The true cost of care: evolution or revolution

1
The true cost of care evolution or revolution?
Bournemouth, 20 November 2007

• Martin Knapp
• Personal Social Services Research Unit
• London School of Economics and Political Science

2
Structure

• Why economics?
• Costs autism as example
• Cost-effectiveness PCP as example
• Incentives changing the system
• Direct payments
• Individual budgets
• Unanswered economic questions

3

• A

• Why economics?

4
4. Incentives ?
Interventions Psychological therapy Family
support Supported housing Medications Self-directe
d service model
5
4. Incentives ?
Outcomes Behavioural change Independence Choice
control Social interaction Employment Quality of
life
Interventions Psychological therapy Family
support Supported housing Medications Self-directe
d service model
6
4. Incentives ?
Outcomes Behavioural change Independence Choice
control Social interaction Employment Quality of
life
Interventions Psychological therapy Family
support Supported housing Medications Self-directe
d service model
Cost savings Reduced use of health and social
care Lower out-of-pocket costs Lower reliance on
benefits Greater economic productivity
So where does economics come in?
7
4. Incentives ?
Outcomes Behavioural change Independence Choice
control Social interaction Employment Quality of
life
Interventions Psychological therapy Family
support Supported housing Medications Self-directe
d service model
Cost savings Reduced use of health and social
care Lower out-of-pocket costs Lower reliance on
benefits Greater economic productivity
1. Costs ?
8
4. Incentives ?
Outcomes Behavioural change Independence Choice
control Social interaction Employment Quality of
life
Interventions Psychological therapy Family
support Supported housing Medications Self-directe
d service model
Cost savings Reduced use of health and social
care Lower out-of-pocket costs Lower reliance on
benefits Greater economic productivity
1. Costs ?
2. Cost-offsets ?
9
4. Incentives ?
Outcomes Behavioural change Independence Choice
control Social interaction Employment Quality of
life
Interventions Psychological therapy Family
support Supported housing Medications Self-directe
d service model
Cost savings Reduced use of health and social
care Lower out-of-pocket costs Lower reliance on
benefits Greater economic productivity
1. Costs ?
3. Cost-effectiveness ?
2. Cost-offsets ?
10
4. Incentives ?
Outcomes Behavioural change Independence Choice
control Social interaction Employment Quality of
life
Interventions Psychological therapy Family
support Supported housing Medications Self-directe
d service model
Cost savings Reduced use of health and social
care Lower out-of-pocket costs Lower reliance on
benefits Greater economic productivity
1. Costs ?
3. Cost-effectiveness ?
2. Cost-offsets ?
11

• Our over-riding concern is how to meet the needs
  of people affected by intellectual disability
• But resources are SCARCE
• We dont have enough resources to meet our own
  wants
• Society certainly doesnt have enough resources
  to meet all needs

But why?
12

• B

• Costs

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• Prevalence
• Level of functioning
• Place of residence
• Service use patterns
• Family expenses
• Lost employment
• Costs per person
• UK-wide costs
• Lifetime costs

ASD costs
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Children with HF ASD average annual costs ()
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Adults with LF ASD average annual costs ()
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Lifetime cost of ASD

• Someone with low-functioning ASD 4.7 million
• Someone with high-functioning ASD 2.9
  million

17
Overall UK cost of ASD

• Aggregate cost for children and adults across
  the whole autism spectrum
• 28 billion
• Knapp, Romeo Beecham (2007) report published
  yesterday on FPLD and PSSRU websites

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Why calculate these costs?

• Our primary concerns are how to meet the needs
  and improve the quality of life of people
  affected by autism
• But
• Money talks to different people and in a
  familiar language
• Such calculations are especially relevant when
  impacts are broad
• Comparisons are possible with other areas
• This gives a baseline for examining efficiency
  (cost-outcome links)

19

• C

• Cost-effectiveness

20

• The core service or outcome question is
• ? Does this treatment or intervention work?
• The core economic question is then
• ? Is it worth it?

21

• A policy or service does not need to save money
  to be cost-effective
• It just needs to deliver outcomes that are worth
  paying for
• BUT the policy/service obviously has to be
  affordable

Note
22
Example PCP

• Person-Centred Planning (PCP) evolved out of
  Individual Programme Planning (IPP),
  normalisation, social role valorisation and other
  developments.
• Clearly part of a personalisation approach to
  care.
• Different styles of PCP are used to answer the
  questions (from Helen Sanderson et al 1997)
• Who are you and who are we in your life?
• What can we do together to achieve a better life
  for you now and in the future?

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PCP outcomes

• Evaluation of PCP in 4 localities. Funded by the
  Department of Health
• Outcomes
• PCP was associated with benefits in
• Community involvement
• Contact with friends
• Contact with family
• Choice
• Full details in Janet Robertson et al report
  (2005) and published papers

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But what did PCP cost?
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But what did PCP cost?
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What does this tell us?

• PCP has good outcomes and costs are no higher
  it looks cost-effective
• But this study has some limitations
• Short-term
• Circumstances representative?
• Lots of development work sustainable?
• Enthusiasts only?
• No comparison group
• Despite limitations these were clearly
  encouraging findings and the economics element
  was essential to reassure budget holders

27

• D

• Incentives how we can change the system of care?

28
Incentives to change

• Many approaches have been/are being tried
• Funding reallocation/re-routing e.g. between
  NHS, local authorities and social security
• Commissioning strategic-level efforts to manage
  the system to better match services to needs
• Incentive-based contracts to reward providers
  delivering higher quality care
• Payment by results to discourage long inpatient
  stays and use competition to raise quality

29
Promotion of responsiveness to need and user
choice

• Initiatives in the UK to improve the care system
  by offering economic incentives
• Kent Community Care Project (older people 1970s)
• Independent Living Fund (physical and sensory
  disability 1980s)
• Direct payments (all service user groups
  eventually 1990s)
• in Control (intellectual disability, later
  broader 2000s)
• Individual budgets (all adult user groups 2005)

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Why emphasise choice?

• Long-standing social work commitment to
  self-determination i.e. empowerment
• to encourage services to be responsive to
  individual needs and preferences
• Hence, belief that user/carer outcomes will be
  better
• Social care emphasis on roles of families and
  communities
• Consistent with community development principles
  stressing key roles of local communities,
  social capital etc

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and more reasons to emphasise choice

• Rights-based advocacy by and for service users
• Universalism everyone assigned fair level of
  funding, regardless of user group
• Flexibility offers different levels of control,
  and can add new budget streams, etc.
• Political support
• from the Right - encouraging accountability,
  market-like allocations
• from the Centre Left encouraging public
  confidence, local understanding, social
  inclusion, citizenship

32
Operationalising choice
Diversity
Information
Empowerment
Control
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• Diversity (of provision)
• Is there enough service variety? Undoubted
  changes over past 20 yrs in some service areas
• Commissioning can encourage variety (if
  commissioners work for it)
• but regulation (e.g. national standards can
  constrain it (coercive isomorphism)
• So, too, can monopoly power hence concerns
  about market concentration.
• Key question how much of the diversity is
  affordable to typical service users?
• And is there much diversity for older people with
  lower-level needs?

34

• Information (for users)
• In what form does it exist? Accessible and
  meaningful to people with (e.g.) communication or
  cognitive limitations?
• Does it cover relevant dimensions?
• England - big improvements from a low base
• The experience good challenge ? intrinsic
  difficulty of communicating the quality of care
• Do bureaucratisation and fragmentation of care
  (in our developing mixed economy of provision)
  create information problems?
• ? Are competing providers willing to share
  information about their services?

35

• Empowerment (of users)
• Challenge of empowerment can be considerable for
  social care service users especially if frail
  or confused
• Do service users participate in decisions about
  their lives? Still rather limited in many
  traditional services
• More generally, are service users supported to
  become more autonomous?
• Tokenistic approaches to user involvement are
  not the same as empowerment

36

• Control
• Is there a step up from diversity, information
  and empowerment to control?
• Lots of evidence ? older and disabled people want
  independence. Plus strong cohort effects
• Are service users free to choose risky
  behaviours or service options?
• And control for whom? User? Carer?
• Consumer-directed services (e.g. direct
  payments and individual budgets) are attempts
  to develop control though still fall short of
  full independence

37
Operationalising choice
through policy
Promoting the mixed economy of provision, c.1980
- 96
Diversity
Information
Empowerment
Promoting the mixed economy of purchasing, 1997 -
Control
38
People with intellectual disabilities limited
choices ?

• Failure to recognise rights of individuals as
  citizens
• Patchy provision of advocacy services
• Very limited involvement in decision making
• and not acting on the expressed preferences of
  those people who do participate
• Low take-up of direct payments

• Promising recent progress?
• Valuing People agenda ? personalisation etc
• in Control ? highly successful development work
• Person-centred planning ? encouraging pilot
  results
• Individual budgets ? now being evaluated

39

• E

• Direct payments

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Direct payments

• Direct payments given to individuals in lieu of
  directly provided care services.
• DPs must be spent on services that local
  authority agrees that the individual needs but
  not on local authority in-house services
• Why this policy?
• Professional support for empowerment
• Assumed cost-effectiveness
• Broad political appeal
• Popular with some users
• Appealing simplicity

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Slow progress

• Take-up rates (England, 2004/05)
• Physical disability 6.2 (higher need)
• Sensory disability 4.7
• Intellectual disability 3.6 (lower need)
• Mental health service users 0.6
• Older people 0.7 (lower need)
• Carers not known
• Disabled children and their carers ??
• plenty of room for improvement

42
Prevalence of DPs per 000 popn, England, 2003/04
43
DPs uneven spread across the country
Darker shade higher per capita of DPs
44
DPs uneven spread across the country
Many factors help to explain these variations
(partially)See Fernandez et al, Journal of
Social Policy, Jan 2007
Darker shade higher per capita of DPs
45
What is hindering progress?

• Staff resistance/conservatism
• Users concerns about complexity of holding their
  own budgets, administration etc
• Shortage of people willing to work as personal
  assistants
• Data come from two recent UK-wide surveys by
  PSSRU in partnership with other teams
• Survey of UK Local authorities (published July
  07)
• Survey of UK support organisations (out Nov/Dec
  07)
• Download from PSSRU website www.pssru.ac.uk

46

• F

• Individual budgets

47
Individual budgets

• Individual budgets
• broader than DPs
• more budgets pooled
• wider purchasing span
• more flexibility in how funds can be spent
• can take many forms, including direct payment or
  directly provided services

48
Potentially pooled funds

• Social care (LA adult care)
• Supporting People housing-related (ODPM)
• Independent Living Fund - for disabled people
  (NDPB)
• Disabled Facilities Grant home adaptations for
  disabled people (LA)
• Access to Work for disabled people (DWP)
• Integrated Community Equipment Service people
  in need (DH)

49
Positive features of IBs

• Increasingly streamlined assessment processes
  across all relevant agencies
• Transparent allocation of resources (RAS) -
  people know very early what budget they will have
• Variety of funding streams (eventually)
• Wider choice of options for spending to give
  flexibility (i.e. variety of routes)
• and more control over resources.
• Promote service diversity

50
More positive features of IBs

• Freedom and independence (e.g. to get out)
• Taking pressure off the family
• Promoting self-esteem and sense of identity
• Proportionate (?) arrangements for
  accountability, striking balance between risk
  management for individual and organisation
• Opportunities for people to exercise choice
• first when deciding how to use their budget,
• then when making arrangements to deliver their
  plan
• and so to expand diversity of provision

51
Operationalising choice
Diversity
Information
Empowerment
Control
52
IBSEN evaluation
CORE QUESTION ? Do individual budgets offer a
better way to support disabled adults and older
people than conventional methods of resource
allocation and service delivery? If so, which
models work best and for whom?
Evaluation dimensions
User experience Carer impact Workforce Care
management Provider impact
Risk protection Commissioning Outcomes Costs Cos
t-effectiveness
53

• G

• Unanswered economic questions

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So what economic questions remain to be
answered? (1)

• Commissioning
• What will happen to block contracts and their
  price advantage?
• Service provision
• What will happen to provision as patterns of
  demand alter? What are the transition costs of
  moving from one system to another (of
  evolution/revolution)?
• Families and carers
• What responsibilities fall to families? At what
  cost to them?

55
Questions to be answered (2)

• Jobs
• What will happen to staff of conventional
  services how many will make successful
  transition to new modes of working?
• Are there enough people to work as personal
  assistants etc?
• Brokerage and support
• Are there enough honest brokers?
• What are the costs of regulating them?

56
Questions to be answered (3)

• Discrimination
• What will the new transparent RAS mean for
  allocation of resources between and within
  service user groups?
• Costs
• What are the costs of IBs?
• What, in particular, are the support costs,
  transaction costs etc?

57
Questions to be answered (4)

• Cost-effectiveness
• Will IBs deliver better outcomes? And if so, at
  what cost?
• For whom will IBs prove to be effective and
  cost-effective?
• Finally Generalisation
• Will the early findings from enthusiastic local
  authorities, highly committed staff and highly
  motivated users be relevant to everyone
  eligible for care?