Governance and finance of long-term care - University of Birmingham

Allen et al., 2011 Governance and Financing of LTC | European Overview
5 Finance and sustainability
Building on the wider governance context and specific areas of governance interest (e.g. informal care,
volunteering) identified in this report so far, this section looks specifically at some of the ways finance
has been steered in LTC. It explores some of the key challenges in financing LTC, including:
• Monitoring financial information where distinct LTC systems are only just emerging and where the
budget for LTC is often fragmented: between health and social care; between central, regional and
local levels; and between people classified as having disabilities and older people with more
generalised care needs.
• Creating equality across services rather than the source of funding or entry point influencing the
nature and ethos of services provided.
• Ensuring effectiveness where many solutions have been temporary solutions rather than
comprehensive reform projects.
• Overcoming culturally specific understandings and strong public opinion about the nature of the
relationship between state, family, employer and individual and the popularity of different funding
systems (e.g. taxation, Insurance, means-­‐testing).
5.1 Public expenditure and resources
Within governance in Europe there are few separate national systems or budgets for LTC. This creates a
problem for those monitoring and planning finance, whereby information can slip into the silos of health
and social care sectors and the real financial activity and outcomes for LTC remain hidden. As public
resources are gathered from different budgets, no countries have implemented a completely separate
LTC budget and in fact, for most it is difficult to have a clear idea of how much is spent on LTC for older
people. Of the countries surveyed Denmark comes closest to having an integrated budget at the local
level for LTC. The Netherlands and Germany are an exception to this rule with distinct LTC insurance
systems and budgets stemming from the Exceptional Medical Expenses Act (NL) and LTC Insurance (DE),
respectively. The German LTC insurance demonstrates the tendency towards partial coverage. It only
covers the service part of institutional care, not accommodation costs, and home care costs of up to 10
hours a week or less are also not covered.
Situated at the boundaries between health and social care, LTC services draw resources from both
health and social care systems. This means that different funding sources, financing and access
principles (see “Access and Equity” below) and budgets usually apply to LTC within each country,
depending on the nature of services involved. Health care is usually provided in the framework of
‘mandatory’ universal health insurance (financed generally by obligatory tax or social insurance
contributions), which aims at being comprehensive in the coverage of the population and therefore
tends to be free at the point of delivery. Social care services, on the other hand, have often evolved
from social assistance laws. As such their financing relies heavily on tax revenues and user’ fees and
tend to be means tested based on the user and their family’s assets.
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