A

REPORT ON THE COSTING OF THE OLDER PERSONS BILL

Tuesday 05 APRIL 2005

INTRODUCTION

The process of developing legislation for Older Persons was initiated in 1999, and it culminated with the development of a draft Bill in 2002

The Bill has incorporated both the recommendations of the Ministerial Committee and the three priorities of the Madrid International Plan of Action-on-Ageing

A new legislation had to be developed as the legislation was no longer addressing the needs of Older Persons

A significant percentage of the Budget was focusing on residential care

BACKGROUND

Objectives of the Older Persons Bill

Maintain and promote the status, safety and security of Older Persons

Maintain and protect the Right of Older Persons as recipients of services.

Regulate the registration of facilities for Older Persons, and Combat the abuse of Older Persons

The costing had to consider

Fiscal risks Administrative costs and cost drivers, and Institutional Arrangements

DEFINITION OF KEY CONCEPTS

Older person is a female person aged 60 or over and a male person who is 65 years old and above

Community-based care refers to domestic and personal care that a consume can access nearest to home, which responds to need, encourages local involvement and supports family and community values and responsibilities

Vulnerable Older Person is a person over the age of 60 who is in receipt of a social security grant by qualifying through a

means test and is eligible for other state social services. These are Older Persons in the community that are at risk of not having their needs met due to inadequate or inaccessible resources, and as a result are susceptible to deprivation or relative deprivation

DEFINITION OF KEY CONCEPTS CONTINUE

Home based care is the provision of health and personal care services rendered by formal and informal caregivers in the home in order to promote, restore and maintain a person’s maximum level of comfort function and health including care towards a dignified death (World Health Organisation)

Capital Programme is a programme for government and community infrastructure development in service delivery to Older Persons

Administration Programme is the internal programme for government at national and provincial level, responsible for, amongst other co-ordination, policy and legislative development, monitoring and evaluation, funding and the maintaining of relevant registers

PROJECT OBJECTIVES

Understand the contents of the Bill in terms of an implementation plan Analyse each component of the Bill in order to cost the OPB Assess the fiscal and budgetary implications Determine the cost implication at a National, Provincial and Local levels across the various sectors Determine the cost implications of priorities as determined by the DSD for the Two-year MTEF cycle period Analyse the various components of the Bill, and thereafter cost

the components Facilitate consultative processes jointly with National department

and Treasury

CHALLENGES

Short timelines

Draft/wording of the Bill

Unavailability of adequate and valid information on Older Persons

Non-standardisation of services resulting in disparity in current costing

LEGAL ASSESSMENT

Legal assessment of the Bill was done with a view to:

Identify and determine cost drivers

Identify the rights and obligations (both compulsory and discretionary obligations) of the various parties recorded in the Bill

Identify the risks of litigation related to the implementation or enforcement of certain provisions of the Bill

Table 4: Distribution of Total Vulnerable Older Persons (60+) by Province

Distribution of Total Vulnerable Older Persons (60+) by Province

1996Actual

2001Actual

2005guestimate

2006guestimate

2007guestimate

2008guestimate

2009guestimate

Province

Eastern Cape 462,157 514,194 560,510 573,132 586,039 599,235 612,730

Free State 155,218 172,053 186,982 191,038 195,182 199,416 203,742

Gauteng 397,411 473,681 546,408 567,381 589,159 611,773 635,255KwaZuluNatal 482,833 567,572 647,262 669,981 693,498 717,841 743,038

Limpopo 305,669 355,237 401,321 414,337 427,775 441,649 455,972

Mpumalanga 142,223 170,497 197,612 205,469 213,638 222,133 230,964

North West 194,866 234,438 272,524 283,593 295,110 307,096 319,569NorthernCape 54,604 58,979 62,759 63,765 64,787 65,825 66,880WesternCape 262,659 307,061 348,587 360,372 372,556 385,152 398,173

South Africa 2,457,641 2,853,712 3,223,965 3,329,068 3,437,744 3,550,119 3,666,323

PROGRAMMES

Costing was done for the following programmes

Residential Care Programme Integrated Community Care and Outreach Programme Home-based Care Programme Poverty Relief and Economic Development Programme Capital Programme Administration Programme for National and Provincial

Table 5: Composite Table for 75% of Total Costs for All Programmes for the Different Levels of Carebased on estimated VOPs (3,329,068) for 2006/07

Basic Care Intermediary Tertiary CareProgrammes

TargetNo.

Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost

Residential Care 66,581 R 1,788.25 R 1,500,199,762.95 R 2,474.00 R 2,075,489,564.40 R 2,528.00R2,120,791,276.80

Integrated Community Care +Outreach 665,814 R 264.67 R 2,220,384,491.39 R 304.67 R 2,555,954,747.39 R 318.00

R2,667,783,535.20

Home-based Care 99,872 R 391.67 R 492,872,514.62 R 617.50 R 777,054,096.00 R 617.50 R 777,054,096.00Poverty Relief + EconomicEmpowerment (100%) 11,625 R 1,475.00 R 216,050,625.00 R 216,050,625.00 R 216,050,625.00

Capital (100%) - - R 24,150,000.00 - R 24,150,000.00 - R 24,150,000.00Administrative: National +Provincial (100%) - - R 30,249,225.16 - R 30,249,225.16 - R 30,249,225.16

TOTAL COSTS R 4,483,906,619.12 R 5,678,948,257.95 R

5,836,078,758.16

Have factored in a 5% inflation increase on 2005/06figures.

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TABLE 3 DISTRIBUTION OF TOTAL OLDER PERSONS(60+) BY PROVINCE

Distribution of Total Older Persons (60+) by Province

1996

Actual 2001

Actual Growth

2005 guestimate

2006 guestimate

2007 guestimate

2008 guestimate

2009 guestim

ate Province Eastern Cape

531,276

591,095 11.26%

644,338

658,848

673,685

688,856

704,368

Free State

178,432

197,785 10.85%

214,947

219,609

224,373

229,240

234,213

Gauteng 456,847

544,524 19.19%

628,127

652,237

677,272

703,268

730,262

KwaZulu Natal

555,044

652,457 17.55%

744,065

770,182

797,216

825,199

854,165

Limpopo 351,384

408,365 16.22%

461,342

476,304

491,752

507,701

524,167

Mpumalanga

163,494

195,996 19.88%

227,167

236,199

245,590

255,354

265,507

North West

224,010

269,500 20.31%

313,282

326,006

339,246

353,025

367,362

Northern Cape

62,771

67,800 8.01%

72,146

73,302

74,476

75,669

76,882

Western Cape

301,942

352,984 16.90%

400,720

414,268

428,274

442,754

457,723

South Africa

2,825,200 3,280,506 16.12% 3,706,133 3,826,955 3,951,885 4,081,066

4,214,648

Table 6: Composite Table for 100% of Total Costs for All Programmes for the Different Levels of Care based on estimated VOPs (3,329,068) for 2006/07

Basic Care Intermediary Tertiary Care Programmes

Target No.

Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost

Residential Care 66,581 R 2,384.00 R 1,999,986,710.40 R 3,299.00 R 2,767,599,059.40 R 3,377.00 R 2,833,034,866.20 Integrated Community Care + Outreach 665,814 R 352.89 R 2,960,484,691.00 R 406.22 R 3,407,883,734.81 R 424.00 R 3,557,044,713.60

Home-based Care 99,872 R 522.22 R 657,154,963.58 R 823.33 R 1,036,067,933.38 R 823.33 R 1,036,067,933.38 Poverty Relief + Economic Empowerment (100%) 11,625 R 1,475.00 R 216,050,625.00 R 216,050,625.00 R 216,050,625.00

Capital (100%) - - R 24,150,000.00 - R 24,150,000.00 - R 24,150,000.00 Administrative: National + Provincial (100%) - - R 30,249,225.16 - R 30,249,225.16 - R 30,249,225.16

TOTAL COSTS R 5,888,076,215.14 R 7,482,000,577.74 R 7,696,597,363.34

Have factored in a 5% inflation increase on 2005/06 figures.

PROJECT: APPROACH

Comprehensive analysis of the Older Persons Bill and proposed amendments

Comparative analysis between the Older Persons Bill, its proposed amendments and the Aged Persons Act, and

Cost Driver analysis to effect implementation and maintenance of Older Persons Bill

PROJECT: METHODOLOGY

METHODOLOGY

Legal Matrix – compulsory and discretionary obligations

Costing Model

Social Services Delivery Model

NORMS

The norms upon which the costing was done is based upon policies and service delivery models of the Department of Social Development

The baseline data of Older Persons used is based on the number of older persons who are currently in receipt of the Old Age

Grant, as these have been means tested for vulnerability

Target groups - 2% of the total vulnerable older persons is a target for accommodation in a residential care facility (old age

homes)

NORMS CONTINUE

3% of the total vulnerable Older Persons for home-based care. For those Older Persons who require frail care services whilst

remaining in the community

20% for integrated community care and outreach programmes. This is to ensure that the Older Persons remain independent at the highest possible level of functioning in the community

COSTING MODEL

The Model used to cost the various aspects of the Bill was based on a range of variables, namely:

Demand variables – indicating the volume of a particular service that is required, for example the number of vulnerable Older

Persons to be serviced as per the Core Programmes identified

Process and input variables – that give information on the different types of inputs (cost drivers) required to deliver the services, for example the number or health care professionals/social workers needed to manage a day-care facility, and

Costing variables – namely the costs of the different inputs required to provide the service

LEVELS OF CARE

The programmes have been costed according to the following levels:

Basic care – the minimum level at which the service can be provided

Intermediate care – minimum level plus additional services such as:

- ancillary health services occupational (therapy and physio- therapy)- recreational activities and others

Tertiary care – more advanced and luxurious care such as that which is provided in retirements or private homes (Please refer to attachments)

FINDINGS AND ANALYSIS

Current allocation for 2005/06 = R462m

For 2006/07 = R514m

Projected estimates as set out in table 7, exceeds the Department’s budgetary allocation

Consideration must be given to the fact that costing models give the actual cost of basic services required for Older Persons

Provision regarding monitoring processes will increase the number of social service personnel, required to execute the Bill

Innovations introduced by the Bill e.g. register of older persons will increase administrative functions

FINDINGS AND ANALYSIS CONTINUE

The new processes to manage and operate a facility expands the administration function of the facilities and the Department

The right to reasonable access to basic service, places a burden to the government to make services available

Notification of Older Persons’ Abuse and the notification for thereof demand an increase of professionals to notify, investigate, report and take action

KEY OBSERVATIONS

The demand for services outway the available services

Provision for frail care is critical

Service points are more required in rural areas as revealed in poverty gaps

The implementation of the Madrid Plan of Action on Acting demand a different scope of services

The development of community based care and support services is critical

Province

Old Age Homes Service Centres NPOs* Poverty Relief programmeNo.

Old Age

Homes

SubsidyNo.

Residents

Subsidy / Person

No. Service Centres

Subsidy / Person / Month

Total Subsidy

SubsidyProvincial ProjectsR’000

Eastern Cape

54R

45,772,000 3,643

R 1,047 75.18

5,530,000

1,064,282

 5,000

Free State

38R

12,906,000 717

R 1,500 78  

8,259,000

 

160,187  

2,500

Gauteng 99R

62,358,809 9,403

R 1,157 120 78.00

5,288,879

 

4,933,378  

750

KwaZulu Natal

54R

48,468,240

2,362 R 1,710 73

80.00

2,472,000

2,436,198  

5,000

Limpopo 8R

9,060,592 893

R 2,470 50 78.25

3,408,101

 

181,215  

5,000

Mpumalanga

19R

9,387,479 1,228

R 1,215 50 

165.00

3,947,107

 

1,010,800  

2,500

North West

26R

23,852,400 1,529

R 1,300 42 70.43

2,738,318

 

87,429  

2,500

Northern Cape

27R

5,836,800 1,216

R 400 19

120.00 1,455,708 

1,333,712 

750

Western cape

136R

81,500,000 10,854

R 1,215 168 93.90

11,532,000

 

1,099,000  

1,000

National               1,700,000  

Total 461299,142,32

0 31,845   654   446,311,11

3

R

12,306,201  

R 25,000

TOTAL Expenditure: R382 779 634 

* The second last column of Table 2 represents social work services rendered by NGOs

Table 2: Current Expenditure and Coverage per Province for Old Age Homes, Service Centres and NGOs

CONCLUSION

Government has to invest in community based services and target programmes that reach the poor of the poorest

Resources should be driven by the needs, with the intention of keeping Older Persons independent within their community,

functioning at the maximum potential level

T H E E N D