Press release: NHS Confederation responds to launch of care and support consultation
12 May 2008
Commenting on the consultation, Steve Barnett, acting chief executive of the NHS Confederation, said:
"We welcome the launch of the social care consultation. The current system of funding is both unfair and unsustainable which is why we launched a debate with our members on the future of social care funding last month.
"Our debate paper, Funding tomorrow today, argues for fairer social care funding through a social insurance model. We invite debate on this proposal via our social care funding forum at www.debatepapers.org.uk.
"Decisions around the care of the elderly and the long term sick cause genuine heartache for frontline NHS staff. A new system of a sensible level of care backed up by top-ups through social insurance and government support for the poorest would reward those who save, favour prevention over high cost 'last resorts' such as care homes and hand control of how money is spent to the users rather than the funders of care."
Key Points in Funding Tomorrow Today:
The current social care system is unable to deliver targeted social care to all those who could benefit from it, let alone universal provision.
The solution could be found in a social insurance system which removes the disincentive to save while helping the poorest.
Social care users are currently a small subset of the population who have little voice and not much choice.
If services need to be individually tailored, they will have to be much more directly accountable to users.
Elsewhere in Europe, the benefits and income support system are better connected.
The blurred and hard-to-define line between nursing and social care for people with long-term needs has not been addressed adequately.
The NHS Confederation futures debate series is designed to stimulate new thinking on future challenges to the health service. The papers will feed into the NHS Confederation annual conference and exhibition, Delivering the future today, with debates on the issues raised in the papers. Find out more about the event at www.nhsconfed.org/2008
Three further papers will be published in the lead up to the conference, including: compassion in healthcare (May), globalism (June) and disruptive innovation (at the conference).
You can join the debate by contributing to the forum at www.debatepapers.org.uk. Here you will be able to read the papers and leave comments which will influence the debate at conference.
What is the financial situation now?
£46 billion is spent by councils on all local services. Councils raise £23 billion from council tax, £19 billion from non-domestic rates and get £4 billion from general taxation. The Wanless Report (2006) estimated that local authorities spent £8 billion on social care in 2004/05, £1.6 billion of which was recouped from means-tested charges. £3.7 billion was paid in non-means tested benefits to individuals to help with the costs of care in the same period, and private spending on care homes is estimated at £3.5 billion per year.
Around half the expenditure on personal social care for older people comes from private contributions or charges and top-ups. This is estimated to total nearly £5.9 billion.
How would the new system work?
Instead of applying for targeted care and an assessment from your local social services, all people with elderly care or long term sick needs will be guaranteed a level of care as they will have been adding money into their own social insurance account during their working life before they require care. They will also get a say on how this money is spent and if, for whatever reason they do not use it, the money can be passed down to the next of kin.
Those who chose to will be able to 'top-up' their entitlement with extra money while for the less well off, extra support will be provided by the state to ensure they receive adequate care.
What are the advantages of this new system over the current one?
A partnership model based on social insurance removes the disincentive to save while helping the poorest.
We need a mechanism in place now would deal with future funding problems, rather than waiting for another green paper in 15 years' time.
The scope for arguments, cost and blame shifting between sectors would be reduced.
The system would become less complex, more transparent and easier to navigate.
The new system would empower the users of services much more effectively.
Insurers would have an interest in investing in prevention and interventions that stop rapid descent into using high-cost services.
What's wrong with the current system?
At the moment, the social care system is unable to deliver targeted care to all those who could benefit from it, let alone universal provision. 90% of adults expect subsidised care from councils in their old age yet 70% of social services department provide care only to people with the highest two levels of need. By 2009, it is predicted that all councils will be providing only substantial or critical care.
One of the most pressing results of this is that the default setting for many is a care home or other - more expensive - means of delivering care. This is neither sustainable in the long term nor is it what people want. The new system would incentivise prevention while delivering continuity of care via local health services.
At the same time, there is a widespread feeling that the system is unfair. Those who have saved money or invested in property often end up feeling forced into sell their homes in order to pay for care while those who have not - and indeed may have followed a more chaotic lifestyle - are not penalised and receive similar levels of support through the state.
What have other countries done?
1. Germany
In 1995, Germany added long-term care to its social insurance system, funded by new payroll charges on employees and employers. A single needs assessment unlocks payment based on dependency and what form of care is used. Most popular is the family payment which has lower value in kind/cash allowances than opting for a package including professional care. Some 80 per cent of care recipients choose to get benefi ts as a cash allowance rather than receiving benefits in kind.
2. Japan
Japan altered its system in 2000. A tax-funded entitlement system, with compulsory social insurance premiums for those over 40 years of age, pays a flat rate of 90 per cent for all care homes and home care. The remainder comes from a private co-payment. Japan does not offer support for family care as it feels that this places an excessive burden on families in general and women in particular. Some readjustments in 2005 added charges for personal care and domestic services in residential homes as a way of encouraging people to use home and community services. This has been coupled with an increase in the numbers of preventive services offered to those at risk of dependency on care. Care coordination is provided through a community support centre which administers assessment and care planning. A mix of for- and not-for-profit providers is then commissioned to provide services.
3. The Netherlands
The Netherlands was the first country to introduce social insurance for long-term care in 1968 and this has remained separate to its healthcare system to this day. It covers institutional and home-based care, personal and domestic help. The insurance contribution constitutes 12 percent of salary, all of which is contributed by the employee. There are also income-dependent co-payments. Despite being a social insurance model, both central and local government exert high levels of control on the system. They grant fi ve-year contracts to sickness funds and control of entry and exit to the provider market.
ENDS
Notes for editors
1. The NHS Confederation annual conference and exhibition 2008 takes place from 18 - 20 June at Manchester Central (formerly known as GMEX and the MICC). Programme details are available at www.nhsconfed.org/2008
2. The NHS Confederation represents more than 95% of the organisations that make up the NHS. Its members include the majority of NHS acute trusts, ambulance trusts, foundation trusts, mental health trusts, primary care trusts, special health authorities and strategic health authorities in England; trusts and local health boards in Wales; and health and social service trusts and boards in Northern Ireland.
Contact details
Contact Niall Smith 020 7074 3304 or 077 6777 0309, Ruby Casey-Knight 020 7074 3306 or 07881 957 305 or Ruth Kennedy 020 7074 3312 or 078 8447 3086. For out of hours media enquiries, please call the Duty Press Officer on 07880 500726.
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