_2008_09_report.pdf [9 September 2011].Google Scholar
Ettner, S. L. (1993), ‘Do elderly Medicaid patients experience reduced access to nursing home care?’, Journal of Health Economics, 11: 259–280.Google Scholar
Fernández, J.-L., Forder, J., Truckeschitz, B., Rokosova, M.McDaid, D. (2009), How Can European States Design Efficient, Equitable and Sustainable Funding Systems for Long-term Care for Older People? Policy Brief 11, Copenhagen: World Health Organization, Europe.Google Scholar
Forder, J., Fernandez, J-L. (2011), ‘Length of Stay in Care Homes’, PSSRU discussion paper 2969, London: LSE.Google Scholar
Grabowski, D. C. (2007), ‘Medicare and Medicaid: conflicting incentives for long-term care’, Millbank Quarterly, 85(4): 579–610.CrossRefGoogle ScholarPubMed
Hagenaars, A., de Vos, K.Zaidi, M. A. (1994), Poverty Statistics in the Late 1980s: Research Based on Micro-data, Luxembourg: Office for Official Publications of the European Communities.Google Scholar
Hancock, R., Hviid, M. (2010), ‘Buyer power and price discrimination: the case of the UK care homes market’, CCP Working Paper 10–17, Norwich: University of East Anglia, Centre for Competition Policy.Google Scholar
Hancock, R., Pudney, S. (2010), ‘The distributional impact of reforms to disability benefits for older people in the UK’ ISER working paper 2010–35, Colchester: University of Essex, Institute for Social and Economic Research.Google Scholar
Hancock, R., Comas-Herrera, A., Wittenberg, R.Pickard, L. (2003), ‘Who will pay for long-term care in the UK? Projections linking macro- and micro-simulation models’, Fiscal Studies, 24(4): 387–426.Google Scholar
Hancock, R., Wittenberg, R., Pickard, L., Comas-Herrera, A., Juarez-Garcia, A., King, D., Malley, J. (2007a), ‘Paying for Long-term Care for Older People in the UK: Modelling the Costs and Distributional Effects of a Range of Options’, PSSRU Discussion Paper 2336/2, London: LSE.Google Scholar
Hancock, R., Juarez-Garcia, A., Comas-Herrera, A., King, D., Malley, J., Pickard, L.Wittenberg, R. (2007b), ‘Winners and loser: assessing the distributional effects of long-term care funding regimes’, Social Policy and Society, 6(3): 379–395.Google Scholar
Hancock, R., Malley, J., King, D., Pickard, L., Comas-Herrera, A., Morciano, M. (2010), ‘Paying for Long-Term Care: Potential Reforms to Funding Long-Term Care’, Memorandum by the MAP2030 Research Group (SC 55). In House of Commons Health Committee Report on Social Care. Third Report of Session 2009–10, Volume 2 (HC 22-2), London: the Stationery Office.Google Scholar
Harrington Meyer, M. (2001), ‘Medicaid reimbursement rates and access to nursing homes: implications for gender, race and marital status’, Research on Aging, 23(5): 532–551.Google Scholar
Her Majesty's Government (2009), Shaping the Future of Care Together, CM 7673. London: The Stationery Office.Google Scholar
Her Majesty's Government (2010), Building the National Care Service, CM784. London: The Stationery Office.Google Scholar
Her Majesty's Treasury (2008), Long-term public finance report: an analysis of fiscal sustainability, Annex A: illustrative long-term projections. London: TSO.Google Scholar
Keen, J.Bell, D. (2009), Identifying a Fairer System for Funding Adult Social Care, York: Joseph Rowntree Foundation.Google Scholar
King, D., Malley, J., Darton, R., Comas-Herrera, A. (2010), ‘Report for BUPA’. PSSRU Discussion Paper 2624, London: LSE.Google Scholar
Laing and Buisson (2011), Care of Elderly People, UK Market Survey 2010–11, 23rd edition, London: Laing and Buisson.Google Scholar
Machin, S.Wilson, J. (2004), ‘Minimum wages in a low-wage labour market: care homes in the UK’, The Economic Journal, 114: C102–C109.CrossRefGoogle Scholar
Mayhew, L., Karlsson, M.Rickayzen, B. (2010), ‘The role of private finance in paying for long-term care’, Economic Journal, 120: F478–F504.Google Scholar
Malley, J., Hancock, R., Murphy, M., Adams, J., Wittenberg, R., Comas-Herrera, A., Curry, C., King, D., James, S., Morciano, M.Pickard, L (2011), ‘The effect of lengthening life expectancy on pension and long-term care expenditure in England, 2007 to 2032’, Health Statistics Quarterly, 52(Winter): 1–29.Google Scholar
Millers, E. A., Mor, V., Grabowski, D. C.Gozalo, P. L. (2009), ‘The devil's in the details: trading policy goals for complexity in Medicaid nursing home reimbursement’, Journal of Health Politics, Policy and Law, 34(1): 93–135.Google Scholar
Netten, A., Bebbington, A., Darton, R., Forder, J., Miles, K. (1998), ‘1996 Survey of Care Homes for Elderly People’, Final Report, PSSRU discussion paper 1423/2.Google Scholar
Netten, A., Darton, R., Curtis, L. (2001), ‘Self-funded Admissions to Care Homes’. Department of Work and Pensions Research Report No. 159, Leeds: Corporate Document Services.Google Scholar
Netten, A., Williams, J.Darton, R. (2005), ‘Care home closures in England: causes and implications’, Ageing and Society, 25: 319–338.Google Scholar
Office of Fair Trading (2005), ‘Care Homes for Older People in the UK: a market study’. Available at http://www.oft.gov.uk/shared_oft/reports/consumer_protection/oft780.pdf [28 April 2010].Google Scholar
PricewaterhouseCoopers (2011), ‘Understanding Commissioners’ Behaviours: Commissioning in the Public Sector’, Report by Price Waterhouse Coopers for the Office of Fair Trading, http://www.oft.gov.uk/shared_oft/reports/comp_policy/commissioning%2Bcompetition.pdfGoogle Scholar
Rothgang, H. (2002), ‘Long-Term Care in Germany: Projections on Public Long-Term Care Insurance Financing’, in H. Conrad and R. Lützeler (eds), Aging and Social Policy. A German–Japanese Comparison, Munich: Iudicium, 251–275.Google Scholar
Royal Commission on Long Term Care (1999), With Respect to Old Age. Cm 4192. London: The Stationery Office.Google Scholar
Stapleton, D., Protik, A., Stone, C. (2008), ‘Review of International Evidence on the Cost of Disability’, Department for Work and Pensions (DWP). Retrieved from http://statistics.dwp.gov.uk/asd/asd5/rports2007-2008/rrep542.pdf [13 February 2012].Google Scholar
Scottish Government (2009), Free Personal and Nursing Care, Scotland, 2007–8. Edinburgh: Scottish Government Statistics. Available at http://www.scotland.gov.uk/Resource/Doc/293050/0090405.pdf [June 2011].Google Scholar
Southern Cross Health Care (2011), ‘Southern Cross Health Care Group PLC: Interim Results’. Available at: http://investors.schealthcare.co.uk/uploads/southerncrosshealthcaregrpplc-halfyearlyreport.pdf [July 2011].Google Scholar
Troyer, J. L. (2002), ‘Cross-subsidization in nursing homes: explaining rate differentials among payer types’, Southern Economic Journal, 68(4): 750–773.Google Scholar
Wanless, D. (2006), Securing Good Care for Older People: Taking a Long-Term View, London: King's Fund.Google Scholar
Wittenberg, R., Hancock, R., Comas-Herrera, A.Pickard, L. (2002), ‘Demand for Long-Term Care in the UK: Projections of Long-Term Care for Older People in 2051’, in R. Brooks, S. Regan and P. Robinson (eds), A New Contract for Retirement: Modelling Policy Options to 2050, London: Institute for Public Policy Research.Google Scholar
Wittenberg, R., Comas-Herrera, A., King, D., Malley, J., Pickard, L., Darton, R. (2006), ‘Future Demand for Long-Term Care, 2002 to 2041: Projections of Demand for Long-Term Care for Older People in England’, PSSRU Discussion Paper 2330. London: LSE.Google Scholar
Wittenberg, R., Pickard, L., Malley, J., King, D., Comas-Herrera, A., Darton, R. (2008), ‘Future demand for social care, 2005 to 2041: projections of demand for social care for older people in England’, Report to the Strategy Unit (Cabinet Office) and the Department of Health. PSSRU Discussion Paper 2514. London: LSE.Google Scholar