Financing aged care: inancing aged care: Swimming against the tide?Swimming against the tide?

Toni AshtonSusan St John

“Older people with high and complex health and disability support needs will have access to flexible, timely and co-ordinated services and living options that take account of family and whanau carer needs.”

Health of Older People Strategy 2002

The VisionThe Vision

Financing of residential careFinancing of residential careTax funded + patient contributions

Subsidy is income and asset-tested

To be eligible for subsidy must

– Be NZ permanent resident aged 65 +

– Be assessed as in need of care

– Have assets less than $150,000

Top-upsubsidy

Statepension

SubsidyOther

Income

Statepension only

High income

Statepension

Statepension

Otherincome

Subsidy

Some other income

Sources of fundsSources of funds

DHBContractprice forrest homes

The Asset TestThe Asset Test

Years Single person

Married couple with one in care

Married couple,

both in care

1998 – 2005 $15,000 $45,000 + house etc $30,000

From July 2005

$150,000 $55,000 + house etc

or

$150,000 total

$150,000

Raising the threshold is Raising the threshold is popular with voters but…..popular with voters but…..

How about a divorce,

honey?All this

And $55,000

too!

….Favours non-income-earning assets

Costly…so less funds available for Costly…so less funds available for increasing the price of servicesincreasing the price of services

900

950

1000

1050

1100

1150

1200

' 95 ' 96 ' 97 ' 98 ' 99 ' 00 ' 01 ' 02 ' 03 ' 04 ' 05

CPI

Hospital

Homecare

Source: Max Robins, HealthCare providers, NZ

Ministry of Health 2005Ministry of Health 2005

“Providers consider funding has consistently and increasingly lagged behind costs …. leading to business failures, service cuts, suppression of wage rates, high labour turnover, inadequate return for risk and investment, and inadequate investment in workforce development. The problems are of such a magnitude that they cannot be resolved by small injections of funding.”

The demographic tidal wave is The demographic tidal wave is approaching………approaching………

2005

Is “ageing in Is “ageing in place” the place” the solution?solution?

2005

ResidentialCare62.6%

CarerSupport 4%

Environmental Support 3.1%

CarerSupport 2.4%

ResidentialCare54.7%

HomeCare9.4%

HomeCare11.1%

Environmental Support 5.5%

NASC 1.5%Respite care 1.4%

Government expenditure on Government expenditure on long term carelong term care 1998/99 2003/041998/99 2003/04

Assessment & rehab 11.2%

Other12.3%

Assess & rehab 21%

Other 9.4%

Expenditure on home care services increased from 15% to 21%

0

1

2

3

4

5

6

7

8

1966 1976 1986 1991 1996 2001

L/S hospital

Rest home

% of people in aged 65+ in % of people in aged 65+ in long term residential carelong term residential care

4.3 4.0 2.21.5

1.9

1.92.6

3.74.7

4.8

1.4

5.1

Current obstaclesCurrent obstacles

Level of home support services currently inadequate and make clients devalued (Parsons, Dixon et al, 2004)

Low paid, unskilled workforce Problems of isolation, elder abuse Lack of adequate support for carers Difficult to monitor quality of home care Home care not cost-effective for levels of

dependency

Cost-effectiveness of hospital Cost-effectiveness of hospital care versus hospital-at-homecare versus hospital-at-home

Objective: To compare: (a) Usual hospital care

(b) Early discharge + intensive home management by Quick Response Team (QRT)

Harris, Ashton, et al. The effectiveness, acceptability and costs of a hospital-at-home service compared with acute hospital care. Journal of Health Services Research and Policy, 2005.

MethodMethod

Quick response team of – 4 - 6 registered staff nurses, medical registrar,

social worker,home support workers, other health professionals as required

– Provided intensive home support and rehab, inc up to 10 hrs nursing, 7 days per week

285 patients randomised to receive either standard hospital care or hospital-at-home care

Patients assessments at 10 days, 30 days and 90 days

Measures of effects Measures of effects and costs and costs

Costs Hospital costs

– individual treatments– per day hospital costs– overheads

Community services– Quick Response Team – GPs, meals-on-wheels, community

health services, home agency services, etc

Patient costs– GP and other fees– carer’s lost income

Effects Measures of patient health

– SF36– cognitive function– daily activities, etc. etc

Patient satisfaction Carer’s satisfaction GP satisfaction

ResultsResults

Effectiveness: No significant difference

in almost all of the measures of health outcome

Scores for patient satisfaction, relative satisfaction and carer strain index generally favoured QRT.

Average episode

costs:

Hospital care = $3,498

Hospital-at-home =

$6,904!!

Why was the hospital-at-home Why was the hospital-at-home so costly?so costly?

New service – operating below full capacity – conservative approach

Very comprehensive service inc. 24 hr cared if needed

Some patients had high readmission rates – inappropriate placement??

Study conclusionStudy conclusion

Hospital-at-home services can be safe and effective BUT….

Can be very costly for highly dependent patients

Further work required to examine how costs of these services can be reduced without undermining safety and acceptability

Swimming against the Swimming against the demographic tide…demographic tide…

Demand is increasing– Larger percent of

residents now eligible for subsidies

– Cost to government of raising asset threshold will increase

BUT….Supply is decreasingBUT….Supply is decreasing

Cost of service provision is increasingProviders are leaving residential sectorCare facilities concentrated in high

income urban areasHome care services currently

inadequateSmaller DHBs likely to have difficulty

managing funding pressures

ConclusionConclusion

Tax-funding alone for long term unlikely to be sustainable

Recent changes to asset test have exacerbated the problem

The “Vision” of the Health of Older People Strategy unlikely to be achieved

Proposed government review should include:– Inequities in asset testing– Funding options that spread costs more widely

across working and older population– Comprehensive review of funding across whole

spectrum of long term care

Thank you!Thank you!