Transcript Slide 1

SUSTAINABILITY AND FINANCING
ASPECTS OF LONG TERM CARE
Lidia Pola
European Commission
DG EMPL Unit E4
Social Protection and Social Services
22 February 2010
17-Jul-15
Directorate-General for Employment, Social Affairs & Equal Opportunities ─ Unit
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European Commission
Outline
• The demographic challenge - Population projections
and projections for public expenditure, including
LTC – 2009 Ageing Report
•
Modernising social protection systems – Social
OMC – including health care & long-term care
• Related activities and policy initiatives in LTC:
access, quality sustainability
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Directorate-General for Employment, Social Affairs & Equal Opportunities ─ Unit
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European Commission
17-Jul-15
Directorate-General for Employment, Social Affairs & Equal Opportunities ─ Unit
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European Commission
A unique collaboration
• Projections for economic consequences of ageing and
future public expenditure on pensions, health care, longterm care, education and unemployment transfers
• Repeat of projections carried out in 2001 and 2006
• Joint project of Economic Policy Committee (EPC) and
Commission (DG ECFIN) to ensure comparability while
reflecting the diversity of welfare systems accross
Member States
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Directorate-General for Employment, Social Affairs & Equal Opportunities ─ Unit
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European Commission
Ageing Report 2009
• In 2007 some 20.7 million dependent
persons, 65 years old or older, in the
EU 27 Member States
• This could increase to some 30 million
persons in 2030,
• and to 39 – 44 millions in 2060
– Care in institutions: from 2.9 to 8 millions
– Care at home: from 5.5 to 13 millions
– Informal or no care: from 12.3 to 20 million
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Directorate-General for Employment, Social Affairs & Equal Opportunities ─ Unit
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European Commission
Overview of 2009 projection exercise
Pensions
Labour force
National models
- Participation
- Employment
- Unemployment
Health care
Population
2008-2060
Labour
productivity
GDP
Long-term care
Real
interest rate
Total
agerelated
spending
Education
Unemployment
benefits
European Commission
Main demographic indicators
EU15
2008
2060
1,6
1,7
77,2
84,8
82,6
89,1
1647
750
14
EU12
2008
2060
1,4
1,5
71,2
82,3
79,0
87,6
37
54
4
EU27
2008
2060
1,5
1,6
76,0
84,5
82,1
89,0
1684
804
12
390
27
103
21
493
25
(EUROPOP2008)
Fertility rate
Life expectancy at birth - men
Life expectancy at birth - women
Net migration flows (thousands)
Net migration flows
(cumulated 2008-2060 as % of population in 2008)
Total population (millions)
Old-age dependency ratio (65+/15-64)
421
51
85
65
506
53
European Commission
Population projections: EUROPOP2008
2008
2060
European Commission
Substantial increase in public spending
( pension, HC, LTC, UB, Education)
Total Cost of Ageing, 2007-60
% of GDP
20.0
18.0
15.9
15.0
12.8
10.8
10.1
10.2
8.9 9.0 9.0 9.4
10.0
5.0
0.4 0.4
1.6
5.5
4.7 4.8 5.1 5.2 5.4
4.1
3.4 3.7
2.6 2.6 2.7 3.1
6.3 6.9
LU
SI
EL
MT
CY
RO
NL
NO
IE
ES
FI
BE
CZ
SK
LT
UK
BG
HU
AT
PT
SE
FR
IT
DK
-2.4
EU
27
DE
-5.0
LV
PL
EE
0.0
-10.0
European Commission
Health Care -Simple basic methodology
but several sensitivity tests possible
Input data:
POPULATION
PROJECTIONS
Sensitivity
tests:
(1)
Alternative
demographic
projections
*
AGE-RELATED
EXPENDITURE
PROFILES
(2)
Health
status
*
(2a)
Income
elasticity
of demand
UNIT COST
DEVELOPMENT
=
TOTAL
SPENDING
ON HEALTH
CARE
(3)
Alternative
patterns
of unit cost
evolution
European Commission
Projected increase in health care
expenditure – EU15 and EU12
EU15: from 0.7 to 2.4 (even 4.2% if technology is incorporated)
EU12: from 0.2 to 2.8 (even 4.2% if convergence is incorporated)
change 2007-2060
EU15
5
% of GDP
4.2
4.2
EU12
4
2.8
3
2
1.2 1.3
1
1.5 1.3
1.7
2.1 2.0
2.2 2.1
2.8
2.4
1.5
0.7
0.2
0
Constant Death-related AWG
Pure
Income
High life
Labour Technology
Cost
health
costs
reference demographic elasticity expectancy intensity scenario convergence
scenario scenario
scenario scenario
scenario
scenario (conv. 30 scenario
years)
EU15
EU12
European Commission
Main findings
•
Europeans living longer than ever before, and hopefully in good health,
is an enormous achievement and should not be seen as a threat
•
Ageing leads to strong increase in spending
•
Health status drives demand for care. Therefore, prevention and
improvement in health status would substantially offset ageing
effects, limiting future spending
•
A population in better health will be able to work longer as it grows
older, allowing higher productivity and labour participation, and will
need less healthcare, ultimately resulting in decreased pressure on
public finances.
•
Supply side factors (technology, prices in health care sector,
institutional setting) are expected to push up spending (but difficult to
model)
•
Newly developed methods for early diagnosis and treatments strongly
contribute to growth in spending, but some of the medical progress
may well be cost-saving in the long term. Investment in prevention and
health technologies offers instruments for the population to stay
healthy and productive for longer.
European Commission
Model structure for long-term care
Formal
care at
home
Unit cost of
care at
home
Total
spending
Population
by age
and gender
Size of the
disabled
population
Formal
care in
institutions
Unit cost of
care at
institution
Informal
care
Alternative
demographic
projections
Changes in
disability rates
Increase
in formal care
provision
Cash benefits
and disability
transfers
Alternative
patterns
of unit cost
evolution
European Commission
Projection of dependent population
EU15
Thousands
EU12
40000
12000
+115%
+113%
35000
+88%
30000
+71%
25000
8000
+46%
20000
5000
0
+104%
6000
15000
10000
+94%
10000
+150%
52%
+121%
+86%
4000
81%
31%
2000
+189%
+163%
17%
2007
0
2060 pure demographic
2060 constant disability
formal care in institutions formal care at home informal or no care
13%
5%
2007
+159%
+134%
+148%
+125%
2060 pure demographic
2060 constant disability
formal care in institutions formal care at home informal or no care
European Commission
Pure effect of demographic changes
10
% of GDP
9
8
7
6
5
4
+103% +102%
3
1
0
+161%
0,5
0,3
1,3
1,3
1,2
1,3
CY
EE
RO
PT
BG
HU
SK
CZ
EU12
LV
LT
PL
UK
ES
IE
FR
DE
EU27
AT
EU15
MT
SI
BE
IT
DK
LU
EL
FI
NO
SE
NL
2
Level 2007
Increase 2007-2060
European Commission
Alternative scenarios
• Pure demographic= no policy (or other)
changes scenario
• Constant disability =disability rates by age
assumed as constant
• AWG/EPC=impact of variability/changes
(projections, dependency rates, different
care options, costs perunit)
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European Commission
Alternative scenarios
4
% of GDP
EU15 EU12
EU15 EU12
EU15 EU12
1,2
1,3
EU15 EU12
3
2
1,7
1,1
1
1,3
0
0,4
1,3
0,5
0,3
Constant
disability scenario
0,3
AWG reference
scenario
2007 level
1,3
0,5
0,3
Pure
dem ographic
scenario
1,3
0,6
0,3
Shift from
inform al to form al
care
change 2007-2060
European Commission
Main findings
• Strong impact of ageing populations on long-term care
expenditure.
• Public expenditure is very sensitive to trends in
prevalence of disability among the elderly.
• Growing gap between the number of elderly in need for
care and the actual supply of formal care services
(possible alleviating effect: narrowing gap in life
expectancy between women and men)
• Relation between formal care provision and labour market
situation (higher labour participation, higher effective
retirement <=> more formal care needed)
• Need to reconcile two opposite trends: increasing need
for formal LTC provision and/or growing pressure on
public finances
European Commission
Outline
• The demographic challenge - Population projections
and projections for public expenditure, including
LTC – 2009 Ageing Report
•
Modernising social protection systems – Social
OMC – including health care & long-term care
• Related activities and policy initiatives in LTC:
access, quality sustainability
17-Jul-15
Directorate-General for Employment, Social Affairs & Equal Opportunities ─ Unit
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European Commission
Modernising Social Protection
• Lisbon European Council 2000, four key objectives:
•
•
•
•
Promote social inclusion;
Make work pay and provide secure income;
Make pensions safe and sustainable;
Ensure access to high quality, sustainable health care
Reinforced message in Council and European
Council in 2002 and 2003
• 2004 European Parliament resolution
•
•
•
•
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need more cooperation in the area, requesting the Council to extend
the principle of the OMC to health care;
Commission should submit proposal;
MS should agree common objectives and indicators by 2006
Directorate-General for Employment, Social Affairs & Equal Opportunities ─ Unit
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European Commission
Modernizing Social Protection
• Several Communications 2001-2004:
- extend OMC to health care and long term care
- common objectives: Accessibility, Quality,
Sustainability
• 2005 Communication 706 =
STREAMLINED OMC
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European Commission
The Open Method of Co-ordination
The OMC = learn from each other, exchange
experiences
•
•
•
•
•
•
•
Common Objectives
Common Indicators
National Strategy Reports
Joint reviews – Report = summary & synthesis
Conferences
Peer exchange of specific experiences between
interested parties
Studies etc
• Community Action Programme PROGRESS –
financial support for projects
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European Commission
Social OMC = streamlined OMC
• One National Plan for social inclusion, pensions
and health care & long-term care – 3 years
• Common objectives and indicators for each
strand, and indicators.
• Health care and LTC is one chapter
• One Joint Report every year, but heavy and light
years
• To match with National Reform Programs of
revised Lisbon strategy
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European Commission
The OMC Objectives – in one
• Member States should (strive to)
ensure access for all to high-quality
and sustainable health care and longterm care.
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European Commission
OMC- activities
•
•
•
•
•
•
•
National reports, joint reports:
2005 Streamlined OMC, Common objectives
2006 National Reports
2007 Joint Report
2008 LTC paper, with SPC
2009 Joint Report
2010 Commission Staff Working Document
– 2011 Communication ?
• 2011? Guidelines for National Reports
• 2011? National Reports
• 2012? Joint Report, with support doc & country doc
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European Commission
Social OMC - LTC - latest outputs
• The general cycles of National Reports
and Joint Reports
• ‘SPC’ LTC Report April 2008
• Joint Report 2009 and Supporting Doc.
– LTC definition – close to OECD – similar as
SSGI Biannual report
• Council Conclusions 30 Nov 2009
– Review situation in 2010 - a CSWP
• MISSOC Analysis 2009 on LTC
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European Commission
LTC Key message in JR 2009
Member States are striving to
• establish and strengthen systems
• for quality long-term care,
• to create a solid financing basis,
• to improve care coordination,
• to ensure sufficient human resources
and
• support for informal carers.
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European Commission
Sustainability:
• How provide support and/or services
• How much from society
– Money, support services, services in kind
– Geographic distribution and access
• How finance
– Private financing, social insurance, tax financed
• Efficiency, care coordination
• Promote healthy life, prevention
• Personnel
– Recruitment, training, mobility
– Working conditions
– Support to informal carers
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Directorate-General for Employment, Social Affairs & Equal Opportunities ─ Unit
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European Commission
Outline
• The demographic challenge - Population projections
and projections for public expenditure, including
LTC – 2009 Ageing Report
•
Modernising social protection systems – Social
OMC – including health care & long-term care
• Related activities and policy initiatives in LTC:
access, quality sustainability
17-Jul-15
Directorate-General for Employment, Social Affairs & Equal Opportunities ─ Unit
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European Commission
Ministerial Conference on the Financial
Sustainability of Health Systems –
Prague May 2009
• Policy Brief 11: How can European States
design efficient, equitable and sustainable
funding systems for long-term care for
older people (WHO)
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European Commission
Key messages and policy options
• Challenges to sustainability !!!
• Policy options:
- Universal system: cover entire population
at a high cost
- Safety net system: concentrates support
on specific subgroups
- Progressive universalism: combines
universal entitlement with means-testing
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European Commission
Social Situation Observatory –
Research activities
• LSE Health
• A number of documents on health and
LTC
• Reuse information – take step further
• Studies and research on LTC financing
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European Commission
Related EMPL activities
•
•
•
•
•
•
•
•
•
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Demographic ageing, challenges
Intergenerational solidarity
Especially vulnerable groups
Counteract abuse and maltreatment
Deinstitutionalisation
Disability action plan
Antidiscrimination, human rights
Effects of current crisis
‘White jobs’, sectoral restructuring
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European Commission
Other related activities
• DG ECFIN
– Projections
• DG SANCO
– Healthy Ageing
– Health Workforce
• DG MARKT
• DG COMP
• DG REGIO
• DG RESEARCH
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European Commission
THANK YOU !
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Directorate-General for Employment, Social Affairs & Equal Opportunities ─ Unit
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European Commission
Age pyramids for the EU25
population in 2004 and 2050
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European Commission