How is long-term care funded?
When it came into office in 1997, the Labour government ordered a Royal Commission on Long-Term Care to look at the options for funding long-term care for older people with long-term illness or disability, provided in their own homes or in sheltered housing, residential or nursing homes.
In 1999, the commission recommended that while older people's living costs (such as food and heating) and housing costs should be means-tested, nursing and personal care (which includes help with feeding, dressing and personal hygiene) should be available free at the point of use.
The United Kingdom government rejected this for England, arguing that personal care should remain means-tested because providing it free would increase demand, benefit the better-off more than the poor, and weaken incentives for private provision.
In effect, it decided to preserve the distinction between health care, provided free at the point of use and financed through general taxation, and means-tested social care.
So personal care in England continues to be means-tested, although the Scottish Executive accepted the commission’s recommendation.
What does the government pay for?
In England, the government has agreed to pay nursing home residents a contribution towards their nursing costs on the grounds that, if they were in their own homes, the NHS would give them free nursing care. So some residents who under previous arrangements would have paid now receive a contribution towards the cost of this element of their nursing home fees.
Implementing this policy has not been straightforward. Nursing home residents have to be assessed to establish whether they need nursing care, and contribution levels are linked to their assessed level of need.
The government also accepted that free care should continue for those older people living at home who require specialist medical or nursing care. However, eligibility for this type of care has been determined by individual health authorities, with the result that some people have not received the free care to which they are entitled. Recently, following criticism by the Health Ombudsman and others, the government said it would apply a nationally consistent approach to determining eligibility.
What has the government done?
The government has increased funding to local authorities by £1 billion a year from 2003–2006. In 2003/04, £7.4 billion was spent on services for older people, up eight per cent on the previous year. The emphasis is on enabling older people to live independently at home by investing in the range and quality of care services.
It has awarded short-term extra monies to support specific developments, including £900 million to develop short-term rehabilitation (‘intermediate care’) services; £300 million for more care services; and over £87 million to create a further 1,500 very sheltered (‘extra care’) housing units.
It has created incentives to encourage the NHS, local government and housing to work in partnership to make the best use of resources, deliver integrated care and relieve pressures on hospitals.
This includes fines for local authorities who fail to provide residential or nursing-home places to patients ready to be discharged from NHS hospitals.
It has also given primary care trusts and local authorities the authority to pool their budgets to support integrated working, and awarded extra resources to develop community services, with the aim of preventing delayed discharges from and inappropriate admissions to hospitals.
What has been achieved?
The numbers of people receiving short-term intermediate care rose from 132,000 in 1999 to 331,721 in 2004. Eighty per cent of those receiving this kind of care are older people.
There has been slow but steady growth in 'extra care' accommodation, from 18,000 in 1997 to 25,500 in 2003.
Older people can now receive money to buy their own care and support (‘direct payments’), rather than having to use the services supplied by their local authority. But take-up of 'direct payments' has been slow.
The numbers of delayed hospital discharges have decreased, apparently reflecting a growth in intermediate care and other community services. But concerns remain about what choice some older people have about their future care.
What problems remain?
Many older people find themselves ineligible for care services, even though they have considerable support needs. Funding pressures on local authorities mean that most can only offer services to people assessed as having 'critical' or 'substantial' needs.
Fewer people receive home care, despite a substantial increase in home care contact hours, which went up 76 per cent between 1992 and 2002. This reflects local authorities' tendency to focus home care services on those who are more dependent.
Since 1996, capacity in the residential care sector has shrunk by 16 per cent, but demand has decreased more slowly, by 11 per cent, leaving a shortfall in provision. In particular, it is difficult to find places in care homes for older people with dementia.
At a recent conference David Behan, the Chief Inspector at the Commission for Social Care Inspection, reported that 15 per cent of care homes still failed to meet national minimum standards.
Some local authorities and primary care trusts report difficulties in providing preventative services, because resources are diverted to people with high-dependency needs.
What does the future hold?
With numbers of older people set to increase, future funding for long-term care remains a major issue.
The question of who should pay raises difficult issues about the balance of state and individual responsibilities, and a coherent approach to policies in areas such as pensions, benefits, inheritance and housing will be needed for a fair and equitable solution to be found.
The government is placing more emphasis on shifting resources to individuals and enabling them to control their own care services, through direct payments and individual budgets.
The King's Fund is conducting an investigation into care services for older people in London, including the balance of individuals buying their own care and authorities commissioning services on their behalf.
The King's Fund has also commissioned Sir Derek Wanless, former NatWest chief executive and author of an influential review of future NHS funding for the Treasury, to head a further major review of social care funding.
This will examine expected demographic, economic, social and health trends over the next 20 years, identify the resources required to meet the needs of older people, and recommend how care might best be funded.
