Long-Term care: Let’s have an adult conversation before it’s too late
TheStar.com – Opinion/Editorial Opinion
November 20, 2012. Åke Blomqvist and Colin Busby
The former governor of the Bank of Canada, David Dodge, has asked Canadians to have an “adult conversation” about growing health-care spending. Canada’s aging population is one reason: Those over age 65, on average, use several times more health-care resources than younger people, which is why we need to start talking about the coming surge in demand for long-term care and how to pay for it.
OECD data show that about half those aged 80 and above need long-term institutional or home care, and the share of Canada’s population that is over 80 will rise from around 4 per cent today to 10 per cent by 2050. Long-term care and its costs, which are projected to nearly triple over the next few decades, are already important issues for families with elderly parents.
Because long-term care is not covered under the Canada Health Act, patients and their families have to pay a large share of its cost. Expensive long-term care for a physically or mentally disabled parent is one of the most significant health-related financial risks that many families face today.
All provinces and territories have programs that subsidize long-term care at least to some extent, but the criteria for who is eligible and for what degree of subsidy vary a great deal. Moreover, long waiting lists for places in subsidized nursing homes and home care force many families to pay for unsubsidized care, or adult children to look after their disabled parents with little or no help.
While the pressure for provincial governments to spend money on long-term care will grow, fiscal realities will force them to contain costs and get better value for the money they do spend. Eliminating waiting lists should be a high priority. Not only will that reduce the burden on many patients who urgently need care, and their families; it may also save the provinces money as it will reduce the number of acute-care hospital beds that are occupied by patients who cannot be discharged until a nursing home bed or home-care services become available.
One way to shorten waiting lists and improve value for money could be to give patients a choice between services provided in kind (through subsidized nursing homes or home-care agencies), or a cash grant or voucher that may be used to pay for similar services from private unsubsidized providers. Experience with this model in Germany and in Nordic countries suggests that patients and their families appreciate having a greater say in their long-term care decisions, even if many continue to choose the in-kind option. Provinces should experiment with this approach.
Increased government spending on long-term care will add to the already heavy burden on future working-age taxpayers, as they become a smaller share of the population but still have to pay for most of the health care and old-age security benefits of growing numbers of elderly retirees. For this reason, means testing should be used to reduce the government cost of long-term care subsidies.
While most provinces already do so, better and fairer rules for means-testing are needed — especially if they take assets into account, as they should, since accumulated assets are part of a person’s ability to pay. The rules should include provisions that protect elderly couples, so that one spouse doesn’t get impoverished or is forced to sell the family home when the other needs long-term care. Moreover, subsidies should not be reduced dollar for dollar as the patient’s assessed ability to pay increases; a 100-per-cent clawback rate unduly penalizes middle-income individuals who have saved during their working years in order to have more retirement income or pass on some assets to their children.
For health-care spending that is covered by the Canada Health Act, the adult conversation that Dodge is asking for has barely begun. For long-term care, provinces should prepare for the inevitable surge in demand for long-term care services from aging baby boomers before it’s too late, and the number of options shrinks.
Åke Blomqvist is an adjunct research professor at Carleton University and health policy scholar at the C.D. Howe Institute; Colin Busby is a senior policy analyst with the C.D. Howe Institute. Their study entitled “Long-Term Care for the Elderly: Challenges and Policy Options,” can be found atwww.cdhowe.org.
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Tags: budget, disabilities, housing, pensions, standard of living
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