Economic pressures

1
Economic pressures social care of older people
The post-Wanless discoursePresentation to the
Older People Ageing Research Development
Network Cymru at Swansea University January 2007

• Bleddyn Davies
• OIA PSSRU
• LSE universities of Oxford Kent
• B.Davies_at_lse.ac.uk

2
Plan

• Factors influencing care needs practical policy
  options
• Nervousness about economic prospects
• Socio-demographic trends
• PSSRU projections their interpretation
• Main principal funding alternatives evaluated re
  default option How dependent should we be on
  public funding?
• How will social care do in the competition for
  public spending?
• Comprehensive Spending Review 2007 medium run
• The long run
• Changing assumptions arguments in the
  governments policy response values, goals,
  means-ends relationships
• Interpretations of values and contexts
• Prioritisation of ends and suggestions about
  means
• Unstated opportunity costs who will gain and
  lose?
• Some tentative conclusions

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Influence on policy options in practice
Increasing uncertainty about rate of economic
growth the UK norm

• Low perhaps falling British investment
  productivity growth
• Risks of deficit in balance of payments
• High economic activity. Driven by consumer
  expenditure driven by government expenditure
  increasing unsustainably 42 to 50 gdp by 2050.
  Dependence on service sector
• Overall rate of economic growth fallen terms of
  trade may become less favourable dampers on
  inflation diminish

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Influences on policy Socio-demographic change
Age distributions(Source Pensions Review 2004)
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Influences on PolicySocio-demographic change
Dependency ratios 1960-2050Total dependency
ratio worsens until 2050(Source DWP Opportunity
Age 2005)
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Influences on policy Socio-demog change
Projections of disabled older people (Source
Jagger for Wanless Report 2006) a Increased
numbers of older people in need projected rise
by 54 2005-25. b Increasingly insensitive to
poorer population health, no change
improving population health scenarios. c
absolute or even relative compression of
disability is unlikely
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Influences on policy choicePer cent gdp on
expenditure on long term care of older
peopleCentral assumptions current
policiesCalculated from Wittenberg, Hancock et
al (2006), PSSRU dp 2336, Table 7a Private
spending higher share b Increases in public
spending
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Influences on policy choice Cost projections
funnel of doubt (Source PSSRU projections
1998 for Royal Commission http//www.pssru.ac.uk/
pdf/ltcrep98.pdf)a Funnel widens through time
b is already wide at the 20-year Wanless horizon
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Main funding alternatives evaluated
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Main alternative funding mechanisms evaluated
Can one envisage system diminishing demands on
public purse yielding other desired policy
outcomes?

• Wanless Report Securing Good Care for Older
  People Taking a Long Term View (Kings Fund
  2006)
• a new level of relevance sophistication in its
  framework for evaluating alternative principal
  funding mechanisms
• Focus outcomes valued in own right not crude
  risk factors
• Techniques adopted.
• a Created a methodology for setting threshold
  level of social care outcome to be achieved given
  costs a benchmark
• Does so by combining
• Estimation of outcomes valued in own right from
  varying service inputs using production
  functions (Davies et al 2000), with
• Estimated values of outcomes - discrete choice
  experiment (Ryan et al 2006) - PSSRU OPUS outcome
  indicators (Netten et al 2005)
• b Used these also to compare values of outcomes
  achieved given the threshold for alternative
  funding mechanisms)

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Wanless technique for fixing benchmark/target
outcome evaluating funding models1 Example of
a productivity curve net outcome of one kind
given differences in home care input (Davies et
al 2000)(Source Wanless Report Figure 16)
12
Wanless technique for fixing benchmark/target
outcome evaluating funding models2 Put
together valuation of each type of net outcome
with net outcome predicted from productivity
equation Total value net outcome level times
valuation. Source Wanless Figure 20
13
Wanless technique for evaluating funding
models3. Estimate total cost by setting a
threshold Cost/(standard unit of value of
benefit) below which no public subsidy

• Logic Criterion required for setting total
  budget bid comparable to competitors for the
  overall health budget (and for allocation between
  users?) ie NICE threshold equivalent
• Invented a generic outcome indicator of a
  standard unit of benefit. Measures reduction of
  welfare shortfall due to ADL limitations during
  budget period - ADL Adj Year (ADLAY). ADLAY
  comparable to QALY, allowing budget comparisons
• Wanless cost/ADLAY 20k meanest NICE
  threshold. Benchmark budget bid total cost of
  outcomes for all increments of outcome produced
  for less than 20k/ADLAY
• Outcomes of value in own right are net effects of
  services on outcomes central to Social Care
  Paradigm, but separates a prioritised core
  business safety personal care from b
  wellbeing social inclusion

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Wanless options and their appraisalAppraisal by
tests of fairness (9 items), economic effic (9),
choice (2), development of resource capacity (3),
clarity (1), sustainability/acceptability
(4)Each test weighted. Scores aggregated. Three
highest scorers evaluated by projected costs
ADLAYoutcomes.So the models which most obviously
thrust the responsibility for financing and
management on the citizen are argued to be
generally inferior by all criteria, though
(current) means-tested included for comparison.
But supporting roles?

• Evaluation by current cost service incidence
  only
• Private insurance
• Out of pocket
• Social insurance
• Limited liability
• Care savings accounts

• Evaluation also by estimates of benefit value
• - Free personal care
• Public funding (means-tested)
• Partnership models

15
Three short-listed funding models estimated
costs and outcomes

• Current means-tested Below benchmark levels of
  outcome not outcome-driven. Deprives those just
  above income threshold so disincentives to save
  for old age
• Partnership Min guarranteed (66 of benchmark)
  matched contributions by users state not paid
  for outcome increments gt benchmark any
  unmatched private contribution. Evaluation
  outcome-driven so criterion is best value ratio
  of outcomes to total expenditure. Wider
  risk-sharing. Shifts means-testing to income
  maintenance
• Free tax-funded personal care Higher than
  benchmark. Not driven by broad outcomes, but
  ratio close to partnership. Higher call on public
  funding. Wider risk-sharing than partnership
• Also Limited liability Connecticut Part. type.
  Regressive
• Many variants in each family possible, and some
  evaluated by more trad criteria by Hancock
  Wittenberg (06), Hirsch(06

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Expenditure outcome value variants of 3
short-listed modelsa All 3 much in excess of
la net expenditure lane 2/3 AA DLA b
Cost incidence very different c Spectrum
narrowly targeted means-tested to universalist
free personal care PM near to FPC
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Wanless reasons for selecting Partnership Model

• Advantages
• Consign means-testing to income support system
  where most potential recipients would already
  have established eligibility
• Guarranteed minimum level of care, universal
  inclusive
• Incentives to save for old age
• Best ratio of outcomes to cost, and so value for
  money
• Forces many fewer people to dispose of assets
  than with means testing
• Sustainable, with charge beyond benchmark to
  limit public subsidy
• Clarity about what people can expect
• But
• Gap between what rich poor pay diminished
• Complex working with social security system
• Higher direct costs than means-testing, but
  indirect benefits?

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• Will social care greatly improve its share of the
  public budget?

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Political prioritisationAre prospects really
that gloomy?

• Economic policy priorities increasingly winners
  among both parties since 1979 Climate Change,
  transport?
• Social policy
• Pensions gap. On hold. Expensive modified Turner
  accepted
• National Health Service. Potential gains demand
  shift to Primary Based Care accelerating
  public exp. Only small incremental contraction of
  State commitments likely, with only reluctant
  nibbling of public commitment. Acute
  embarrassment of cuts by overspending pcts
  without pervasive productivity gains shown by
  post-Atkinson work bigger short run claim
• Long-term care short shrift in short run.
  Perhaps medium run given expansion of 85
  2031-51?
• Almost certainly demands for public spending from
  more prioritised areas will thwart policy
  ambitions for real economy of care force second
  best choice of main public funding mechanism in
  medium run? In long run also?
• Question is whether the shift to prevention
  life style changes because of personal
  responsibility primary community-led system
  integration partnerships shift to individual
  family other policy ideas in green paper will
  reduce demand raise productivities

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• Changing assumptions and policy

21
Changing assumptions policy green white
papers Challenges shortcomings of social care
system

• Unmet needs
• Users with unmet needs even at higher levels of
  dependency Wanless CSCI 2006 low Horizontal
  Tget Effic Wanless underspending by 1/5 (core
  business) or 2/5 (core wellbeing)
• Stress illhealth caused by excessive dependence
  on informal carers
• Inefficient mix of services
• Within paradigm of mid90s, too little use of new
  hd-based day respite
• Still reducible proportion in residential
  institutions 39, CSCI 06
• Expectations
• Quality
• Control in return for taking risks

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Changing assumptions policy green white
papers Challenges shortcomings of social care
systema underspending by 1/5 (core business)
or 2/5 (core wellbeing) b fewer authorities
ceasing to provide for lowest FACS category, c
unmet needs at higher dep levels d low
falling Horizontal Target Efficiency for all FACS
categories e that little bit of help
prevention not mainstream f carer stress
illhealth
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Changing assumptions policy Challenges
shortcomings Stress levels high mid-80s. Despite
shift in targeting hcbs to users with informal
carers, increased further, despite increased
resources to users with informal carers (Davies
et al 1990 2000). Wanless review showed stress
ill-health still unacceptably prevalent intense
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Changing assumptions policy Challenges
shortcomings Effects of informal personal care
hours on carer stressResults illustrate a
powerful impact b widespread high scores
irrespective of dependency level living
arrangement. Majority of stress scorers of 6
more were considered by care managers to be
overwhelmed by their caregiving
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Changing assumptions policy Challenges
shortcomingsInput mix inefficiency under-use of
newer services (eg day care respite)
26
Changing assumptions policy Challenges
shortcomingsInput mix inefficiency too little
time for care management during set-up phase
particularly those with least professional
qualifications
27
Changing assumptions policy Green paper
afterGreen paper continuity, response to
change, local application of doctrines of
citizen empowerment control

• Reassertion reworking of retainable values
  policy principles of the social care paradigm for
  a worse resource balance given a risk that the
  worsening could devastate performance without
  substantial system change
• Attempt to work through implications of broad
  irresistible forces broad public service reform
  vision joined-up strategy following shift to
  wicked problem specification NHS shift to
  prevention, chronic disease management primary
  care devolution decentralisation
• Citizen empowerment control in all policy
  areas direct payments, individual budgets,
  participation in governance etc

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Changing assumptions policy Challenges
shortcomingsCurrent models of care incompatible
with rising expectations capacities of
successive cohorts, need for profound cultural
structural change

• Higher expectations capacities ascribed to
  baby boomers generation
• Evidence of increased citizen demands for control
  reinforced by experience of the politics of the
  independent living movement for younger disabled
• though
• Baby boom generation will not hit user population
  until 2025 though increased expectations
  capacities among earlier generations also
• Life stage may affect to hopes, fears, attitudes
  to dependence
• Large minorities of older people with fragile
  capacities networks should they have lower
  priority than now?
• Models expecting most from users carers in
  effect depend on carers when users capacities and
  morale affected by health accidents etc

29
Changing assumptions policy Green paper
afterGreen paper as essay in improving
efficiency of public spending by means of
re-engineering and substitution

• Universal services, improving effectiveness of
  mainstream services, partnerships Care Services
  Improvement Partnership, encouragement of new
  models, improved information sharing, working
  with the VCS
• That is
• Tap new human resources use flexibly so
  increasing elasticity of service supply caring
  capacity of the community
• Improve service productivities rebalance
  targeting (3 Kaiser levels, but low cost)
• Substitute physical for human resources
• Substitute universal services not financed by
  social care

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Changing assumptions policy Green paper
after White Paper Our health, our care, our
say a new direction for community services Cm
6737

• Shift to Primary Based Health Care. Point of
  reference the health social care system, but
  overwhelmingly health and health professional
• A sustained realignment of the whole health
  social care system Joint commissioning, job
  re-engineering, streamlined budgets planning
  cycles, shared outcome-based performance
  framework with aligned performance assessment
  inspection regimes
• Among 4 white paper key aims
• Better prevention with earlier intervention via
  Life Check assessments etc but not at the
  expense of those with high needs
• Choice and Control Direct payments,
  Individual budgets, not cm. Away from
  monolithic top-down paternalism. Risk management
  promised
• More support for long term needs. Manage
  conditions themselves with the right help
  Expert Patient Programme personal health and
  social service plans integrated records joint
  health social care teams for complex needs
  more carer support
• Social care community fears could this shift to
  language of integration be assimilation by
  stealth creating risk of increased medicalisation
  of later life (eg Community Matrons, Intermediate
  Care)

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Changing assumptions policy Green paper
after Useful features of Green White Papers

• Reassertion reworking of retainable values
  policy principles of the social care paradigm for
  a worse resource balance given a risk that the
  worsening could devastate performance without
  substantial system change but assertion that a
  part of broader hsc paradigm, must conform to
  strategic policy priorities
• Attempt to work through implications of broad
  irresistible forces broad public service reform
  vision joined-up strategy following shift to
  wicked problem specification NHS shift to
  prevention, chronic disease management primary
  care devolution decentralisation

32
Changing assumptions policy Green paper
afterLess useful features consequences 1

• For how many new models are preconditions for
  central role satisfied?
• Risk losing gains of reforms
• Technological determinacy removes possibility
  of free lunch to prioritise things not directly
  under control deprioritise goals central to
  profession risks alienation lower
  productivities losses of valued gains
• Big effects of variations in social care for
  users on hospital use - contrast Evercare how
  far will community matron effects work
  substantially through social service inputs, and
  if so, any better in medium run when learned
  trade?
• Models expecting most from users carers in
  effect depend on carers when users capacities and
  morale affected by health accidents etc

33
Green paper after Less useful features 2
Risk Offset and Cover of Productivity
Proportionsa Big effects for key policy goals
indicators reflecting values of Social Care
Paradigm b Note shown acute bed use
substantially offsetting costs
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Changing assumptions policy Green paper
afterLess useful features consequences 3

• Reform gains depend on untried technologies
  supported by missionary rhetoric rather than hard
  evidence. More profound cultural change than
  required from 1989-2005
• Initially failures of vast partnership effort
  to show demonstrable user benefits ploughed
  ahead regardless
• Evercare nurse-led cm targeted at acute bed
  risk failed similarly
• Targeting imprecise in logic implementation
  contra-cultural to social care cf 90s priorities,
  nurse transfers from acute with little depth in
  lt social care but can-do RCN. Smaller DH
  pool of social care expertise too little
  influence on nursing case management
• Cons-dir models in-house promoters thin narrow
  ve evidence for tiny pilots ve about outcomes
  achieved now, without evidence from good
  implementations. No direct evidence to set
  against mid-late 90s marginal productivities of
  care management overall service impacts. With
  weak evidence, tendency to be led too far by
  fashion

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• Conclusions

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Tentative conclusions Policy 1Partnership model

• Gold standard comparator more than medium run
  candidate?
• Implementation currently unlikely
• Parameters wrongly set may make sufficient
  compensation for vulnerable current beneficiaries
  
• But New Mercantilist context aside perceived to
  fit future needs emerging values a yardstick
  for the evaluation of policy proposals and
  performance
• Long run possibility?
• Strategic needs of health and income maintenance
  policy would be well served by the partnership
  model in the long run for the modified Turner
  pensions model, the reinforcement to save for old
  age for which means-tested models weaken
  incentives for the NHS social care, the
  reduction of the incentives to cost shunt on the
  boundary of health social care.
• What relatively inexpensive modifications of the
  present system would be compatible with moving to
  the partnership model in the long run?

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Tentative conclusions Policy 2

• If public spending low, Wanless just a
  gap-leaving indemnity insurance? Revive interest
  in private insurance, private/public partnerships
  (Kent tested BRITSMO feasibility), Connecticut
  models, etc. Bi-partisan stability of policy
  intent a precondition.
• At low levels of funding, better to stay with
  means-tested base than leave poor stranded?
  Politics when global competition leads to
  neo-Mercantilism Poor Law fits?!?
• If Means Test base prioritise least able to
  cope with self-management, cm should have a place
  with individual budgets etc all struggle (back?)
  to the productivity patterns and priorities of
  mid-late 90s, with careful targeting of public
  health nsing led cm models for reducing
  deterioration acute admissions
• Conservatives recovering diluted Wanless could
  appeal

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Tentative conclusions Policy 3Other funding
mechanisms

• Since Wanless, useful gap-fillers eg Hirsch 2006
  (interim stop-gaps or steps) Hancock Wittenberg
  et al 2006 (sensitivity to detail of model
  parameterisation
• Evaluation focus of discussion what would be the
  best principal mechanism. Also roles as
  complementary mechanisms for niche targeting.
  Reawaken interest for complementary insurance
  partnerships (eg Kent BRITSMO). Bi-partisan
  stability of policy intent a precondition.

39
Tentative conclusions policy 4 Design of
primary funding mechanism not the only vital
issueDevelopment of new NHS models, prevention
life-style changes

• Much evidence in UK elsewhere for schemes
  targeted at vulnerable. At least mixed, not
  mainly negative results from literatures around
  the world. Issue what are prerequisites for
  favourable costs outcome impacts?
• How far are benefits in eg Evercare successors
  due to the social services input so auspices
  profession of cm unimportant?
• For how many will the high caseloads with case
  management from able nurses with only
  hospital-based experience reduce the impact for
  some of the traditional social care clientele for
  whom success more limited by non-health/dependency
  features?
• To what degree will funds for development of
  social care inputs be transferred for these
  alternatives. The reductions in hospital
  admissions over 2 years associated with greater
  rather than less social care service inputs large
  (Davies Fernandez 2004)

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Tentative conclusions policy 5 Design of
primary funding mechanism not the only vital issue

• Questions about what determines outcomes in new
  structurally integrated settings variations in
  priorities performance between primary care
  teams
• Early multi-disciplinary team evidence that
  impacts dependent on leadership culture, but
  that variable. In new settings too?
• Evidence that response to culture of new setting
  of social care professions in primary care highly
  varied sometimes a loss of the strengths of
  social care practice
• Conflicting logics of efficiency social care
  targeting key to improved effectiveness
  efficiency when targeting sufficiently weights
  benefits in stand-alone social care
• Management dominated by health care paradigms
  tend to de-prioritise virtues of social care
  paradigm (eg learning difficulty institutons in
  Cornwall, Merton Sutton) but management
  required etc

41
Tentative conclusions policy 6 Design of
primary funding mechanism not the only vital
issue The non-health ends means

• Broad perspective on housing as ends means
  practice linkages. Social care models of ageing
  in place lessons from other countries
• Amorphous wellbeing agenda. Distracted DASS
  replace crisis-fighting DSS?

42
Tentative conclusions Development of theory,
data analyses Theory value perspective
theory

• Valuations Complicate over-simple form of Ryan
  et al model theory of influence ( joint
  influence) on valuations.
• Escape from straight-jacket of dependency levels
  (default assumption of some professionals?) by
  incorporating other need-related circumstances
  from the social welfare paradigm elsewhere, ie
  contextual influences on valuations which might
  justifiably affect outcome targets. eg
  experience, personality, culture, hopes
  expectations and value stretch.
• Avoid egoism individualism incorporate
  interdependence of utilities of users and carers,
  of potential carers, of joint users.
• Acknowledge interdependence of level of one
  outcome on the value of another, between joint
  users between potential carers
• Whose values? Citizens in general? Citizens from
  older cohorts? Citizens with vicarious
  experience? Users carers? Some combination?

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Tentative conclusions Development of theory,
data analyses Theory value perspective

• Wanless threshold of 20k/ADLAY about right?
• NICE position is anything around about 20k/QALY
  is likely to be regarded as cost-effective.
  Beyond about 30k/QALY we wouldnt necessarily
  say no, but youve got to have better reasons
  for saying yes QUALY quality life years gained
  DT figure for value of lost life averted by
  road accident of 1-1.5m discounted approx 32k
• Exceptional circumstances where gt20k/QALY
  such as Riluzol, avoids need for tracheotomy for
  about six months for sufferers of Motor Neurone
  Disease people with tracheotomy say its almost
  worse than death
• Research questions
• Are the quality of life contributions of a 1
  ADLAY or b an equivalent generic outcome
  indicator for social care 1 QALY
• Are there interventions subgroups of users for
  whom 1 ADLAY or alternative equivalent to 1 QALY

44
Tentative conclusions Development of theory,
data analyses Production functions
Theoretical model

• Avoid bias by allowing the complications of form
  suggested by Production of Welfare theory to
  reveal themselves. See equation features in
  theoretical chapter of Equity Efficiency Policy
  (Davies et al 1985 1990 2000)
• most services affect several outcome dimensions
  but in different mixes different degrees, so
  substitution complementarity
• levels of one outcome affects marginal
  productivities of services for other outcomes -
  special case of morale as means as well as end
• patterns of productivities contingent on user,
  carer delivery circumstances (eg more trained
  cf less trained care managers, care management
  and delivery models). See equation features in
  theoretical chapter of Equity Efficiency
  Policy. Link with ological studies of nature
  degree of influence
• Production functions of different shapes
  depending on degree to which input mix
  inefficiency (due sometimes to absolute
  constraints on supply of some newer services)
• Service reengineering so adapt service categories
• Develop OPUS to differentiate more dimensions of
  quality of life care

45
Tentative conclusions Development of theory,
data analysesProduction functions Data
collection

• Triadic more complex cohort designs match
  complexity of postulated relationships in
  production of welfare theory evidence, but more
  costly (complex interviews, scale for subtle
  effects)
• Updated standardised indicator bank for linking
  with studies of effects of risk factors,
  performance monitoring other uses of standard
  data bases
• Potential for networks of researchers with
  variety of theoretical perspectives and foci,
  research techniques, to contribute insights to
  one another. Literature shows that work from
  other streams simply not read.

46
Tentative conclusions Development of theory,
data analysesProjectionsa combining micro-
macro-simulation powerful in absence of
developed dynamic theory strong longitudinal
data b Anchoring varying scenario and
relationship assumptions c Stern Report
probability distributions showing effects of
uncertainty
47
Overall

• The obvious
• No easy solutions to problems
• Change necessary
• Most issues are dilemmas and issues are of
  balancing imperfect outcomes
• Ensure adequate evidence about opportunity costs
  and performance with respect to field impacts at
  least a step towards achieving solutions
  balance
• Persistent reduction downwards of inadequate
  public expenditure risks the morale basis for
  policy-making, practice change lead by
  appropriate outcomes