Saga response to the Commission on Funding of Care and Support on funding of care and support

Thursday 3 February 2011

Saga response to the commission on funding of care and support

Question 1: Do you agree with the Commission's description of the main challenges and opportunities facing the future funding of care and support?

Saga broadly agrees with the description of the challenges facing the future funding of care and support, but believes that, if anything, the description understates the severity of the problem. For instance, projections from the Office for Budgetary Responsibility suggest that by 2029/30 Government will be spending 1.7% on long-term care, compared with 1.2% in 2009/10 but is it really credible that Government will be able to find that increase of 42% within 20 years as well as having to increase expenditures on pensions and health expenditure for the older age groups?

Saga broadly agrees with the description of the challenges facing the future funding of care and support, but believes that, if anything, the description understates the severity of the problem. For instance, projections from the Office for Budgetary Responsibility suggest that by 2029/30 Government will be spending 1.7% on long-term care, compared with 1.2% in 2009/10 but is it really credible that Government will be able to find that increase of 42% within 20 years as well as having to increase expenditures on pensions and health expenditure for the older age groups?

The consultation explains, “There will also be changes in the working-age (18-64) population” and proceeds to illustrate this with the projection that, “The number of working-age adults with learning disabilities will rise by around 30% over the next 20 years”. The consultation fails to mention the fall underway in the economic support ratio (the ratio of the number of people aged 16 and over in employment compared with other persons in the UK). This has been falling since 2008 when it was at 0.93; ONS calculations suggest that the economic support ratio will decline to 0.87 by 2021 and 0.81 by 2051, reflecting the projected ‘ageing’ of the population. The blunt fact is that there will be fewer people in the working population to support a larger bulge in the older age groups.

Saga believes that it is critically important not to understate the problem. It is not as if politicians have been unaware of the looming difficulties – but it appears they have shied away from presenting the solutions, because the solutions have a substantial bill attached to them. There will be a limit to what Government (the taxpayer) will be able to provide, and private provision is going to need to take up a large part of the slack. This is perhaps an unpalatable message to convey but unless the population is educated as to the true extent of the problem there will be less propensity for providential private provision.

As for “opportunities” arising out of the picture painted by the Commission, these appear to be limited to the advantages of expanded telecare. In fact, the biggest opportunity arising from the extra years of life will be the chance for those who wish to take it to continue contributing to the economy. Research undertaken by Saga showed that more than a third (34%) of people that have already retired said they would prefer to be doing some paid work. Large scale research amongst the over 50s, undertaken by Populus for Saga in January 2010, showed that 48% of men over 50 saw themselves as wanting to work beyond 65 and 74% of women wanted to work beyond 60.

Accessible information and advice is touched upon in the report, but this is a real shortcoming in the current system. We have found that many people who contact Saga’s care funding service have been given wrong information, were not aware of state benefits to which they are entitled, or did not find that social services were able to adequately deal with their enquiries. There needs to be a robust system in place so that those needing care or arranging care for others know where to go to get reliable and accurate information and advice. Information and advice needs to be a key feature of any care journey. Currently, lack of the right information is causing a lot of frustration and upset when people are already at a very vulnerable and stressful time. Wrong information also affects the quantum and funding of care needs.

Question 2: Do you agree with the Commission's description of the strengths of the current funding system, and its potential shortcomings? Do you think there are any gaps?

Saga agrees that the current system provides a ‘safety net’ for those with the lowest means and highest needs and that the drive for personalisation could give people choice and control, and power to determine the outcomes they want. We accept the consultation’s view that, “The current system can already be described as a partnership between the state, the private sector and individuals and their families”. We also agree that, “Focusing on prevention activities should prevent (or slow) needs escalating” but to conclude that, “We would like to see the focus on prevention maintained” understates the potential for more prevention. The NHS has traditionally emphasised treatment over prevention. Those who benefit from private dentistry, for instance, notice the contrast between public and private provision in that private dentists emphasise preventive hygiene – under a private insurance system it is in their financial interests to do so. But, the NHS operating under the sceptical gaze of the Treasury finds it hard to convince its funder that money spent on prevention now saves taxpayers’ money further down the line.

Another example, among many others possible, is heart disease. The main cause of death in the UK is cardiovascular disease and coronary heart disease (CHD) – nearly half of these deaths caused by the latter. Based on 2005 data, there are some 227,000 heart attacks each year. The British Heart Foundation estimate that 1.5 million men, and 1.1 million women are living with CHD. That is an immense residual quantum of personal suffering but also an effective burden on the economy. CHD costs the UK economy nearly £9 billion a year - £5.7 billion of this is a result of days lost owing to death, illness and informal care costs.

Recognising that high blood cholesterol was the single biggest risk factor a national programme of vascular checks for 40 to 74 year olds, including risk assessment and management was put in place but death rates from cardiovascular disease remain amongst the highest in Western Europe. Tony Hockley, Director of the Policy Analysis Centre reckons that in England alone there are more than 7,000 unnecessary heart attacks a year because we do not diagnose and treat enough people with raised cholesterol levels. In the USA, cholesterol testing is recommended for all adults over 20 every 5 years; the USA targets for cholesterol reduction are significantly more ambitious than in the UK; and, broadly speaking the hard-headed medical insurance companies in the USA are prepared to pay for cholesterol reducing medications on a preventive basis for those in high-risk groups. What makes sense to commercial ventures in the USA should make sense to a value-for-money minded Treasury in the UK, too. The Quality Outcomes Framework by which GPs are incentivised should be revised to treat high cholesterol preventively down to more demanding levels and to target high risk groups in particular. Applying these lessons to care would mean screening and assessing peoples’ needs. This would ensure that the right support was offered at an earlier stage ensuring that people remain better for longer, that family care is also supported; both of which delays the day when someone’s care needs become chronic and very expensive e increases exponentially.

The consultation claims that, “The current system is responsive to local needs” but here we disagree. We do not believe the system responds adequately to local needs. The true picture is of variable quality and adequacy. The Commission itself describes a “postcode lottery” of provision leading to perceptions of unfairness, of retraction rather than advance in provision (described as “tightening eligibility over time”) and “unmet need”. As we stated in the Saga Manifesto before the 2010 Election “the last Government’s Solution was over-dependent on local authorities delivering the bulk of the package”. We preferred a mixed economy solution. We believed that “Commissioned private-sector assessment services might be more cost-efficient and less bureaucratic than those provided by local authorities. There is also a problem with information and advice services. The current situation is patently unsatisfactory and we believe that local authorities should no longer be the main arbiters in this field”. This echoes the Commission’s point that the system is “complex and difficult to navigate” and that there is a lack of co-ordination between local authorities – “Assessments have to be done again if someone decides to move house or is relocated through work, and a new local authority has to pay for the care”. Given the record outlined, we would not put local authorities in the driver’s seat for reform or delivery.

The Commission averts to the current “postcode lottery” and asserts the need for geographical fairness. The Commission omits to mention the most glaring example of geographical unfairness. The Saga Manifesto 2010 had this to say: “Provision in Scotland is generally considered more generous than in England. While the Green Paper on carers published early last summer did not examine this difference, it laid great stress on there being a national, joined up system, while not explaining if that meant throughout England, Wales and Scotland. Although devolution opens up the possibility of delivering services differently, such as free care in Scotland, this may create problems of perceived inequities across borders within the UK. These problems need to be aired, not ignored”.

The Commission finds that, “Some people may also want, and choose, to live independently in their home for as long as possible. With people increasingly having more choice over their care through personal budgets, this is likely to increase. Home care costs on average £8,000 per year, but intense care and support within a domiciliary setting can be as expensive as residential care and can still see people using up large proportions of their income and non-housing assets”. Saga would broadly accept this but would stress that the average domiciliary bill is far less expensive to the state/individual than residential care, and it is in this area where we suggest there is a big gap in provision waiting to be filled.

With increasing age and frailty, the ultimate need for assistance with both personal (social) and health care is inevitable. Often, this initially takes the form of privately sourced assistance with day-to-day activities, the cleaning lady, man to mow the lawn etc. Later this can progress to a need for assistance with other social activities, transport, shopping, cooking etc. and ultimately with more personal but not illness related needs such as bathing and dressing. Such support is generated in a variety of ways, often involving a complete network of friends, neighbours and family members, as well as “professional” help from voluntary organisations or other paid providers.

With increasing age and frailty, the ultimate need for assistance with both personal (social) and health care is inevitable. Often, this initially takes the form of privately sourced assistance with day-to-day activities, the cleaning lady, man to mow the lawn etc. Later this can progress to a need for assistance with other social activities, transport, shopping, cooking etc. and ultimately with more personal but not illness related needs such as bathing and dressing. Such support is generated in a variety of ways, often involving a complete network of friends, neighbours and family members, as well as “professional” help from voluntary organisations or other paid providers.

Historically, domestic care was typically delivered by Local Authority employed “home helps”, commissioned by health visitors or social workers as need was detected. This has led to the current situation where, what are essentially the same care needs can be classified as “social” or “medical” depending on the context which determines the commissioning agency (Local Authority or PCT) and how they are funded.

The funding situation is further complicated by the mean testing framework, the personalisation agenda, which is being embraced with varying degrees of enthusiasm in different geographic locations and the fact that around 30% of domiciliary care is purchased privately and paid for by the individual receiving the care for their family.

As both the size of the population needing or seeking care grows, and the age to which they survive increases, care resources will have to grow both in scale and type. The entirely artificial boundary between social and medical care can be removed by adding nursing resource to provision in the home, and it has been clearly demonstrated that even very complex medical needs can be successfully catered for in the domiciliary setting (Healthcare at Home).

At the moment PCTs are both providers and commissioners of services such as district nurses and health visitors and going forward there is merit in combining community nursing services with domiciliary care and allowing GP practices to commission them alone or in concert.

Domiciliary care can make a significant contribution to fulfilling the care needs, both social and medical, of the aging population and at the same time help to contain or reduce the cost of care.

Maintaining independence in the home for as long as possible is the preferred outcome for most individuals. Residential care will clearly always be needed at some stage for some of the population but this should be the less commonly used option.

The provision of appropriate domiciliary care services at the right time is essential to achieve these aims. Very often the use of domiciliary care is delayed until some “crisis” event occurs such as a fall or stroke which leads to hospitalisation and disruption of the care support network which naturally builds up around the most frail, and elderly in their own homes.

The mechanisms by which domiciliary care is mobilised need to be re-examined and the concept of “prescribable care” introduced. Domiciliary care agencies provide twenty-four hour cover to their clients and this resource could be utilised to deliver acute support at short notice.

The additional benefit such service provision could deliver is both an avoidance of unnecessary hospitalisation and facilitation of early discharge when admission has proved inevitable.

The commonest precipitating factor of hospital admission in the elderly is a fall, which may be a simple accident or result from a significant medical event such as a stroke or hip fracture. Since the changes in out of hours provision in Primary Health Care the first call after such an event is most commonly to the Ambulance Service. It is then difficult for ambulance personnel to leave the elderly person in their own home, or indeed the residential home in the absence of other care support. This very often leads to hospitalisation which may result in a lengthy stay as care assessments have to be performed prior to discharge. Access to an acute domiciliary care support service could potentially be very helpful in such circumstances.

Reducing the use of residential care and hospital beds through timely provision of domiciliary care offers the potential to make significant budgetary savings whilst improving the quality of life of the older population.

Research undertaken amongst over 50 year olds by Populus for Saga in May 2008 showed that 84% of respondents would prefer to receive care in their own home, with a further 12% opting for sheltered accommodation. 3% would prefer residential care. If a relative or loved one required care, 71% of respondents would prefer that they too received it at home. We can confidently expect, then, that our concept of expanded domiciliary care would be popular.

Question 3: Given the problem we have articulated what are your suggestions for how the funding system should be reformed? How would these suggestions perform against our criteria that any system should be sustainable and resilient, fair, offer value for money, be easy to use and understand and offer choice? Please also take into account the impact that your suggestions will have on different groups.

This section of the consultation is the most inchoate. Stating that, “Increased resources – public, private and voluntary – will need to be dedicated to care and support in the future” hardly gets us to square one. As we implied in our response to Question 1 we believe there has been political reluctance to grasp this nettle, and people have been left in the dark about their personal responsibility for providential provision. The State may find some “increased resources” from the taxpayer but we should not expect a cornucopia. Besides, the State with its unprovidential reliance on the “pay as you go” system, and its record of unreliability (witness the abolition of graduated retirement benefit, and cut backs in SERPS in the 80s) should not seek to displace individual prudential provision. The Commission’s final report should make this crystal clear.

The Commission sees the need to educate people on the system: “Many people believe they will receive free care in later life – because they mistakenly believe that they have been paying for this through the National Insurance system or that it is part of the NHS. This leads to inertia, and a lack of planning.” Inertia and lack of planning will result unless people realise that the bulk of the responsibility for their own long-term care is likely to be their own personal responsibility.

The Saga Manifesto advanced the following views, based on extensive research: “The essential problem is that not enough money is being applied to solve our care and support needs. Our recent research, through Populus, showed that just 4% of respondents said they would “be easily able to afford” care fees of £30,000 per year. Two-in-five (43%) say they could afford the care fees, but only by selling their home. A further 17% would be able to afford care by using their savings. A quarter (26%) of our respondents said that while they will not qualify for local council funded care nor can they afford to pay for their own care.

“Demographic change and the impact of the recession will worsen this problem, and more is likely to be needed from us as individuals and taxpayers to fund increased care and support needs in the future. The prospect of paying more is never going to be popular: but, if we are going to have to, the least we can expect is clarity about what we are paying for.

“A similar issue arises with the level of income/assets someone has before taxpayers’ money comes in to top up basic care and support. We need the clarity of knowing in advance about how any future means test will be applied – so people will know if saving is worthwhile.

“We undertook a large-scale survey of 11,568 people aged over 50 to see how different options of paying for long-term care were viewed. There was a clear preference (51%) for the partnership model where all receive an equal amount and the rest of the costs are met by the individual. The research showed only 21% of respondents liked the voluntary insurance option. Our feeling is that voluntary insurance may not be the right way forward as the take-up is likely to be low.

“The compulsory lump-sum insurance was the least favourite: only 6% felt that this was the best way forward. We are aware of a widespread feeling that those paying for care feel that the current system is unfair; if people have to pay £20,000 from their estates for care that has never been required, we can only imagine those feelings being magnified. Also, in the current pension crisis with many worrying about not having enough to live on in retirement, many may not have such a large sum available at retirement to pay in advance – the UK average pension pot is only around £25,000.”

Although the objective of a proper national care system ought to be universally accepted, at the outset the solutions will be diverse to reflect the fact that different age and income groups face different needs, and have different capacities to take action to provide for their care needs. Those who have some time before they need care ought to be encouraged to save to provide for care; whilst those providing or paying for care for loved ones, and those receiving care, will be interested in more immediate support and ensuring the quality and quantum of care being delivered is appropriate.

Incentives to self-fund and save for care

As reflected in work done by Saga with focus groups of older people, there is widespread recognition of the importance of care provision in later life and of being in a position to find the care needed to maintain independence. However, there is also great reluctance to invest money in financial products to fund the necessary care, particularly amongst the age group where regular savings need to be invested in order to accumulate sufficient financial resources. Indeed, in the last year the final provider of pre-funded long-term care insurance has left the market owing to low uptake. The simple fact is that people do not like to think about long-term care and have an 'It's not going to happen to me' attitude. If a voluntary insurance route is to be followed, a deal of consumer education is required.

To kick-start the drive to save for care needs we suggest the introduction of tax relief on financial contributions into products, the proceeds of which could be used only for the purchase of specified forms of care.

Tax relief could be introduced for payment of care fees – whether you pay for care yourself or whether family members club together to contribute towards the cost of care for a relative. This would increase the number of people saving for care and also increase the number of families who could self-fund in full or in part.

Given the spread of property ownership equity release solutions should also be developed to meet care home fees when required. In the shared-ownership sector it should also be possible for people to ‘sell-back’ portions of equity to the social housing provider to fund care.

Supporting family care

The Commission suggest that the supply of care by adult children is to grow by 13% a year and that carers provide an "immensely valuable contribution". With the demand for care likely to increase by 55% there is going to be a huge shortfall in informal family care.

In 2002, Carers UK calculated the value of informal care at £57bn a year (whereas £23bn is spent on the formal care market). This highlights just how important it is that this contribution is nurtured. There needs to be improved support given to informal carers - at the moment carers allowance is £53.90 per week, though you do not receive it if you have other income above £100 per week or receive more than £53.90 in state pension or other benefits. In addition, you must be caring for that person for at least 35 hours a week: this means that the state support for providing full time care for someone is valued at £1.54 an hour, compared to a minimum wage for those over 21 of £5.23 an hour. Given that the most income you can receive under this regime is £153.90 a week this does not allow those unable to work, owing to providing care, much support. They will be left having to claim income support or pension credit - though this is then likely to remove the entitlement to carers allowance! This complex area needs a thorough overhaul to encourage family carers to remain carers.

The provision of respite care and respite breaks enables family carers to go on caring – without this support many become mentally and physically drained which reduces their capacity to provide care which leads to this burden falling entirely on the UK taxpayer. Resources set aside for respite care and respite breaks need to be ring-fenced or else authorities will be tempted to use it for other things as it is lost within the budgets for the overall services they deliver.

-ENDS-

For more information please contact the Saga Press Office on 01303 771529

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