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Sarah Gregory: What can we learn from how other countries fund health and social care?

31 Mar, 14 | by BMJ

England is not alone in facing the implications of an ageing population with changing patterns of illness. To inform the work of the independent commission on the future of health and social care in England, I have spent the past few months looking at how other countries are responding to these challenges.

By comparison with other OECD countries, two features of the English system stand out. First, we have an unusually defined split between our health and social care systems. By comparison, many countries have developed a funding system for social care that complements their funding for health. For example, Germany, France, Korea, and Japan have all introduced insurance for social care to complement their systems of health insurance. Second, we are at the lower end of the range for public spending on social care, although it is difficult to establish direct comparisons as we do not report on social care funding to the OECD. The UK spent 1.2 per cent of GDP on long term care in 2012/13, while the highest figure reported to the OECD was 3.7 per cent (in the Netherlands).

The funding of health and social care in OECD countries is usually categorised in one of three ways—general taxation, social insurance, and private spending through insurance and out-of-pocket costs. In practice all countries fund their services through a mixture of these. The United States relies mainly on private health insurance, but the government still funds Medicaid; Sweden funds universal services through general taxation, but still has higher levels of patient co-payment than England. Those countries attempting reform are usually approaching it by adjusting the mix of the three methods.

Both Australia and the US have set up government funded commissions to look at the future of social care. But no one yet has the definitive answers and different countries are going in different directions in their attempt to find solutions. For example, while Ireland is moving away from general taxation to implement insurance for healthcare, France is beginning to underpin its statutory insurance with non-wage-related taxation.

Where there has been extensive reform it has often been implemented very gradually. In the Netherlands, for example, reform of their health system took 20 years, while in Korea it took 30 years to move to a system of comprehensive health insurance. It has also involved false starts—the US made several attempts at reform before it passed the Affordable Care Act in 2010. Settlements can also be revisited: benefits to social care packages were cut in Japan and the Netherlands as they struggled financially.

As a rule, countries develop systems that fit with their culture, history, and politics. This can be seen most clearly when looking at attitudes to informal care. In Japan informal care is completely taken out of the equation when assessing eligibility for care: assessment is “carer blind.” Germany has taken the opposite approach, going so far as to put a premium of 0.25 per cent on the social care insurance paid by individuals with no children, in anticipation of the extra cost that the state is likely to bear in later life. As a comparison, England has a relatively high proportion of the population providing informal care compared to most countries—only Italy and Spain have higher. Political scientists call this “path dependency.” So while the options may seem to be wide open, international experience shows that reforms are more likely to hold when they work with the grain of the systems and culture already in place. This poses a challenge for the commission, which is looking for solutions in England, where the public is attached to universal health care, free at the point of use, with less understanding that social care is severely rationed and means tested. We will wait to see whether the commission has been inspired by international comparisons when its interim report is published on 3 April.

Sarah Gregory is a researcher in health policy at The King’s Fund.

This blog also appears on the King’s Fund website at http://www.kingsfund.org.uk/blog/

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  • Francesca Cignola

    We too at Innovation Unit are looking forward to reading the interim report of the Commission on the future of health and social care in England.
    We share your hope that it will be informed by what has been tested and learned elsewhere in the world.
    We also hope that, as it considers how we should be redrawing the boundaries between health and social care, the Commission is taking as a starting point the lived experience of the people who are constantly having to navigate their way across these boundaries.
    The question of funding and entitlement is bound to be a really hard one to tackle. Charging an insurance premium to people without children seems a bit harsh – it also misses out on the fact that social networks of support can be built on reciprocity and not just on kinship.
    Giving people the opportunity to ‘pay forward’ for their care by providing support to others and getting in return help when they will need it (along the lines of the model put forward by Prof. Heinz Wolff in Care4Care) may seem idealistic, but its potential as a complementary insurance model should not be ignored.
    We like it because it relies not only on the finite financial resources of individuals and administrations but also on the non-scarce assets of people and communities, like for example their human ability to care for each other.

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