Social Security

Contents I
International Labour Conference

89th Session 2001
Report VI
Social security:
Issues, challenges and prospects
Sixth item on the agenda
International Labour Office Geneva
Social security: Issues, challenges and prospects II
ISBN 92-2-111961-0
ISSN 0074-6681
First published 2001
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Contents III
CONTENTS
Pages
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CHAPTER I. The prospects for social security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The global context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Social security and decent work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Some key issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Social security, employment and development . . . . . . . . . . . . . . . . . . . . . . . 9
Extending the personal coverage of social protection . . . . . . . . . . . . . . . . . . 10
Contributing to gender equality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Sustainable financing for social protection . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Expanding social dialogue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
The aim of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
CHAPTER II. Social security, employment and development . . . . . . . . . . . . . . . . . . . . . 12
The social and economic impact of social security . . . . . . . . . . . . . . . . . . . . . . . . 12
Social security expenditure, unemployment and growth . . . . . . . . . . . . . . . . 13
Productivity and social stability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Employer contributions and international competitiveness . . . . . . . . . . . . . . 16
Unemployment benefits, unemployment and employment . . . . . . . . . . . . . . 18
Early retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Unemployment benefits and employment promotion . . . . . . . . . . . . . . . . . . . . . . 19
Relevant international labour standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Industrialized countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Middle-income developing countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Other developing countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Conclusions: Linking social security with employment and development policies 23
CHAPTER III. Extending the personal coverage of social protection . . . . . . . . . . . . . . 25
The right to social security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
The problem of non-coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Policies to achieve the extension of coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
The economic, social and political context . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Strategies for extending social protection . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Social security: Issues, challenges and prospects IV
CHAPTER IV. Gender equality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
International labour standards and gender equality . . . . . . . . . . . . . . . . . . . . . . . . 38
The link between social protection and gender . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
The impact of labour market inequalities on different forms of social protection . 39
Measures to grant equality of treatment in social protection and to promote gender
equality through social protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Survivors pensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Divorce and pension splitting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Pensionable age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Pension credits for persons with caring responsibilities . . . . . . . . . . . . . . . . . 44
Sex-differentiated annuity rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Parental leave and benefits and childcare services . . . . . . . . . . . . . . . . . . . . . 44
Child benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
CHAPTER V. The financing of social security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Global trends in social security expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Social security and its main challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Does social security face an ageing crisis? . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Or does social security face a globalization crisis? . . . . . . . . . . . . . . . . . . . . 50
Has social security reached the limits of its affordability? . . . . . . . . . . . . . . . 51
National financing options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Financing systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
The indispensable role of government as ultimate financial guarantor . . . . . 57
Globalization and social security financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
CHAPTER VI. Strengthening and expanding social dialogue . . . . . . . . . . . . . . . . . . . . 61
Actors in social protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Family and local solidarity networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Institutions of civil society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Enterprises and the commercial market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Government and social security institutions. . . . . . . . . . . . . . . . . . . . . . . . . . 63
The international community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Partnerships for social protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Enhancing the effectiveness of social security . . . . . . . . . . . . . . . . . . . . . . . . 64
Towards social protection for all . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
CHAPTER VII. Implications for future ILO work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Research and policy development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Contents V
Providing a normative framework through standard setting. . . . . . . . . . . . . . . . . . 72
Technical cooperation and other means of action . . . . . . . . . . . . . . . . . . . . . . . . . 74
SUGGESTED POINTS FOR DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
STATISTICAL ANNEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Introduction 1
INTRODUCTION
In 1999 the Governing Body of the International Labour Office decided that a
general discussion on social security should take place at the International Labour
Conference in 2001. The objective of this discussion is to establish an ILO vision of
social security that, while continuing to be rooted in the basic principles of the ILO,
responds to the new issues and challenges facing social security. In a second stage this
may lead to the development of new instruments or to the possible updating or revision
of existing standards.
1
During the last two decades specific aspects of social security have been discussed
at the International Labour Conference on various occasions. Most recently, in 2000,
the Conference looked closely at the subject of maternity benefits when it revised the
Maternity Protection Convention (Revised), 1952 (No. 103), and Recommendation
(No. 95). Unemployment benefits were on the agenda in 1987 and 1988 when the
Employment Promotion and Protection against Unemployment Convention, 1988
(No. 168), was discussed and adopted. In 1987 the Social Security (Seafarers) Conven-
tion (Revised) (No. 165) was adopted. The special needs of migrants were taken into
account with the adoption in 1982 of the Maintenance of Social Security Rights Con-
vention (No. 157).
However, it was in the 1950s with the adoption in 1952 of the Social Security
(Minimum Standards) Convention (No. 102) and the 1960s with the adoption of
a series of superior standards that the Conference dealt with the broad range of
benefits provided by social security.
The last opportunity that the Conference had to consider social security as a whole
was at the 80th Session in 1993 in the discussion of the Report of the Director-General,
Social insurance and social protection. That discussion confirmed the bleak picture
concerning the developing countries painted in the Report. The unfavourable situation
of women with regard to social protection was emphasized, as was the social distress
which had resulted from structural adjustment policies. Some delegates had found the
Reports analysis too optimistic with respect to the industrialized countries, noting that
social protection was deteriorating, very often at the expense of the most vulnerable
groups of the population. The social problems in the economies in transition were
stressed: to ensure a smooth economic transformation and the development of democ-
racy, it was vital to strengthen social protection. Many spoke about the relationship
between economic growth and social protection, but it was clear that views differed
considerably on this subject.
The Governing Body has identified a number of key issues that should be taken
into account in the general discussion in 2001. These include: the interconnections
between social security, employment and development; extension of the personal cov-
erage of social protection; gender equality; the financing of social security; expanding
1
See ILO: Governing Body document GB.274/3, 274th Session, Geneva, March 1999.
Social security: Issues, challenges and prospects 2
social dialogue; and implications for future ILO work.
2
In this report a chapter is de-
voted to each of these topics. The report begins by looking at the global context in
which social security schemes are now operating and the relevance of social security to
the goal of decent work.
2
For a more detailed discussion of these and other issues concerning social security, see ILO: World
Labour Report 2000: Income security and social protection in a changing world (Geneva, 2000).
The prospects for social security 3
CHAPTER I
THE PROSPECTS FOR SOCIAL SECURITY
In many parts of the world, in the closing years of the twentieth century, social
security systems have been under challenge. Some consider that the systems are too
expensive, and that they harm the process of economic growth and development.
Others point to deficiencies in the level of protection and the scope of coverage, and
argue that in times of increased unemployment and other forms of labour insecurity,
social security is more needed than ever. Particularly in the industrialized countries
(including the transition economies of Central and Eastern Europe), social security
systems must respond to new demographic challenges, such as ageing and changing
family structures, with important implications for the financing of social protection. In
some countries, there is dissatisfaction with the administration of social security, and
calls for reform involve a review of the role of the State, the responsibilities of the
social partners and the desirability of greater participation of the private sector.
One of the key global problems facing social security today is the fact that more
than half of the worlds population (workers and their dependants) is excluded from
any type of social security protection. They are covered neither by a contribution-based
social insurance scheme nor by tax-financed social benefits, while a significant addi-
tional proportion are covered for only a few contingencies. In sub-Saharan Africa and
South Asia, statutory social security personal coverage is estimated at 5 to 10 per cent
of the working population and in some cases is decreasing. In Latin America, coverage
lies roughly between 10 and 80 per cent, and is mainly stagnating. In South-East and
East Asia, coverage can vary between 10 and almost 100 per cent, and in many cases
was until recently increasing. In most industrialized countries, coverage is close to
100 per cent, although in a number of these countries, especially those in transition,
compliance rates have fallen in recent years.
In most of its standard-setting and technical cooperation activities on social secu-
rity, the ILO had expected that an increasing proportion of the labour force in develop-
ing countries would end up in formal sector employment or self-employment covered
by social security. It implicitly assumed that past economic and social development
patterns of the industrialized countries would replicate themselves in other regions.
However, experience in developing countries and more recently in the industrial-
ized countries has shown that this proportion is in many cases now stagnating or
declining. Even in countries with high economic growth, increasing numbers of work-
ers often women are in less secure employment, such as casual labour, home
work and certain types of self-employment.
The growth of informal, unprotected work creates dangers for formal and informal
economy workers alike. The area of social protection illustrates the very real and direct
interest, on the part of workers with normal employment status and of their organiza-
tions, in bringing informal economy workers into the mainstream of formal employ-
ment. With shrinking formal employment, workers bear an increasing direct burden of
financing social needs, with adverse effects on their quality of life. That burden may
also undermine the capacity of enterprises to compete in the global economy.
THE GLOBAL CONTEXT
Globalization, either alone or in combination with technological change, often ex-
poses societies to greater income insecurity. Research on the developed countries sug-
gests that income transfers tend to be largest in economies that are simultaneously very
open and subject to substantial price risk in world markets. Other observers claim that
reductions in income security and social protection arise from the attempts of govern-
ments to promote competitiveness and attract foreign direct investment. Some of them
also foresee that tax competition will lead to further reductions in taxes, particularly on
returns to capital, and lower the ability of governments to finance social protection.
The structural adjustment policies pursued in most developing countries have
often contributed to a decline in the small percentage of the working population in the
formal sector. The successive waves of structural adjustment programmes have also
led to wage cuts in the public and private sectors, thereby eroding the financial base of
statutory social insurance schemes. Simultaneously, many such schemes in developing
countries have suffered from bad management and bad governance, which have often
strongly reduced the trust of their members. In addition, structural adjustment pro-
grammes have often resulted in severe cuts in social budgets. In Benin, for example,
health expenditures share in the total government budget dropped from 8.8 to 3.3 per
cent between 1987 and 1992. As most governments can no longer guarantee access to
free health and education, there is apart from national systems greater demand
for international and local arrangements to finance and organize these social services.
Particularly in low-income countries, structural adjustment and socio-economic
changes have also produced large vulnerable groups that cannot contribute to social
insurance schemes. The most vulnerable groups outside the labour force are people
with disabilities and old people who cannot count on family support, and who have not
been able to make provisions for their own pensions. Some countries, such as China
and India, have taken specific social assistance measures to meet the needs of these
groups.
The world today also faces a large number of complex crises, often with global
repercussions. One of the most visible recent examples has been the Asian financial
crisis, which led to massive job losses in the formal sector of the economy, rapidly
rising unemployment, and an expansion of employment in the informal economy.
Then there have been many armed conflicts in recent years, particularly in sub-Saharan
Africa (Angola, Congo, Liberia and Rwanda, for example) but also in Europe (Bosnia,
Kosovo). Numerous countries around the world continue to be afflicted by health dis-
asters, such as the HIV/AIDS pandemic, leaving many children orphans (see box).
Natural disasters, such as recurrent droughts and floods (in Africa and Asia), earth-
quakes and hurricanes (for example in Turkey and Central America) have not only left
many communities without homes and sources of income but have also wiped away
years of their countries efforts at development. Lastly, some countries are facing the
difficult process of making economic as well as political transitions, whether from a
centrally planned economy to a market-oriented system, or from a politically restric-
tive regime like apartheid to a multiracial and democratic society. The transition in
Central and Eastern European countries led to unprecedented unemployment, which
still persists in some of these countries. In these countries and in the former USSR the
responsibility for income security and certain social services has often shifted from
enterprises in the context of centrally planned economies to other, often weak and
inadequate, schemes, a situation which threatens to leave many workers with reduced
benefits or no protection whatsoever. In South Africa, the peaceful transition from an
apartheid political regime to a democratic and inclusive one has not as yet yielded
decent jobs, appropriate incomes and improved economic conditions for the majority
of the population.
The challenge of HIV/AIDS for social security
The HIV/AIDS pandemic is the most dramatic of the challenges facing
social security in certain countries, notably in Africa. Its human conse-
quences are becoming all too evident, but its implications for social secu-
rity systems are still far from fully known or understood.
The pandemic has served to underline the gravely inadequate nature
of social protection systems in the countries most affected. Many of the
individuals who have been infected have no social security coverage. As a
result they typically do not have access to the quality medical care they
require. Nor if they are breadwinners do their dependants receive
Probability of a 15-year-old boy dying before age 50, Zimbabwe
any replacement income when they die or become unable to carry on
working. The first figure shows how dramatic the situation already is in
many African countries. In a typical African country, Zimbabwe, a 15-year-
old boy today has only about a 50 per cent chance of reaching age 50. The
equivalent figures for women are not available but it is to be expected that
the pattern is not very different. That means implicitly that a huge number
of families will lose their prime-age breadwinners before the pandemic
can be halted.
The informal social protection mechanisms (extended family, local
community) are being stretched well beyond breaking point by the large
numbers of adult breadwinners now being struck down in their prime.
Never was it more clear why social solidarity and risk-pooling must be
organized on the widest possible basis: this is vital in order to ensure that
all the necessary help is channelled to the family, groups, communities
and regions most direly affected.
International solidarity is urgently needed to back up national
efforts particularly to help in prevention campaigns and to assist in the
provision of health care. Partnerships must be developed between the
competent health authorities, governmental and non-governmental or-
ganizations and the drug industry to ensure a supply of medication which,
if international prices were charged, would be totally beyond the reach of
patients in certain communities. At the local level, social security
schemes, health care providers and social services must coordinate their
efforts in order that AIDS sufferers receive proper care in the most appro-
priate setting.
Estimated change in per capita GDP caused by AIDS, Kenya (in 1985 Kenyan
shillings)
The finances of social security schemes are being affected in a number
of ways by the pandemic. Generally, their resource base declines with the
general contraction that the AIDS pandemic inflicts on national econ-
omies. The second figure shows the estimated effect of AIDS on the Ken-
yan gross domestic product (GDP).
In the industrialized countries, the financial impact of HIV/AIDS is
much less serious; in the United States, for example, spending on HIV/
AIDS care represents less than 1 per cent of personal health care expendi-
ture and the average cost of care per person is less than that of treating
many other disabling conditions. However, the financial effects on indi-
viduals are often dramatic, particularly if they do not have adequate health
insurance. In the United States, only 32 per cent of people with HIV have
private health insurance (compared with 71 per cent of Americans over-
all); almost 50 per cent depend on Medicaid or Medicare for coverage; and
about 20 per cent are uninsured. Even among people who have resources,
the costs of HIV/AIDS care (approximately US$20,000 per annum per pa-
tient) can quickly exhaust their assets and leave them impoverished.
1
In
most other industrialized countries, social security health care systems or
national health services protect people from this risk.
In many countries social security schemes will cease or have already
ceased to receive contributions from workers who are unable to carry on
working. Depending on the scope of the scheme, they are having to fin-
ance considerably higher expenditure on medical care, cash sickness ben-
efits, disability benefits and, ultimately, survivors benefits. Premature
mortality, on the other hand, will tend to reduce expenditure on old-age
pensions, but these savings will become significant only at a much later
stage. Research is necessary to obtain the data that are indispensable for
making valid projections and thereby to ensure the financial equilibrium
of social security schemes in the long term. As part of its action against
HIV/AIDS, the ILO is embarking on a project which seeks to assess the
impact of AIDS on the financial viability of social insurance schemes and
national budgets.
2
Employers and workers organizations have an enormously impor-
tant role to play in dealing with the pandemic. The workplace is a setting in
which highly effective preventive activities can be conducted. Investment
in such activities pays off handsomely by helping to retain a healthy and
experienced workforce and to contain the costs of employer medical care,
sick pay and pension schemes. Companies can maximize the benefits of
their prevention activities by involving not only their employees, but also
their clients and the community of which they are a part.
1
Kaiser Family Foundation: Financing HIV/AIDS care: A quilt with many holes, in Capi-
tol Hill Briefing Series on HIV/AIDS, Oct. 2000 (http://www.kff.org/content/2000/1607/).
2
ILO: ILO action against HIV/AIDS: A draft framework for global and regional initiatives,
discussion paper on HIV/AIDS and the world of work (Geneva, 1999). See also ILO: HIV/AIDS in
Africa: The impact on the world of work, study prepared for the Africa Development Forum
2000, Addis Ababa, 3-7 Dec. 2000, and HIV/AIDS: A threat to decent work, productivity and
development, document for discussion at the Special High-Level Meeting on HIV/AIDS and the
World of Work, Geneva, 8 J une 2000. These reports, as well as further information on the ILO
Global Programme on HIV/AIDS and the World of Work, are available on the ILO website, at
http://www.ilo.org/aids.
SOCIAL SECURITY AND DECENT WORK
People wish to secure a decent standard of living, within a context of security and
of freedom to express their opinion and to associate. They can achieve this income
security not only through productive employment, savings and accumulated assets
(such as land and housing), but also through social protection mechanisms. These
mechanisms function not only as a protective but also as a productive factor. Workers
need income security to make long-term plans for themselves and their families.
Workers income security is also good for the economy, since it makes effective de-
mand more predictable and provides enterprises with a more productive and flexible
workforce.
The objective of most social security schemes is to provide access to health care
and income security, i.e. minimum income for those in need and a reasonable replace-
ment income for those who have contributed in proportion to their level of income. The
Income Security Recommendation, 1944 (No. 67), for instance, focuses on compul-
sory national social insurance schemes, which in principle also cover the self-em-
ployed, and provides for social assistance. In practice, however, it has been very
difficult to implement this concept in the case of workers, such as many of the self-
employed, who have irregular patterns of income, for whom the concept of earnings
itself is difficult to measure and who generally have different social security needs and
priorities. The emergence of new contributory schemes for workers in the informal
economy has highlighted this need for a wider concept. A broader social security con-
cept could cover, for example, some housing, food security and child education ben-
efits, in addition to the contingencies foreseen in the Social Security (Minimum
Standards) Convention, 1952 (No. 102) (medical care and family benefits, as well as
benefits in the event of sickness, unemployment, old age, employment injury, mater-
nity, invalidity and death of the breadwinner).
Various authors and institutions, in particular those with experience in developing
countries, have pleaded for a broader definition of social security. Some claim that
within the context of a developmental anti-poverty strategy social security could
also include policies, for example on access to productive assets, employment guaran-
tee, minimum wages and food security. Others distinguish two aspects of social secu-
rity, which are defined as the use of social means to prevent deprivation (promote
living standards) and vulnerability to deprivation (protect against falling living stand-
ards). Many international organizations, including the ILO, also use the broader con-
cept of social protection, which covers not only social security but also non-statutory
schemes; the Statistical Office of the European Communities (Eurostat) includes in its
figures for social protection certain social services such as crches and home help.
The goal and concept of decent work match this broader concept of social security.
In his first Report to the International Labour Conference, the Director-General of the
International Labour Office, Mr. Juan Somavia, introduced the decent work for all
strategy, which established as the primary goal of the ILO to promote opportunities
for women and men to obtain decent and productive work, in conditions of freedom,
equity, security and human dignity.
1
The decent work strategy adopts a broad per-
1
ILO: Decent work, Report of the Director-General, International Labour Conference, 87th Session,
Geneva, 1999, p. 3.
spective on work, which includes not only (paid) employment, but also work at home
so as to take gender roles into consideration. Decent social protection can therefore
play an important role in achieving gender equality (see Chapter IV), if all people
working men and women (remunerated or not), as well as children and the elderly
can have independent access to social protection.
One of the essential features of the decent work approach is that everybody is
entitled to basic social protection. The right to social security for everyone is already
laid down in article 9 of the International Covenant on Economic, Social and Cultural
Rights. A decent work strategy therefore aims at universality of coverage (see also
Chapter III), which has now been translated into the official goal of the Social Protec-
tion Sector: enhancing the coverage and effectiveness of social protection for all. As
noted earlier, this goal is far from being achieved.
It is obvious that not all societies can afford the same level of social security. Yet it
is inhuman anywhere to live and work in permanent insecurity threatening the material
security and health of individuals or families. An essentially rich world can afford a
minimum of security for all its inhabitants. That minimum might range from basic
health services and basic food, shelter and educational rights in the poorest countries to
more elaborate income security schemes in the industrialized countries. Everyone of
working age has a responsibility to contribute to the social and economic progress of
the community or country he or she lives in and should be given the opportunity to do
so. In exchange, all have the right to a fair share of the countrys or communitys
income and wealth.
In a globalizing world, where people are increasingly exposed to global economic
risks, there is growing consciousness of the fact that a broad-based national social
protection policy can provide a strong buffer against many of the negative social ef-
fects of crises. However, such a policy might need to be complemented by new interna-
tional and possibly global financing mechanisms (see Chapter V), as proposed by the
recent Social Summit+5 Special Session of the United Nations General Assembly in
Geneva. These proposals concern, inter alia, the possible establishment of a (volun-
tary) World Solidarity Fund, international cooperation in tax matters, debt relief, living
up to development aid commitments and the provision of more concessional financing.
SOME KEY ISSUES
Taking into account the profound global changes affecting social security and the
essential features of a decent work approach, this report will review the following key
issues.
Social security, employment and development
Chapter II takes stock of the various arguments about the social and economic
effects of social security. Most of the current debate seems to be focused on its alleged
negative effects, but the chapter also highlights various positive effects, and then at-
tempts to assess the conditions for the validity of the various arguments. It examines
the role of unemployment insurance schemes, particularly in middle-income countries.
It then discusses the potential benefits of limited employment guarantee schemes that
could provide temporary employment for underemployed workers, mainly in poorer
developing countries. Lastly, the chapter reviews various ways in which social security
and employment policies can reinforce each other, and how these synergies depend on
the socio-economic circumstances of individual countries.
Extending the personal coverage of social protection
Chapter III reviews four principal ways to extend social protection, i.e. extending
statutory social insurance, promoting micro-insurance, developing universal schemes
and providing means-tested benefits. In the industrialized countries, statutory social
security systems are well established, but determined action is necessary in various
countries to prevent coverage being eroded by informalization of labour markets. In
most middle-income countries, it may be possible to draw new non-covered groups
into the national statutory social security system. However, in middle- and particularly
in low-income countries, it may also be necessary to promote micro-insurance
schemes so as to cover certain groups in the informal economy that have some con-
tributory capacity. Universal and means-tested benefits and services are alternative
ways to provide social security to the population. Where national resources are not
available to finance such benefits, as is often the case in low-income countries, interna-
tional resources are sometimes made available, particularly in times of crisis. In gen-
eral, there is a need for an integrated approach at the national level, providing linkages
between various mechanisms and policies and avoiding the danger of a two-track sys-
tem for those included in and those excluded from the national system.
Contributing to gender equality
Chapter IV reviews various ways in which social security can contribute to the
attainment of gender equality. Most social security systems were originally structured
to cater for families with a male breadwinner. As a result of changing lifestyles, expec-
tations and family structures, a large proportion of the population do not live in such
families, which has added to the demand for gender equality. Part of the challenge for
social security is to respond to these changes by guaranteeing equality of treatment
between men and women and, at the same time, to phase in the equalizing measures,
concerning for example pensionable age and survivors benefits. A further challenge is
to use social protection, such as crche facilities, as well as social benefits for parents
and children, to attain greater gender equality and a more equal sharing of responsibili-
ties at work and at home.
Sustainable financing for social protection
Chapter V suggests that the extension of social protection will require improved
national financing as well as new forms of financing at the local and global levels. At
the national level, financing could be enhanced through better collection of existing
social security contributions and taxes. The pay-as-you-go (PAYG) form of financing
would probably be most appropriate for short-term benefits, such as health insurance
and maternity benefits. In the case of old-age benefits, it is shown that PAYG and
advance funding are both vulnerable to demographic change. At the local level, more
emphasis could be put on resources available to local governments as well as on tap-
ping the contributory capacity of workers in the informal economy for micro-insurance
schemes. The financial sustainability of such schemes can be enhanced through vari-
ous mechanisms, such as pooling, reinsurance and some form of affiliation with statu-
tory social insurance schemes. At the global level, new sources might be found for
financing some form of basic social protection for all, as well as measures to cope with
the consequences of crises.
Expanding social dialogue
As argued in Chapter VI, the prospects of decent social protection for all can be
improved by broadening the underlying social protection partnership and galvanizing
the social actors. The chapter reviews the roles of the various actors in providing social
protection and suggests ways in which partnerships can be formed among them to
enhance the effectiveness of social security and to extend social protection through
statutory social insurance, micro-insurance schemes and tax-based social benefits. The
chapter concludes by pointing out briefly how social dialogue could be expanded at the
national and international levels.
THE AIM OF THE REPORT
The aim of this report is to raise a number of key issues on the future of social
security in a fundamentally changed global context. Its ambition is not to suggest de-
finitive answers but to promote consensus on the assessment of the situation and on
possible ways to go forward. Chapter VII gives some pointers to what the implications
for the ILO could be, in terms of knowledge-based activities, standards, services and
advocacy.
CHAPTER II
SOCIAL SECURITY, EMPLOYMENT AND DEVELOPMENT
There is considerable controversy about the social and economic effects of social
security, and most of the current debate is focused on its supposedly negative effects.
Social security is said to discourage people from working and saving, to reduce inter-
national competitiveness and employment creation, and to encourage people to with-
draw from the labour market prematurely. On the other hand, social security can also
be seen to have a number of very positive economic effects. It can help to make people
capable of earning an income and to increase their productive potential; it may help to
maintain effective demand at the national level; and it may help create conditions in
which a market economy can flourish, notably by encouraging workers to accept inno-
vation and change. As noted in Chapter I, social protection and decent employment are
both necessary components for a market economy to provide income security for all.
Social protection is also designed to have important positive effects on society as a
whole, by promoting social cohesion and a general feeling of security among its mem-
bers. The first section of this chapter therefore takes stock of the various arguments and
attempts to assess their validity.
Unemployment is one of the greatest social risks facing people who depend for
their livelihood on the sale of their labour power. Yet unemployment benefit systems
exist only in a minority of countries and many workers, including almost all the self-
employed, are not covered by them. Protection against the risk of unemployment is
provided not only by benefits but also by measures of employment protection (such as
protection against dismissal
1
) and promotion. The second section gives a brief world-
wide review of social protection against unemployment and its interaction with labour
market and employment policies.
The third section sums up the main findings and highlights the need for closer
linkages between policies for development, employment and decent social protection.
THE SOCIAL AND ECONOMIC IMPACT OF SOCIAL SECURITY
The mechanisms by which social protection influences socio-economic develop-
ment involve the behaviour of individuals, as workers and jobseekers, as savers, as
portfolio investors and as members of civil society. They involve the decisions of firms
and enterprises, and the operation of markets, including the determination of wages
and prices.
In the case of the labour market, social protection has an impact on labour force
participation. Benefits can encourage people to leave the labour force, for example
1
See Termination of Employment Convention, 1982 (No. 158) (Short survey), document GB.279/
LILS/WP/PRS/1/3 (Geneva, ILO, 2000).
Social security, employment and development 13
where there is provision for early retirement. Conversely, social protection may induce
people to participate in the formal economy, on account of the prospective entitlement
to pensions and other benefits. Social protection can also have an impact on employ-
ment. Do benefits cause people to be slower about finding a new job when they are
unemployed? Does unemployment benefit allow better worker/employer matches?
Then there is the question of the extent of productive labour input. Do sickness benefits
reduce hours worked, by encouraging absence from work, or is such an effect offset by
the way they help promote quick recovery and prevent the spread of infection among
the workforce? Does social protection form part of a package which causes workers to
be more productive? Answering these questions is not easy, as other variables have to
be held constant in order to isolate the effects of social protection. It may be added that,
if effects on worker productivity are considered here, this in no way disregards the fact
that social protection finds its primary justification in the impact it has on workers
well-being.
In the capital market, the existence of state pensions is held by some economists to
have reduced the rate of personal savings. This is a complex issue on which as
shown in Chapter V empirical studies are not conclusive.
Social security expenditure, unemployment and growth
Much of the concern about social protections economic impact centres on the
effect on unemployment and on economic objectives such as productivity growth. In
figure 2.1, countries are ranked by the percentage of GDP allocated to expenditure on
social security transfers. Care has been taken to base the analysis on data covering a
substantial period of time. This is important, since a similar analysis carried out over a
shorter period might give a misleading impression, especially if it were in the 1990s,
when the countries of the European Union (EU) high social security spenders
were pursuing a restrictive macroeconomic policy at the expense of high unemploy-
ment in order to gain admission to the monetary union.
On the left of the diagram are those countries with a low level of social protection,
including Australia, Japan and the United States. On the right are those countries with
a relatively high level of social security expenditure, such as Belgium and the Nether-
lands. There is no apparent relationship between expenditure and the economic vari-
ables in question. There are countries with relatively low unemployment rates (see first
panel) both on the left of the diagram, such as Japan and the United States, and on the
right, such as Austria and Sweden, but the highest rates are to be found in the middle
(Ireland and Spain).
Unemployment affects the level of national output, but the level of productivity
also needs to be taken into account. Economies differ in GDP per hour worked in ways
that are not widely known. The productivity estimates in the second panel of figure 2.1
show that GDP per hour worked in the United States is twice that in Portugal but lower
than that in a number of European countries. The countries with the highest social
security expenditure have productivity per hour which at least matches that in the
United States (this productivity measure takes no account of the contribution of factors
other than labour).
Current levels of productivity are a reflection of past differences in growth rates.
The third panel of figure 2.1 shows the growth performance of different economies
over the period since the first oil shock. Labour productivity, measured as GDP per
Figure 2.1. Selected economic indicators for OECD countries ranked by the
percentage of GDP devoted to social security expenditure (lowest on
left, highest on right)
hour worked, grew strongly in Japan, but also in Ireland, Italy and other European
countries. Growth in this period was low in Sweden,
2
but the same was true of the
United States.
Lastly, it should be stressed that the indices of performance considered are those
conventional in economic analysis, but their limitations are well known. They deal
with marketed output, but there are other important dimensions of activities (non-mar-
keted output, quality of working life, effects on the environment) which contribute to
the ultimate goal of improving human welfare. In particular, security can be viewed as
a good that citizens demand, but which the market, in various cases, is not well
equipped to provide efficiently, because of economies of scale, adverse selection and
transaction cost problems. This would help to explain the relative stability of social
security systems despite their allegedly having been in crisis for the last 30 years.
Productivity and social stability
It has been suggested by various commentators that social security contributes to
economic growth by raising labour productivity and enhancing social stability. Vari-
ous types of social security are particularly relevant to labour productivity:
a Health-care systems help to maintain workers in good health and to cure those who
become sick. Poor health is a major cause of low productivity in many developing
countries where workers do not have access to adequate health care. Not only does
it limit their ability to cope with the physical demands of their jobs, but it also leads
to sickness absence and can seriously undermine efficiency even among workers
who do not absent themselves from work. Care for workers family members helps
to ensure the good health of the future labour force.
a Pension systems ease the departure of older workers from the labour force, thereby
helping to avoid the problem of workers remaining in employment when their pro-
ductivity has fallen to a low level.
a Cash sickness benefit contributes to the recovery of sick workers by removing the
financial pressure to carry on working when ill. It also helps to maintain the pro-
ductivity of other workers by countering the spread of infection.
a Maternity insurance is of particular importance for the reproduction of a healthy
workforce, as well as for the maintenance of the health of working mothers.
a Work injury schemes the oldest and most widespread form of social security
are playing an increasingly important role in preventing work-related accidents
and sickness and in rehabilitating workers who fall victim to these. Such activities
are of considerable relevance to productivity, given the enormous numbers of days
off work attributable to avoidable health risks.
a Unemployment benefit provides unemployed workers with the breathing space
they need in order to find suitable work which makes full use of their talents and
potential; the associated employment and training services are also highly relevant
in this respect.
2
The low productivity growth rate in Sweden, and perhaps in certain other OECD countries as well,
during this period is thought to result not from low productivity growth in the old core sectors, but rather
from the huge expansion of the service sector, especially the labour-intensive health and caring profes-
sions.
a Child benefits (and other cash benefits provided when the breadwinner is unable to
work) help to ensure that families with children have enough income to provide
proper nutrition and a healthy living environment for their children. In developing
countries, child benefits can also be a powerful instrument to combat child labour
and promote school attendance. Children can thus receive an education that will per-
mit them in the long run to attain much higher levels of productivity and income.
More indirect effects on productivity may also be important. The existence of a
good unemployment insurance system creates a feeling of security among the
workforce which can greatly facilitate structural change and technological innovations
that workers might otherwise perceive as a great threat to their livelihoods. The link
between these issues was graphically illustrated in the Republic of Korea by the Tri-
partite Accord of 1998 under which workers organizations accepted greater labour
market flexibility, including lay-offs, in exchange for better social protection.
Social security helps create a more positive attitude not just to structural and tech-
nological change, but also to the challenges of globalization and to its potential benefits
in terms of greater efficiency and higher productivity. Countries with relatively open
national economies (a high ratio of trade to GDP) and high exposure to external risks
(high variability in the relative prices of imports and exports) have been observed to
provide high levels of social security. It appears that societies which expose them-
selves to more external risk demand a higher degree of social protection. Globalization
and social security thus tend to be mutually reinforcing.
Social security can be an important factor in the maintenance of effective demand
and of business confidence. This effect is most obvious in the case of unemployment
benefits, which help to maintain the purchasing power of workers who have lost their
jobs. However, other social security benefits also act as an economic buffer during a
recession or crisis. Without them, the multiplier effects of the first round of job losses
could be followed by second and third rounds that could cut deep into the social fabric
of the community, as well as leaving much of the economy working well below capac-
ity. Social security thus helps to prevent production from falling too far and to keep
companies in business, with their workforce intact, ready to participate in the upswing
when it comes.
Employer contributions and international competitiveness
Widespread concern has been expressed in business and political circles that high
employer contributions to social security make national economies less competitive, a
claim frequently heard in discussions of globalization. Most economists, however,
have taken the view that in the long run, through the normal working of market forces,
these costs will be borne by workers in the form of lower wages (lower, that is, than
they would receive in an identical economy without any payroll tax or employer social
security contributions). As a result, employer contributions probably do not affect total
labour costs in the long term. This appears to be borne out by OECD figures given in
table 2.1, which ranks OECD countries according to their labour costs (defined as
gross wages plus employer social security contributions). The ten countries with the
highest labour costs include only two with high employer contributions (of 20 per cent
or more). Of the next ten countries, five have high employer contributions. The propor-
tion of countries with a high level of employer contributions is in fact greatest (five out
of nine) in the countries with the lowest labour costs.
Table 2.1. Income tax plus employee and employer social security contributions (as percentage of
labour costs), 1998
1
Country
2
Income tax Social security contributions Total
4
Labour costs
5
Employee Employer
3
Belgium 22 10 26 57 40 995
Germany 17 17 17 52 35 863
Switzerland 9 10 10 30 32 535
Italy 14 7 26 47 32 351
Netherlands 6 23 14 44 32 271
Denmark 34 10 1 44 32 214
Canada 20 5 6 32 32 211
Norway 19 7 11 37 31 638
United States 17 7 7 31 31 300
Luxembourg 10 11 12 34 31 102
Austria 8 14 24 46 29 823
Sweden 21 5 25 51 29 768
Australia 24 2 0 25 29 590
Finland 22 6 21 49 29 334
United Kingdom 15 8 9 32 29 277
France 10 9 28 48 28 198
Japan 6 7 7 20 27 664
Ireland 18 5 11 33 24 667
Spain 11 5 24 39 24 454
New Zealand 20 0 0 20 24 332
Korea, Rep. of 1 4 9 15 22 962
Iceland 20 0 4 25 22 545
Greece 2 12 22 36 17 880
Turkey 21 8 11 40 15 825
Czech Republic 8 9 26 43 15 781
Portugal 6 9 19 34 13 903
Poland 11 0 33 43 12 696
Hungary 12 8 32 52 9 916
Mexico 0 2 20 22 8 662
1
Single individual at the income level of the average production worker.
2
Countries ranked by decreasing labour
costs.
3
Employer social security contributions include reported payroll taxes.
4
Owing to rounding total may differ by one percent-
age point from aggregate of columns for income tax and social security contributions.
5
Dollars with equal purchasing power. Labour
costs include gross wages plus employers compulsory social security contributions.
Source: OECD: Taxing wages in OECD countries 1998/1999: Taxes on wages and salaries, social security contributions for employees
and their employers, child benefits 1999 edition (Paris, 2000), bilingual edition.
In the short term, however, an increase in employer contributions may well be
reflected in higher labour costs. And this effect could last for quite some time, particu-
larly if labour and product markets are imperfect and if the increase takes place during
a period of low growth and low inflation, when employers typically have less room for
manoeuvre in wage negotiations. This means that it is very important to avoid large
increases in contributions: several small increases phased over a number of years will
be very much easier for the economy to absorb than a single large increase.
Empirical evidence suggests that social security contributions do not have any
long-run impact on unemployment.
3
This helps to explain why Denmark, the only
country in Europe with virtually no employer contributions, has over the years had
unemployment on a par with the European average and appears to derive no special
employment advantage from its lack of such contributions. Governments often believe
that a reduction in social security contributions will reduce labour costs. The experi-
ence of Chile before and after its social security pension reform has been investigated
in order to establish the impact of the sharp reduction in contributions. The average
payroll tax rate in the sample of manufacturing firms covered by the research fell from
30 per cent to 5 per cent over the period between 1979 and 1985. Strong evidence is
found that the reduction was fully offset by higher wages, leaving labour costs
unreduced.
4
All this should not be taken to suggest that there is no limit to the level of social
security contributions. In any democratic society the political preferences of the major-
ity most certainly impose a limit. Depending on what people perceive as desirable and
fair, that limit is much lower in some countries than others. Moreover, if the level of
contributions rises very high, this creates strong incentives for non-compliance, which
if not controlled will seriously undermine the system.
Unemployment benefits, unemployment and employment
Much research has been carried out to investigate the hypothesis that the average
duration of unemployment benefit receipt is positively related both to the level of un-
employment benefits (the replacement ratio) and to the maximum duration of benefit.
Various studies have confirmed that significant relationships exist, but that their ef-
fects are modest.
5
An important question left unanswered by many of these studies is what happens
to people once they cease to receive unemployment benefit. It cannot simply be as-
sumed that they find regular employment. Recent work has investigated this issue. In
Bulgaria those without unemployment benefit are more likely to leave registered un-
employment, but it is to inactivity rather than to employment. In Slovakia, changes in
eligibility periods result in people leaving unemployment not so much to take up regu-
lar jobs as for other reasons. People in Sweden not receiving unemployment benefit
were found to be much more likely to leave the labour market or to take up places in
active labour market programmes.
6
In other countries those who cease to receive un-
employment benefit often move into informal or even criminal activities, resulting in
massive tax evasion and other costs to society. Since lack of benefit entitlement may
simply be causing people to quit the labour force, it may be more important to examine
3
See World Labour Report 2000, op. cit., p. 68; and S.J. Nickell: Unemployment and labor market
rigidities: Europe versus North America, in Journal of Economic Perspectives (Minneapolis, Minnesota),
Vol. 11, No. 3, 1997, pp. 55-74.
4
Jonathan Gruber: The incidence of payroll taxation: Evidence from Chile, NBER Working Paper
No. W5053 (Cambridge, Mass., National Bureau of Economic Research, 1995).
5
See, for example, Anthony B. Atkinson and John Micklewright: Unemployment compensation
and labor market transitions: A critical review, in Journal of Economic Literature (Nashville, Tennes-
see), Vol. 29, No. 4, 1991, pp. 1679-1727.
6
World Labour Report 2000, op. cit., p. 154.
the relationship between unemployment benefit and employment: after all the real con-
cern is that people may be drawing unemployment benefit when they could be em-
ployed instead. A recent study
7
concluded, on the basis of cross-country evidence, that
there is in fact no connection between unemployment benefits and total employment.
This study also found that high unemployment was associated with the absence of
complementary active labour market policies.
Early retirement
In recent years there has been great concern about the adverse effects which
early retirement provisions may have upon employment as well as upon pension
costs. These had been introduced during periods of high unemployment, particularly
among older workers, in the hope of creating more job openings for younger work-
ers. As unemployment has fallen, early retirement provisions in numerous social
security systems have been tightened or even abolished. However, there has been
little or no change in retirement behaviour. This paradox is explained by a number of
factors:
a the proportion of older workers receiving unemployment benefits remains rela-
tively high and includes many who have, for all intents and purposes, retired;
a employer pension schemes often contain strong incentives to retire early;
a even workers without unemployment benefits or private pension entitlements are
quitting the labour force before standard pensionable age, many of them manual
workers for whom demand is low and who are often in poor health.
UNEMPLOYMENT BENEFITS AND EMPLOYMENT PROMOTION
It was estimated that at the end of 1998 some 1 billion workers or one-third of
the worlds labour force were either unemployed or underemployed. The actual
number of unemployed people that is, seeking or available for work but unable to
find it was about 150 million. In addition, 25 to 30 per cent of the worlds workers
were underemployed, that is, either working substantially less than full time, but wish-
ing to work longer, or earning less than a living wage. It is striking to see not only how
many workers are affected in absolute terms, but also how rapidly the situation can
change. For example, as a result of the Asian financial crisis, one in 20 workers in the
Republic of Korea lost their jobs during the nine months from November 1997 to July
1998 and open unemployment jumped from 2.3 to 8 per cent between the end of 1997
and the beginning of 1999.
Unemployment benefit systems protect employees in the industrialized coun-
tries and in a number of middle-income developing countries. In most developing
countries no unemployment benefits exist as such, but some of the unemployed may
be able to get a limited amount of paid work in labour-intensive programmes. Of the
worlds unemployed, probably not more than a quarter are entitled to unemployment
benefit.
7
Nickell, op. cit.
Relevant international labour standards
The most recently adopted instruments are the Employment Promotion and Pro-
tection against Unemployment Convention, 1988 (No. 168), and Recommendation
(No. 176). The contingencies covered by the Convention include full unemployment
defined as the loss of earnings due to inability to obtain suitable employment [...] in
the case of a person capable of working, available for work and actually seeking
work. Member States shall in addition endeavour to extend the protection of the Con-
vention to two other contingencies:
a loss of earnings due to partial unemployment (short-time working); and
a suspension or reduction of earnings due to a temporary suspension of work;
as well as to part-time workers who are actually seeking full-time work.
Persons protected under the Convention shall comprise prescribed classes of
employees, constituting not less than 85 per cent of all employees. Compared with
previous Conventions dealing with unemployment benefit (the Unemployment Pro-
vision Convention, 1934 (No. 44), and the Social Security (Minimum Standards)
Convention, 1952 (No. 102), Part IV), an innovative feature of Convention No. 168
is that it requires the payment of social benefits to at least three of the following
ten categories of new applicants for employment: young persons who have com-
pleted their vocational training; young people who have completed their studies;
young people who have completed their compulsory military service; people seeking
work after a period devoted to bringing up a child or caring for someone who is sick,
disabled or elderly; people whose spouse had died, when they are not entitled to a
survivors benefit; divorced or separated persons; released prisoners; adults, includ-
ing disabled persons, who have completed a period of training; migrant workers re-
turning to their home country (except in so far as they have acquired rights under the
legislation of the country where they last worked); and previously self-employed
persons.
The benefits under the Convention are not less than 50 per cent of previous earn-
ings in earnings-related systems, while in other types of system they must be fixed at
not less than 50 per cent of the minimum wage or of the wage of an ordinary labourer,
or at a level that provides the minimum essential for basic living expenses, whichever
of the three is the highest.
Industrialized countries
Within the industrialized countries there is substantial variation in unemployment
benefit systems. One group of countries is characterized by the high level and long
duration of their unemployment insurance benefits, by extensive coverage and by the
existence of a fall-back benefit system of unemployment assistance for workers who
have exhausted their insurance entitlements. These countries include Austria, Bel-
gium, Denmark, Finland, France, Germany, Iceland, Luxembourg, Netherlands, Nor-
way, Portugal, Spain, Sweden and Switzerland. They generally have not only good
benefits, but also a high level of employment protection.
A second group of countries, including Australia, Canada, Japan, New Zealand,
the United Kingdom and the United States, have systems which provide lower ben-
efits. According to the OECD employment protection ranking, the legal arrange-
ments in these countries apparently provide relatively little statutory employment
protection.
8
The countries of Central and Eastern Europe introduced unemployment benefit
systems about the end of the 1980s which were initially rather generous, but have since
been reduced, particularly in terms of benefit duration. Benefit levels as a percentage
of wages are similar to those in Western Europe, but a much lower proportion of the
unemployed receive benefits in these countries for example, about one-third of the
registered unemployed in Poland.
Unemployment benefit schemes have become more and more inadequate as indi-
vidual employment patterns have become increasingly uncertain. These schemes
therefore have to be flexible enough to cover new uncertainties and changes facing
workers and have to form part of larger strategies for employment and economic
development.
Employment protection policies in the industrialized countries have been con-
cerned in particular with the high rates of unemployment affecting unskilled workers.
One approach has stressed the need for better education and training to ensure that
workers have the skills that are in demand in a high-wage, high-productivity economy.
Another approach has been to use social protection to subsidize unskilled labour, either
through the payment of income-tested benefits to the working poor or through the (par-
tial or total) exemption of their employers from paying social insurance contributions
on their behalf (with the cost being borne by the State).
Middle-income developing countries
Unemployment benefit systems are at best in their formative stages in the middle-
income developing countries: the duration and level of benefits are generally low and
coverage is much more limited than in the industrialized countries. On the other hand,
formal sector employees are covered by various forms of employment protection legis-
lation in a number of middle-income developing countries, including some that do not
have any unemployment benefits. The legislation typically includes severance pay,
which can help to tide redundant workers over a period of unemployment. However,
these are lump-sum payments, the size of which depends on the length of previous
service, not on the occurrence or duration of unemployment. Severance payments have
traditionally been an employers liability. However, in some Latin American countries
in the 1990s they were replaced by mandatory severance savings schemes. This change
has meant that the funds are invested in the capital market rather than retained within
the firm. While this introduces uncertainty as to the amount of benefit that workers will
receive, it guards against the risk that an insolvent employer may fail to provide sever-
ance pay.
Most unemployment benefit schemes in the developing countries, as in the indus-
trialized world, are financed by employer and worker contributions, but in certain
Latin American countries such as Brazil and Chile they are financed from tax revenue.
Where unemployment benefits exist, the proportion of the total unemployed receiving
them tends to be low. The replacement rate (benefits as a proportion of previous
wages) varies between 40 and 80 per cent in Latin America and the Caribbean and is
8
45 per cent in South Africa. Benefit duration tends to be fairly limited and is often
related to the length of time that the worker has been insured. In China the locally set
rates of unemployment benefit are generally low. Hong Kong, China, provides benefits
on a means-tested basis as part of its social assistance system to registered unemployed
persons with at least one years residence. The Republic of Korea has expanded its
unemployment insurance system to cover about half of all employees, but those in
small enterprises who are often the most vulnerable are still excluded.
The recent Asian financial crisis has made it clear that unemployment insurance
schemes could have played a substantial role in coping with the unacceptable levels of
hardship caused by rapidly escalating unemployment. They would also have helped to
limit the collapse of consumer demand and business confidence which made the crisis
much more acute than it would otherwise have been. As was shown in an ILO feasibil-
ity study carried out for the Government of Thailand, the contribution rate necessary to
finance a modest unemployment insurance scheme would in the long run be less than
1 per cent of earnings.
Implementing unemployment insurance in the context of a developing country
represents a considerable challenge. Employment services, where they exist, tend to be
rudimentary and have to be upgraded in order to provide meaningful help to unem-
ployed workers to find other work, as well as to monitor whether they are in fact will-
ing and available to take up employment. A second problem is that much employment
in these countries is not effectively covered by social security either because it is
excluded from the legislation, which may apply only to workers in firms above a cer-
tain size, or because employers and workers do not comply with the legislation.
The reality for most workers in developing countries, even countries in the middle-
income category, is that their jobs are not covered, because they are self-employed or
because they are employed in the informal economy or in small enterprises. To help
protect them in the event of unemployment, other measures are needed, such as the
opportunity to obtain employment in labour-intensive public works. It is important to
note that when people lose their jobs and have no access to benefits, they must usually
resort to informal sector activity in order to survive: they may therefore be more accu-
rately described as underemployed than unemployed.
Other developing countries
In so far as other developing countries have taken measures to provide some pro-
tection for the unemployed and underemployed, these have tended to take the form of
employment-intensive programmes. These are undertaken mainly during the lean sea-
son, when small farmers and landless workers are not engaged in agricultural activities
and have no alternative sources of employment. In an urban setting they can also be
implemented during periods of recession or economic crisis. These programmes can
both generate employment and reduce poverty by using labour-based techniques for
mainstream investment programmes and by directing investments increasingly to-
wards the productive and social needs of the low-income groups in the population.
Some programmes of this type operate on a large scale. For example, the Jawahar
Rozgar Yojana (JRY) programme in India by the mid-1990s covered over one-third of
the countrys underdeveloped districts and provided some 20 days work a year to each
participant. Similar programmes operate on a smaller scale in countries such as
Bolivia, Botswana, Chile, Honduras, Kenya, the United Republic of Tanzania and (re-
cently) South Africa, and the umbrella organization AFRICATIP groups together
some 18 executing agencies in French- and Portuguese-speaking African countries
which organize public works for implementation by small local contractors, with a
view to boosting employment.
A salient feature of employment-intensive programmes is that they self-select
the people who participate in them. Since they pay only the going agricultural wage in
the region (or the minimum wage if this is set realistically), only low-income workers
are attracted to them. This avoids the cumbersome and costly administrative arrange-
ments that would be necessary if assistance were to be provided to such people on a
means-tested basis. The programmes have the advantage that they are open both to
wage earners and to people who normally work on their own account (whose needs
may in some cases be just as great). Employment under a labour-intensive programme
can be organized so that workers can obtain an employment guarantee for a certain
number of days per year, which thus provides a kind of income security. The guarantee
is most extensive where employment is provided on demand.
CONCLUSIONS: LINKING SOCIAL SECURITY WITH EMPLOYMENT
AND DEVELOPMENT POLICIES
This chapter has shown that there is a complex relationship between social security,
employment and development. At the macro level, at least for the industrialized coun-
tries, there does not seem to be a clear relationship between social security expenditure,
productivity and unemployment. However, at the sectoral and enterprise levels there is
good reason to believe that there is a positive relation between productivity and social
security. This is particularly true for health insurance, which boosts workers productiv-
ity, and for child benefits when they are linked to school attendance. The evidence in this
chapter also shows that employer contributions do not seem to have a long-term impact
on labour costs and international competitiveness, since the burden of all social security
contributions is in the end absorbed by workers in the form of lower wages. Finally, there
is evidence for some industrialized countries that the level and duration of unem-
ployment benefits exert a modest adverse effect on unemployment, but that this effect
can be reduced through better design of benefits and supporting labour market policies.
Worldwide, probably not more than one-quarter of the 150 million unemployed
people are covered by unemployment benefits, and they are mainly concentrated in the
industrialized countries. But for those who work in the rural or urban informal sectors
in the developing countries hardly any unemployment protection exists. In the industri-
alized countries, the most important issue is probably to extend the personal coverage
of unemployment insurance schemes in coordination with labour market policies.
In most middle-income developing countries, unemployment insurance can at a
relatively modest cost play a substantial role in coping with the unacceptable levels
of hardship caused by rapidly escalating unemployment. However, the majority of
workers outside the formal economy could only be protected against unemployment
through macroeconomic policies, such as demand-stimulating policies, and direct em-
ployment promotion measures, such as enterprise development, training and employ-
ment-intensive programmes.
Social security policies are part of and interact with a wide range of social
policies, such as investments in basic social services, protective labour legislation and
the enforcement of basic rights. They are also intimately related to employment poli-
cies, because most social insurance schemes are financed out of labour incomes and
protect against risks related to employment capacity, such as unemployment, sickness,
disability and old age. Favourable social security and employment outcomes are
strongly influenced by economic development, and all of them contribute to the pro-
cess of socio-economic development.
As noted in Chapter I, social security is increasingly seen as an integral part of the
development process. It is therefore necessary to look for synergies between policies
for social protection, employment and development. These synergies exist in various
areas of social policy, such as health, education, housing and social welfare, but also in
areas of economic policy, such as macroeconomic and sectoral policies (for instance,
small-scale enterprise development). However, the potential synergies are probably
strongest with regard to employment and labour market policies.
This chapter has turned the spotlight on the economy, in recognition of the very
real economic effects which social security may have. There is of course the more
fundamental question: What is the purpose of economic activity? The concepts of de-
cent work and people-centred development, embracing social security, must then take
centre stage.
Extending the personal coverage of social protection 25
CHAPTER III
EXTENDING THE PERSONAL COVERAGE OF SOCIAL PROTECTION
THE RIGHT TO SOCIAL SECURITY
International instruments adopted by the ILO and the United Nations affirm that
every human being has the right to social security. In the Declaration of Philadelphia
(1944) the International Labour Conference recognized the ILOs obligation as regards
the extension of social security measures to provide a basic income to all in need of
such protection and comprehensive medical care. The ILOs Income Security Rec-
ommendation, 1944 (No. 67), provides that social insurance should afford protection,
in the contingencies to which they are exposed, to all employed and self-employed
persons, together with their dependants (Paragraph 17). The Universal Declaration of
Human Rights, 1948, states that everyone, as a member of society, has the right to
social security [...] (article 22), and refers specifically to the right to medical care and
necessary social services, to security in the event of sickness, disability, widowhood,
old age and unemployment, and to special care and assistance for motherhood and
childhood (article 25). The International Covenant on Economic, Social and Cultural
Rights, 1966, recognizes the right of everyone to social security, including social in-
surance (article 9).
It goes without saying that the practical implementation of this right requires a
major undertaking by the State and the community. The ILOs social security Conven-
tions recognize that in practice the ideal may be difficult to attain. For example, the
Social Security (Minimum Standards) Convention, 1952 (No. 102), requires in the
case of sickness and old-age benefits, for instance, that persons covered shall com-
prise:
a prescribed classes of employees, constituting not less than 50 per cent of all em-
ployees; or
a prescribed classes of the economically active population, constituting not less than
20 per cent of all residents; or
a all residents whose means during the contingency do not exceed prescribed limits.
These alternatives are intended to facilitate ratification of the Convention by coun-
tries, whatever type of social security system they may have. Later Conventions such
as the Invalidity, Old-Age and Survivors Benefits Convention, 1967 (No. 128), con-
tain more exacting standards, but provide a similar choice.
The Plantations Convention, 1958 (No. 110), applies to workers hired by agricul-
tural undertakings in the tropical or subtropical regions of the world. In terms of social
security its standards are less exacting than those of Convention No. 102. It requires
that plantation workers be covered by workers compensation and maternity protec-
tion, including a minimum of 12 weeks paid leave. The Convention also contains
provisions relating to medical care.
During the 1990s new ILO instruments have sought to promote social security
coverage for persons outside regular wage employment. Thus, the Home Work
Convention, 1996 (No. 177), provides that national policy on home work shall
promote, as far as possible, equality of treatment between homeworkers and other
wage earners in areas including statutory social security protection and maternity
protection. The accompanying Recommendation (No. 184) proposes that social
protection can be achieved through the extension and adaptation of existing social
security schemes and/or through the development of special schemes or funds.
The Job Creation in Small and Medium-Sized Enterprises Recommendation, 1998
(No. 189), recommends that labour and social legislation be reviewed inter alia to
determine whether social protection extends to workers in these enterprises,
whether there are adequate provisions to ensure compliance with social security
regulations covering the standard contingencies and whether there is a need for
supplementary social protection measures for workers in these categories. The
Part-Time Work Convention, 1994 (No. 175), states that social security schemes
shall be adapted so that part-time workers enjoy conditions equivalent to those of
comparable full-time workers.
THE PROBLEM OF NON-COVERAGE
A very large proportion of the population in most regions of the world still does not
enjoy any social protection or is covered only very partially. This is the case for the
vast majority of people in developing countries, and even in some of the richest indus-
trialized countries there are large and growing gaps in social protection.
Informal economy workers are not covered by social security for a variety of
reasons. One is the extreme difficulty of collecting contributions from them and, as
the case may be, from their employers. Another problem is that many of these work-
ers are unable to contribute a relatively high percentage of their incomes to financing
social security benefits and unwilling to do so when these benefits do not meet their
priority needs. Their most immediate priorities tend to include health care, in par-
ticular where structural adjustment measures have reduced access to free services.
They feel less need for pensions, for example, as for many of them old age appears
very remote and the idea of retirement perhaps unreal. Unfamiliarity with social se-
curity schemes and distrust of the way they are managed add to their reluctance to
contribute.
The problem of low coverage is of course not new, especially in countries where
large numbers of people work in subsistence agriculture. However, in recent years,
prospects of resolving or at least mitigating it have taken a dramatic turn for the worse,
as an increasing proportion of the urban labour force is working in the informal
economy, inter alia as a result of structural adjustment.
In Latin America and many other parts of the developing world in recent years
most of the increase in the urban labour force has taken place in the informal
economy. In most countries of Africa, a growing proportion of the urban labour force
is active in the informal economy, reflecting the (at best) sluggish growth of wage
employment, the massive migration to the cities and the need for workers to supple-
ment falling wages with earnings from the informal economy. For example, in the
case of Kenya, informal employment accounted for almost two-thirds of total urban
employment in 1996, compared with just 10 per cent in 1972.
1
Several developing
countries of Asia have expanded wage employment substantially but the informal
economy remains very important almost everywhere. In India, for example, if agricul-
ture is included, more than 90 per cent of workers are to be found in the informal
economy.
It should be noted that the informal economy is not a sector as such. It is in fact a
phenomenon to be found in almost all sectors. And it includes workers of all different
categories: employees, self-employed, homeworkers, unpaid family workers, etc.
Informalization is not restricted to small-scale enterprises; in many countries it includes
unregulated wage labour throughout the economy: in Argentina and Brazil, for example,
approximately 40 per cent of urban wage earners are in informal employment.
In many countries a higher proportion of women work in the informal economy, to
some extent because there they can more easily combine work with their heavier bur-
den of family responsibilities, and partly for other reasons related, for example, to
discrimination encountered in the formal economy. ILO statistics show that in two-
thirds of the countries for which separate figures are available, the informal economy
accounts for a higher share of total female urban employment than is the case for men.
2
There is a widespread tendency for women to remain trapped in the informal economy
for much of their working lives, whereas for men in the industrialized countries at
any rate it is less likely to be permanent. For long-term income security (in old age
for instance), this difference has especially important implications, as women tend to
live longer than men.
Informal economy workers have little or no security of employment or income. Their
earnings tend to be very low and to fluctuate more than those of other workers. A brief
period of incapacity can leave the worker and her or his family without enough income to
live on. The sickness of a family member can result in costs which destroy the delicate
balance of the household budget. Work in the informal economy is often intrinsically
hazardous and the fact that it takes place in an unregulated environment makes it still
more so. Women face additional disadvantages due to discrimination related to their
reproductive role, such as dismissal when pregnant, or upon marriage. Women in the
informal economy do not benefit from safeguards and benefits related to child-rearing
that in principle apply to women in formal wage employment (such as family allow-
ances, paid maternity leave, nursing breaks or assistance with the cost of childcare).
It is now widely recognized that there is a pressing need to find effective ways to
extend social protection. The recent past has seen a stagnation in the proportion of the
labour force covered. Given current economic trends, failure to take action is very
likely to lead to a reduction in the rate of coverage or even in the absolute numbers of
workers protected, as has occurred in parts of sub-Saharan Africa.
POLICIES TO ACHIEVE THE EXTENSION OF COVERAGE
Outside the industrialized world, policy-makers have found few remedies for the
lack of social protection. This may be because existing social protection policies are
1
ILO: Kenya: Meeting the employment challenges of the 21st century (Addis Ababa, East Africa
Multidisciplinary Advisory Team, 1999).
2
World Labour Report 2000, op. cit., statistical annex, table 7.
inappropriate. It may be because insufficient efforts have been made to implement
these policies. Or it may be because the lack of social protection is related to much
wider economic, social and political problems. If policy-makers define the problem
too narrowly, their chances of finding feasible solutions may be greatly reduced. It is
therefore necessary to give due consideration to the wider context in which social se-
curity systems have to operate.
The economic, social and political context
The first point to consider is the nature of a countrys governance. Among market
economies, experience shows that, with few exceptions, there tends to be a correlation
between the level of democracy and the adequacy of social protection. For the most
vulnerable members of the population to have their needs for health care and basic
income security met, it is vital that they should at least be able to make their voices
heard. In the long run a democracy which does not ensure adequate social protection is
unlikely to survive.
The second issue which must be considered is the macroeconomic situation and
the state of the labour market. The scope of social protection is likely to extend nat-
urally (the means by which it may do so are considered below) if and only if the labour
market is strong. So long as demand for labour remains weak, few people will obtain
decent jobs and most will depend on ill-paid and unprotected work in the informal
economy. Conversely, if the demand for labour increases, more workers may look
forward to better-paid and generally better-protected employment in the formal
economy. However, the informal economy in its many manifestations is hardly
likely to disappear either naturally or quickly, and it is of the greatest importance that
governments work towards social protection policies, which must be both innovative
and imaginative, that will promote improved conditions for such workers.
A third point is that excessive demands should not be placed on social security sys-
tems. They are no substitute for adequate macroeconomic, regional education and hous-
ing policies and they cannot be expected to achieve a fair distribution of income on their
own. Many social security systems redistribute from the rich to the poor, but this is not
their main objective. The prime objective is to provide security for people when they are
sick, disabled, unemployed, retired, etc. Schemes which represent reasonable value for
money for all the insured have the best chance in practice of achieving high compliance
rates, that is, of ensuring that legislation providing for wide coverage is actually imple-
mented. Social security is just part albeit an important part of the broader package
of measures necessary to reduce poverty and improve income distribution.
Finally, public confidence in social security systems is crucial if they are to attain
and maintain wide coverage. This requires not only efficient administration and high
standards of financial probity, but also a strong degree of commitment by the govern-
ment itself to ensure the long-run health of the system. Where this confidence is lack-
ing, people will always find ways to avoid contributing, even though their need for
social protection may be very high.
Strategies for extending social protection
There are essentially four ways to extend social protection:
a extending social insurance schemes;
a encouraging micro-insurance;
a introducing universal benefits or services financed from general state revenues;
a establishing or extending means-tested benefits or services (social assistance), also
financed from general state revenues.
None of these approaches should be excluded a priori. The appropriate mix of
different mechanisms will depend on the national context and on the national strategy
adopted. Careful thought has to be given to their respective roles and to the linkages
between them. Achieving a better understanding of these is essential if progress is to be
made. There is a need for research, experimentation and innovation. No doubt, in this
process, distinctions will be drawn between groups of countries, depending on their
level of economic and social development. Within the developing countries, there are
those in the middle-income category, some of which already have well-developed so-
cial security institutions. These countries, and indeed the industrialized countries
where coverage is incomplete, may aim at extending compulsory coverage to all or
most of the population, using the existing social insurance schemes or modifying them
to suit the needs of the new categories of the population to be covered. Secondly, there
is the large group of low-income countries where, if any real increase in coverage is to
be achieved, it will almost certainly have to be by some of the other means mentioned
above.
Extending social insurance schemes
Whenever social insurance schemes have been made compulsory for a limited sec-
tion of the labour force in the formal economy, legislators have usually envisaged ex-
tending their coverage at a later stage. The initial restriction of coverage has almost
invariably been justified by invoking practical constraints: for example, the adminis-
trative infrastructure did not exist which would permit the collection of contributions
from workers in small firms or from the self-employed, or health care facilities did not
exist in rural areas, so workers there could not be required to contribute. These reasons
were and, in many cases, remain perfectly valid. However, the question that should
always be asked is what is being done to remove these constraints.
Unfortunately, the answer in many cases is that very little has been or is being
done, and this for a variety of reasons:
a a lack of effective political pressure from those who are not protected and limited
awareness of the benefits that social protection can bring;
a a lack of effective and efficient social partnership within certain countries and at
the international level;
a the unwillingness or inability of governments to assume new and potentially costly
commitments; and
a institutional inertia.
The first and, to some extent, the second reasons reflect the relatively low level of
organization among people who are unprotected. The third reason has to do with the
fact that subsidies, which governments sometimes provide for the minority of the
population covered by the existing system, would become very much more expensive
if protection were significantly extended. As for the fourth, the institutions which pre-
pare proposals to extend coverage are often those responsible for administering the
existing system and often have to do so in difficult conditions; they may have little
incentive to propose extensions of coverage where these would make it still harder for
them to discharge their existing responsibilities.
Removing constraints on freedom of association and strengthening democratic in-
stitutions would help address the first problem and measures to foster collective bar-
gaining and tripartite institutions would be relevant to the second. The adverse
implications for the state budget of extending social insurance coverage could be at-
tenuated by a reduction or reorientation or, if necessary, the elimination of state subsi-
dies particularly where they benefit only a minority and could not conceivably be
extended to the majority of the workforce. As for institutional inertia, this may be at
least partially remedied by government action, for example to release the social secur-
ity institution from civil service rules when these impose unrealistic limits on staffing
and on pay levels, and to give it clear instructions to formulate, within a certain time
frame, legislative proposals to extend coverage.
Most commonly, compulsory coverage is extended in stages by bringing into the
scheme successively smaller enterprises. Each extension naturally expands the number
of insured workers, but disproportionately increases the number of enterprises with
which the social security system must deal. The smaller enterprises may present addi-
tional problems, given their rudimentary accounts and arrangements for paying work-
ers and their stronger tendency to non-compliance. Many less developed social
security systems understandably hesitate to try covering all employees, including those
in the smallest enterprises. However, experience in numerous countries has now
shown that it is feasible. Indeed, it can be advantageous to abandon any threshold and
so remove an incentive for employers to report artificially low numbers of workers.
Many enterprises usually claim to be just below the threshold, and it is very difficult in
practice to prove otherwise. Besides, a rule which encourages enterprises to remain
small can seriously hamper their development and constrain productivity growth. The
most compelling reason for covering even the smallest enterprises is that it is their
workers who tend to be the lowest paid and to have least job security they need
social security even more than other employees.
Attempts to extend existing social insurance schemes to cover the self-employed
have met with mixed success. Few join these schemes on a voluntary basis, as they are
unwilling and indeed frequently unable to pay the combined worker and em-
ployer contribution. Only in some cases do people not subject to compulsory coverage
have a strong incentive to contribute voluntarily, for example in order to preserve their
pension entitlements or to complete the minimum period required to qualify for a pen-
sion. As for compulsory coverage of the self-employed, this is difficult to achieve,
given the problems involved in identifying who the self-employed are and what they
earn. Some special schemes for self-employed workers tend to have more success,
particularly if the government is willing to subsidize them. Specially adapted social
insurance schemes can take account of the lower contributory capacity of most self-
employed workers by providing a more limited benefit package than the employees
scheme. Lower contributions and concentration on benefits which are of greatest inter-
est to the self-employed (recent ILO work in several developing countries suggests that
these include not only health care, but also survivors and invalidity insurance) make it
easier to achieve compliance.
Most of the financial support currently given (via tax concessions) to voluntary
coverage tends to go to supplementary private pension and health insurance schemes
and thus to favour the higher-income groups. It is important to quantify the support that
the State gives to such schemes. Such data will inform the public debate on social
protection and help to define priorities in the use of public resources, so that in future
state support for voluntary coverage could be much better targeted than it is now.
Recent examples of successful extensions of compulsory coverage
In 1995 Namibia launched a new scheme covering maternity, sickness and death
(funeral) benefits. By 1999 an estimated 80 per cent of formal sector workers were
covered and the scheme enjoyed wide popularity. The scheme provides three months
of maternity benefit at 80 per cent of covered wages, and up to two years of sickness
benefit at 60 per cent of wages for six months and 50 per cent thereafter.
3
The success
of the scheme is attributed to its efficient administration, its low contributions and the
absence of organized financial interests opposing it.
Following Bill Clintons first election as President of the United States, one of his
nominees for a senior administration appointment was asked during her confirmation
hearing whether she had paid social security contributions for the person she employed
to look after her young child. It turned out that she had not and the same was the case of
many other nominees. Congress then rewrote the law in order to improve enforcement.
The changes made it easier to pay the contributions and increased the penalties for not
doing so. Many more domestic workers were subsequently covered.
The Republic of Koreas national pension system, which previously covered 7.8
million workers, was extended in 1999 to cover a further 8.9 million persons, compris-
ing the urban self-employed and employees of firms with fewer than five workers. The
previous year the unemployment insurance scheme, initially applicable from 1995
only to employees in firms with 30 or more workers, was extended, as planned, to
firms with ten or more workers; later the same year, as a result of an agreement reached
in the Tripartite Commission, the scheme was further extended to workers in enter-
prises with five or more workers and in 1999 to part-timers.
In Spain the 1986 legislation establishing a national health service extended health
care to 99.8 per cent of the population by the 1990s, bringing in all dependants of
insured persons (regardless of age), recipients of social pensions and those who had
previously had to have their health care financed out of poor relief.
Encouraging micro-insurance and specific schemes
for informal economy workers
In recent years various groups of workers in the informal economy have set up
their own micro-insurance schemes. In these schemes, the insurance is independently
managed at the local level and sometimes the local unit links into larger structures that
can enhance both the insurance function and the support structures needed for im-
proved governance. Such schemes typically have the advantages of cohesion and di-
rect participation, although this is not true of provider-based systems. They can also
achieve low administrative costs, but views differ widely about their cost-effective-
ness. They may operate within the context of a credit scheme, such as the Grameen
3
Elaine Fultz and Bodhi Pieris: Social security schemes in southern Africa: An overview and
proposals for future development, ILO SAMAT Discussion Paper No. 11, Dec. 1999, p. 28.
Bank, which has already had experience with the collection of contributions and ad-
ministration of payments. On the other hand, as in Argentina, mutual benefit organiza-
tions may set up credit schemes in order to subsidize their activity in the field of health
care. They have in some cases developed jointly with organizations such as the Self-
Employed Womens Association (SEWA) of India which have a good understanding
of the needs of their members.
The term micro-insurance refers to the ability to handle small-scale cash flows
(by way of both income and expenditure), not to the size of the scheme, although often
such schemes are in fact local and have a very small membership. The primary aim of
many of these schemes is to help their members meet unpredictable out-of-pocket
medical expenses. They do not usually aspire to provide comprehensive health insur-
ance, still less to pay income replacement benefits.
It is estimated that these schemes usually attract about 25 per cent or less of the
target population in the localities where they exist. The only schemes which manage to
achieve high penetration rates (between 50 and 100 per cent) are those in particularly
close-knit communities or those that all members of the target group (such as a trade
union or professional association) are required to join. This percentage, though far
from satisfactory, is much higher than that achieved by social insurance schemes open
on a voluntary basis to all the self-employed, no doubt because micro-insurance contri-
butions are very much lower and because the schemes focus on providing only those
benefits which are perceived by people as most urgently necessary.
These schemes may have the potential to increase social protection coverage sub-
stantially, by collaborating with each other and by working together with statutory
social insurance schemes, local and national government and other large-scale organ-
izations. There are various ways in which the State can promote micro-insurance
schemes:
a financial support: help with set-up costs, facilitating reinsurance options, payment
of subsidies in the form of matching contributions, etc.;
a creation of a legislative and regulatory framework within which such schemes may
operate, for example ensuring democratic and economically sound management.
It remains to validate the potential of micro-insurance schemes in practice. Argu-
ably there is justification for these schemes to receive more support and certainly they
should be the subject of further research.
Examples of specific government-supported schemes for workers in the informal
economy are the labour welfare schemes in India, financed from resources derived
from a tax on the output of about 5 million workers in the cigarette (beedi) and cinema
industries as well as in certain mines. A similar scheme operates in the Philippines for
sugar workers. In general, however, the level of resources generated is low and only
limited social protection is provided.
Introducing universal benefits or services financed
from general state revenues
Universal cash benefits are to be found in a number of industrialized countries, but
only rarely in developing countries, one example being Mauritius. Universal services,
particularly public health services, are more common. However, in recent years the
universal character of these health services has been greatly eroded by the imposition
of user charges, from which only the destitute tend to be exempt.
By definition, universal schemes extend coverage to 100 per cent of the target popu-
lation, for instance those over a certain age, without any contribution condition or income
test. They avoid many of the problems involved in contributory systems. Naturally, they
will tend to cost more to the extent that they are providing benefits to more people. How-
ever, it must be borne in mind that eligibility conditions, such as pension age, may be
quite restrictive and benefit levels rather low. Universal health care systems are able to
achieve much more effective cost control than other types of health care systems and do
not need to spend money on administering systems of insurance and patient billing. An-
other difference between contributory schemes and universal schemes is that the latter do
not provide higher cash benefits to higher earners, but a single flat-rate amount to all who
qualify. This too helps to hold down the cost of universal schemes.
Universal schemes can greatly enhance gender equality. They cover people re-
gardless of their employment status and work history, and women receive the same
rate of benefit as men. The benefits typically provided by universal schemes are all of
particular importance to women: old-age pensions (as women have a longer average
life expectancy); child benefits (as women are typically more involved in caring for
children); and health care (as the health of children and issues of reproductive health
are of special concern to women).
The real problem with the existing universal schemes, which are mainly to be
found in the industrialized world, is not so much their aggregate cost (which is usually
less than that of contributory schemes), but the fact that unlike contributory
schemes they have to be financed from general government revenue and therefore
have to compete every year with all the governments other expenditure priorities.
What may be perceived as affordable one year may be less so the next, if policies or
economic conditions have changed.
The widest possible form of universal cash benefit is the citizens income, which
would be provided not only for groups such as children and the elderly who are not
expected to earn their living but also for the able-bodied of working age. This type
of proposal has excited much interest in recent years. According to some of its propo-
nents it would replace income-tested benefits such as social assistance; for others it
would replace all existing social security schemes, including social insurance.
Establishing or extending means-tested benefits or services
(social assistance)
Social assistance is to be found in virtually all industrialized countries, where it
serves to plug at least some of the gaps left by other social protection schemes and thus
to relieve poverty. In developing countries social assistance is much less widespread.
Where it exists, it is usually restricted to just one or two categories of the population,
such as the elderly.
The relative paucity of social assistance schemes in the developing world testifies
to the problems which many governments have in devoting adequate resources to it.
This should not be seen purely as a reflection of the low absolute level of national
income or of government revenue. It may be questioned whether governments, in es-
tablishing their priorities, always give sufficient weight to their social assistance
schemes, whose beneficiaries are rarely in a position of political strength.
Social assistance is targeted only at those in need and the means test can in theory
be made rigorous enough to exclude all but those whose needs are greatest. In practice
things tend to be different, even in the most sophisticated social assistance systems. On
the one hand, no means test is foolproof, so some people who are not eligible neverthe-
less succeed in obtaining benefits particularly in countries where there is a thriving
informal economy. Such errors are serious not only because they cost money, but
above all because they undermine public confidence in the system. On the other hand,
social assistance benefits fail to reach many of those in greatest need for one or more of
the following reasons:
a they are unwilling to apply because of social stigma;
a they may be unaware of their rights under the legislation;
a they find it difficult to submit an application for benefit, as procedures are often
complicated and time-consuming;
a social assistance is often subject to considerable administrative discretion, opening
the way to favouritism, clientelism and discrimination.
The more rigorous the means test, the greater the likelihood that people will be put
off from applying and that those in real need will fail to obtain benefit. Self-selection
mechanisms are often more appropriate than means testing, especially in the context of
developing countries. These tend to be used, for example, in the provision of paid work
in labour-intensive projects and of basic food aid.
Means-tested social assistance has another major drawback, as it can discourage
people from saving (or encourage dissaving) if they think that any savings they have
will simply be deducted from the benefit that they would otherwise receive. Similarly,
it may act as a disincentive from contributing to other forms of social protection. Thus
it can help to create situations of need because of the perverse incentives inherent in
means testing.
On the other hand, social assistance can be useful for specific vulnerable groups,
such as the elderly and children. It may well be the only solution for widows who have
not been able to contribute themselves to pension schemes or whose husbands were not
covered by survivors insurance. It is often also a way of helping poor households with
children; in various countries the provision of such benefits is now linked to school
attendance.
Linkages between different components of social protection
Most social protection systems are mixed and there are linkages between their
different components. One obvious linkage is that certain benefits are designed to sup-
plement others. Compulsory contributory benefits may supplement universal benefits.
Voluntary contributory benefits may be intended to supplement one or both of these.
The linkage between social assistance and the other components of social protection is
of course quite different. If a person receiving social assistance is eligible for other
social benefits, then the latter will be deducted from what would otherwise have been
paid by social assistance. If these other benefits are contributory, the result is that the
person has contributed for nothing.
This suggests that the relationship between means-tested schemes and contribu-
tory schemes has to be carefully thought through. Among the issues which deserve
attention are: the sequence in which social assistance and contributory schemes should
be established; the relative levels of benefits provided by each; and whether eligibility
conditions (such as pension age) should be different. These issues give rise to real
dilemmas. As policy-makers become more aware of them, they may be more prepared
to give universal schemes serious consideration, in order to minimize perverse incen-
tives.
Social protection is constantly changing and the direction in which it is likely to
change is often highly dependent on what has gone before. Policy-makers should be
conscious of these dynamic linkages, since otherwise the final result of their decisions
may diverge significantly from their intentions. For example, they may be very keen to
encourage the establishment of contributory schemes, in view of the many advantages
which such schemes obviously have. However, if these schemes fail and with non-
statutory schemes in an unregulated environment this is quite likely to happen then
peoples trust in such ventures may be destroyed for a long time to come. Or to take
another example, tax policies may result in the establishment of voluntary contributory
schemes for some workers, creating vested interests (notably among the financial insti-
tutions involved in managing them) which would stand in the way of establishing a
national social security scheme covering all workers.
The existence of these various linkages serves to underline the need to develop an
overall public policy concerning social protection, defining priorities and the financial
involvement of the State. The key issues are to determine the institutions through
which to channel state subsidies and the categories of the population which are to ben-
efit. It is also important to recognize possible complementarities, for example, support
for the creation of health care facilities and support for the development of insurance
mechanisms.
CONCLUSIONS
Those lacking social protection tend to belong to the economically weaker sections
of society. The aim in the long term should be to bring them into a national system
covering the whole population (or the entire labour force, as the case may be) where
they can benefit from risk-pooling and solidarity. In the medium term this may be
possible for middle-income developing countries, but not for the low-income coun-
tries. Such schemes are difficult to enforce, especially for some sections of the self-
employed, but plans should be drawn up (and included in legislation) to extend
compulsory coverage in a step-by-step manner, at least to all employees. The State
may facilitate and support micro-insurance schemes for those whom compulsory
schemes are for the time being unable to reach, although it is clear that many of those in
greatest need will never choose or be able to contribute to such schemes and will thus
never benefit from any support which the State provides to them. Micro-insurance
schemes should be encouraged to develop in a way that will facilitate their possible
integration into the national scheme and eventually the generalization of compulsory
coverage.
Apart from contributory schemes, the other main types of social protection are
financed from general government revenue and may take the form of means-tested or
universal benefits. Governments in developing countries have been slow to develop
either of these, being already under intense pressure to cut existing public expenditure,
within the framework of structural adjustment programmes. However, such benefits
need not be very costly: the category of persons eligible can be quite narrowly defined,
at least at the initial stage, in order to limit the impact on the state budget. Over time, as
the benefits prove their worth and gain political support, it should be possible to devote
greater resources to them and to provide them on a less restrictive basis. Both types of
benefit provided by the State can help those who are in greatest need. Universal ben-
efits tend to cost more but they are simple to administer and they are a foundation on
which individuals can build better income security for themselves and their families.
They can be a powerful tool to promote gender equality and, more generally, to en-
hance individual autonomy, since they can free people from destitution without sub-
jecting them to the controls and conditions usually associated with poor relief.
The goal of social protection is not mere survival, but social inclusion and the
preservation of human dignity. As governments seek to extend coverage, they would
do well to study the experience of countries where social security is popular and enjoys
a high degree of public support. The huge task of extending social protection is one for
which they will need all the public support they can get. There are no simple solutions,
and the prospects of success of the various strategies will vary according to the national
context. More research, accompanied by experimentation and innovation, can help to
inform policy to achieve progress towards ensuring that all working people and their
families enjoy decent social protection.
Gender equality 37
CHAPTER IV
GENDER EQUALITY
Gender equality issues are to be found in virtually all aspects of social protection.
While problems of unequal treatment are also dealt with in other chapters of this re-
port, the present chapter attempts to give an overview of the topic as a whole.
The first point to emphasize is that gender equality in social protection is more than
a question of securing equal treatment of men and women in the formal sense. It is also
a matter of taking account, in an appropriate way, of gender roles in society, roles
which differ between societies and have in recent years undergone immense change in
very many countries. Thus social protection schemes should be designed, on the one
hand, to guarantee equality of treatment between men and women and, on the other
hand, to take into account different gender roles and serve as a tool for the promotion of
gender equality.
After briefly reviewing what ILO social security Conventions and Recommenda-
tions have to say on discrimination on the basis of sex, this chapter looks at the link
between social protection and gender and at the impact which labour market inequali-
ties have on different forms of social protection. It then proceeds to consider actual and
potential measures to promote gender equality through social protection.
Gender equality in social security systems is a complex matter which involves two
types of discrimination, direct and indirect.
Direct discrimination can be traced to: (i) differences in treatment between econ-
omically active married women and men, based on the idea that the woman is depend-
ent on her husband, so that her social insurance entitlements are derived rights based on
his insurance rather than personal rights based on her own; (ii) differences in rates of
benefits or contributions based on actuarial calculations made separately for men and
women, taking into account factors such as different life expectancy, risks of morbidity
and disability, anticipated work patterns, etc., such differences being found in systems
of individual savings accounts in which there is no pooling of risk or solidarity.
Indirect discrimination results from measures which, although often defined with-
out distinction as to sex, do in practice affect women and men differently because of
the nature of their occupational activity, marital status or family situation. Women
workers predominate in the sectors not covered by social security, such as domestic,
part-time or occasional work or in the informal economy. Certain conditions, such as
long qualifying periods, also penalize women.
Many women spend much of their lives outside paid employment and are thus
economically dependent on their husbands. In social security systems based on gainful
employment, derived rights allow a dependent spouse to benefit from health care and
survivors benefits. The issues to be considered here include: the adaptation of derived
rights to changing family structures such as common-law unions, divorce and separa-
tion; the change in the concept of social protection which implies equal treatment of
widows and widowers; the introduction of measures for all single parents (of which
widows are but a subcategory).
INTERNATIONAL LABOUR STANDARDS AND GENDER EQUALITY
In the ILOs early years, standards related to women aimed primarily at protecting
female workers in terms of health and safety, conditions of work and special require-
ments related to their reproductive function. Over time, there has been a change in the
types of standards relevant to women from protective Conventions to Conventions
aimed at giving women and men equal rights and equal opportunities. The adoption of
the Equal Remuneration Convention, 1951 (No. 100), the Discrimination (Employ-
ment and Occupation) Convention, 1958 (No. 111), and the Workers with Family Re-
sponsibilities Convention, 1981 (No. 156), marked a shift in traditional attitudes
concerning the role of women, and a recognition that family responsibilities affect not
only women workers but the family and society as well. The mid-1970s marked the
emergence of a new and more ambitious concept aimed at equality of opportunity be-
tween men and women in all fields. This concept found its expression in the debates
and texts that came out of the 60th Session of the International Labour Conference held
in 1975. Since then the protection of working women has been based on the principle
that women must be protected against the risks inherent in their job and profession on
the same basis and according to the same norms as men. The special protective meas-
ures which remain permissible are those aimed at protecting womens reproductive
function.
Most of the ILO social security instruments contain no provision forbidding dis-
crimination on the basis of sex, having been adopted at a time when the prevailing
opinion (often at variance with reality even then) was that men were the breadwinners
and that women would normally stay at home to take care of the family. Two social
security Conventions do however prohibit discrimination. One is the Maternity Protec-
tion Convention (Revised), 1952 (No. 103), which states that any contribution shall be
paid in respect of all men and women employed by the enterprise without distinction
on the basis of sex. The other is the Employment Promotion and Protection against
Unemployment Convention, 1988 (No. 168), which requires equality of treatment for
all persons protected, without discrimination on the basis inter alia of sex, while allow-
ing member States to adopt special measures to meet the specific needs of categories of
persons who have particular problems in the labour market.
Other ILO Conventions not specifically relating to social security do of course
expressly prohibit discrimination on the basis of sex, namely Conventions Nos. 100,
111 and 156 mentioned above. With a view to creating effective equality of opportu-
nity and treatment for men and women workers, Convention No. 156 prescribes that all
measures compatible with national conditions and possibilities shall be taken to take
account of the needs of workers with family responsibilities in social security. The
Discrimination (Employment and Occupation) Recommendation, 1958 (No. 111), rec-
ommends that all persons should, without discrimination, enjoy equality of opportu-
nity and treatment in respect of social security measures.
The protection of the reproductive function of women is intimately linked with the
promotion of gender equality. Maternity insurance benefits are critical for allowing
women and their families to maintain their standard of living when the mother is un-
able to work. Throughout its history the ILO has been concerned to ensure that women
workers enjoy this entitlement, from the adoption in 1919 of the Maternity Protection
Convention (No. 3) to the adoption in 2000 of the Maternity Protection Convention
(No. 183) and Recommendation (No. 191).
Gender equality 39
THE LINK BETWEEN SOCIAL PROTECTION AND GENDER
Most social security schemes were initially set up on the basis of the male bread-
winner model. Thus, for example, they usually provided widows but not widowers
benefits and, in some countries, wives who engaged in paid employment did not have
to contribute to the scheme. A lower pensionable age for women was also in some
ways a reflection of a model in which the labour force participation of women was
regarded as secondary. As more and more women have joined the paid labour force,
ideas about gender roles have evolved and social security schemes are gradually being
reformed.
Within social protection there are two complementary approaches leading towards
gender equality:
a prescriptions/measures to level the playing field and ensure that equal treatment is
granted to men and women. The goal is to eliminate discriminatory practices in
programme design; but women remain in a disadvantaged position in terms of
social protection as long as social security benefits are tied to labour market em-
ployment, where pervasive gender inequalities persist;
a prescriptions/measures to equalize outcomes and compensate for discrimination
and inequalities generated outside the social security systems, for example in the
labour market.
THE IMPACT OF LABOUR MARKET INEQUALITIES ON DIFFERENT
FORMS OF SOCIAL PROTECTION
Women are often in a disadvantaged position in the labour market. Their situation
is determined by the division of labour, in which they undertake a very large share of
unpaid caring work. The latter role often prevents women from taking up or remaining
in full-time employment. It affects the type of work they can undertake and the number
of years they spend in employment covered by social security. It often has an adverse
effect on their earnings, on their ability to pursue their training and on their prospects
for professional advancement. Even women who currently have no caring responsibili-
ties may be affected, if employers assume that they will have in future.
These labour market inequalities affect the position of women in some types of
social protection much more than others. Some of the strongest effects are to be seen in
company pension and health plans: women are more often excluded from these
schemes than men, because they are in lower grades, or have insufficient years of
service, or work part time. Company schemes also exclude those workers who, for one
reason or another, are not covered by social insurance schemes. Company schemes
provide benefits that are related to the level of previous earnings and to length of serv-
ice, both factors which tend to favour men. In addition, some are final pay schemes,
which are particularly advantageous for employees who have moved up most in the
company and for those who have long periods of uninterrupted service. Again this is
more likely to be the case for men than for women.
All sorts of savings schemes for old age tend to reflect, and indeed to amplify,
labour market inequalities. Workers in low-paid and precarious jobs, among whom
women are disproportionately represented, cannot afford to save much and often fail to
do so, even in countries where the law has supposedly made retirement savings
schemes mandatory. Those whose savings are small or irregular typically get a lower
net return, as a greater proportion of their savings is eaten up by administrative costs,
owing to the higher costs of small accounts. In savings systems there is no solidarity or
redistribution. Because of their greater life expectancy, womens pensions are lower
than those of men, even if their savings are of the same value.
Social insurance schemes frequently do not cover categories such as home-
workers, domestic workers and part-time workers, in which women are heavily repre-
sented. Workers in the informal economy where so many women spend much of
their working life are also unprotected. Interrupted careers, shorter contribution
records and lower pay adversely affect womens entitlements under social insurance as
in other employment-related schemes. This affects not only pensions but also unem-
ployment benefits, which many unemployed women do not receive. (If they are single
they may be able to obtain social assistance benefits, but these are usually lower and
subject to numerous restrictions. If they have a partner, the household means test usu-
ally disqualifies them from social assistance, as explained below.) However, social
insurance schemes do have certain features which attenuate labour market inequalities,
such as minimum pensions or weighted benefit formulae favouring the lower paid.
For workers in the informal economy, notably in developing countries, micro-
insurance schemes can help to fill the gap in social protection, and some of them cater
especially for women; given the voluntary character of such schemes, however, there
tends to be little systematic redistribution from men to women.
Universal schemes national health services, child benefits, universal old-age
benefits usually give women the same rights as men, regardless of employment and
earnings history. As noted in Chapter III, they can greatly enhance gender equality.
As for social assistance schemes, these may, in formal terms, provide for equal-
ity of treatment and, since they cater for the poor, tend to redistribute income in
favour of women (at least to those who are single). However, social assistance ben-
efits are means-tested against the earnings of a spouse or partner; given that men
usually have higher earnings than women, the result in practice is likely to be that a
married woman has less chance of receiving benefit than a married man. And where
a male partner succeeds in establishing entitlement to social assistance, the element
of the benefit intended to meet the needs of his female partner will be paid to him, not
to the woman.
Finally, it should be borne in mind that not only do labour market inequalities
affect social protection, but social protection also has an impact on labour market in-
equalities. For example, a well-functioning system of unemployment benefits (includ-
ing both unemployment insurance and unemployment assistance for those without
insurance entitlements) helps to minimize the problems of low-paid, low-productivity
jobs. Childcare and other social services are also of crucial importance in helping
women to compete in the labour market on a more equal footing with men.
MEASURES TO GRANT EQUALITY OF TREATMENT IN SOCIAL PROTECTION
AND TO PROMOTE GENDER EQUALITY THROUGH SOCIAL PROTECTION
A wide range of social protection measures have been used or may potentially be
used to promote gender equality. These and some other issues relevant to gender equal-
ity are examined below under the following headings:
Gender equality 41
a survivors pensions;
a divorce and pension-splitting;
a pensionable age;
a pension credits for persons with caring responsibilities;
a sex-differentiated annuity rates;
a parental leave and benefits and childcare services;
a child benefit.
Survivors pensions
Survivors pensions are based on the notion of dependency: they link benefit en-
titlements to the contributions paid by (or on behalf of) the deceased spouse, they insure
against the loss of the breadwinner and (in many countries) they may be suspended if the
recipient remarries. Traditionally survivors benefits were provided only to the widow
and to orphans, not to the widower (unless he had a disability and was for that reason
dependent on his wife). This discrimination has been abolished in the social security
systems of many countries, including the United States and most Member States of the
European Union. Discrimination against widowers was ruled to be unlawful in occupa-
tional pension schemes by the European Court of Justice in 1993.
Mainly as a result of the developments described above, elements of income testing
have been introduced in the statutory survivors benefits schemes, for example in France,
Greece, Italy, Netherlands and Sweden. Other countries have restricted the payment of
benefit to survivors above a certain age (at which it is judged to be difficult to enter
employment) and to those caring for young children. As a result of such restrictions,
some women are worse off than they would have been under the old legislation. Those
who are younger than the specified age may experience real difficulty finding employ-
ment. And even for many who are employed, the death of the husband may lead to seri-
ous financial difficulties, if no widows pension is payable: the household budget in most
cases is then less than half of what it was. The main aim of these restrictive measures has
been to limit the increase in the cost of survivors benefits resulting from their extension
to widowers. It is no doubt significant that equal treatment of survivors was introduced at
a time when social security systems already faced financial problems. The issue has
given rise to a debate between those who feel it is reasonable that women should now-
adays normally be expected to earn their living and those who point out that this was not
what was expected of many women entering married life in past decades. Should those
becoming widows now suffer because values and attitudes have changed?
In numerous pension systems, women who are not legally married do not qualify
for a survivors pension upon the death of their partner. However, some countries do
grant a pension provided that there is evidence of dependency or cohabitation. Such is
the case, for example, in Costa Rica, Denmark, Luxembourg, the Netherlands,
Norway, the United Kingdom and Venezuela.
The position of widows in developing countries, particularly in Africa and South
Asia, is very much more difficult than in the industrialized economies, not only be-
cause the social security systems are more rudimentary, but also because widows are
often subject to discrimination, social isolation and even physical violence. If a country
has a universal pension (or a social assistance pension available on conditions that are
not too restrictive), this is of immense assistance to older widows, few of whom will
have any contributory entitlements whatsoever. However, it should be remembered
that many widows are not nearly old enough to qualify for an old-age pension, particu-
larly in societies with a tradition of child brides and in countries seriously affected by
AIDS and by wars. (High mortality rates from AIDS, among both men and women, are
also leaving many orphans, most of whom have no benefit entitlements.) Various
states in India have extended means-tested pensions to cover destitute widows, but
problems of implementation have limited the impact of such measures.
Divorce and pension-splitting
The last three or four decades of the twentieth century saw a rapid rise in the rate of
divorce in many industrialized countries. For example, in both Canada and the United
Kingdom they were six times higher in 1990 than in 1960. Between the mid-1970s and
the mid-1990s the rate doubled in the Republic of Korea, Thailand and Venezuela.
This trend has profound implications for the old-age security of divorced women, par-
ticularly where they have not themselves been in pensionable employment. If the
former husband remarries as is most often the case they may lose some or all of
their entitlement to a widows pension.
To deal with this problem, pension systems in various countries have introduced a
refinement commonly known as pension-splitting. All the pension entitlements
earned by both partners while they were married to each other are added up, then di-
vided equally between them. Such a system has existed in the social security schemes
of Canada and Germany for almost a quarter of a century. More recently, it has been
introduced in Ireland, South Africa and Switzerland. It has recently also attracted at-
tention in relation to occupational pension schemes.
Pensionable age
Numerous countries either have or have had until recently a lower pensionable age
for women than for men, as shown in table 4.1. Why did legislators in these countries
(the overwhelming majority of whom were men) decide to make this difference? It has
been suggested that it may be related to the tendency for men to marry somewhat
younger women and for them to wish to retire about the same time. Another possible
explanation is that the age for women is lower to compensate for the double burden
they have borne, by going out to work and also doing most of the work in the home.
A lower pensionable age for women constitutes formal discrimination against
men. The difference, where it still exists, is now widely questioned. That women do
bear a double burden is undeniably true, but whether this affects their ability to re-
main in employment until the same age as men is far from evident. Indeed their
higher life expectancy might even suggest the opposite. A consensus is tending to
emerge in favour of a common pensionable age, as already exists in Canada, France,
Germany, Japan, the United States and many other countries. However, what that
age should be is often the subject of heated debate. Many women are understandably
reluctant to see their pensionable age increase or to receive reduced pensions at the
existing pensionable age. On the other hand, if the age for men were to be reduced,
the cost would be enormous. This would in any case be inadvisable, since the pro-
jected rise in the ratio of pensioners to workers suggests that pensionable age should
rise rather than fall.
Gender equality 43
Many countries which are increasing pensionable age have introduced an element of
flexibility that allows workers to continue drawing their pension from the previous pen-
sionable age, subject to an actuarial reduction. Generally speaking, women have opposed
proposals to increase their pensionable age and/or to reduce the benefits granted at the
existing pensionable age. However, some women workers may stand to gain, if the in-
crease means that they can stay longer than before in employment and build up bigger
pension entitlements. For women who have taken time out of the labour force to raise a
family, this may be a real advantage, assuming of course that they do wish to carry on
working and that they are actually obliged to retire at the standard pensionable age. To be
regarded as equitable, increases in pensionable age usually have to be introduced
Table 4.1. Differences in standard pensionable ages for men and women, 1999
Country Men Women
Algeria 60 55
Armenia 62 57
Australia 65 61.5 (rising to 65 by 2013)
Austria 65 60
Belgium 65 61 (rising to 65 by 2009)
Brazil 65 60
Bulgaria 60 55
Chile 65 60
China 60 50; 55 (if salaried);
60 (if professional)
Colombia 60 55
Cuba 60 55
Hungary 60 (62 by 2009) 57 (rising to 62 by 2009)
Iran, Islamic Rep. of 60 55
Iraq 60 55
Israel 65 60 (65 for housewives)
Italy (old law, for persons working before 1996) 64 59
Pakistan 60 55
Poland 65 60
Romania 60 55
Russian Federation 60 55
Slovakia 60 53-57 (according to number
of children raised)
Slovenia 63 58
South Africa 65 60
Sudan 60 55
Switzerland 65 62 (rising to 64 by 2005)
Turkey 55 50
Ukraine 60 55
United Kingdom 65 60 (rising to 65 by 2020)
Uruguay 60 56 (rising to 60 by 2003)
Venezuela 60 55
Viet Nam 60 55
Source: United States Social Security Administration: Social Security Programs throughout the World, 1999 (Washington, DC, 1999).
gradually. For example, a formula commonly suggested in Central and Eastern European
countries has been to raise the age each year by three months thereby phasing in a five-
year increase over a 20-year period. This is necessary, not only to give the working popu-
lation time to adjust to quite a profound change, but also to allow time for the labour
market to adjust: a more rapid increase could lead to significantly higher unemployment.
Pension credits for persons with caring responsibilities
Many women reach retirement age with low or even zero pension entitlements in
their own right either because their unpaid work as carers has prevented them from
participating in the paid labour force or because their caring responsibilities have
obliged them to participate only in peripheral forms of employment, which are poorly
remunerated and not covered by social security systems. In order to help remedy this
problem, numerous countries have introduced provisions under which persons staying
at home to care for young children (and for others unable to look after themselves) are
awarded pension credits for the period in question as if they had been employed and
paying social security contributions. Among the countries with such provisions are
Germany, Norway, Sweden and Switzerland. Ireland and the United Kingdom have
implemented a variant of the caring credit through a procedure called home responsi-
bilities protection which provides for years of low or zero earnings to be disregarded in
the calculation of the pension amount. In 1996 Ireland increased the number of years
for which such protection could be available by raising the age of qualifying children
from six to 12. These measures contribute to gender equality not only as they help to
provide better income security for the many women who leave the labour force to raise
a family, but also as they are available to husbands who look after the children while
their wives pursue their careers. Another approach, which in practice helps more to
promote labour market equality, is the provision of childcare services.
Sex-differentiated annuity rates
In most of the mandatory retirement savings systems that have been introduced to
date, particularly in Latin America, workers upon retirement have the option between
the purchase of an annuity and a phased withdrawal of the money in their account.
Under this type of system unlike the existing social insurance schemes there is
no pooling of risk or solidarity between men and women (who have a substantially
longer average life expectancy). Hungary and Poland, however, have provided in their
legislation for mandatory lifetime annuities using unisex rates. It remains to be seen
how easy it will be to enforce such legislation upon competitive annuity companies, all
of which will have a strong preference for male customers. The male/female pension
differentials in the Latin American countries concerned may be widened not only by
the introduction of gender-specific parameters, such as lower annuity rates for women,
but also perhaps by the increase in the standard pensionable age for women and the
associated actuarial reductions for women unwilling or unable to postpone retirement.
Parental leave and benefits and childcare services
Social security can promote gender equality not only by compensating unpaid
carers for lost periods of pensionable employment, but also by making it easier for
Gender equality 45
either men or women to assume the caring role and for them to do so without abandon-
ing their careers. Parental leave and parental benefits (which replace their lost earn-
ings) contribute significantly to this objective:
a as they are available to the mother or the father or can be shared by both;
a as they usually also provide for a number of days per year on which either parent
may take time off work to look after a child who is sick.
The provision of high-quality and affordable childcare services, often under the
aegis of social security institutions or social service agencies, also plays an important
role in promoting gender equality. The need for these services has risen as the partici-
pation of women in paid work has increased. In many countries a higher proportion
of the workforce is faced with the competing demands of work and family responsi-
bilities.
Child benefit
Child benefit is also a measure that favours gender equality in more ways than one.
It is a benefit that is nowadays usually paid to the parent effectively caring for the child.
This is an important consideration as the distribution of income within the single-
breadwinner family is often highly unequal and breadwinners sometimes abuse the
dominant position that receipt of the household income confers. While common
in industrialized countries, child benefits are to be found in very few developing
countries.
Recent years have seen a large rise in the proportion of families that are headed by
a lone parent. Since 1960 this has more than doubled in countries such as the United
Kingdom and the United States. This trend is related to the enormous increase in births
to unmarried mothers (up more than fivefold in these and other countries), as well as to
rising divorce rates. The vast majority of lone parents are women, most of them young.
Given the high cost of childcare in many countries and the limited access of young
mothers to reasonably well-paid jobs, many of those concerned find that they have
little choice but to stay at home with the child and live on social assistance or other
means-tested benefits. But if child benefit is paid, this can, in combination with earn-
ings from employment, provide them with a viable alternative. For those who are try-
ing to develop a career and are often at an early and crucial stage, having the option to
enter or remain in employment may be extremely important for their future earnings
potential.
In developing countries the provision of child benefit conditional upon school at-
tendance can be a powerful instrument for ensuring that both girls and boys receive an
education and for combating the scourge of child labour. Such benefits can take the
form of waivers of school fees, which is probably the most powerful incentive for
children to go to school. The experience with cash grants to families and children
shows that they are a useful initial incentive for families to withdraw their children
from work and send them to school. If possible these should be reinforced by other
provisions such as school lunches, books, uniforms, pads and pencils, transport, ac-
commodation and counselling, which encourage children to attend school and to re-
main in school. The Bolsa Escola programme in Brazil, for example, has shown how
cash grants can help very poor families to keep their children in school. Its major im-
pact is to allow poor children to remain in school when they would otherwise be
excluded owing to inadequate academic performance. Although only a minute number
of families has benefited so far from the programme and the amount they receive does
not eliminate poverty, in-depth assessments have indicated a significant impact on
beneficiary families.
CONCLUSIONS
Reflecting the opinions prevailing at the time of their adoption, most ILO social
security Conventions contain no prohibition of discrimination on the basis of sex, al-
though certain other ILO instruments touch briefly upon the subject.
Social security can enhance gender equality by:
a extending coverage to all workers, or at least to all employees, including the par-
ticular categories in which women are heavily represented;
a helping men and women to combine paid employment and caring work, for exam-
ple through paid parental leave and child benefits;
a recognizing unpaid caring work either through the award of credits under contribu-
tory schemes or through the provision of universal benefits;
a granting dependent spouses entitlements in their own right, thereby safeguarding
their position in case of separation or divorce.
The introduction of gender equality with regard to parameters such as pensionable
age or survivors benefits may, however, have an adverse effect on women, as it can
lead to a levelling down of entitlements, rather than a levelling up. Where, for econ-
omic or other reasons, this is judged to be unavoidable, there must at least be a careful
and gradual transition process.
Finally, all social security reforms should be closely scrutinized for possible ad-
verse implications for women and for gender equality.
The financing of social security 47
CHAPTER V
THE FINANCING OF SOCIAL SECURITY
Many contemporary national social security systems financed largely on a pay-
as-you-go (PAYG) basis are presently criticized on the grounds that they will be-
come unaffordable, inefficient or ineffective in the face of ageing populations, or
owing to the competitive forces in the new global economy and to the growth of the
informal economy. The main point made in this chapter is that affordability of social
protection will remain much more a question of national income policy preferences
than of objective economic circumstance. There may be social transfer levels that
some countries cannot afford, but very few are too poor to share enough resources at
least to avoid destitution. However, globalization will require new policy responses.
GLOBAL TRENDS IN SOCIAL SECURITY EXPENDITURE
Worldwide social security expenditure has been on the increase for decades. In
market economy countries sharp increases were observed in the overall social ex-
penditure ratio (i.e. social security expenditure measured as a percentage of GDP) in
the 1960s and 1970s, followed by a stagnation during the second half of the 1980s and
most of the 1990s. Social security expenditure reached an average of about 18 per cent
in the mid-1990s in the OECD countries (25 per cent in the EU Member States). In the
former planned economies, economic transition placed a heavy strain on the badly
prepared social transfer systems during the 1990s, yet total social security expenditure
was maintained at about 15 to 20 per cent (excluding subsidies on certain goods and
services) albeit of contracting levels of GDP. In the developing world the picture is
more heterogeneous. As a general rule expenditure has increased in recent decades.
But it grew from a level which on the whole was about ten times lower than in devel-
oped countries in the 1960s and is still three to five times lower. Table 5.1 shows
aggregate worldwide and regional levels of social security expenditure in 1990, the
most recent year for which fairly complete data are available.
1
The social expenditure
ratio is an aggregate measure and does not reveal how the redistributed resources are
allocated equitably to specific population groups or whether they are allocated ef-
ficiently. However, it is useful as an indicator of general trends.
Under status quo conditions it is to be expected that formal social expenditure will
continue to increase for some time. Schemes in developing countries will mature, their
scope will expand and new schemes will be introduced. In the more developed econ-
omies overall social security expenditure could grow further if dependency ratios were
to continue to rise. Dependency will remain high or will increase further if female
1
For more detailed data, see the statistical annex at the end of this report.
labour force participation in some major economies remains relatively low (compared
to that of males), if the average age of entry into the labour market continues to rise and
if de facto retirement ages continue to drop.
It is often maintained that there is a simple relationship between social security
expenditure and GDP levels. In other words, as countries get richer they tend to spend
more on social security. Figure 5.1 shows that this is only partly true. It approaches the
problem through a straightforward two-dimensional regression. While the exercise
may be methodologically simple, it produces some interesting results.
The graph indicates that the mathematical correlation between GDP per capita and
social security expenditure as a percentage of GDP is relatively weak (even using a
non-linear, i.e. exponential, regression line).
2
However, it also reveals a more complex
picture. The advanced industrialized countries clearly have a higher level of transfers
through the social protection system than lower-income countries. The higher- and
lower-income countries actually form two clusters around the regression line. How-
ever, neither cluster is very dense. This means that the level of social security spending
varies substantially between countries with similar GDP per capita. Clearly, the level
of social expenditure (measured as a percentage of GDP) does not at least exclu-
sively depend on the level of GDP. Thus there are poorer societies which decide to
devote a similar percentage of their GDP to social security expenditure to that spent by
societies which are far better off. This indicates that social spending is also to a large
extent a matter of political choice.
SOCIAL SECURITY AND ITS MAIN CHALLENGES
Contemporary social protection financing systems face three major challenges.
They are said to be ill-equipped to deal with the ageing of the population and with
globalization, and the financial burden placed on contributors and taxpayers in all
Table 5.1. Aggregate levels of social security expenditure, 1990
Region
1
Total social security Of which:
expenditure (% of GDP)
Pensions Health care
All countries 14.5 6.6 4.9
Africa 4.3 1.4 1.7
Asia 6.4 3.0 2.7
Europe 24.8 12.1 6.3
Latin America and the Caribbean 8.8 2.1 2.8
North America 16.6 7.1 7.5
Oceania 16.1 4.9 5.6
1
Averages refer only to countries for which data are available. For the countries included in each region, see the statistical annex at the
end of this report.
Source: World Labour Report 2000, op. cit., statistical annex, table 14.
2
The R square measure is only 0.2858, which is not normally taken to indicate a measurable
correlation.
countries is said to have reached the limits of affordability. This section briefly analy-
ses the arguments, then sets out the options at the national and international levels to
deal with the challenges.
Figure 5.1. Relationship between social security expenditure (as a percentage of
GDP) and GDP per capita (in thousand US$), selected countries, mid-
1990s
Does social security face an ageing crisis?
Ageing often misrepresented as the key challenge for the financing of formal
social transfer systems will pose a major problem only if rapidly ageing societies
cannot contain overall social dependency. However, even in Europe where the age-
ing process is at a relatively advanced stage dependency could be reduced substan-
tially through increased retirement ages and greater labour force participation of
women. An ageing society need not face any crisis, as long as it is able to provide jobs
for its ageing workforce. After decades of heavy investment in health care through
social protection, people are remaining fit and healthy until later in life and should be
able to work longer. In addition, modern and more flexible lifetime working patterns
should be able to accommodate employment patterns needed by parents and older
workers. ILO model calculations show that in a typical rapidly ageing European coun-
try with a de facto retirement age of 60 and a female labour force participation rate like
that of the Netherlands, the combined unemployment and old-age pensioner depend-
ency ratio would have been on the order of 62 dependants per 100 employed persons in
1995. If the country were to (a) raise the de facto retirement age to 67 by 2030 and
(b) increase female labour force participation to the present highest levels in Europe
(i.e. the Swedish level) then the combined dependency ratio in 2030 would amount to
about 68 per 100 employed. Under status quo conditions (i.e. unchanged de facto re-
tirement age of 60 and unchanged labour force participation of women) that ratio
would be 80 to 100, or about 18 per cent higher. Employment is the key to the future
financing of social protection in all societies. Ageing is not so much a threat for social
security systems as a challenge for economic and social policy-making and for the
labour market.
Or does social security face a globalization crisis?
The statistical annex shows that up to now some of the countries with the most
open economies have the highest levels of social spending (for example, most of the
Nordic countries, Austria, Germany, the Netherlands). Open national economies in a
global economy do not have to have lower social spending. On the contrary, a higher
level of social protection would appear to be necessary in countries that are more ex-
posed to external risks or which have to undergo difficult structural adjustments.
However, the data reflect economic realities in the mid-1990s. In the meantime
political realities appear to have changed to some extent. Globalization not only
channels liquid financial resources from one part of the world to another, it also
exposes whole industries to new competitive pressures; pressures which sub-
sequently trickle down as pressures on wages and non-wage labour costs to
employees. Credible threats to relocate enterprises or actual closures due to competi-
tive forces can in practice limit the power of the nation State to tax or collect contri-
butions.
National fiscal policies may react by seeking to move to income sources which are
not exposed to globalization pressures or do not negatively affect the countrys com-
petitive position, or by taking measures to curb expenditures in systems that are seen to
affect labour costs. Containing overall labour costs is an explicit policy objective in
most highly industrialized countries as well as many developing countries. There is
wide agreement among economists that social security contributions and taxes are not
driving labour costs.
3
Labour markets determine the price of the overall compensation
package of employees. Nevertheless, since wages the major component of that
package are often hard to change directly, the labour cost debate often concentrates
on other elements of labour costs, notably on social insurance contributions. If alterna-
tive sources of financing cannot be found, benefit levels in public social security
schemes tend to be reduced.
The diminishing fiscal sovereignty of the nation State as a result of globalization is
one of the major new challenges for national social protection systems.
Has social security reached the limits of its affordability?
It is the case in all societies (assuming the intention to treat their members with
decency) that income is shared, to a greater or lesser extent and by more or less trans-
parent means, between those who have the capacity to earn it and those who are unable
to do so. However, the levels of transfers recorded in national statistics do not appear to
correspond very closely to the economic potential of different countries. This suggests
that the measurement of transfers, in most countries, is very inexact. In countries where
extended family and kinship structures remain relatively strong, these may well pro-
vide the major vehicles for transfers, on an informal basis, whereas other countries
have moved towards more formal redistributive mechanisms, such as national pension
schemes. Overall, it seems certain that the differentials between countries in total (in-
formal and formal) transfers are much smaller than shown in national and international
social statistics.
A simple quantitative exercise may illustrate the point. It is assumed here that the
economically active population (including the unemployed) earn all the income in a
country (i.e. profits and wages) and would share this income with children, inactive
persons in the active age group and persons beyond active age. It is assumed also that
the ratio of consumption of an active person to that of an economically inactive person
(in any decent society) is 1 to 0.666.
4
Based on these assumptions a hypothetical trans-
fer ratio can be calculated for selected regions. Figure 5.2 displays the estimated total
transfer ratio and also compares the estimated extent of informal transfers to the statis-
tically known extent of formal transfers.
One has to bear in mind that this exercise is to some extent speculative, as the data
basis is far from perfect. However, it appears that worldwide, only about half of the
total transfers are presently channelled through formal social protection systems. Most
of these formal transfers are taking place in Europe. In the developing world only a
small fraction of total transfers is channelled through formal systems. For the time
being the overwhelming part of all transfers in these societies is still achieved by infor-
mal arrangements. The total transfer ratios calculated show that the formal social pro-
tection expenditure projected for even the Western European countries is smaller than
the total estimated transfers.
3
4
This is of course a hypothetical assumption; it is assumed implicitly that the overall degree of
sharing of consumption is independent of the relative proportions of those dependent by reason of child-
hood and those dependent by reason of old age.
It can be concluded that most countries (except possibly the poorest) are redistrib-
uting more societal resources than formal social transfer statistics indicate. There is no
reason to believe that formal social transfer levels have anywhere become excessive in
terms of the income redistribution which societies find necessary. The debate on the
affordability of social protection is thus really a debate on policy preferences for par-
ticular redistribution mechanisms.
NATIONAL FINANCING OPTIONS
Each country has to adapt its overall social protection financing systems to its
economic circumstances, its demographic situation and most importantly the
preferences of its citizens. Each country has a limited set of possible transfer mecha-
nisms at its disposal, ranging from completely informal intra-family transfers to uni-
versal systems financed from general government revenue, with many intermediate
possibilities. National policy choices and objectives are embodied in the selected fi-
nancing systems and the role of governments versus the private provision of social
transfers. This section attempts to discern these often implicit choices and objectives.
Financing systems
Financing systems can be described in terms of the following parameters:
a the extent of group solidarity;
Figure 5.2. Estimated total transfers and their composition in selected regions,
early 1990s (as percentage of GDP)
a the level and pattern of funding; and
a the sources of financing.
The extent of group solidarity
The smallest group within which transfers occur is obviously the nuclear family.
The next smallest group is the extended family or the immediate neighbourhood, fol-
lowed by the community or by occupational groups. Unless mandated by specific legal
provisions (such as alimony provisions in family law), transfers within families and/or
small communities are most often of an informal nature. The extent of solidarity within
these groups varies greatly, depending on values and on specific family or community
circumstances. There are often no clear entitlements to benefits, even in community-
based schemes. Just as in informal family settings, community-based transfer levels
often depend on the level of income of the group as a whole rather than on the precise
needs of potential transfer recipients.
The theory of insurance suggests that the viability of a scheme increases with the
size of the insured group. National schemes or social insurance schemes with a wide
coverage generally have more stable income than schemes restricted to smaller groups.
The variance of the benefit experience of large groups (i.e. their financial risk) is inevi-
tably more stable than that of smaller groups, which in turn stabilizes their financial
position. Small groups also often face joint risks, such as unemployment in an occupa-
tional group, poverty in a family, or epidemics in a community. In other words larger
schemes can usually cope better with most risks, provided they are well governed. The
disaggregation of national solidarity into smaller solidarity groups inevitably leads to a
wider disparity of benefit levels. In various parts of the world, a trend may be observed
towards greater disaggregation of solidarity groups, the extreme case being that
of individual accounts. This inevitably creates greater benefit inequalities and
uncertainties.
The level and pattern of funding
Short-term benefit schemes (with the notable exception of private health insurance
schemes) are generally financed on a PAYG basis on all levels of group risk-pooling.
The rationale is that short-term benefits are short-term promises and can be adapted
relatively quickly to changing demographic or economic circumstances and hence do
not need to build up huge reserves for distant future liabilities. In the case of pension
schemes three financing methods are commonly distinguished:
a PAYG, i.e. virtually no advance funding;
a full advance funding; and
a intermediate or partial funding.
Private pension systems usually are fully funded, i.e. they have to have sufficient
resources to honour their obligations should the insurance company, the occupational
pension scheme or the sponsor of an occupational scheme be dissolved. If this condi-
tion is met, the scheme is fully funded. Public pension schemes, which are backed by a
societal promise guaranteeing their liquidity and ideally indefinite existence, do
not require the same level of funding. The level of funding in social security schemes is
determined by considerations other than the exclusive financial safeguarding of
pension promises. Most social security pension systems are in practice partially
funded. Even systems which were originally designed to be fully funded often became
partially funded when inflation undermined the value of reserves. Recently several
countries with old PAYG schemes have begun to introduce defined contribution
funded second-tier schemes (Hungary, Latvia, Poland). Others are introducing reserve
funds in their PAYG schemes (e.g. Canada, France and the Netherlands). From a
purely financial point of view, there is no real difference between a partially funded
defined benefit scheme and a pension system which consists of an unfunded and a
funded tier. In aggregate terms, both are partially funded.
Recent years have seen an intense international debate on the merits or demerits of
increased advance funding of national pension schemes. While social security pension
schemes do not really require the financial security that a high level of funding may
provide for small private systems, extraneous reasons for advance funding of pension
schemes are frequently invoked. Funding, it is claimed, can increase national savings. As
shown in table 5.2, the evidence does not support that contention. High levels of national
savings may well coincide with low levels of pension reserves and vice versa. Funding is
often said to stimulate the growth of capital markets. But, here again, the evidence is far
from compelling: emerging stock markets have notched up very impressive growth rates
in various countries where there are few, if any, funded pension schemes.
It is often claimed that funding will help to insulate pension schemes against the
negative effects of ageing. While this is possibly true for small insured communities
within a society or a small country in a global economy, the same does not apply to
whole national societies or to global society as a whole. A society has to allocate a
certain amount of resources to provide a certain level of consumption for its elderly.
The shift from wage-based to capital-based financing does not change that fundamen-
tal equation. Ultimately the consumption of the retired population has to be financed
out of the current GDP produced by the active population (unless it sells real assets to
the rest of the world).
Table 5.2. National savings rates (1990-92) and occupational pension assets (1990-91)
Country National savings Pension assets
(as % of GDP) (as % of GNP)
Australia 18 39
Canada 15 35
Denmark 19 60
France 21 3
Germany 23 4
Ireland 20 37
Japan 34 8
Netherlands 25 76
Switzerland 30 70
United Kingdom 14 73
United States 15 66
Note: The savings rate is the total (private sector plus government) savings rate.
Source: Gerard Hughes: Pension financing, the substitution effect and national savings, in Gerard Hughes and Jim Stewart (eds.):
Pensions in the European Union: Adapting to economic and social change (Dordrecht, Kluwer, 2000).
It must be expected that advance funded and PAYG financed pension schemes will
both be vulnerable to demographic change. Funded schemes operate on the principle
that pensioners are able in effect to sell their assets to (or use them as collateral to
borrow from) active generations in order to generate cash income. If the buyer genera-
tion contracts, then one must expect asset prices to drop, thereby reducing the retire-
ment income of the selling generation.
A heavy strain on national finances (as opposed to the real amount of transfers
needed to finance the consumption of the elderly) may arise if a country moves from
PAYG financing to advance funding (for example by replacing its social insurance
scheme wholly or partially with private funding arrangements), as a (long) transitional
period will be necessary during which funds must be accumulated by current workers
to finance future pensions while at the same time pensions must be paid to current
pensioners. There is then a real risk that the value of the social insurance benefits may
be allowed to fall, in order to achieve economies and to limit the amounts that govern-
ment would otherwise have to raise through taxation or borrowing or the sale of assets.
If funding per se does not increase the resources that can be allocated to the de-
pendent population and economic advantages of funding are uncertain, then the only
policy rationale for switching from PAYG defined benefit schemes to funded defined
contribution schemes (as in Latin America and parts of Eastern Europe) lies in the
stabilization of social security contribution or tax rates. As benefit levels are then de-
pendent on long-term capital market performance, certainty concerning contribution or
tax levels is achieved at the cost of uncertain benefit levels. This represents a complete
reversal of previous policy objectives.
Sources of financing
National social security systems are generally financed through the following
main sources of revenue:
a social security contributions paid by employers and/or workers;
a taxes, which may be either part of general government revenue or earmarked
taxes;
a investment income; and
a private out-of-pocket outlays or insurance premiums.
However, most national social security systems are in practice financed by a mix of
sources (see table 5.3). This even applies to subsystems such as pension schemes.
The present debate about high public spending on social protection may disguise
the fact that many government budgets have substantially benefited from the existence
of national social security schemes. Young pension schemes and unemployment ben-
efit schemes during periods of high growth normally produce large surpluses when
contributions are collected but no or few pensions are paid. These surpluses might have
simply been absorbed into the general government budget either through straight trans-
fers (as was the case in Central and Eastern Europe) or through lending (as was the case
in many African schemes). Many of these transfers were never returned and low inter-
est rates (often negative in real terms) were paid on the loans. In such cases, social
security contributions were thus to a large extent another form of taxation.
Governments often feel unable to finance social protection expenditure from gen-
eral tax revenue. The traditional solution has been to provide special legislation for
social security to be financed from compulsory contributions which have to be used only
for the purposes specified in the legislation. However, governments may also explicitly
mandate private agencies to finance and provide social security, or they may choose to
leave any such provision up to voluntary initiative. Private provision, mandatory or vol-
untary, is often regarded as a convenient way of keeping down public expenditure
(broadly defined to include social security expenditure financed from contributions). It
is, however, incorrect to think that private provision has no effect on public finances.
There is an obvious indirect linkage between all public and private social protection fi-
nancing instruments. In addition to the contingent liabilities of the government as ulti-
mate guarantor of most social transfers, that linkage is defined by the overall limit of
aggregate social charges (both public and private) that is accepted by the population. It
seems probable that most people, if obliged to make payments on a mandatory basis, will
be indifferent subject to equivalent guarantees as to whether these take the form of
contributions (or taxes) to a public institution or premiums to private institutions. They
are prepared to accept a certain aggregate level of social charges in return for a certain
level of protection. If charges increase beyond the acceptable level, tax avoidance strate-
gies begin to take their toll on public revenues. There is no general rule as to what com-
bined level of social security contributions and taxes is acceptable. This has to be tested
on a trial and error basis in long-term political consensus-building processes.
However, there are indications that the differences between countries at least
between countries at the same level of development are less pronounced than com-
monly assumed. The point is illustrated in figure 5.3, which compares social expendi-
ture (as a percentage of GDP) in two advanced industrialized economies, Sweden and
the United States. While gross public social expenditure is twice as large in Sweden as
Table 5.3. Current contribution rates in national social security pension schemes, selected countries
Scheme Total rate of contribution Employer Employee Government contribution
(as % of total insurable share (%) share (%)
earnings)
Belgium 16.36 8.86 7.5 Annual subsidies
France 14.75 8.2 6.55 Variable subsidies
Gabon 7.5 5 2.5 None
Germany 19.5 9.75 9.75 Cost of non-insurance
benefits
Italy 32.7 23.81 8.89 Cost of social assistance
benefit plus overall
deficit
Korea, Rep. of 9 4.5 4.5 Partial cost of
administration
Luxembourg 24 8 8 8% of insurable earnings
Pakistan 5 5 None Subsidies as needed
Poland 32.52 16.26 16.26 Funds for minimum
(including invalidity) pension guarantee
Trinidad and Tobago 8.4 5.6 2.8 Full cost of social
assistance benefits
United States 12.4 6.2 6.2 Cost of special benefits
and means-tested
allowance
Source: United States Social Security Administration, op. cit.
in the United States, net total social expenditure is of roughly the same order of magni-
tude in both countries. The explanation is twofold: a relatively large part of social
expenditure in the United States, particularly on health care and pensions, is private,
and in Sweden a comparatively large share of public social expenditure is recouped in
taxes. While the net total spent in the two countries is about the same, the results are
radically different in social terms, mainly because private social expenditure is much
more unequally distributed than public.
The indispensable role of government
as ultimate financial guarantor
In addition to assuming direct financial costs on a regular basis, governments may
bear indirect costs or be liable for potential costs. Governments play an important role
as financial guarantor, or ultimate underwriter, of social security schemes or even of
privately administered social security systems.
5
The liabilities of governments can take
Figure 5.3. Social expenditure as a percentage of GDP, 1995
5
In this connection it may be noted that under Convention No. 102 any ratifying State shall accept
general responsibility for the due provision of benefits; it shall ensure in particular that the necessary actuarial
studies concerning financial equilibrium are made periodically and, in any case, prior to any change in
benefits, the rate of insurance contributions, or the taxes allocated to covering the contingencies in question.
several explicit and implicit forms. An explicit liability exists when the social insur-
ance law stipulates that the government will cover any deficit of the scheme. Guarantee
payments of this type exist in several countries, both in Western Europe and in Central
and Eastern Europe (for example, Bulgaria). Governments also have an explicit liabil-
ity when the State guarantees a minimum benefit, by supplementing pensions falling
below that level for any beneficiary fulfilling prescribed conditions. The magnitude of
such contingent liabilities may be considerably affected by systemic declines in the
rate of return on pension assets and by market turmoil-induced falls in asset prices.
An implicit guarantee exists if as a result of public political pressure the
government is obliged to bail out non-performing private, community-based or social
security schemes (as, for example, Bac-Kur, the public system for the self-employed in
Turkey). Even if governments resist pressure to bail out schemes in serious financial
trouble, they may well end up paying far more in social assistance benefits to the
people whose other benefits (i.e. pensions or short-term cash benefits) go unpaid or
have to be reduced.
Thus, through explicit or implicit financial guarantees, governments provide
reinsurance for public and private social transfer systems, even if they do not directly
finance benefits. Governments remain the ultimate guarantor of national social secur-
ity schemes and have to exercise their supervisory function accordingly.
GLOBALIZATION AND SOCIAL SECURITY FINANCING
While for a long time the choice of the actual national mix of social protection and
public finance instruments was a matter of national preferences and consensus, today
global pressures leave their mark on many national policy choices. For the time being
such pressures can only be relieved albeit imperfectly by domestic policy meas-
ures. Governments may not have exhausted all domestic policy means to increase rev-
enues and contain costs without an outright reduction of protection levels. Financing
could be switched to general income taxation and specific consumption taxes. In addi-
tion measures to reduce dependency could be introduced, for example by raising the
retirement age. Simultaneously production processes have to be adapted to accommo-
date an older workforce.
And yet it is not difficult to foresee that the increasing interconnectedness of world
markets may further modify the architecture of social protection financing. Financial
globalization has proceeded apace in recent years, at the same time as the role of finan-
cial markets in the financing of pension schemes has increased. Major second-tier pen-
sion schemes and in future the reserve funds of public pension schemes (for example
those in Canada, France and Ireland) will be or are already leading players on the
international financial markets. As the performance of these markets is interconnected,
pension entitlements of many workers around the world are already highly inter-
dependent. If one major stock exchange crashes, or if stock markets collectively mark
down asset prices, millions of workers around the world are simultaneously affected.
Conversely, many jobs depend, directly or indirectly, on the investment decisions of
the pension schemes of the industrialized world. The international financial institu-
tions are increasingly lending money for the inception or reform of social security
systems. International loan and grant moneys go into national and regional social
funds. International aid is providing disaster relief and subsidies to national health sys-
tems, etc. In their Heavily Indebted Poor Countries (HIPC) debt initiative the IMF and
the World Bank are now tying debt relief to the development of sound national anti-
poverty policies. All these developments and initiatives are so far proceeding in an
uncoordinated manner.
According to recent ILO estimates it would take only a small fraction of the world
GDP to lift most people out of most severe poverty in the poorest countries. Organiz-
ing or canalizing transfers and delivering benefits still constitute an enormous chal-
lenge for global and national governance. With their debt relief campaign the
international financial institutions have made a first step. In 2000 the Social
Summit+5 Special Session of the United Nations General Assembly encouraged in-
terested governments to consider the establishment of a World Solidarity Fund to be
financed on a voluntary basis in order to contribute to the eradication of poverty and
promote social development in the poorest regions of the world.
It must nevertheless be stressed that the extension of social security remains funda-
mentally the responsibility of each nation. While the international community may
provide crisis-related social assistance (and of course development assistance) the con-
tinuing effort required to provide social protection must rest with individual countries.
CONCLUSIONS
Social security expenditure, especially in developing countries, is projected to rise
as a proportion of GDP, as systems are extended and schemes mature. In the industri-
alized countries expenditure may also continue to increase if it is not possible in par-
ticular to stabilize old-age dependency ratios by increasing the labour force
participation of women, young people and older workers. The real challenge is a labour
market challenge. Jobs have to be found for all workers.
Social security is essentially about the pooling of risk and, generally speaking, the
larger the risk pool, the more reliable the protection provided. Reliance on schemes
covering small groups or on individual savings plans creates great benefit disparities
and uncertainties as long as they are not stabilized and subsidized through national (or
even international) resources.
The extent to which advance funding is used and necessary to finance the provi-
sion of benefits depends primarily upon the nature of the benefits and the characteris-
tics of the scheme. But advance funding alone is unlikely to solve any of the long-term
structural financial problems of national social transfer systems. From the financial,
fiscal, economic and social points of view, the only reliable long-term appropriate
strategy for maintaining acceptable levels of social expenditure is to reduce depend-
ency levels.
Social protection may be provided by social security schemes or by private systems.
Governments play an indispensable role as financial underwriters of social security
schemes and they often also have liabilities, explicit or implicit, in the case of private
benefit provision. There are important links between the different national instruments
that may be used to finance social protection. In particular, decisions about the role of
private schemes have major financial implications both for the finances of public
schemes and indeed for the state budget. Finally, there is no general rule as to what
constitutes an acceptable limit to compulsory social security contributions and taxation.
National social transfer levels reflect societal values rather than economic limits.
However, the long-term challenge in social protection financing is global as well
as national. If global economic players are allowed to undermine seriously the power
of the nation State to levy taxes and social security contributions, then social security,
which achieved such progress in the twentieth century, will face great uncertainties in
the twenty-first. Governments must work together to preserve their sovereignty in
these crucial areas.
Strengthening and expanding social dialogue 61
CHAPTER VI
STRENGTHENING AND EXPANDING SOCIAL DIALOGUE
People and societies have developed different forms of social protection, depend-
ing on their needs and their pattern of social and economic development. Social protec-
tion can be provided within family and community networks, as well as by institutions
of civil society, by enterprises and the commercial market, and by public institutions.
In more recent years, the international community as was made clear by the World
Summit for Social Development (Social Summit) in Copenhagen in 1995 and Social
Summit+5 held in Geneva in 2000 has become more concerned with global social
policies.
Previous chapters have shown that social protection is expanding its scope from
the world of formal sector wage employment to that of self-employment and casual
labour in the informal economy. A wider group of social actors may therefore have to
be included in the process of social security financing and management. This chapter
therefore attempts to review various forms of partnership and social dialogue that can
enhance the effectiveness and coverage of social protection for all.
ACTORS IN SOCIAL PROTECTION
The main function of social protection is to provide income security and access to
health care and basic social services. There are various actors involved here, such as
family and local solidarity networks, institutions of civil society, enterprises and the
commercial market, government and social security institutions, as well as the inter-
national community. The social partners employers and workers organizations
often play an important role in the development and management both of social secu-
rity and of occupational or complementary schemes within the formal sector of the
economy. Trade unions need to be committed to expanding their activities to include
the informal economy. Can informal economy workers join existing unions and, if not,
what changes are needed? Are special structures and recruitment strategies required?
In order to be relevant to informal economy workers, unions must be able to deliver
tangible benefits and increased protection.
Family and local solidarity networks
The role of the family in providing income security is essential, irrespective of a
countrys level of development. Income-sharing within the nuclear family provides
income security both for the young and for those (mainly women) who work at home
as unpaid carers. The family also tends to be the major source of care for young chil-
dren and, though to a lesser extent, for adults with disabilities and elderly persons. The
role of the extended family in providing income security for adult members who are
elderly, sick or disabled varies considerably: in some countries of Africa and Asia it
remains extremely important; elsewhere it has been eroded by recent social and demo-
graphic developments. Large families were often the best guarantee of income in old
age, and for many people who are still not covered by any kind of social security sys-
tem this continues to be the case. Of course, even if the family is large and income is
shared fairly within it, the family income may simply not suffice. The poorest families
are sometimes able to call on mechanisms of financial solidarity operating at the level
of the local community.
Institutions of civil society
The institutions of civil society which help to maintain income security through
social protection are of many kinds: self-help groups providing assistance in kind or in
the form of labour, savings societies, associations, cooperatives, mutual benefit so-
cieties, religious bodies, charities, etc. Their role and their aims vary according to the
national and local context. They may provide benefits in addition to those offered by
public institutions, or they may be designed to afford a modicum of social protection
for people who are not covered by any other system. Some of them may not have any
legal status, as in the case of self-help groups providing assistance in kind or in the
form of labour. In general, however, the activities of these groups are governed by law
and monitored by the public authorities.
The range of benefits which these institutions can offer is very wide. Some are
devoted to food security, others to health insurance or pension provision, others pro-
vide compensation for death or disability. They are generally financed from the ben-
eficiaries contributions, sometimes with subsidies from elsewhere. Because they are
so close to the beneficiaries, they are generally able to offer benefits which correspond
to the recipients main priorities.
Some social insurance systems had their roots in mutual benefit societies which
became widely established and were ultimately converted into compulsory social se-
curity schemes. In certain countries they have continued to play an important role by
supplementing the benefits of the compulsory system, for example, in health care or in
retirement provision. In other countries their role is limited to certain marginal groups.
Overall, their contribution at the global level has increased in recent years owing to
spreading marginalization and to the growing gaps in statutory social protection.
Enterprises and the commercial market
Income security can be purchased on the commercial market, for instance, for old
age, death and disability. Individual contracts involve high transaction costs and tend
not to be very widespread, except in countries where they have been made compulsory
or where they benefit from generous tax concessions. They can, however, be important
for self-employed persons, for whom alternative opportunities to obtain income secur-
ity may be quite limited.
Occupational or employer pension schemes are another form of income security
provided by the private sector. They may be managed in the case of smaller enterprises
by commercial providers, or be self-administered in the case of large companies. The
transaction costs of these schemes are much lower than for individual arrangements.
Typically, the scheme is not open to people not working in the enterprise concerned, so
marketing costs are avoided and collecting the premiums or contributions is straight-
forward.
While occupational schemes were traditionally established at the initiative of the
employer, many are now the subject of collective agreements or indeed in some coun-
tries have been made compulsory by law or by decree. Employers organizations and
trade unions have played an important role in the development of occupational pension
schemes, not only at the level of the individual enterprise, but also at the industry or
sector level. This role may be crucial not just for the negotiation of occupational
schemes, but also for their subsequent management. Some industry-wide schemes in
such countries as the United States are wholly run by trade unions. As pension funds
come to play an ever more important part on financial markets, there is an increasing
demand from the primary stakeholders to participate in decisions concerning pension
fund investments. With billions of dollars of workers capital circulating in the global
markets, many national labour organizations have taken steps to try to control and
redirect these funds in order to advance workers broader interests.
Government and social security institutions
In most countries the organization and provision of social benefits are mainly the
responsibility of the public authorities. In historical terms, the development of national
social protection systems often reflected the desire of legislators to harmonize and make
compulsory various schemes which had developed in individual companies or sectors. It
was a question of gradually ensuring that everyone had access to the same social rights.
The structure of the social security scheme will often determine the arrangements
for its administration. Thus, schemes which provide universal and means-tested ben-
efits are more likely to be directly administered by the State. But there is a broad spec-
trum of institutional arrangements ranging from direct administration by a government
department to reliance on private sector management. Where the social insurance tra-
dition (or the contributory principle) is the strongest, as in France and Germany and
throughout most of Africa, Asia and still much of Latin America and the Caribbean,
schemes are generally administered by a public institution which is supervised by a
board of directors or trustees and which, invariably, is legally autonomous. The board
is typically bipartite or tripartite, with representatives of employers, workers and gov-
ernment; sometimes other sections of the community and experts such as bankers or
medical professionals may also participate. Day-to-day management of the scheme is
in the hands of a chief executive who may be appointed by the board or by the minister.
Particularly in some developing countries, administrative segmentation has been a
major cause of the lack of focus and thrust in social protection policies. Government
policy-making is often concentrated in the ministry of finance, which tends to have a
particular interest in pensions. Various other ministries, such as labour, health, social
welfare and civil affairs, may be responsible for different social security schemes, of-
ten managed by separate agencies. Depending on the extent of fiscal decentralization,
local-level governments may also have some independent role, particularly with re-
gard to social assistance.
The international community
Since the end of the 1980s it has been increasingly acknowledged that the interna-
tional community should develop its own responsibility for humanitarian and social
affairs. Humanitarian actions have been accepted as a first area, because according
to United Nations General Assembly resolution 43/131 of 8 December 1988 failure
to assist the victims of natural disasters and emergency situations constitutes a threat
to human life and an offence to human dignity.
The core labour standards identified by the Social Summit in 1995 as the social
floor of the emerging world economy are now the subject of the ILO Declaration on
Fundamental Principles and Rights at Work adopted by the International Labour Con-
ference in 1998. The concept of a global social floor can be extended to include the
guarantee of basic entitlements with regard to education, health and social protection.
With regard to education and health, these entitlements have been formulated as aims
by the Social Summit in Copenhagen, i.e. the achievement of universal primary educa-
tion and an under-five mortality rate below 45 per 1,000 by the year 2015. The follow-
up Special Session of the United Nations General Assembly in 2000 recommended the
strengthening of modalities of coverage of social protection systems to meet the
needs of people engaged in flexible forms of employment, but did not formulate
quantitative objectives or time frames.
1
PARTNERSHIPS FOR SOCIAL PROTECTION
In addition to strengthening the role of the various actors in social protection listed
above, there are a number of ways in which partnerships can be formed among them in
order to enhance the effectiveness of social security and extend social protection.
Enhancing the effectiveness of social security
The State can shape social security systems and influence their effectiveness in a
variety of ways:
a organization and provision of social benefits;
a regulations imposing obligations on employers to provide benefits or obliging
commercial insurance companies or private pension funds to maintain prescribed
standards;
a fiscal policy, including tax concessions for social security benefits or contribu-
tions;
a ratification of ILO social security Conventions and participation in bi- and multi-
lateral social security agreements.
Choices made as to the relative weight given to these different approaches have
determined the overall structure of the social security system. This has provided the
State with both the responsibility for and the opportunity of determining the extent of
its own involvement, the range and level of protection to be provided by the market and
by the community, etc., the financial arrangements and the organization and manage-
ment of schemes.
1
United Nations: Report of the Ad Hoc Committee of the Whole of the twenty-fourth Special Session
of the General Assembly, A/S-24/8/Rev.1 (New York, 2000).
It has long been considered important that the social partners, particularly the rep-
resentatives of the workers covered, be involved in designing and running social secur-
ity schemes. The Income Security Recommendation, 1944 (No. 67), states that the
administration of social insurance should be unified or coordinated within a general
system of social security services, and contributors should, through their organiza-
tions, be represented on the bodies which determine or advise upon administrative
policy and propose legislation or frame regulations. Under the terms of the Social
Security (Minimum Standards) Convention, 1952 (No. 102), where the administra-
tion is not entrusted to an institution regulated by the public authorities or to a govern-
ment department responsible to a legislature, representatives of the persons protected
shall participate in the management, or be associated therewith in a consultative ca-
pacity, under prescribed conditions; national laws or regulations may likewise decide
as to the participation of representatives of employers and of the public authorities.
Similar requirements are contained in later instruments, such as the Invalidity, Old-
Age and Survivors Benefits Convention, 1967 (No. 128), the Medical Care and Sick-
ness Benefits Convention, 1969 (No. 130), and the Employment Promotion and
Protection against Unemployment Convention, 1988 (No. 168).
One reason for the participation of the social partners is the fact that the schemes
are, at any rate in the case of social insurance, financed wholly or predominantly by the
contributions which employers and workers pay on the basis of labour incomes. How-
ever, even in the case of schemes which are financed from general tax revenues and
administered by a government department, tripartism can play an important role in
improving policies and in making systems more responsive to workers needs. Other
forms of popular participation in these schemes can also serve to enhance them, for
example patients consultative committees in the case of public health services. Con-
vention No. 168 requires that where the administration of employment promotion and
protection against unemployment is entrusted to a government department, representa-
tives of the protected persons and of the employers shall be associated in the adminis-
tration in an advisory capacity.
Within the framework of contributory social security systems, enterprises are al-
most invariably given important responsibilities with respect to the deduction and pay-
ment of contributions. In some countries, however, enterprises are obliged under
labour legislation to provide certain benefits themselves or to make appropriate ar-
rangements with an insurance company. This technique, known as employer liability,
has been widely used in the past for employment injury benefits and maternity ben-
efits. Owing to its numerous shortcomings, it has tended to be replaced by social insur-
ance in these fields. However, in recent years, there has been an important trend
towards making the employer liable for the payment of cash sickness benefit or sick
pay for the first few days or weeks of absence. (This type of reform has been inspired
by research findings which show that short-term sickness absence can be greatly re-
duced if employers have a financial incentive to take appropriate action to improve the
quality of working life and to monitor absence from work.)
In many countries responsibilities for the provision of social protection, especially
retirement pensions and health care, are ascribed to enterprises, not explicitly by em-
ployer liability legislation, but implicitly by the absence of satisfactory provision
through statutory mechanisms. The intentions of the State are usually indicated clearly
by the fact that enterprises (and to a lesser extent employees) receive substantial tax
concessions if they fulfil these responsibilities. Lower-paid workers in less secure jobs,
especially women, tend to benefit less from voluntary employer schemes. Providing
social protection in this way rather than through social security can mean much greater
inequality in the distribution of benefits.
Legislation or government decisions have in certain countries extended private or
occupational pension schemes to cover all enterprises and workers in an industry or
even entire sectors of the economy. The resulting system falls somewhere between
compulsory social insurance schemes and voluntary private schemes. It combines the
advantages of broad coverage and pooling of risk with autonomy from any direct in-
volvement of the State. The sound financial base of such schemes and the absolute
requirement for them to be jointly managed by employer and worker representatives
create favourable conditions for their functioning. Experience in countries such as
Finland, France and the Netherlands suggests that these basic safeguards greatly facili-
tate the regulatory function of the State. By contrast, in countries which rely widely on
individual company schemes, vast regulatory systems have developed, accompanied
in some cases by the establishment of pension guarantee mechanisms. The regulations
tend to be experienced as burdensome by employers and are difficult to police.
Some countries, particularly in Latin America, have indicated a number of reasons
for the privatization of their pension systems. To what extent is privatization the an-
swer for improved governance in social security? The debate is essentially on two
levels: one relates to the responsibility for providing it, and thus to its structure, and the
other to its management.
At the structural level, those who argue against the principles of social insurance
maintain that it over-protects individuals and removes their freedom of choice. It is
argued that the State should withdraw to a position in which it provides a minimum
level of social protection and then creates and encourages an environment under which
private arrangements can be made.
At the administrative or institutional level, it is argued that the social insurance insti-
tutions are not subject to market competition (they are effectively monopolies) and they
are not required to make a profit. Administrators, according to this view, consequently
pay insufficient regard to the financial implications of the decisions they are obliged to
make. There has been a tendency to assume that the competitive forces of the market-
place would have a generally beneficial effect. However, experience has shown that it is
much more costly to administer individual savings accounts than social security records,
that pension fund management companies (for example the Administradoras de Fondos
de Pensiones (AFP) in various countries of Latin America) have high marketing costs,
that levels of concentration among pension funds are high, and that private management
companies cannot be relied upon to enforce compliance.
On the other hand, many schemes have recognized the need for improved govern-
ance and have either reformed their institutional arrangement to achieve a greater level
of real autonomy or involved the private sector in various aspects of their administra-
tion. The trend is therefore for public schemes to contract out some of their functions
and for other private sector management concepts and practices to be introduced to
improve efficiency and accountability.
Towards social protection for all
The appropriate paths for extending coverage depend on a number of factors, such
as the countrys level of economic development, the state of the social security system
and the degree of informalization of employment. Certain industrialized countries
have reached full personal coverage for some contingencies, but not for others. As a
result, in these countries extension can be achieved within the context of existing sys-
tems. For middle-income developing countries it may be possible, for some contingen-
cies, to achieve universal coverage through existing systems. In other cases, it may be
necessary to first develop and support schemes specifically designed to meet the needs
of workers in the informal economy. Given the small size of the formal sector in low-
income developing countries, it is imperative to give priority to schemes specially de-
signed to meet the needs of informal economy workers.
Micro-insurance schemes and area-based schemes
As noted in Chapter III, access to health care is one of the top priorities for workers
in the informal economy, especially in low-income countries. The extent to which
micro-insurance schemes have been successful has depended on the characteristics of
the bodies that set up the schemes, on their design and on the context in which they
operate. The organization should be based on trust among its members, which is en-
hanced by factors such as strong and stable leadership, its economic base, the existence
of participative structures and a reliable financial and administrative structure. Scheme
design should include measures to control fraud and abuse, to promote some form of
mandatory participation, to contain costs and to foster preventive and promotive health
services. Important context variables concern the availability of good-quality and af-
fordable health care services (public or private) and a favourable climate for the de-
velopment of micro-insurance schemes.
As noted in Chapter III, most of these schemes remain fairly small, and it is there-
fore important to know with what mechanisms and under what forms of partnership
their coverage can be expanded. One option is for such schemes to form organizations
among themselves, which will enable them to achieve various objectives, such as a
stronger negotiating power in relation to the government as well as (public and private)
health providers, sharing of knowledge and greater financial stabilization through
reinsurance. A second approach is to devote more effort to the marketing of micro-
insurance, as a large percentage of the target population is still not well informed of the
benefits of being insured. Linked to this is the need to strengthen the credibility of
micro-insurance. Subsidization of micro-insurance is undoubtedly a promising way to
expand its coverage, but this is entirely dependent on the capacity and will of the State
to redistribute income through the tax system from the rich to the poor.
However, with the growth of micro-insurance schemes, other forms of partner-
ships may also be necessary. Such schemes may team up with, and/or receive support
from, larger organizations in civil society (cooperatives and trade unions for instance).
They may also seek to involve private companies and social security agencies that
already have a well-functioning administration. Experience with successful scaling-up
efforts shows that two sorts of changes are needed: in the culture and organization of
participating organizations as well as in linkages and forms of collaboration between
organizations.
The role of the government is critical for the successful upscaling of these
schemes. Local governments can play an important role in setting up area-based social
protection schemes in partnership with local groups of civil society. At the national
level, governments are in the best position to ensure that particular experiences can be
replicated to embrace other occupations, sectors and areas. Moreover, governments
can create an enabling environment for the development of micro-insurance schemes.
By means of regulation, they need to clarify the relationship between the role of micro-
insurance and that of the compulsory social insurance system, in order to prevent con-
tribution evasion and to promote, in the longer term, closer links between the two. In
the case of health insurance various functions can be distinguished:
(i) promoting health insurance through recommendations on design (benefits pack-
age, affiliation and administration) and the setting-up of a management informa-
tion system;
(ii) monitoring and regulating micro-insurance, possibly within the context of legis-
lation on the efficient and transparent administration of schemes;
(iii) improving and decentralizing the public provision of health care, which is an
essential prerequisite for the development of micro-insurance in many countries;
(iv) undertaking and organizing training, based inter alia on the promotion and moni-
toring activities mentioned under (i) and (ii); and
(v) (co-)financing the access of low-income groups to health insurance, possibly
through subsidies or matching contributions.
Trade unions and employers could also play a major role in setting up new special
funds at the state or provincial levels for example for construction workers and in
experimenting with area-based social protection schemes. The trade unions would en-
sure that the benefits provided correspond to the priorities of workers, while employ-
ers organizations could convince their members to comply with their contribution
obligations.
Social insurance
As noted in Chapter III, there are various ways in which social insurance pro-
grammes can be modified and reformed so as to achieve greater coverage. As the guar-
antor of such programmes, the government obviously plays a critical role here.
However, the social partners can also help achieve the extension of social insurance
benefits to regular workers not covered so far, as well as to casual and contract labour
employed in formal sector enterprises. The social partners, and in particular the trade
unions, could press for measures to extend effective coverage to workers in small
enterprises. Training and awareness-raising, followed by consultation and dialogue
with the government, would be the ideal road to greater coverage.
Tax-based social benefits
It is generally better for social assistance and universal benefits to be mainly fi-
nanced by the central government, since the much greater needs of depressed regions
and localities cannot be adequately met otherwise. This guarantees that people in all
regions of the country have access to the same basic benefits, which need to be ad-
justed where necessary for cost-of-living differences. Local and regional governments
can add benefits to this basic benefit, for example for housing, food or work. More-
over, local government in collaboration with local institutions can play an impor-
tant role in the effective delivery of benefits.
As noted in Chapter I, demand for temporary social assistance measures often
financed by international sources has increased in countries affected by wars, disas-
ters and crises. In the long run as well, the international community has promised to
contribute to the achievement of social objectives such as the reduction of poverty and
universal primary education. Within this context, international resources could be used
to finance child benefits, which in particular reduce child labour and foster school
attendance, as well as basic social assistance benefits, which in combination with
other policies would make a significant contribution to the reduction of poverty.
CONCLUSIONS
This chapter has examined the role of the various actors involved in income secur-
ity and social protection, ranging from the family and local solidarity networks to the
international community. Central government, workers and employers constitute the
core partners, but this partnership will have to be expanded to make social security
more effective and to promote social protection for low-income workers in self-
employment and the informal economy. There is a need for improved linkages both
between central and local governments, and between different ministries (social secu-
rity, labour, health, finance, etc.). An important role will have to be played by local
government, by associations that directly represent workers in the informal economy
(such as cooperatives, mutual benefit societies and communities) and by intermediary
organizations that work on behalf of low-income (wage) workers. In addition, there
may be room for partnerships with private financial institutions, for example in the
case of social insurance schemes requiring investment management services or of
micro-insurance schemes needing reinsurance or other specialized services. At the
international level, new roles may have to be assumed by the international community,
for example regarding the definition of global social policies and the (co-)financing of
some basic social benefits.
CHAPTER VII
IMPLICATIONS FOR FUTURE ILO WORK
The previous chapters have reviewed a number of key issues, some of which repre-
sent challenges to the application of the concept of social security while others focus
attention on weaknesses that limit its effectiveness. At a time when, in many countries,
social protection needs have intensified, the mechanisms for addressing them are seen
by many as having fallen short of meeting their objectives. And, particularly in devel-
oping countries, many of those engaged in some form of gainful employment are de-
nied access even to basic social protection and live on a day-to-day basis on the edge of
destitution. However, it is important to put this in perspective and to note, amidst the
discussion of problems, the success that many schemes have enjoyed in all regions in
providing income security and access to health care for millions of people. The appro-
priate response to the challenge is thus to focus on remedying these weaknesses and to
distinguish them from the concept of social security, which remains valid and strong.
This report provides an agenda for the development of reform initiatives which will
concentrate on these issues.
The ILO has defined its primary goal as the promotion of opportunities for women
and men to obtain decent and productive work in conditions of freedom, equity, secur-
ity and human dignity. Social security is a key ingredient of the goal of decent work
and is recognized as a human right. One of the four strategic objectives of the ILO to
enhance the coverage and effectiveness of social protection for all is directed at
giving effect to this right. The mandate and structure of the ILO are uniquely relevant
to this challenge as they and indeed the goal of decent work both point to the
need for linkages between employment and social protection policies. The implica-
tions for the ILO programme and its envisaged structure are discussed in this final
chapter.
In order to address this objective, the ILO is developing an integrated programme
with the following core components:
a research and policy development;
a providing a normative framework through standard setting; and
a technical cooperation and other means of action.
RESEARCH AND POLICY DEVELOPMENT
The objective here is to strengthen the ILOs knowledge base on the extension of
social protection, and on making schemes more effective and more equitable. This
calls for research and analysis of problems in providing effective coverage, in the fi-
nancing of schemes and in their governance, and a comparison with other schemes
where reform initiatives have been successful. The aim is: (i) to better understand the
nature, cause and effect of weaknesses in schemes; (ii) to formulate strategies for the
Implications for future ILO work 71
development of effective social protection mechanisms; and (iii) to develop an ILO
social protection policy framework through the following components.
(i) Analysing weaknesses in coverage and effectiveness by:
a reviewing statistical trends on coverage and social expenditure to document the
extent of exclusion;
a collecting data on the employment, income and expenditure situation of non-
covered groups, including those in the informal economy, to examine the need
for social protection and contributory capacity at the household and local levels;
a identifying the factors contributing to exclusion from coverage;
a identifying the factors which limit the effectiveness of schemes.
The Social Protection Sector is responsible for a special programme on the exten-
sion of coverage. In the present biennium this will include research on the statistical
trends on coverage and social expenditure as well as on the effectiveness of efforts to
extend social protection. Consideration could be given to establishing a social protec-
tion observatory to monitor progress in the operationalization of the decent work con-
cept.
(ii) Identifying and developing effective social protection mechanisms by:
a assessing the effectiveness of efforts to extend social protection through statu-
tory social security and micro-insurance schemes and the linkages between
them;
a reviewing the role of the social actors to identify the conditions under which
they can work together to extend or improve social protection;
a testing options for design and financing by exploring the feasibility of schemes:
for special sections of the labour force;
financed from tax revenue rather than contributions;
for supporting micro-insurance schemes through mechanisms such as
reinsurance;
for international financial support for basic social protection in the least
developed countries;
a exploring various options for emergency benefits to meet social protection
needs in countries affected by a crisis or natural disaster and for the subsequent
(re)construction of social security systems;
a establishing linkages between social protection and employment policies, for
example between micro-insurance and micro-enterprise development pro-
grammes and between unemployment benefit schemes, social assistance and
active labour market policies;
a identifying ways for social protection to contribute to gender equality through
the design of benefits that guarantee equality of treatment and reduce inequities
both in the labour market and in the division of work between men and women.
(iii) Developing an ILO policy framework to take account of research and experience
which provide the basis for policy guidance on enhancing the coverage and effec-
tiveness of social protection schemes. This may, inter alia, imply the evolution of
new or alternative national or international strategies to finance social transfer
systems.
It should be recalled that the relevant ILO standard-setting activities flow in part
from the research conducted into the development of social security. Such research
would seek notably to determine any gaps in the areas of social security covered by
up-to-date standards and to evaluate the overall real impact of these standards among
member States.
PROVIDING A NORMATIVE FRAMEWORK THROUGH STANDARD SETTING
In principle, everyone has the right to be covered by a social security scheme, and
international standards should reflect this right and facilitate its exercise. As noted
earlier, however, most ILO social security standards focus on wage earners in the for-
mal sector and do not readily fit the needs and circumstances of the self-employed and
those who work on an irregular or flexible basis outside a conventional employer/em-
ployee relationship. How should ILO standards contribute to the extension of coverage
to those presently excluded?
This is a difficult area, where conflicting considerations are compounded by the
complexity and variety of working relationships and by the desire of many employers
and even workers to avoid paying contributions. As many workers as possible should
be brought within the scope of social security schemes based on the solidarity princi-
ples of compulsory membership and uniform treatment. Essentially, persons who have
the characteristics of employees, even if temporary or part time, should be treated as
employees for social security purposes and their employer expected to comply with the
appropriate obligations.
However, all this is easier said than done and the less workers look like employ-
ees the more difficult the process becomes. For the self-employed or for those in
situations where any employer/employee relationship is extremely tenuous, a different
approach might be justified. The established self-employed with a place of business or
profession could gradually be brought within the scope of the same social security
scheme as employees or perhaps covered by a separate scheme based on similar prin-
ciples. Those working on their own account at a lower level are perhaps best covered
by special arrangements, which will vary depending on fiscal and economic factors
and on their capacity to contribute, but which would constitute a more basic level of
social protection. Consideration may therefore be given to the formulation of standards
to promote the extension of social protection on this basis. Such standards could: re-
affirm the right to social security as included in the International Covenant on Eco-
nomic, Social and Cultural Rights; seek commitment from governments and their
social partners to elaborate and carry out strategies for extending basic social protec-
tion; and adopt statistical indicators for measuring progress towards universal cover-
age. In addition, standards could provide recommendations on guidelines to design,
manage and administer social protection schemes and to develop national and interna-
tional policies and strategies.
Different levels of social security for different categories of workers are a delicate
subject, both in principle and in terms of governance. It is vital to delineate the categor-
ies as clearly as possible, since otherwise employers and/or workers will be able to
choose which scheme to join and what rate of contributions to pay. That would under-
mine solidarity and could lead to a widespread downgrading of protection among those
already covered.
In addition, new standard setting could be considered in the area of equality of
treatment between men and women. As noted in Chapter IV, women are heavily repre-
sented in the part-time, low-income, intermittent and precarious jobs, which often fall
outside the coverage of social security. Most women also often assume the greater
share of parental responsibility and therefore have less time to build up their social
security entitlements. Moreover, in most societies, women still have a lower retirement
age which, if mandatory, can make it difficult for them to fulfil the qualifying condi-
tions for (full) benefits. Men, on the other hand, also face inequality of treatment, as in
many countries survivors benefits are granted only to widows. New standard setting
might therefore embrace: equality of treatment as regards entitlement to old-age ben-
efits; equality of treatment as regards survivors benefits; the division of pension rights
in the event of divorce; and the calculation of, or access to, benefits for parents with
family responsibilities.
Of all the branches of social security covered by Convention No. 102, the only one
which is not the subject of a special ILO standard is child and family benefits. As an
effective means to combat child labour and poverty and to promote gender equality,
this might well be considered for future standard setting.
Social and demographic changes since the adoption of Convention No. 102 in
1952 have led to the emergence of new types of social security provision, in particular:
a parental benefits, serving to replace the earnings of parents taking time off work to
care for a young or sick child, a subject briefly mentioned in Paragraph 10(3) of the
Maternity Protection Recommendation, 2000 (No. 191);
a long-term care insurance, protecting people against the very high costs which they
may incur if they become unable to look after themselves and to cope with the
tasks of everyday living.
These might also be the subject of new standard setting.
In considering these and possibly other topics, it should be borne in mind that
new standard setting may take a number of different forms: new standards; revised
standards; or protocols added to existing Conventions. It should be noted that the
Governing Body of the International Labour Office has decided that seven social
security Conventions are in formal terms up to date and has asked member States
to inform the Office of the obstacles and difficulties encountered which might pre-
vent or delay ratification and, in some cases, of the possible need to revise the Con-
ventions. To these seven Conventions must be added the Maternity Protection
Convention, 2000 (No. 183).
In view of the growing complexity of the factors involved in the development of
social security schemes to achieve the objective mentioned at the beginning of this
chapter, as well as the interdependence between these factors, it would not be appro-
priate to engage in any of these various forms of normative action on a piecemeal
basis and without a clear idea of the general direction of such action. Although the
discussion of the present report will undoubtedly provide useful insights in this re-
spect, the complexities and technicalities involved in the subject justify a much more
specific exercise. Social security standards would appear in that respect to be a good
candidate for the application of the new integrated approach for future normative
action which the Governing Body approved on a trial basis at its 279th Session in
November 2000.
1
The first stage of this approach is to make an inventory of existing
standards and standards-related activities in the area chosen. This in-depth analysis is
then to be examined in a tripartite discussion at the International Labour Conference
and would result in the drawing-up of an integrated plan of action in the area consid-
ered. Such a plan of action would identify potential new subjects for standard setting,
specify the purpose and form of new and revised standards, give directions for the
promotion of existing standards and outline areas for relevant technical cooperation.
The discussion could also identify questions which, because of their technical nature or
other reasons, are not suitable subjects for a Convention or Recommendation and
should be dealt with in other forms such as codes of practice or handbooks. In the third
phase, the Governing Body would draw relevant conclusions from the Conference dis-
cussion in the context of its regular procedures, including the selection of items for
standard setting and revision for the agenda of the Conference.
Given the importance of this subject-matter, the present discussion could be con-
sidered as an initial exchange on social security issues, challenges and prospects which
would allow for a clarification of the ILOs future activities in this area. Against the
background of the outcome of this discussion, and should the Conference deem it ap-
propriate, the Office could then initiate an in-depth examination of ILO standards-
related activities in the area of social security within the context of the integrated
approach.
2
The Governing Body would be able to examine the timing of this process in
the light of comments made at the Conference.
TECHNICAL COOPERATION AND OTHER MEANS OF ACTION
The International Labour Office, whether through its Social Protection Sector, or
through social security specialists in multidisciplinary teams, provides technical advis-
ory services and implements technical cooperation programmes which correspond to
the requests of member States concerning social security. A key objective in the ILOs
social security programme is to strengthen the capacity of governments, social security
schemes, social partners and, where appropriate, NGOs to ensure the long-term
sustainability of reforms, and training programmes are given high priority in most
technical cooperation projects. Social protection policies should be based on sound
financial, fiscal and economic analyses, and the ILO will continue to provide actuarial
services and social budget analyses to its constituents. In addition, the QUA TRAIN
initiative will provide specific university-level training to financial managers in these
systems.
More and more countries are asking the ILO for technical assistance on the exten-
sion of social protection either to non-covered sections of the labour force or to new or
previously unprotected contingencies. There is clearly considerable scope for existing
social security schemes to extend coverage to more people and to more contingencies,
1
For full details, see GB.279/4.
2
It should be recalled that at its 282nd Session (November 2001) the Governing Body will examine
the question of follow-up on consultations concerning social security instruments resulting from decisions
by the Governing Body based on the recommendations by the Working Party on Policy regarding the
Revision of Standards of the Committee on Legal Issues and International Labour Standards. See GB.279/
11/2, Appendix I, para. 54.
but often a prerequisite is technical assistance to address governance and legislative
weaknesses and to build the capacity which institutions need if they are to assume new
responsibilities. This may include an in-depth analysis of the financial structure of the
scheme, which may be conducted in a macro context through a social budget analysis.
A second field of action is to assist governments and the social actors with the
formulation of a comprehensive social protection policy. In the field of statutory social
insurance, the ILO provides extensive technical assistance with policy development,
preparation of draft legislation and administrative implementation of health, old-age,
disability, death, employment injury, sickness, maternity and family benefit schemes.
Highest priority is given to technical assistance concerning the extension of social pro-
tection to groups not currently covered. The ILO also assists with the development and
administration of social assistance schemes that are affordable for low-income coun-
tries and consistent with other anti-poverty policies.
In some countries, the ILO, and its STEP programme in particular, has focused
attention on health insurance, which is one of the key unmet social protection needs for
workers in the informal economy. The ILO provides assistance with carrying out feas-
ibility studies, with the aim of assessing how and under what conditions these pilot
activities could be successfully implemented and replicated. On the basis of experience
gained, the ILO is developing practical tools and training materials for the various
social actors to help them to formulate their own policies and activities with regard to
micro-insurance, and it is also providing network services for social and labour groups
involved in micro-insurance.
The introduction of social security provisions for those not currently covered will
probably necessitate the preparation of manuals of practical guidance and the wide
distribution of information concerning such provisions. Existing ILO standards should
provide the framework for technical cooperation and research should be carried out on
the synergies between standards, technical assistance, meetings and activities of the
field structure, with a view to ensuring that these activities correspond as closely as
possible to the objectives of the Organization.
Suggested points for discussion 77
SUGGESTED POINTS FOR DISCUSSION
1. How does the changing global context affect the ability of member States to
maintain or extend social security provision?
2. In most countries, adequate social security continues to be enjoyed by only a
minority of the population. Why is this the case? How can ILO member
States and the social partners succeed in making the right to social security a
reality for all? How can economic constraints and development levels be
taken into account in strategies for achieving this goal?
3. What priority should be placed on extending social protection in small
workplaces, among the self-employed, among migrants and in the informal
economy? What instruments and policies are likely to be most effective for
these groups? What role could micro-insurance play?
4. How can strong social security systems sustain a flexible and dynamic la-
bour market and increase the productivity of enterprises and economies?
5. What is the best means of providing income security for the unemployed at
different levels of development and industrialization? How can this best be
combined with measures to support labour market access and return to
work?
6. How can social protection policies contribute to the promotion of gender
equality? Is it enough to guarantee equal treatment of men and women in
social security schemes? What recent reform measures have helped most to
promote gender equality?
7. Does social security face an ageing crisis? Can it be avoided by changing the
system used to finance pensions? Or is it necessary to stabilize overall de-
pendency rates by increasing labour force participation, notably of older
workers and of women?
8. What are the advantages and disadvantages of alternative methods of financ-
ing social security, taking into account differences in ability to contribute to
social insurance systems? Do employer social security contributions affect
labour costs and employment levels? Can private provision ease the financ-
ing of social security without undermining solidarity and universality?
9. How can an expanded social dialogue, both within countries and at the inter-
national level, contribute to the extension and improvement of social se-
curity? What could be the role of workers organizations and employers
organizations in that context?
10. How can synergy be best promoted between social security and other dimen-
sions of the overall goal of decent work?
11. What should be the long-term priorities for the ILOs research, standard-
setting and technical assistance work in the social security field?
12. Taking into account the integrated approach to standard setting approved by
the Governing Body in November 2000, how should this new approach be
applied in the social security field?
Statistical annex 79
STATISTICAL ANNEX
PUBLIC SOCIAL SECURITY EXPENDITURE
Total social security Pensions Health care Total social se-
expenditure (percentage (percentage curity expendi-
(percentage of GDP) of GDP) of GDP) ture (percentage
of total public
expenditure)
Country 1985 1990 1996 1985 1990 1996 1985 1990 1996 1990 1996
All countries* 14.5 6.6 4.9
Africa 4.3 1.4 1.7
Asia 6.4 3.0 2.7
Europe 24.8 12.1 6.3
Latin America
and the Caribbean 8.8 2.1 2.8
North America 16.6 7.1 7.5
Oceania 16.1 4.9 5.6
Africa
Algeria
4
7.6 ... ... 3.3 ... ... 3.4 ... ... ...
Benin 0.7 1.3 2.2 0.5 0.4 0.2 ... 0.5 1.7 ... ...
Botswana
3, 6
4.0 2.5 2.7 ... ... ... 2.9 2.3 2.3 6.9 7.4
Burundi 1.8 2.2 0.1 0.2 ... ... 0.8 0.8 ... 10.0
Cameroon
7
1.7 2.2 ... 0.4 0.2 ... 0.7 0.9 1.0 10.7 ...
Cape Verde 5.0 ... ... 0.2 ... ... 3.6 ... ... ...
Central
African Rep. 1.9 ... ... 0.3 ... ... 1.0 ... ... ...
Congo
3
2.2 4.2 0.7 0.9 ... ... 1.5 3.2 ... ...
Egypt
2, 7
4.8 4.8 5.4 2.3 ... ... 1.1 0.9 0.9 15.7 15.8
Ethiopia
7
3.4 3.2 3.7 1.1 1.0 0.9 0.8 0.9 1.0 11.1 14.9
Ghana 2.2 3.1 ... 0.0 1.1 ... 1.3 1.0 ... 18.9
Guinea ... ... ... ... ... ... 1.2 1.2 ... ...
Kenya 2.6 2.0 ... 0.4 0.3 ... 1.7 1.7 ... 7.5
Madagascar 2.2 1.6 1.3 0.5 0.2 ... ... 1.1 1.1 ... ...
Mali 1.6 3.1 ... 1.0 0.4 ... ... 1.6 1.2 ... ...
Mauritania 1.0 0.8 ... 0.2 0.2 ... ... ... ... ...
Mauritius 3.4 4.8 6.0 3.2 3.2 1.8 ... 1.9 1.9 21.6 26.5
Morocco
2
1.7 2.4 3.4 1.6 0.5 ... ... 0.9 1.0 8.4 10.1
Mozambique ... 4.7 0.1 ... 0.0 ... 4.4 4.6 ... ...
Namibia ... 3.9 ... ... ... ... 3.3 3.7 ... ...
Niger 1.9 ... ... 0.1 ... ... 1.5 ... ... ...
Nigeria 1.0 ... ... 0.0 ... ... 1.0 ... ... ...
Senegal
4
4.3 ... 1.2 1.0 ... ... 2.8 2.5 ... ...
Seychelles ... 11.6 ... ... ... ... 3.5 4.1 ... 22.4
Togo 1.2 ... 2.8 0.9 ... 0.6 ... 1.3 1.2 ... ...
Tunisia 6.0 7.0 7.7 3.6 2.3 ... ... 2.1 2.2 20.3 23.6
Zambia 0.8 ... 2.5 0.4 ... ... ... ... 2.2 ... ...
Asia
Azerbaijan 9.5 8.4 ... 2.7 ... ... 2.9 1.6 ... 40.8
Bahrain
2
3.4 4.2 0.2 0.6 ... ... 2.6 2.9 10.0 13.7
of total public
expenditure)
Country 1985 1990 1996 1985 1990 1996 1985 1990 1996 1990 1996
Bangladesh ... ... 0.0 0.0 ... ... ... 1.2 ... ...
China
2
5.2 3.6 ... 2.6 1.5 ... 1.4 2.1 ... 23.9
Cyprus
7
8.0 8.1 10.3 4.7 4.5 6.4 1.9 1.9 2.0 24.7 30.2
India 1.7 2.6 ... ... ... ... 0.9 0.9 ... 24.7
Indonesia ... 1.7 ... ... 0.0 ... 0.6 0.6 ... 9.8
Iran, Islamic
Rep. of 4.7 6.1 ... 0.5 ... ... 2.1 2.1 21.5 18.7
Israel 15.2 14.2 24.1 ... 5.9 5.9 3.6 2.7 7.6 27.5 47.4
Japan
2
11.4 11.3 14.1 5.2 5.5 6.8 4.7 4.6 5.6 35.8 37.4
Jordan 6.8 8.9 0.3 0.6 0.5 ... 1.7 2.9 ... ...
Kazakhstan
1
... 13.6 ... ... ... ... ... 3.3 ... 50.9
Korea, Rep. of 4.1 5.6 ... 0.9 1.4 ... 1.7 2.1 22.3 21.2
Kuwait 9.4 9.6 1.5 3.5 ... ... 3.5 2.7 20.7 23.2
Malaysia 2.0 2.7 2.9 1.9 1.0 ... ... 1.5 1.4 8.9 13.4
Mongolia
3
... 8.8 ... ... ... ... ... 4.1 ... 26.4
Myanmar ... 0.7 0.0 ... ... ... 1.1 0.5 ... 6.1
Pakistan 1.1 ... ... 0.3 ... 0.0 0.8 0.8 0.8 ... ...
Philippines 1.7 ... ... 0.5 ... 0.8 0.8 1.3 ... ...
Singapore ... 3.3 ... ... 1.4 ... 1.8 1.3 ... ...
Sri Lanka 2.5 ... 4.7 2.4 ... 2.4 ... 1.6 1.5 ... ...
Thailand 1.5 1.9 ... ... ... ... 1.0 1.3 10.1 11.9
Turkey
2
3.9 5.9 7.1 1.9 3.3 3.8 1.1 1.0 2.3 ... 27.0
Europe
Albania
2
... 10.9 ... ... 5.7 ... ... 2.4 ... 35.0
Austria
2
24.4 24.2 26.2 14.0 13.9 14.9 5.1 5.3 5.8 49.1 49.4
Belarus 15.1 17.4 ... 5.5 8.8 ... 2.6 5.0 ... 50.0
Belgium
2
27.5 25.6 27.1 12.3 11.2 12.0 6.0 6.7 6.9 47.4 50.1
Bulgaria 16.5 13.2 ... 8.7 7.1 ... 3.7 3.3 25.3 24.3
Croatia ... 22.3 ... ... 8.2 ... ... 7.2 ... 47.8
Czech
Republic 16.0 18.8 ... 7.3 8.1 ... 4.6 6.8 ... 38.6
Denmark 25.9 28.7 33.0 7.5 8.2 9.6 5.3 5.3 5.2 47.9 52.5
Estonia
5
13.1 17.1 ... 5.3 7.6 ... 2.8 5.8 40.3 50.6
Finland 23.4 25.2 32.3 10.3 10.6 13.2 5.7 6.5 5.4 53.8 53.8
France
2
27.0 26.7 30.1 12.0 12.2 13.3 6.5 6.6 8.0 53.4 55.3
Germany 26.3 25.5 29.7 11.1 10.3 12.4 7.2 6.7 8.3 54.3 52.1
Greece
2
19.5 19.8 22.7 11.6 12.7 11.7 3.3 3.5 4.5 57.8 67.4
Hungary 18.4 22.3 ... 10.5 9.3 4.1 5.9 5.4 35.4 35.8
Iceland 7.3 15.7 18.6 3.5 2.8 5.7 3.6 7.7 7.5 38.2 47.0
Ireland 22.9 19.2 17.8 6.6 5.9 5.1 6.6 5.9 5.1 47.0 50.2
Italy
2
21.6 23.1 23.7 12.5 13.5 15.0 5.5 6.3 5.4 42.9 45.5
Latvia ... 19.2 ... 6.1 ... ... ... 4.0 ... 45.5
Lithuania ... 14.7 ... ... 7.3 ... ... 4.0 ... 42.5
Luxembourg
2
24.0 23.4 25.2 13.0 11.9 12.6 5.5 6.1 6.5 48.4 51.4
Malta 19.0 13.3 20.6 14.4 ... ... 3.5 ... 4.2 ... 48.6
Moldova,
Rep. of ... 15.5 ... ... 7.4 ... ... 6.3 ... ...
Netherlands 28.9 29.7 26.7 12.2 13.6 11.4 5.9 6.1 6.8 51.6 51.4
Norway
2
20.0 27.1 28.5 7.3 9.1 8.9 5.7 6.7 7.0 52.7 57.7
Poland 17.0 18.7 25.1 ... 8.5 14.3 4.5 5.0 5.2 ... 52.1
Portugal 13.2 14.6 19.0 6.4 7.4 9.9 3.9 4.3 5.0 34.9 ...
Romania ... 12.4 ... ... 6.8 ... ... 2.9 ... 34.7
Russian
Federation
2
... 10.4 ... ... ... ... ... 2.7 ... 26.9
Slovakia 15.9 20.9 ... 7.8 8.3 ... 5.7 6.0 ... ...
Spain 18.5 19.6 22.0 9.2 9.4 10.9 4.6 5.4 5.8 45.8 56.7
Sweden 31.1 32.2 34.7 10.1 10.3 13.8 8.1 7.9 6.1 53.0 50.0
Switzerland
2
17.4 20.1 25.9 9.4 10.1 12.8 4.8 5.3 6.6 44.2 49.3
Ukraine ... 19.8 ... ... 9.6 ... ... 4.1 ... ...
United
Kingdom
2
21.1 19.6 22.8 8.3 8.9 10.2 4.9 5.2 5.7 46.4 54.9
Latin America and the Caribbean
Argentina
6
6.6 9.8 12.4 ... 3.6 4.1 1.1 4.4 4.3 35.8 41.2
Bahamas 5.8 4.2 ... 1.1 1.0 ... 3.3 2.7 2.5 23.7 ...
Barbados 8.6 10.0 4.0 3.4 4.1 ... 3.1 4.4 ... ...
Belize 3.1 3.5 0.3 0.3 ... ... 2.3 2.1 8.7 14.2
Bolivia 4.2 7.0 ... 2.0 ... ... 1.1 2.3 23.8 29.3
Brazil
3
7.6 10.8 12.2 ... ... 2.4 1.6 2.3 2.1 32.0 36.7
Chile 13.5 16.2 11.3 ... 6.0 5.9 1.6 2.0 2.3 ... 45.6
Colombia
2
4.8 ... 6.1 1.0 0.6 0.9 1.8 ... 5.1 ... ...
Costa Rica 7.4 10.3 13.0 2.0 ... ... 4.1 6.7 6.8 40.1 42.6
Cuba 12.5 15.2 ... 6.7 7.0 ... 4.8 5.6 ... ... ...
Dominica 1.4 2.2 4.8 0.7 0.8 1.4 0.3 0.4 0.4 ... ...
Dominican
Rep.
6
2.0 2.1 2.5 ... ... ... 1.4 1.6 1.8 18.3 15.7
Ecuador 2.8 2.1 2.0 1.8 1.1 1.2 0.6 0.6 0.3 ... ...
El Salvador 1.3 1.9 3.6 0.5 0.7 1.3 0.6 0.8 1.3 ... ...
Grenada 6.9 ... 1.8 2.6 ... ... 3.7 2.8 ... ...
Guatemala 2.4 ... ... 0.3 ... ... 1.5 1.7 ... ...
Guyana 4.5 5.8 1.1 0.6 0.9 ... 3.4 4.3 ... ...
Jamaica 4.0 4.5 ... 0.6 0.3 ... 2.9 2.5 ... ...
Mexico 3.4 2.8 3.7 0.3 0.3 0.4 2.9 2.1 2.8 23.7 22.6
Nicaragua
3
7.8 9.1 ... ... 1.4 ... 4.8 4.3 21.6 28.1
Panama 8.0 ... 11.3 4.0 ... 4.3 3.5 ... 5.6 ... 41.3
Peru ... ... ... ... ... ... 1.2 2.2 ... ...
Trinidad
and Tobago
2
... 6.6 ... ... 0.6 ... 2.7 2.5 ... 22.7
Uruguay 14.2 22.4 ... ... 8.7 ... 1.2 2.0 54.7 67.8
of total public
expenditure)
Country 1985 1990 1996 1985 1990 1996 1985 1990 1996 1990 1996
North America
Canada
2
16.4 17.6 17.7 4.2 4.8 5.4 6.1 6.7 6.6 36.9 40.1
United States 13.4 14.1 16.5 6.8 6.6 7.2 4.4 5.6 7.6 40.6 48.8
Oceania
Australia
2
14.0 14.5 15.7 4.6 4.6 4.6 5.5 5.6 5.7 38.7 41.5
Fiji 6.1 ... ... 4.0 ... ... 2.0 ... ... ...
New Zealand 17.6 22.2 19.2 7.9 8.2 6.5 4.4 5.8 5.4 ... ...
Notes: Total social security expenditure covers expenditure on pensions, health care, employment injury, sickness, family, housing and
social assistance benefits in cash and in kind, including administrative expenditure. Pension expenditure includes expenditure on old-
age, disability and survivors pensions. Health care expenditure covers expenditure on health care services.
* Regional averages calculated for listed countries only, using 1996 and 1990 data. Averages weighted by GNP in Purchasing Power
Parity dollars.
1
For 1996: 1997 data.
2
For 1996: 1995 data.
3
For 1996: 1994 data.
4
For 1990: 1989 data.
5
For 1990: 1991 data.
6
For 1985: 1987 data.
7
For 1985: 1986 data.
Sources: Originally published in ILO: World Labour Report 2000 (Geneva, 2000), statistical annex, table 14. Slightly revised to incor-
porate new data which arrived after the World Labour Report 2000 was published. Table includes estimates based on data from ILO:
Inquiries into the Cost of Social Security, combined with data from the Government Finance Statistics Yearbooks 1998 and 1999
(Washington, DC, IMF). For OECD member countries, data from the OECD Social Expenditure Data Base (OECD, Paris, 1999) were
used when no other source was available or data seemed incomplete. For other countries, where the reply to the ILO Inquiry was not
complete, IMF expenditure data on health and social security and welfare were used to estimate total expenditure. GDP data from World
Bank: World Development Indicators 1999 and from the United Nations Statistics Division. Total general government expenditure
estimated on the basis of IMF Government Finance Statistics Yearbooks.
of total public
expenditure)
Country 1985 1990 1996 1985 1990 1996 1985 1990 1996 1990 1996
I nternational Business & Economics Research J ournal April 2010 Volume 9, Number 4
41
Impact Of Retirement Benefit Act (RBA)
On Investment Returns
To Pension Funds In Kenya
Lucy Jepchoge Rono, Moi University, Kenya
Julius Kibet Bitok, Moi University, Kenya
Gordon N Asamoah, Kwame Nkrumah University, Ghana

ABSTRACT

This study focused on the analysis of the impact of RBA guidelines on the return on investments of
both pension funds under management and those for pension schemes. A random sample of 175 fund
trustees and a census of 13 fund managers from registered fund management companies
participated in the survey. The questionnaire was administered through the drop-and-pick method.
Data were analyzed using SPSS (Statistical Package for Social Sciences) and summarized in
descriptive statistics, such as mean, standard deviation, frequencies, percentages, and t-tests for
mean differences were used. The study determined that annual investment return for retirement
benefits schemes in the past three years ranged between 10 and 27.52%, sometimes falling below the
annual inflation. The Kenya pension funds are in compliance with the prescribed broad guidelines
with regard to maximum percentages of total asset value of fund by the RBA Act. They are, however,
moderately in compliance with the regulations requiring that that they maintain an actuarial
solvency of 80% and above. The overall weighted returns before the implementation of RBA
Guidelines was low (average scale of 1.9) while the weighted returns after the implementation of
RBA Guidelines was high, at an average scale of 3.7. An analysis of the trend, however, showed that
long-run performance has slowed down. The highest growth was realized for mortgage and cash
returns as opposed to rights issues and bonus shares. There is need to fashion out the appropriate
mix of reforms suitable for Kenya that will ensure the long-run sustainability of its pension systems.
The challenge is for the country to adopt a unified, harmonized, and transparent regulatory
framework that will integrate the pension system in order to ensure sustainability in its financing
and mobilizing of adequate funds to cater for the ever-increasing population of beneficiaries in this
regard, comprehensive pension reform policy with wider target radar and one that will consolidate
and harmonize the various legislations touching on retirement benefits industry in line with
Retirement Benefits Act. The Regulator needs to implement measures to ensure pension funds are
insulated from inflationary and other risks. An effective way is to institute a pension risk insurance
fund that will underwrite and compensate such losses as will be prescribed. Further, there is need
for a systematic indexation of benefits to inflation. RBA should strengthen its compliance and
enforcement function in order to ensure that it appropriately deals with emerging present and future
regulatory challenges.

Keywords: pension funds, investment, returns, Retirement Benefits Act

INTRODUCTION

he need for better and more specific measures to protect the interests of employees in pension plans
had become apparent in Kenya by about 1991.Employers had unlimited access to the pension funds
and would use it to improve their cash flows in the company. Some of the cases include Railway
Corporation, National Society Security Fund, Postal Corporation and the University of Nairobi (Otieno, 2003) This
problem was as a result of a bad investment profile characterized by lack of diversity, a pension fund such as that of
T
42
National Society Security Fund with an overwhelming 72% of total assets was in real estate. Additionally, 7% of the
fund was invested in bank deposits with 16 financial banking institutions of which 10 have collapsed, thus leading
up to 4.6% of the total fund assets (Odundo, 2003). Also, trustees were the top managers of the employer and others
were political appointees who misused employer contributions, which resulted in cases of poor pension investments,
delays and denials in payments of dues to members, misuse and outright embezzlement of the scheme funds by the
same trustees who were entrusted to guard the funds to the ultimate loss to the beneficiaries (Moridnat, 2005).

The Retirement Benefits Act was set up by the ministry of finance in 1997 with the following objectives:
1) to regulate & supervise the management of their retirement benefits schemes, 2) to protect interest of members
and sponsors of their retirement benefits, 3) to promote the development of the retirement benefits sector, 4) to
advise the Minister on the national policy and to implement government policies, and 5) to perform such other
functions as are conferred by the Act (Kiptanui, 2003).

Statement of the Problem

Since the inception of RBA, a number of pension schemes have either restructured their investment
portfolio or re-assessed their investment returns to be compliant with the Act. Many have complained that the RBA
is too restrictive to the detriment of the members. It required the pension scheme to meet various mandatory
requirements, which consume a lot of funds (Mworia 2000). However, the stakeholders including trade unions and
other bodies, applause the government for their initiative, arguing that pension schemes in Kenya lacked investment
guidelines to enable them to attain maximum results (Odundo 2003). It is evident that Returnees at Railway
Corporation, University of Nairobi and National Social Security Fund were either unable to pay or paid less than the
minimum portfolio return in Kenyan Market (Otieno 2003). A study conducted by World Bank (WB2007) indicates
that Kenya workers are condemned to old age poverty due to lack of clear acts to regulate investment of pension
funds. The recent survey shows that since the implementation of RBA, professional management of pension
schemes, investment and returns are given priority. The current study therefore traces the impact of RBA on pension
investment returns.

Objective of the Study

The main objective of this study was to critically establish the impact of Retirement Benefits Act (RBA) on
pension fund investment returns. The specific objective was to compare the level of pension investment returns
before and after the implementation of the RBA Act.

LITERATURE REVIEW

The Concept of Pension

Prieto describes a pension fund as the set of payment promises in favour of the plan that are protected by
property rights, (Prieto 2002). For the purpose of this study, pension is defined as sum of money paid regularly by
the state or by trustees to an employee upon normal or ill- health retirement. (Dearborn, 1999) Although Pearbou
(1999) has exhaustively described the meaning and origin of pension and its purpose, he failed to describe how the
investment returns are affected by various regulations governing the pension funds. This study therefore traces the
sources of the pension funds, how they are invested and legislation, which affect their returns. Various studies were
reviewed in line with investment of pension schemes. It is important to note that the studies are mainly foreign with
a few local ones .In a study by Mghali (2003) concluded that firms should conduct pension schemes where the
employer contributes a certain percentage together with the employee contribution and then invested and trustees
should control the fund. Mugweru (2001) in his study on National Social Security Fund (NSSF) recommended that
investment department at NSSF should consist of professionals who adhere to proper investment policies and
procedures.

43
Pension Reforms

Pension reforms have taken place in various countries worldwide. Each country has handled reform on
investment differently but all have similar underlying principles on diversification and a balance of risk and return
trade off to achieve optimum return.

In New Zealand the legislations sets restrictions on when, and at what rate the government can draw the
fund and the use needs to be published Ireland directly restricts the pensions revenue toward misuse of the public
pensions fund for the government own purposes by explicitly prohibiting investment by the fund (Holzmann and
Hinz, 2005) Irish government securities. Hotzmann and Hunz (2005) describe the legislation of Irish Republic
governing pension funds but failed to acknowledge that the legislation governing developed countries may not fit
precisely with the conditions prevailing in developing countries. The research therefore will give special emphasis
on the developing countries.

Morocco Public Pension Fund managers have a reasonable institutional capacity. The funds are managed
through an internal investment unit; the unit has three committees, an investment committee, the placement
committee and supervisory committee (Robalino, 2005). Robalino (2005) has introduced the Scenario of pension
acts in Morocco without elaborating how they have impacted on the returns of the investment. Kenya has introduced
the use of investment guidelines as discussed in detail in section

Retirement Benefits Act

The RBA Act was enacted in 1997 with five major objectives. Firstly to Regulate & supervise the
management of retirement benefit schemes. Secondly, to protect interest of members and sponsors of retirement
benefit. Thirdly promote the development of the retirement benefit sector, fourthly to advise the Minister on the
national policy and to implement Government policies and fifthly to perform such other functions as are conferred
by the Act (Kiptanui, 2003)

The RBA implementation provides specific details on mandatory for pension schemes sections of the Act
to be complied with five years after commencement. This included, Section 16-The Retirement Benefits Levy,
Section 24-Registration of Schemes, Section 34-Annual Report & Accounts and Section 37-Prudent Investment
policy (Mworia, 2000) Section 37 of the Act is the focus of this study. This part of the Act requires trustees to
ensure the scheme has a prudent investment policy on the investment of its funds so as to maintain the capital of the
scheme and secure market rates of returns on its investment. The investment policy of a scheme must be
implemented and reviewed every three years in consultation with RBA (Machira, 2004).

Conceptual Framework

The study will adopt a conceptual framework taking the RBA guidelines as the independent variable and
the level of the investment returns to members as the dependable variable. The RBA guidelines, centre around five
objectives which include to supervise the establishment and management of pension schemes, protecting the
interests of members and sponsors, promoting the development of the pension sector, advising the minister for
finance on the national policy and implement all government policies relating to pension schemes. The dependent
variable incorporates the aspects of relations in terms of liquid case, dividends, interests, and shares in companies
and mortgage loans. The interviewing variable will be the managerial aspects and functions, which are supposed to
direct and redirect members contribution into viable investments. The management leaders will utilize the
investment appraisal techniques to effectively attain the objectives. The diagram below illustrates this.

44
Figure 1: Effects of RBA Guidelines on Pension Scheme Returns to Members

From the above diagram if the pension scheme comply with RBA guidelines and the appointed managers
with the assistance of investment appraisal methods such as Net present value, accurate rate of returns, cost benefit
analysis, rest analysis portfolios and the break even analysis. The final result will yield to high returns inform of
high share dividends, interests on debentures and bank loans, more shares in companies which are quoted in Stock
Exchange and high Mortgage to our own homes.

RESEARCH METHODOLOGY

Research Design

The study used a cross sectional survey design. This design has been used by World Bank in follow up
assessments of pension reforms in foreign countries such as Sweden, Ontario Canada, (Mikula, 2000). A survey
research attempts to collect data from members of a population and describes existing phenomena by asking
individuals about their perception, attitudes behavior or values. Moreover, it explores the existing status of two or
more variables at a given point in time. Primary data collected from such a population is more reliable and up-to-
date (Mugenda & Mugenda, 1999).

Target Population

The target population, which the research covered, consisted of two categories. One group consisted of all
the 13 fund managers registered with the Retirement Benefit Authority RBA. The fund managers provided insight
information on level of compliance to the RBA investment guidelines and its effect on return on investment since its
implementation.

The second category of respondents consisted of trust secretaries of 1,753 pension schemes registered with
the Retirement Benefits Authority.

Sample Size and Sampling Techniques

For the first category of respondents, a census study was adopted as all the fund managers were targeted for
the study. The 1,753 registered pension schemes constituted the sampling frame for the second category of
respondents for the study. Random sampling will be used to select 20%, which is equal to 350 registered pension
schemes. The trust secretaries of the sampled registered pension schemes were the respondents.

The study used two sets of simple structured questionnaires which were administered to the two categories
of respondents through post office mailing and follow up by physical drop and pick by research assistants to pension
schemes located within a radius of 50km from Nairobi Central Business District. Each questionnaire was
RBA guidelines
- Regulate and supervise
the rest and
management.
- Protect interest of
members
- Promote development
- of pension sector in
investment.
- Advise the minister of
Finance.
- Implement
government policies
on investment.
Intervening functions
Managerial roles
Effects on Pension
Schemes Returns
- High dividends
- high interest
- high levels of
Mortgages loans
- more scheme
ownership
- credit facilities
45
accompanied by an introduction letter from Moi University School of Business and Management indicating the area
of research to be undertaken by the researcher and confirming that the research information will be treated
confidentially and is for academic purposes. The instrument contained closed and open-ended questions. The
questionnaire captured ways of operations, management style, level of expertise, resource availability such as
technology, which enables the fund manager to comply with the RBA investment guidelines and track down pension
investment returns in form of interest on monthly, quarterly, half yearly or annually.

DATA ANALYSIS AND RESULTS

A content analysis of the responses to open-ended questions has been presented as qualitative data for a
better understanding of the researched themes.

QUANTATIVE ANALYSIS

Demographics for Mangers of Registered Pension Schemes

In this section, respondents characteristics are analyzed. Respondents were asked to indicate their gender,
age, highest level of education, professional background, experience in pension fund management, position, and the
recruitment mode. The results are presented in Table 1.

Table 1: Characteristics of the Managers of Registered Pension Funds
Variable Measurement scale Number of employees Percentage
Gender Male 108 81.8
Female 24 18.2
Age 0-30 36 27.3
31-40 39 29.5
41-50 27 20.5
Above 50 30 22.7
Highest level of education Secondary 3 2.3
Tertiary 36 27.9
University 57 44.2
Post University 33 25.6
Profession Accountancy 46 29.3
Administration 21 13.4
Marketing 13 8.3
Public relation 8 5.1
Economics 61 38.9
Actuarial Science 3 1.9
IT 5 3.1
Experience in the pension scheme
0-10 119 82.6
11 20 15 10.4
21 30 7 4.9
Over 30 3 2.1
Position in the pension scheme
Pension Trustee 117 100.00

Mode of recruitment election 81 71.1
appointment 30 26.3
secondment 3 2.6

Majority of the managers of registered pension schemes interviewed are males (81. 8%) aged above 30
years with post tertiary education in accountancy and economics. In addition, they play the role of asset management
trustees in the pension schemes and have been working with the current pension schemes for less than 10 years.
Majority (71.1%) were recruited through election.
46
Demographics for Registered Pension Schemes

This section presents fund mangers attributes. The respondents were asked to indicate their educational
and their experience in pension fund management. The results are presented in Table 2

Table 2: Fund Managers Attributes
Variable Measurement scale Number of employees Percentage
Educational background Tertiary 1 10
University 3 30
Post University 6 60
Experience in pension fund management
0-10 3 30
11 20 5 50
21 30 1 10
Over 30 1 10

Majority of the fund managers interviewed have post tertiary education and have experience in pension
fund management spanning 20 years and below.

Table 3 is a summary of the current market share of the pension fund managers in the country. As shown,
AIG Global Investment Company (EA) and Old Mutual Asset Managers are the market leaders, commanding an
estimated 22.9% and 22.5% of the total investment portfolios respectively. Genesis Kenya Investment Services
(13.8%), ICEA Investment Services (9.6%) and Co-op Trust Investment Management (9.2%) follow in that order. In
terms of the numbers of pension schemes being managed, ICEA Investment Services takes the lead (33.8%),
followed by Old Mutual Asset Managers Kenya (11.1%), Jubilee (10.8%), Kenindia (10.6%) and Co-op Trust
Investment Management (9.2%). There is an inverse relationship in the number of pension schemes under
management and the value asset portfolio with the two market leaders in asset portfolio value having relatively less
pension schemes under management. This implies that the market leaders are more likely to offer higher net benefits
to the pension schemes under management as a result of accrued benefits resulting from economies of scale
compared to those with many but small value portfolio pension schemes.

Table 3: Fund Mangers Market Share
Fund manager market share Total investment Portfolio % of total no of schemes % of total
ICEA Investment Services 17521.03 9.6 360 33.8
Old Mutual Asset Managers (K) 40949.59 22.5 118 11.1
Jubilee 5189.7 2.8 115 10.8
Kenindia 3442.46 1.9 113 10.6
Co-op Trust Investment Management 16832.75 9.2 98 9.2
CFC Financial Services 5363.46 2.9 67 6.3
Genesis Kenya Investment Services 25101.57 13.8 61 5.7
Stanbic Investment Management Service (EA) 13136.12 7.2 55 5.2
AIG Global Investment Company (EA) 41802.1 22.9 34 3.2
Madison Asset Management Services 665.13 0.4 29 2.7
Old Mutual Asset Managers (K) 11845.19 6.5 5 0.5
African Alliance (K) 542.09 0.3 11 1.0
Total 182391.19 100.0 1066 100.0
Source: RBA (2008); Authors own computations

Investments used by Pension Schemes in Kenya

Respondents were asked to indicate the portfolio investments that their pension schemes investment in. As
provided for Table 4, majority (71.8%) indicated that the pension schemes invests in Kenya Government Securities
47
and quoted equity (shares), an indication of risk-averseness in pension fund investments. The percentage for
investment in guaranteed funds and government securities is a reflection of the shift in asset allocation patterns due
to the current global crisis. Investment schemes have moved into more conservative investments. Such moves risk
locking in portfolio losses and but could also reduce the potential of funds to generate retirement incomes in the
future. The choice of more conservative asset allocation is also a reflection of the current restrictive and high
market-based solvency rules which dictate investment strategies.

Table 4: Investment Portfolios by Pension Investment Schemes
Investment portfolio Frequency Percentage
Government securities 65 39.9
Shares 52 31.9
Guaranteed fund 18 11.0
Commercial papers 13 8.0
Off share investment 11 6.7
Immovable property 3 1.8
Share in unquoted companies 1 0.6
Total 163 100
Source: Survey Data (2008)

The above result is further supported by secondary data from the industry regulator (RBA). An aggregation
of the investment vehicles by pension funds in Kenya is presented in Table 5. As shown, Kenya pension fund
investment portfolio is highly diversified in all the vehicles except for some extent of concentration on Kenya
government securities (39.5%), quoted equity (27.5%) and guaranteed funds (12.3%). The concentration is a
reflection of the risk-averseness of the pension fund managers. It is notable that the current global meltdown has
significantly reduced the value of retirement assets especially offshore and equity investments. The Nairobi share
index has trended downwards, falling to 3,521 points in December 2008 and 2,474.8 points in February 2009 after
having progressively rose to stand at 5,445 in December 2007. The fall in the value of retirement assets is likely to
impair the solvency of pension plan sponsors and the funding levels of defined benefit (DB) plans and also reduce
the amount of money that individuals have accumulated in defined contribution (DC) pension plans.

Table 5: Fund Mangers Investment Portfolio Diversity
Fund Managers investment portfolio (KShs Million) Total Portfolio Percent (%)
Government securities 72116.65 39.5
Quoted equity 50183.52 27.5
Guaranteed funds 22389.87 12.3
Fixed deposits 12704.09 6.9
Offshore 8925.7 4.9
Cash 8283.06 4.5
Immovable property 7326.13 4.0
Unquoted equity 325.19 0.2
Others 137 0.1
Total 182391.2 100.0
Source: RBA (2008); Authors own computations

Table 6 presents the responses on the factors affecting pension fund managers choice of investment
vehicles. As shown guaranteed funds, past port folio performance and RBA guidelines rank very highly in
determining fund managers choice of investment vehicles as opposed to trends in interest rates, decision making
preference and risks. Past returns and investment portfolio were ranked high.

48
Table 6: Factors Affecting Pension Fund Managers Choice of Investment Vehicles
Factors affecting choice of investment weighted average Level
Guaranteed returns 4.8 Very high
Past performance 4.7 Very high
RBA investment guideline 4.5 Very high
Past returns 4.2 High
Investment Portfolio 4.1 High
Trends of interest rates 3.2 Moderate
Decision making preference 3.2 Moderate
Risks 2.9 Moderate
Source: Survey Data (2008)

Types of Returns that Pension Schemes and Managers Receive from Investments

Respondents were asked to indicate the types of returns member of their pension schemes receive. Almost
half (49.1%) of the study participants indicated that members receive cash dividends. Further, 30.7% of them
indicated bonus share while 8% indicated interest. Majority of the respondents indicated that the average overall
annual investment return for retirement benefits schemes in the past three years has ranged between 10-27.52%,
sometimes falling below the annual inflation. This has significant implications on old age earnings and
consequential poverty of retirees as the rate of returns are not inflation insulated and the pension systems currently
lack systematic indexation of benefits to inflation. The results are presented in Table 7.

Table 7: Returns that Pension Schemes Receive from Investments
Frequency Percentage
Cash dividends 80 49.1
Script/ Bonus share 50 30.7
Interest 13 8.0
Rights issue 12 7.4
Mortgage loan 8 4.9
163 100.0

Comparison of the Level of Pension Investment Returns before and after the Implementation of RBA Act

The study participants were requested to describe the level of pension investment returns before and after
implementation of RBA Investment Guidelines on a 5-point likert scale ranging from very high to very low. The
results are presented in Table 8. As shown, the overall weighted returns before the implementation of RBA
Guidelines was low (average scale of 1.9) while the weighted returns after the implementation of RBA Guidelines
has been high, at an average scale of 3.7. Highest growth was realized for mortgage and cash returns as opposed to
rights issues and bonus shares. This implies that the implementation of the RBA Guidelines enhanced the
performance of the pension funds.

Table 8: Weighted Average Returns before and after the RBA Guidelines

weighted average
returns Before RBA
Guidelines
Level
weighted average
returns- after RBA
Guidelines
Level
Growth in
Weighted mean
returns
Cash returns 1.5 low 3.5 High 133.3
Dividends 1.7 low 3.3 Moderate 94.1
Mortgage 1.6 low 3.9 High 143.8
Interest 2.1 low 4.0 High 90.5
Bonus share 2.2 low 3.8 High 72.7
Rights issue 2.1 low 3.6 High 71.4
Overall 1.9 Low 3.7 High 94.7

49
The above result is further supported by the analytical results of pension return performance trends
performance trends from year 1986 to 2007. These are presented in Tables 9, 10 and Figures 2 and 3 below.

Table 9 presents the annual net average rate of weighted return for Pension funds under Management. As
indicated, pension funds under management recorded negative mean rate of return (-25.3%) before the
implementation of the RBA Guidelines as compared to the positive performance of cumulative 8.1% after the
implementation of the guidelines.

Table 9: Annual Net Average Rate of Weighted Return for Pension Funds under Management
N Mean Std.
Deviation
Std. Error
Mean
Annual net average rate of
weighted return for Pension
funds under Management
before the implementation of RBA
guidelines
11
-25.3
19.9 6.0
after the implementation of RBA
guidelines
11 8.1 3.5 1.1

As can be seen from the linear trend in Figure 2, returns for pension funds under management were
negative from year 1986 to year 1996 when the trend reversed and has been an upward trajectory since. It is
however notable from Figures 2 and 3 that the annual net rate of returns for both funds under management and those
under pension schemes has since 1998, averaged below 15% and 5% respectively. This is an indication of fund
managers and investment trustees continued complacence and laxity in complying with the governance mechanisms
introduced by the RBA Guidelines. This is a further indication of the current inadequate capacity of the RBA to
enforce its guidelines.

Figure 2: Trend of Returns for Pension Funds under Management: 1986-2007

Table10 presents the annual net average rate of weighted return for funds of pension schemes. As indicated,
funds of pension schemes recorded a mean rate of return of 2.3% before the implementation of the RBA Guidelines
compared to a cumulative performance of 4.5% after the implementation of the guidelines.

annual net average rate of weighted return for funds under management
-70
-60
-50
-40
-30
-20
-10
0
10
20
1
9
8
6
1
9
8
7
1
9
8
8
1
9
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
50
Table 10: Annual Net Average Rate of Weighted Investment Returns for Pension Schemes
N Mean Std. Deviation Std. Error Mean
Annual net average rate of
weighted investment returns
for pension schemes
before the implementation of RBA
guidelines
11 2.2727 .1 .03
after the implementation of RBA
guidelines
11 4.5364 .2 .07

As can be seen from the linear trend in Figure 3, average rate of returns for pension schemes were
constantly leveled at slightly above 2% before implementation of the RBA Guidelines. There was however a huge
positive shift in performance in 1996, the year following the implementation of the RBA guidelines. The positive
shift in investment returns is attributable to short-term governance gains following the introduction of RBA
Guidelines.

Figure 3: Annual Average Rate of Investment Returns for Pension Schemes

What are the Major Challenges in Operations since the Operationalization and Implementation of the RBA
Act of 1997?

Majority of the respondents were of the view that at present, pension provision in the country remains
disjointed with occupational and individual schemes falling under the Retirement Benefits Act, while the National
Social Security Fund (NSSF) falls under both the NSSF Act and RBA Acts. The Civil Service Scheme falls under
the Pensions Act, while there are innumerable legislation covering other areas.

Further, the current policy and legal framework under which Kenyas pension system operates,
ignores to large extent coverage of informal sector workers and focuses to some extent on formal sector workers.
The fund managers and the RBA indicated that level of pension coverage in Kenya is limited to a mere 15% of the
labor force and thus requires a systemic reform in terms of policy and law in order to widen coverage. The
Retirement Benefits Act and the Regulation made there under have therefore not helped in the widening of
the coverage of private occupational pension schemes to all the labor force in Kenya.

The study participants pointed to the legal deficiency in the current pension system in the country. There is
no law that compels a private employer to provide retirement benefits to its employees. At the same time, there is
no law that compels an employee to set aside, or save, any portion of her/his income for future old-age
support. An employees compensation package will include a pension benefit from active employment if both the
employer and employee agree that the employer will provide and the employee will accept a portion of her
compensation in the form of legally enforceable rights to receive pension payments after retirement.

Combined average investment returns from pension investment schemes
0.0
1.0
2.0
3.0
4.0
5.0
6.0
1
9
8
6
1
9
8
7
1
9
8
8
1
9
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
51
Further, the respondents were of the strong view that there exists weak regulatory capacity and that though
not all pension schemes have met all the conditions for final registration, none has been taken to court for
contravening the RBA Act. In some cases, pension schemes have investment profiles greatly at variance with the
prescribed investment guidelines due to gross mismanagement and abuse.

Most of the study participants pointed out that challenges still remain for the RBA to bring some funds in
line with the law and fully funded level. Others include post-retirement poverty, low coverage, low contributions
rates and the HIV/AIDS epidemic- which had reduced the life expectancy of Kenyans to below the normal
retirement age.

CONCLUSIONS AND RECOMMENDATIONS

Summary of Key Findings

Fund management market leaders in the country seem to concentrate in few but high value asset portfolio
schemes, thus benefiting from economies of scale.

Kenya pension fund investment portfolio is highly diversified in all the vehicles except a large
concentration on Kenya government securities, quoted equity and guaranteed funds. Huge proportion funds of
pension schemes in the country are therefore invested Kenya Government Securities and quoted equity (shares) and
guaranteed funds, a reflection of risk-averseness in pension fund investments and the shift in asset allocation
patterns due to the current global crisis. Such conservative investments are impressive in risk locking portfolio
losses and but could also reduce the potential of funds to generate retirement incomes in the future. The choice of
more conservative asset allocation is also a reflection of the current restrictive and high market-based solvency rules
which dictate investment strategies.

The overall weighted returns before the implementation of RBA Guidelines was low (average scale of 1.9)
while the weighted returns after the implementation of RBA Guidelines has been high, at an average scale of 3.7. An
analysis of the trend however showed that long-run performance has slowed down. Highest growth was realized for
mortgage and cash returns as opposed to rights issues and bonus shares. This implies that the implementation of the
RBA Guidelines injected governance gains resulting in enhanced the performance of the pension funds in the short-
run but have proved ineffective in the long-run, reflecting fund managers and investment trustees continued
complacence and laxity in complying with the governance mechanisms introduced by the RBA Guidelines. This is a
further indication of the current inadequate capacity of the RBA to enforce its guidelines.

The most pertinent concerns for the sector were lack of adequate legal and regulatory framework, the
low coverage with marginalization of informal sector, imprudent investments that lead to negative rates of
returns on overall investment portfolio. Narrow and restrictive investment guidelines do not promote development
of retirement benefits sector, an indication that liberalized investment regimes perform better.

In addition there were pressures arising from shrinking contribution bases and growing beneficiary
populations, both of which were caused by contractions in economic activity, the pernicious effect of HIV/AIDS
that has lead to an increase in the dependence ratio, a high level of unremitted contributions from the employers to
the schemes, inefficient administration and institution weaknesses that increase costs or reduce returns to
members, poor governance and insufficient expertise. It is important to note that though some challenges have
been outlined, they however still require further research.

CONCLUSIONS

It can be concluded from the results that the performance of pension schemes in Kenya, with regard to
return on investment, is not sustainable owing low levels of growth against a backdrop of high overall inflation, the
after-effects of the global financial and economic crisis which eroded off-shore and Nairobi Stock Market asset
values, the inadequate legal and regulatory environment and the incapacity challenges of the industry regulator to
monitor and enforce governance, and investment guidelines for pension schemes and fund managers.
52
The current prescriptive pension regulations, including quantitative asset restrictions on investment
vehicles, were, however, effective in the short run, but have proved ineffective in the long-term. The results can be
interpreted to imply that asset regulations imposing quantitative limits on different asset classes reduce the set of
otherwise admissible investment policies with consequential effect on return on investments.

RECOMMENDATIONS

The Regulator needs to implement measures to ensure pension funds are insulated from inflationary and
other risks. An effective way is to institute a pension risk insurance fund that will underwrite and compensate such
losses as will be prescribed. Further, there is need for a systematic indexation of benefits to inflation.

The RBA needs to enhance its regulatory capacity of the industry in order to ensure compliance among
pension schemes and fund managers. An evaluation should be conducted in order to map out areas, roles and
departments that should be enhanced. Specifically, the authority needs to strengthen its compliance and enforcement
function in order to ensure that it appropriately deals with emerging present and future regulatory challenges. The
RBA also needs to move away from proactive supervision of schemes toward a more risk based supervision
approach. The primary areas of risk once a scheme is properly set up in compliance with the law are: financial loss
of funds; violation of member protection regulations; inefficiencies that increase costs or reduce returns to
members; and poor quality of service to members or beneficiaries Investment regulations should be reviewed
to enhance growth of the sector. The investment policy of fund managers should ensure that the retirement benefits
are ahead of inflation.

Fund managers should develop good systems to mitigate on the enormous risks they face in their duty as
investment managers. Scheme Trustees should be trained in risk management in order to oversee the schemes
investments.

The government should enhance and provide substantial tax incentives to stimulate growth in the industry.
The effort by the government to give tax incentives to retirement benefit schemes is commendable; however, the
current tax limits on contributions and benefits are too low- contributions to registered retirement benefits schemes
are tax deductible from gross income at a maximum of Ksh 20,000 per month.

AUTHOR INFORMATION

Lucy Jepchoge Rono is a Graduate Assistant at the Department of Accounting and Finance at Moi University,
School of Business and Economics. She holds B.Sc Bo Degree (Hons) from Moi University, Master of Business
Administration (Entrepreneurship) from Moi University and Master of Business and Management (Finance) from
Moi University. Email: jepchoge@yahoo.com

Julius Kibet Bitok, M.B.A.(University of Nairobi) is a Lecturer at the Department of Accounting and Finance, Moi
University, Eldoret, Kenya. He has taught in the department for five years. He is also the undergraduate studies
coordinator at the School of Business and Economics. He teaches courses in finance and quantitative techniques. He
is a doctoral student at Moi University, school of Business and Economics and is in the dissertation phase of his
program. Email: hezkibet@yahoo.com

Gordon Newlove Asamoah is a lecturer and a Public Policy Analyst at the Department of Accounting and Finance
at Kwame Nkrumah University of Science and Technology School of Business. He holds B.Ed Social Science
Degree (Hons) from the University of Cape Coast, Ghana and Msc (Econs) in Public Policy from the University of
Hull, UK. Email: gnasamoah.ksb@knust.edu.gh or gasamoahn@yahoo.com

REFERENCES

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KEY POLICY ISSUES
World Health Organization
Collection on Long-Term Care
KEY POLICY ISSUES
IN LONG-TERM CARE
World Health Organization
Geneva
LONG-TERM CARE
This publication can be found on the WHO web site:
http://www.who.int/ncd/long_term_care/index.htm
World Health Organization, 2003
All rights reserved. Publications of the World Health Organization can be obtained
from Marketing and Dissemination, World Health Organization, 20 Avenue Appia,
1211 Geneva 27, Switzerland (tel: +41 22 791 2476; fax: +41 22 791 4857;
email: bookorders@who.int). Requests for permission to reproduce or translate
WHO publications whether for sale or for noncommercial distribution should be
addressed to Publications, at the above address (fax: +41 22 791 4806;
email: permissions@who.int).
The designations employed and the presentation of the material in this publication
do not imply the expression of any opinion whatsoever on the part of the
World Health Organization concerning the legal status of any country, territory, city
or area or of its authorities, or concerning the delimitation of its frontiers or
boundaries. Dotted lines on maps represent approximate border lines for which there
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The mention of specific companies or of certain manufacurers products does not
imply that they are endorsed or recommended by the World Health Organization in
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incurred as a result of its use.
The named authors alone are responsible for the views expressed in this publication.
WHO Library Cataloguing-in-Publication Data
Key policy issues in long-term care / edited by Jenny Brodsky, Jack Habib, Miriam J. Hirschfeld
(World Health Organization collection on long-term care)
1.Long-term care 2.Delivery of health care,
Integrated - organization and administration 3.Health policy
4.Caregivers I.Brodsky, Jenny II.Habib, Jack III.Hirschfeld, Miriam J.
ISBN 92 4 156225 0 (NLM classification: WX 162)
http://www.who.int/chronic_conditions/en/
KEY POLICY ISSUES
Preface
i
iii
Demographic and epidemiological transitions will result in dramatic changes
in the health needs of the worlds populations. Everywhere, there is a
steep increase in the need for long-term care (LTC).
These trends reflect two interrelated processes. One is the growth in factors
that increase the prevalence of long-term disability in the population.
The second is the change in the capacity of the informal support system
to address these needs. Both of these processes enhance the need for public
policies to address the consequences of these changes.
The growing need for LTC policies is generally associated with industrialized
countries. What is less widely acknowledged is that long-term care needs are
increasing in the developing world at a rate that far exceeds that experienced
by industrialized countries. Moreover, the developing world is experiencing
increases in LTC needs at levels of income that are far lower than that which
existed in the industrialized world when these needs emerged.
Therefore, the search for effective LTC policies is one of the most pressing
challenges facing modern society. Recognizing that such trends greatly
increase the need for well coordinated and cost-effective LTC, the
World Health Organization (WHO) launched a global initiative, with the
JDC-Brookdale Institute leading this effort.
The goal of the project is to prepare a practical framework for guiding the
development of long-term care policies in developing countries. This
framework will address the major issues and alternatives in designing LTC
systems. The framework is not intended to provide specific prescriptions,
but rather a basis for translating national conditions, values, culture, and
existing health and social policies into a long-term care policy.
LONG-TERM CARE
iv
This process is based on a number of major premises:
Previous efforts have not been successful in identifying
meaningful policy guidelines that are appropriate to the
unique situations of developing and middle-income countries.
A key resource in formulating LTC policies for developing
countries is their own existing experience.
LTC policies in the developing world need to reflect each
countrys unique conditions, which have to be understood
in much more depth and complexity.
There is much to be learned from the experience of
industrialized countries in order to define the range of options
and to identify successful and unsuccessful policy practices.
There is a need to create a deeper and more informed dialogue
between the experiences of industrialized and developing countries
so that there can be a mutually beneficial learning process.
Over the course of the project, a number of steps have been taken to promote
exchange of experience. In 1998, a comparative review of the implementation
of long-term care laws based on legislation and entitlement principles in
five industrialized countries (Austria, Germany, Israel, Japan and the
Netherlands) was carried out and summarized in a widely distributed report:
Long-Term Care Laws in Five Developed Countries (WHO/NMH/CCL/00.2).
In implementing this study, a framework was developed for cross-national
comparisons of LTC policies that address the needs of policy-makers.
In December 1999, a meeting of a group of LTC experts from the industrialized
and developing world identified specific issues in LTC provision in developing
countries. Their general recommendations were submitted in a report and
accepted by the 108
th
WHO Executive Board (WHO Technical Report Series,
No. 898), and ratified by the 54
th
World Health Assembly in May, 2001.
One lesson from this workshop was that to go beyond previous discussions
requires a more in-depth understanding of the existing situations in developing
countries and the nature of the variance among countries. Thus, a plan was
developed to request in-depth case-studies from experts in middle-income
developing countries, and in April 2001 a second workshop was organized
with these experts to discuss the framework for the preparation of these
case-studies.
KEY POLICY ISSUES
This framework was designed to emphasize additional elements that would
be important in the developing country context, and also to examine the more
general health and social policies and service structure along dimensions that
have major implications for long-term care. Case-studies of the general health
system and current LTC provision in ten developing countries were written by
local health care experts (Peoples Republic of China, Costa Rica, Indonesia,
Lebanon, Lithuania, Mexico, Republic of Korea, Sri Lanka, Thailand, and
Ukraine).
Furthermore, to complete and broaden the picture of patterns of LTC policies
in industrialized countries, case-studies of countries without a legislative
framework (including Australia, Canada, and Norway) were commissioned.
An additional perspective was provided on the experience of the industrialized
countries by commissioning a set of papers on key cross-cutting issues.
These include:
The role of the family and informal care, and mechanisms
to support the family.
Issues of coordination among various LTC services,
and of LTC with the health and social service systems.
Human resource strategies in delivering LTC.
A series of video conferences that opened a dialogue between WHO
Headquarters and the six Regional Offices on desirable directions for
long-term care was also conducted.
The next step was to convene the group of leading experts from industrialized
and developing countries who had prepared the papers, together with WHO
Regional Representatives and key WHO Headquarters staff.
Two integrative papers on the overall patterns identified and lessons learned
from the case-studies of industrialized and developing countries were
prepared by the Brookdale team for the meeting, which took place in
November 2001 in Annecy, France.
The purpose of the meeting, Bridging the Limousine Train Bicycle Divide,
was to assess what has been learned thus far from the experiences of both
industrialized and developing countries that can contribute to the development
of LTC policies for developing countries.
v
LONG-TERM CARE
The report from the meeting, entitled Lessons for Long-Term Care Policy
(WHO/NMH/CCL/02.1), gives a broad overview of the nature of the background
materials that were prepared and the issues that were discussed. It also
presents some general conclusions that were agreed on by the participants.
In parallel, work proceeded on developing estimates of current and future
LTC global needs. R. H. Harwood and A. A. Sayer analysed the 1990
WHO Global Burden of Disease data and prepared estimates for all
WHO Member States. These estimates are published on the WHO web site
http://www.who.int/ncd/long_term_care/index.htm and summarized in a report,
Current and future long-term care needs (WHO/NMH/CCL/02.2).
Another complementary area of work relates to family caregiving in countries
with high HIV/AIDS prevalence. E. Lindsey conducted several qualitative
studies, focusing on Community Home-Based Care and its effects on young
girls and older women. She summarized the findings from studies in Botswana,
Cambodia, Haiti, Kenya, Thailand and South Africa in a guideline entitled
Community Home-Based Care in Resource-Limited Settings: A Framework
for Action (ISBN 92 4 156213 7, WHO, Geneva, 2002). The theoretical
framework for this guideline had been developed by JDC-Brookdale for the
analysis of LTC laws in five industrialized countries. One additional area of
work relates to ethical responsibilities in LTC and the ethical discussion
countries need to initiate as input into the determination of the priority of LTC
and the considerations in designing fair and just policies.
This volume is the first in a series of publications addressing the following
topics:
Key policy issues in the design of long-term care: a review based
on the experience of industrialized countries (this volume).
Long-term care in developing countries: ten country case-studies.
Long-term care strategies in industrialized countries: case-studies
of countries with and without national LTC legislation.
Framework for guiding the development of long-term care policies
in developing countries.
Ethical choices in long-term care: what does justice require?
A long-term care Futures tool kit.
vi
KEY POLICY ISSUES
In order to consider this volume within the broader context, we paraphrase
from the Director-Generals World Health Report 2000,*
Health care (and long-term care) can be catastrophically costly.
Much of the needfor care is unpredictable, so it is vital for people
to be protected from having to choose between financial ruin and
loss of health . . . . The other peculiarity of health is that illness
itself . . . can threaten peoples dignity and their ability to control
what happens to them . . . .
Health systems have a responsibility not just to improve peoples
health, but to protect them against the financial cost of illness . . .
reducing the damage to ones dignity and autonomy, and the fear
and shame that sickness often brings with it and to treat them
with dignity . . . .
In accordance with these goals, countries need to address long-term care
as they further develop and reform their health and welfare systems.
*WHO (2000), The World Health Report 2000 Health Systems: Improving Performance,
pages 8, 24. Geneva, World Health Organization.
vii
KEY POLICY ISSUES
i Preface
ii Contents
iii Abbreviations
iv Acknowledgements
v Introduction
Part one. The role of and support to the family
Chapter 1. The role of informal support in long-term care,
Joshua Wiener
Chapter 2. The support of carers and their organizations
in some northern and western European countries, Marja Pijl
Part two. Issues of integration and coordination
Chapter 3. The interface of LTC and other components of the
health and social services systems in North America, Robert L. Kane
Chapter 4. Long-term care integration in four European countries:
a review, Dennis L. Kodner
Chapter 5. Achieving coordinated and integrated care
among LTC services: the role of care management, David Challis
Contents
ix
ii
iii
ix
xi
xiii
xv
3
25
63
91
139
LONG-TERM CARE
x
Part three. Human resources
Chapter 6. Human resources for long-term care:
lessons from the United States experience, Rosalie A. Kane
Part four. Evaluating long-term care
Chapter 7. Approaches to evaluating LTC systems,
Itziar Larizgoitia
Part five. Choosing overall LTC strategies
Chapter 8. Choosing overall LTC strategies:
a conceptual framework for policy development,
Jenny Brodsky, Jack Habib, Miriam Hirschfeld,
Ben Siegel, Yael Rockoff
193
227
245
KEY POLICY ISSUES
iii
Abbreviations
ADL Activities of daily living
AWBZ Exceptional Medical Expenses Act (The Netherlands)
(in Dutch, Algemene Wet Bijzondere Ziektekosten)
IADL Instrumental activities of daily living
IPA Independent Practice Association, a type of HMO
ICF International Classification of Functioning, Disability and Health
CSHSC Center for the Study of Health System Change
GBD The Global Burden of Disease
GNP Geriatric Nurse Practitioner
GP General practitioner
HIV Human Immunodeficiency Virus
HMO Health Maintenance Organization
MDS Minimum Data Set
MRC Medical Research Council (United Kingdom)
MSHO Minnesota Senior Health Options programme
NRV National Public Health Council (The Netherlands)
(in Dutch, Nationale Raad voor de Volksgezondheld)
PAC Post Acute Care
PACE Program for All-inclusive Care of the Elderly
RAI Resident Assessment Instrument
xi
LONG-TERM CARE
RAPs The Resident Assessment Protocols
RIO Regional Assessment Organization (The Netherlands)
(in Dutch, Regionaal Indicatie Orgaan)
RUG Resource Utilization Groups
SDI Social Dependency Insurance (Germany)
SHMO Social Health Maintenance Organization
SWO Welfare Services for Older People (The Netherlands)
(in Dutch, Stichting Welzijn Ouderen)
UNDP United Nations Development Programme
WPP Wisconsin Partnership Program
xii
KEY POLICY ISSUES
The World Health Organization gratefully acknowledges the crucial scientific
and technical leadership of the JDC-Brookdale Institute, Jerusalem,
a WHO Collaborating Centre, in guiding the WHO Long-Term Care Policy
Initiative and in preparing this volume. The special contributions of Jack Habib,
Jenny Brodsky, and Ben Siegel are most appreciated.
WHO also gratefully acknowledges the authors of the chapters included in
this volume: Joshua Wiener of The Urban Institute in Washington, DC, USA;
Marja Pijl, an independent researcher in The Hague, The Netherlands;
Robert L. Kane of the University of Minnesota School of Public Health in
Minneapolis, USA; Dennis L. Kodner, of the Wagner Graduate School of Public
Service at New York University, USA; David Challis of Manchester University
in the United Kingdom; Rosalie A. Kane of the University of Minnesota School
of Public Health in Minneapolis; Itziar Larizgoitia of the Department of Health
Services Provision at the World Health Organization in Geneva, Switzerland;
Jenny Brodsky, Jack Habib, Ben Siegel, and Yael Rockoff of the JDC-Brookdale
Institute in Jerusalem, Israel; and Miriam J. Hirschfeld, Director of the
Cross-Cluster Initiative on Long-Term Care at the World Health Organization
in Geneva, Switzerland.
Another in the WHO Collection on Long-Term Care, this document
was produced and edited under the direction of Miriam J. Hirschfeld.
The manuscripts in this volume were language edited and formatted, and the
WHO Collection on Long-Term Care was designed, by Anne Bailey and
Ross Hempstead of Creative Publications.
xiii
Acknowledgements
iv
KEY POLICY ISSUES
Introduction
xv
v
This volume focuses on selected major issues in designing long-term care.
These issues represent significant opportunities for learning from the
experience of industrialized countries. It was prepared by leading experts
in long-term care to promote a more systematic effort to learn from the
experience of the industrialized world in the framework of the WHO Long-Term
Care Initiative, described in the Preface to this volume.
There are a large number of design issues that need to be addressed when
developing a LTC system. Within the framework of this project, J. Habib and
J. Brodsky developed a classification of these key issues to analyse available
policy alternatives and identify factors relevant to the choice among them. Some
major design issues include: the relative priority of LTC among other needs;
which LTC services should be prioritized; state vs. family responsibility; service
delivery strategies; nature of entitlements, targeting and financing; strategies
for achieving integrated or coordinated care; human resource strategies;
provision of LTC by government, nongovernmental organizations and for-profit
organizations; role of voluntarism and community organizations.
The resolution of this set of issues adds up to an overall LTC policy, and
determines the degree to which LTC needs are addressed. There is a need to
analyse each of these design elements separately, and to better understand
the interaction between them.
This volume focuses on five issues.
The role of the family and informal care, and mechanisms
to support the family (Chapters 12).
Issues of coordination among various LTC services, and of
LTC with the health and social service systems (Chapters 35).
Human resource strategies in delivering LTC (Chapter 6).
Approaches to evaluating LTC systems (Chapter 7).
Approaches to designing overall LTC strategies (Chapter 8).
LONG-TERM CARE
The first three deal with specific design issues, and the final two address the
LTC system as a whole. On each issue, the authors present a conceptual
framework for understanding the issue, reflect on the major considerations
for its resolution, and provide selected examples from the experience in
industrialized countries.
1. The role of the family and informal care, and mechanisms to support
the family. Chapters 1 and 2, written by Joshua Wiener and Marja Pijl,
respectively, discuss the role of the family in providing LTC and mechanisms
to support the family in this role. The papers in these chapters complement
each other in their focus and also in the range of experience presented from
According to Joshua Wiener, despite the development of formal services,
care by the family and other informal carers is by far the dominant form of care
throughout the world. However, there are many questions regarding the
possibility and desirability of informal care maintaining such a large share of
caregiving responsibilities as LTC needs rapidly increase.
Thus, a particularly critical issue is the balance of responsibility between
society and the family. Many long-term care policy issues revolve around whether
the individual, the family, or society, should be responsible for providing and
caring for persons with disabilities. Does the primary responsibility for care
belong with individuals and their families, and should governments act only as
a payer of last resort for those unable to provide for themselves? Or on the
contrary is long-term care primarily a societal responsibility and therefore
public support should play a larger role? The resolution of this issue
determines who should receive assistance and how much.
Some additional policy issues raised in these papers include whether the
provision of formal care reduces the amount of informal care; how work
outside the home affects caregiving and vice versa; and whether support should
be in the form of cash or services.
The papers also discuss the types of assistance that various governments
have provided to aid informal caregivers, such as education, training, and
counselling of families; respite care; laws guaranteeing unpaid leave if they
have to care for sick relatives; and various forms of direct financial support.
xvi
KEY POLICY ISSUES
2. Issues of coordination among various LTC services, and of LTC
with the health and social service systems. Chapters 3, 4, and 5, written
by Robert Kane, Dennis Kodner, and David Challis, respectively, address the
complex issues of coordination/integration among various LTC services,
and of LTC with the health and social service systems.
The paper by Robert Kane particularly focuses on the possibility of integrating
long-term care with preventive, acute, and chronic health care, and is based
on the North American experience. Kane emphasizes the fact that integrating
funding streams is necessary but not sufficient to achieve integrated care.
Successful integration requires a major reorganization of the programmatic
infrastructure, which can then be reinforced by funding approaches. One of
the major obstacles raised by Kane is that health systems are built upon an
acute disease model that is not appropriate to addressing long-term care needs.
Kane provides a review of the experience in the United States with programmes
aimed at providing integrated care.
Dennis Kodners paper describes and analyses the fragmentation that exists
in most LTC systems, classifies the major integrating/coordinating strategies,
and provides a review of the experience of several European countries
in addressing this issue.
The paper prepared by David Challis provides a comprehensive review of
case management, one of the principal coordinating strategies developed in
the past two decades in industrialized countries. According to Challis, case
management has a central role as the mechanism designed to achieve a shift
from institutional provision to home-based care.
3. Human resource strategies in delivering LTC. Chapter 6, written by
Rosalie Kane, analyses some of the major decisions related to human
resource policy. Kane discusses the types of human resources that a country
requires to provide long-term care based on the experience of industrialized
countries. She presents principles for deciding on the various types of
personnel needed in particular care settings based on the kind of skill and
abilities required.
Some major issues discussed include the level of formal requirements and
training for different tasks; the need for a specialized versus generic staff
to provide LTC (i.e. those providing general health and social services); and
appropriate working conditions for the development of a LTC workforce.
xvii
LONG-TERM CARE
4. Approaches to evaluating LTC systems. Chapter 7, written by
Itziar Larizgoitia, provides a conceptual framework to analyse the performance
of LTC systems in meeting their goals. Using the WHO framework for
assessing the performance of health systems, Larizgoitia argues that in
order to isolate the contribution of long-term care, it is necessary to identify
the specific subset of health and responsiveness outcomes which are a direct
consequence of, or directly attributable to, the long-term care received.
The paper explores some specific LTC outcomes and examines the
implications for quality assurance mechanisms.
5. Approaches to designing overall LTC strategies. Chapter 8, an
overview written by JDC-Brookdale staff, represents an effort to go beyond the
discussion of specific design issues to present broad paradigms of alternative
systems that combine in various ways the resolution of these specific issues.
It attempts to address the complexities of the policy-making process by
considering the following broad questions. Is it possible to reduce the broad
range of LTC policy design issues to a smaller number of major overall policy
strategies? Is it possible to suggest key starting points in developing an
overall strategy? What are the key interdependences in the resolution of LTC
issues and how do they play a role in defining alternative overall strategies?
The paper argues that in specifying alternative strategies it is necessary to
distinguish between design issues that are more primary, and those that are
more derivative in defining overall policy strategies. It discusses principles of
eligibility, service integration, and the interaction between these two aspects of
LTC policy design.
We hope that the richness of the material presented in this volume will be
useful for the development of LTC policy in both industrialized and developing
countries alike.
xviii
KEY POLICY ISSUES
1
THE ROLE OF
AND SUPPORT
TO THE FAMILY
CHAPTER 1
THE ROLE OF
INFORMAL SUPPORT
IN LONG-TERM CARE
Joshua M. Wiener
CHAPTER 2
THE SUPPORT
OF CARERS AND
THEIR ORGANIZATIONS
IN SOME NORTHERN
AND WESTERN
EUROPEAN COUNTRIES
Marja Pijl
P
a
r

t

o
n
e
KEY POLICY ISSUES
3
1
THE ROLE OF INFORMAL SUPPORT
IN LONG-TERM CARE, Joshua Wiener
1 Introduction
Informal care unpaid care by relatives and friends is the dominant form
of care of di sabl ed persons throughout the worl d, despi te the
considerable burdens that it places on those who do it. Paid services, either at
home or in institutions, play a relatively small role, except in a few countries.
Because of the potential fiscal and care implications of the decline in
informal care, public policy-makers want to assure that this care is maintained.
Modern society especially with its trend towards smaller families,
greater longevity, separate and more independent living situations for older
people, greater freedom for women, and workplaces that are separate from
home places strain on the traditional mechanisms of providing unpaid care.
Thus, although most public policy and services in long-term care are aimed at
the disabled person, some financing and services are aimed at informal
caregivers, principally relatives. This paper presents background information
on informal care, describes the services and other support that governments
and private agencies provide to family caregivers, analyses issues raised by
public support of informal caregivers, and discusses some of the implications
of these issues.
2 Background
While there is a widespread belief that modern families in industrialized countries
have abandoned their disabled relatives, informal care is by far the most
prevalent form of long-term care and dwarfs the provision of care in nursing
homes and by paid home care workers. In fact, because of increased longevity,
the lifetime risk of having to care for a disabled parent is much higher now than
it was fifty years ago.
In a review of the data on the non-institutional population in ten developed
countries, Sundstrom (1994) found the vast majority of primary caregivers to
be family members in Australia, Finland, Germany, Japan, the Netherlands,
New Zealand, Sweden, the United Kingdom, and the United States. Only in
Denmark were paid home care workers a major source of primary caregivers,
and even there the family was the primary caregiver in a majority of cases.
In the United States in 1994, 94% of all disabled elderly in the community received
at least some informal care (Spillman & Pezzin, 2000).
LONG-TERM CARE
4
Spouses and adult children, especially daughters and daughters-in-law,
are the most common informal caregivers. In the United States in 1994,
a spouse or adult child provided some care to 80% of the disabled elderly
persons in the community receiving informal care (Spillman & Pezzin, 2000).
Among disabled older people with spouses or adult children, almost half of
primary informal caregivers were spouses and almost half were children; other
relatives and non-relatives played a very small role in providing informal care.
Daughters were over twice as likely as sons to be primary caregivers;
overall, almost two-thirds of primary caregivers were women.
In England, most caregivers are women, as in the United States; however,
caregivers appear more likely to be under the age of 65 than in the
United States (United Kingdom Department of Health, 2000). Most elderly in
Japan live with their sons (if possible) and care of elderly disabled persons is
traditionally the responsibility of the daughter-in-law (Campbell & Ikegami, 2000).
Caregiving is difficult, but when it is required families almost always do what
is necessary to care for their disabled relatives, resorting to institutions
mostly when the burden becomes too great. Lack of family and informal care
are major predictors to use of nursing home care. In many countries, home
care is increasingly helping to meet the needs of community-based disabled
persons.
Informal caregivers take on these caregiving tasks for many different reasons:
There is a sense of family obligation, that families take care of
each other and that blood relationships are the most important
ties that exist.
In many societies, there is a tradition of care for parents and
other relatives when they are older. Informal care is the way
that care for the disabled elderly has always been handled.
In some societies, the principal alternative to informal care is
primarily institutional care, especially nursing homes, which have
a reputation of poor quality care. Families continue to provide care
because they do not want to place their relatives in these facilities.
Caregiving may provide a number of personal satisfactions,
such as feeling useful and needed, feeling a sense of
accomplishment, having the opportunity to express love for
the disabled relative, experiencing satisfaction that one has
fulfilled ones responsibilities, feeling appreciated by family
members and the disabled relative, and altruistic feelings
that one has done all one can (Toseland & Smith, 2001).
KEY POLICY ISSUES
5
Again, despite these positive aspects, much research and public policy
emphasize the burden it imposes. Prolonged caregiving has negative effects
on the emotional health and perhaps physical health of caregivers, even when
it is voluntarily undertaken and a source of personal satisfaction (Whitlatch
& Noelker, 1996; Zarit, Reever & Bach-Peterson, 1980). The physical health
of family caregivers to the frail elderly may deteriorate, with such changes
as interrupted sleep, chronic fatigue, muscle aches, and irregular eating
(Toseland, Smith & McCallion, 2001).
In a study in the United Kingdom, about half of caregivers had suffered a
physical injury, such as a strained back, since they began to care. About half
had been treated for a stress-related illness since becoming caregivers
(Henwood, 1998). Despite the widespread perception that the strains
and burdens of caregiving result in increased health problems, the evidence
as to whether caregivers suffer proportionately more physical problems
than other people of the same age is not conclusive (Neundorfer, 1991;
Schulz, 1995; United Kingdom Department of Health, 2000).
Psychological health appears to be the aspect of the informal caregivers life
that is most affected by caring. As compared to the general population,
primary caregivers are frequently depressed and anxious, are more likely to
use psychotropic medications, and have more symptoms of psychological
distress (Neundorfer, 1991; Schulz et al., 1995; Schulz & Williamson, 1994;
Schulz, 2000; Toseland & Smith, 2001). Depression appears to be the most
common disorder, with 20 to 50% of caregivers reporting depressive disorders
or symptoms (Butler, 1992; Schulz et al., 1995; Schulz, 2000).
3 Supports for informal caregivers
Public and private programmes provide a number of supports for informal
caregivers, although few countries focus on the caregiver in their long-term
care policies. These supports include information and training, respite care,
tax benefits and payments, and regulation of businesses and initiatives by
private organizations.
An underlying premise of many of these programmes is that the provision of
such services or cash payments to informal caregivers will enable them to do
a better job, that they will experience less stress, and that they will be able to
provide care for a longer period of time.
LONG-TERM CARE
6
3.1 Education and training, counselling
and support
Informal caregivers typically come to this role without knowing a great
deal about:
how care should be provided;
how to navigate an often-complicated financing
and delivery system;
the likely course of disability and illnesses;
how to cope emotionally with the strains of caring for a highly
disabled individual.
To aid informal caregivers, many countries provide some sort of education
and training. This support can provide very concrete skills, such as
information on how to lift a disabled individual without creating back strain.
On the other hand, emotional counselling may be provided through support
groups in which caregivers come together to share emotional and practical
concerns. A goal of many of these groups is to have caregivers recognize
that there are others who have the same emotions and problems and that
their experience and feelings are normal (Toseland & Smith, 2001). Individual
counselling may also be provided.
3.2 Respite care
One of the burdens of providing informal care is that care is often needed
day after day after day, many hours a day, without end. Some tasks, such as
the need to use the toilet, are hard to schedule and require constant attendance.
In addition, and specifically among people with dementias and other cognitive
impairments, disabled persons often cannot be left on their own without being
a danger to themselves and perhaps others. The constant nature of a great
deal of caregiving imposes heavy burdens and strain.
To address this problem, many countries provide some form of respite care to
provide temporary relief to family caregivers. Time off from the unrelenting
demands of caregiving is believed to be directly therapeutic for the caregiver
and indirectly therapeutic for the care receiver (Lawton, Brody & Saperstein,
1989).
KEY POLICY ISSUES
7
Formal respite care includes temporary inpatient placement in residential
facilities, nursing facilities, or hospitals; in-home respite by paid caregivers;
and adult day care (also known as adult day health care) (Toseland, Smith &
McCallion, 2001). At a practical level, however, there is not much difference
between respite care and most long-term care services; almost any long-term
care service in which another individual temporarily takes over care
responsibilities can be viewed as providing respite to the informal caregiver.
Among the countries providing formal respite services are Australia, Germany,
the United Kingdom, and the United States. As part of the German social
insurance programme for long-term care, informal caregivers who provide a
substantial amount of informal care are entitled to up to four weeks of respite
care (Cuellar & Wiener, 2000). In Australia, short-term stays for respite care
are estimated to make up 40% of all residential care admissions (Merlis, 2000).
Respite care is a central component of the National Family Caregiver
Support Program, which was enacted in 2000 in the United States, and many
states provide some respite care, especially for families of people with
Alzheimer Disease. The United Kingdom Carers and Disabled Children Act
2000 is another example of a recent initiative focusing on respite care as a way
of providing relief to informal caregivers. While these initiatives in the United
Kingdom and the United States have substantially increased funding for respite
care, they comprise a small part of the long-term care delivery system.
3.3 Regulation of business/business initiatives
Informal caregivers often find that caregiving conflicts with the requirements of
their jobs. To facilitate caregiving, some governments have mandated that
businesses make medical leave available to allow family members to care for
disabled or sick relatives, and some businesses, on their own initiative, have
sought ways to help informal caregivers.
For example, in 1990 Sweden introduced a programme of paid leave to care
for people who are terminally ill (Sundstrom, 1994). In the United States, all
public agencies and private-sector employers who employ 50 or more workers
must provide up to 12 weeks a year of unpaid leave for employees to care for
an immediate family member with a serious medical condition or to take
medical leave to care for themselves (Employment Standards Administration).
Upon return from leave, the worker must be restored to the original job or to an
equivalent job.
LONG-TERM CARE
8
Several American states have more generous standards than the federal
law in terms of covering more employees or requiring longer leave
(Coleman, 2000). The United Kingdom is exploring these types of requirements
(United Kingdom DOH, 2000). Beyond government mandates, some
businesses (usually large corporations) have adopted initiatives to aid their
employees combine work and caregiving (United Kingdom DOH, 2000;
Washington Business Group on Health, 1991). These initiatives can involve
flexible work time (in terms of hours and scheduling of time off), paid and unpaid
medical leave, information and referral for services, and counselling.
The business argument for making these changes is the claim that they will
lower staff turnover, reduce absenteeism and sickness, improve labour
flexibility (by increasing the size of the labour pool and making the business
more attractive to older workers), and improve employee morale and staff
loyalty (United Kingdom DOH, 2000).
3.4 Tax benefits and payments to informal caregivers
Another form of support for informal caregivers involves money, which may
be provided as a tax benefit, supplemental income, or payments to the disabled
person or directly to the caregiver. For example, in the United States, President
Bush has proposed modest tax benefits for informal caregivers who live with
severely disabled relatives.
1
In the United Kingdom, an income supplement,
the Invalid Care Allowance, is available to caregivers of working age who supply
more than 35 hours per week of care and who are wholly or mostly out of the
labour force (Twigg, 1996).
Cash payments to disabled individuals and the ability to hire family members
as care providers is part of a movement towards consumer-directed
long-term care, in which individuals rather than agencies are given the power
to hire, train, direct, and fire the people who provide care (Tilly & Wiener, 2000;
Tilly, Wiener & Cuellar, 2000). These programmes aim to empower disabled
persons to take control over their own lives and decide what is best for them.
In most cases, disabled individuals receive vouchers that they can use to
purchase a variety of services. However, cash payments to disabled
persons in lieu of services are provided in Austria, France and Germany
(Cuellar & Wiener, 2000; Tilly, Wiener & Cuellar, 2000). In Austria and Germany,
there are no significant restrictions on the use of cash benefits and the national
governments do not monitor how beneficiaries spend their money (Tilly, Wiener
& Cuellar, 2000). The United States is conducting a large-scale research and
demonstration project to test the concept of cash payments.
1
This proposal is a variant of an earlier proposal by President Clinton.
KEY POLICY ISSUES
9
Although the consumer-directed care movement has a large market component
to its ideology, it is widely believed that cash benefits in Austria and Germany
are passed along to informal caregivers or are contributed to household budgets
rather than used to purchase formal services. Germanys cash payments are
designed to support informal caregivers and to facilitate the withdrawal of women
caregivers from the labour force (Cuellar & Wiener, 2000). France gives
beneficiaries a cash allowance, most of which must be used to pay workers.
A French demonstration project of cash payments found that 30% of workers
were family members (Simon & Martin, 1996).
Finally, consumer-directed home care programmes in some parts of the
United States and in the Netherlands, allow direct public payment of family
members to provide care to disabled family members, although family members
who are legally responsible for the care of the individual (i.e. spouses and
parents of minor children) are usually excluded. The underlying philosophy is
that the public sector should not pay a spouse or parent for services that they
would normally be required to provide without charge.
From the governments perspective, paid family members are simply another
formal provider, although various requirements may be relaxed. In Californias
In-Home Supportive Services (IHSS) Program, for example, 40% of consumer-
hired personal attendants are related to the beneficiary and an additional 30%
are friends, neighbours, or other individuals the beneficiary already knows
(Benjamin et al., 1998). In the Netherlands, 60% of workers in the consumer-
directed option are family, friends, or acquaintances of beneficiaries (Baarveld
et al., 1998).
3.5 Pension credits
Informal caregiving can result in reduction in labour force participation because
of the difficulty or impossibility of combining caregiving and holding a job.
This is particularly a burden for women, who perform the vast majority of
informal caregiving. Withdrawing from the world of paid work can have a
long-lasting negative financial impact on the caregiver, not only in terms of lost
income but also in terms of reduced pensions, since most pensions are related
to years of paid work. To partially compensate caregivers for their efforts,
a few countries, such as Germany, provide pension credits to caregivers
who provide a substantial amount of care (Cuellar & Wiener, 2000). Fully 93%
of persons receiving credits in Germany are women, with about 55% of them
aged 5065.
The Blair administration in the United Kingdom has announced its intention to
provide a second pension to informal caregivers, but this has not yet been
enacted (United Kingdom DOH, 2000).
LONG-TERM CARE
10
4 Issues
Informal caregiving and public programmes to support it raise a number of
important public policy issues. These include the balance of responsibility
between society and the family, whether the provision of formal care reduces
the amount of informal care, how work outside the home affects caregiving
and vice versa, and whether support should be in the form of cash or services.
4.1 Who is responsible: family or society?
Many long-term care policy issues revolve around the issue of whether the
individual and family, or society as a whole should be responsible for providing
and caring for persons with disabilities (Wiener, Hanley & Illston, 1994). Some
people believe that the primary responsibility for care of people with disabilities
belongs with individuals and their families and that government should act only
as a payer of last resort for those unable to provide for themselves.
Proponents of this view generally favour means-tested programmes and tend
to oppose aid to caregivers as unnecessary and likely to undesirably monetize
family caring relationships. This view predominates in the United Kingdom
and the United States. At its extreme, many industrialized countries, including
Germany, the United Kingdom, and the United States, used to have so-called
family responsibility policies that held relatives financially responsible for
care of disabled relatives; these requirements are no longer in force.
At the other end of the policy continuum are people who believe that
long-term care is a societal responsibility and that, while individuals and families
should do their part, formal care and public support for informal caregivers
should play a large role in meeting the long-term care needs of disabled people.
In this view, societally-supported services should be available to all who
need them regardless of financial status, in the same way that health
insurance should be universally available. According to this view, the fact that
one has a disabled relative should not result in an undue financial or care
burden to the family.
Proponents of this view favour programmes that provide universal coverage
and are not means tested. This perspective is characteristic of the long-term
care systems in Germany, Scandinavia, and recently in Japan. Indeed, the
enactment of the new social insurance programme in Japan was a deliberate
decision to shift the burden of long-term care from the family to society as a
whole (Campbell & Ikegami, 2000).
KEY POLICY ISSUES
11
One way in which the issue of who is responsible for care of people with
disabilities is played out is through the allocation of paid home care resources
among the eligible population. In some countries, such as the United Kingdom
and the United States, the availability of informal care is an important
determinant of whether and how many paid services will be provided by public
programmes (Wiener & Cuellar, 1999; Smith et al., 2000). This is especially
likely where home care resources are perceived to be limited and where public
programmes are means tested.
By taking informal care into account, public resources are stretched further
and more people are able to receive at least some services. In these countries,
the governmental response has been driven by beliefs that public support should
only occur after family resources are exhausted, or the family is not able to
meet basic standards of care.
In these situations, services have been focused on the care recipient rather
than the family (Toseland, Smith & McCallion, 2001). In the United States
Medicaid programme at least, this means that services cannot be provided if
they principally benefit the family rather than the disabled persons particular
needs (Smith et al., 2000).
In other countries, such as Denmark, Germany and Japan, the availability of
informal care is not taken into account in determining how many services will
be provided (Cuellar & Wiener, 2000; Campbell & Ikegami, 2000).
2
This is
usually the practice where the expansion of home and community-based
services is being actively promoted and where programmes are not means
tested. This is especially the case where services are provided on an insurance
basis, since taking informal care into account is often thought to be inconsistent
with insurance principles and to violate the principle of horizontal equity in which
all persons having a similar level of disability should be eligible for the same
amount of services.
4.2 Conflict between work and caregiving
Over the past generation, the participation of women in the labour force in
industrialized countries has increased dramatically, creating a potential
conflict between working outside the home and providing informal care. In the
United States, only 26% of married women ages 4564 were employed in 1960,
compared to 65% in 1997 (US Census Bureau, 1998). In the United States
in 1994, 27% of primary caregivers and 59% of secondary caregivers worked
30 or more hours a week (Spillman & Pezzin, 2000).
2
In Denmark, public programmes consider the presence of the spouse,
but not the availability of help from children (Merlis, 2000).
LONG-TERM CARE
12
Similarly, in the United Kingdom, nearly half of all caregivers are working, either
full- or part-time (United Kingdom Department of Health, 2000). Of the
caregivers who are working full-time, nearly 20% provide more than 20 hours a
week of care.
Paid work can be a legitimate reason for being unavailable to provide care;
however, many women combine working and caring, taking on both burdens.
In addition, the so-called women in the middle find themselves responsible
for caring for young children as well as elderly relatives at the same time.
Work may affect caregiving and vice versa. On the one hand, working may
reduce the ability to provide care; on the other hand, providing care may also
reduce the ability to work. In both cases, the conflict reflects the physical
separation of work and family in industrialized countries, making it harder to
combine the two activities.
Although conventional wisdom predicts that individuals will generally reduce
hours of paid work when they devote time to helping their parents and other
relatives, research evidence in the United States on the relationship between
caregiving and labour supply is mixed. Whereas some researchers have
concluded that hours of paid work reduce hours of caregiver assistance or
that hours of assistance reduce hours of employment (Muurinen, 1986; Brody
& Schoonover, 1986; Boaz, 1996; Soldo & Hill, 1995; Johnson & Lo Sasso,
2000), others have been unable to find a relationship between caregiving
and labour supply (Stone & Short, 1990; Ettner, 1996; Wolf & Soldo, 1994;
Stern, 1995; Dentinger & Clarkberg, 1999; Pezzin & Schone, 1999).
In studies where researchers found no relationship, working women coped
primarily by reducing their own free time. In some of the cases where working
women reduced their caregiving time, secondary caregivers, including
paid home care providers or other relatives, made up the reduced time.
Even when working women did reduce their caregiving hours, they almost
never completely withdrew from the caregiving activity.
4.3 Substitution of formal for informal services
One of the main barriers to the expansion of home and community-based
services is the fear on the part of policy-makers that paid home care will cause
friends and relatives to stop providing informal care (Hanley, Wiener & Harris,
1991). Policy-makers do not want the public paying the bill for services that
would otherwise be provided free. Should the vast volume of informal care
disappear and be substituted with paid care, the costs could be enormous.
KEY POLICY ISSUES
13
Although the fiscal implications of a widespread shift from unpaid to paid care
are abundantly clear, there is little research evidence in the United States to
suggest such a result is likely to happen on a large scale (Weissert et al.,
1988; Christianson, 1986; Smith-Barusch & Miller, 1985; Edelman and Hughes,
1990; Hanley, Wiener & Harris, 1991). Indeed, as noted above in the
background section, in virtually all countries the family is the dominant source
of care, even where substantial paid home care is provided (Sundstrom, 1994).
If formal care does not cause a decline in informal care, this suggests a
certain dilemma regarding home care policy (Hanley, Wiener & Harris, 1991).
On the one hand, if paid home care can be expanded without eroding the
amount of informal care, that would suggest that formal care (i.e. paid care)
increases the overall amount of care provided and thus should result in fewer
unmet needs among the disabled elderly.
On the other hand, one of the main rationales for expansion of home care is to
relieve caregiver burden. At least in terms of quantity of services provided,
providing paid home care may not dramatically reduce caregiver burden
because most caregivers will continue to provide roughly the same amount of
care. This may help explain the perplexingly small impact that prior paid home
care demonstrations have had on perceived caregiver burden.
This does not mean that informal caregivers are ungrateful or do not want
paid home care, but rather that caring for a disabled relative is so large a task
that modest amounts of paid services cannot radically change the global
perception of burden. What paid home care can do for caregivers is to give
them a needed break and allow them to arrange their hours and tasks more
efficiently. Families welcome the relief, but their burden will remain great.
4.4 Cash vs. services
A number of policy issues are raised by the provision of cash benefits directly
to informal caregivers through:
tax benefits;
income supplements;
permitting the hiring of relatives to be service providers;
or indirectly through:
cash payments to disabled individuals
which is then turned over to family members.
LONG-TERM CARE
14
First, evaluation of cash payments as a policy depends on the purpose of the
payments. Cash payments to informal caregivers raise the classic economic
conflict between equity and efficiency (Wiener, 2000). In many instances,
the level of the payment to informal caregivers is extremely low, or highly
discounted against the cost of comparable formal services, and cannot be
seen as real market compensation for the amount of effort by the informal
caregiver. For example, the tax benefit proposed by President Bush for most
people would be only several hundred dollars a year, a very small fraction of
what formal care costs would be.
In the German social insurance programme, disabled persons choosing the
cash benefit receive somewhat less than half the amount of funds available for
agency services, making it difficult to use the money to buy formal care (Cuellar
& Wiener, 2000). Indeed, in Germany, most stakeholders view the cash
payments as a mechanism to support informal caregivers rather than a means
to purchase services. Payment levels are often kept low in order to control
total expenditures since so many people qualify for benefits; even small benefits
multiplied by a large number of beneficiaries can result in substantial costs.
A general income supplement for people with disabilities and their families
may be a good idea, but it does not constitute a programme to pay for
long-term care services. Although almost everyone would like more money
and the funds surely help to defray some of the incremental costs of caring for
a disabled relative, many of these payments are best seen as a social
recognition of the good works that informal caregivers do. In this view,
these payments are a kind of societal gold star and the case for them is
based on concepts of social equity. Because of their good works, informal
caregivers should be better off financially than those who do not provide such
care, or at the very least, they should not be worse off.
On the other hand, if the goal of these payments is to change behaviour by
reducing nursing home use or increasing the amount of informal care provided,
it is not clear how effective these cash payments are. It seems unlikely that
very many people would decide whether or not to put their mother in an
institution based on receipt of a relatively small cash payment for informal
care.
Research in the United States suggests that the decision to place disabled
elderly persons in nursing homes occurs when the amount of care becomes
overwhelming and unsustainable (e.g. requiring 24-hour a day care)
(Boaz & Muller, 1991), or when the type of care needed is more medical
than the personal care that families can provide. Similarly, although the rationale
for paying informal caregivers is to expand the pool of potential workers,
the payment levels, at least in the United States, are not high enough to entice
very many persons out of other jobs and into full-time caregiving.
KEY POLICY ISSUES
15
With receipt of cash payments by disabled relatives, only ten per cent of
Austrian caregivers reduced hours worked at their place of employment and
nine per cent left their jobs to provide help to disabled relatives (Badelt et al.,
1997).
3
In a study in the United States of a programme that allowed disabled
workers to hire family members, 80% of family members chosen were already
providing informal care prior to being hired (Benjamin et al., 1998).
For lower-income relatives, however, receipt of the cash payment may
make a big difference in their financial status and may make caregiving less of
a burden. For policy-makers, the crux of the problem is that the enormous
amount of informal caregiving being provided means that cash benefits end up
paying for a lot of care that is already being provided at no public cost. It is also
extremely difficult to increase the volume of informal care, because such a
large volume is already being provided.
In addition, consumer-directed home care raises a number of other public
policy issues:
Do people with disabilities want to take on the management
responsibilities inherent in a consumer-directed model?
Several surveys in the United States suggest a moderate level of
interest by older persons, although substantially less than among
younger people with disabilities (Glickman, Stocker & Caro, 1997;
Desmond et al., 1998; Mahoney et al., 1998; Simon-Rusinowitz
et al., 1998). Data from Germany and the Netherlands suggest
that younger people are more likely to choose consumer direction
than older persons (Woldringh & Ramakers, 1998; Tilly, Wiener
& Cuellar, 2000).
Are people with disabilities capable of managing their
own services?
Little is known about the extent to which people with disabilities
have the individual management capabilities necessary to handle
the responsibilities of consumer-directed services (Tilly & Wiener,
2001). People with disabilities are often very sick, frail and
cognitively impaired; their informal caregivers generally do not
have expertise in long-term care financing and service delivery.
Nonetheless, this is not always the case and many of the services
required are of a non-technical nature, such as personal care and
housekeeping, that disabled people and their relatives should be
capable of managing.
3
On the other hand, half of the Austrian caregivers reported that the cash payment permitted them to coordinate
their relatives care better, and 60% said the money was sufficient to cover most of their caregiving costs.
LONG-TERM CARE
16
Is quality of care adequate in consumer-directed
home care?
The quality of consumer-directed services is probably the most
highly contested issue facing policy-makers. Traditional home
care programmes attempt to assure quality by relying heavily on
government regulation that mandates provision of services by
professionals, training requirements for paraprofessional staff,
and agency supervision of paid caregivers. Almost all of these
mechanisms are lacking in consumer-directed care, where
the ultimate quality assurance mechanism is to fire the worker,
which is difficult when relatives are involved. Limited research
suggests that consumer-directed services provide quality of
care and life that is at least comparable to agency-directed care
(Benjamin et al., 1998; Taylor, Leitman & Barnett, 1991; Tilly,
Wiener & Cuellar, 2000). However, these results generally
relate to measures of consumer satisfaction and not to objective
measures, such as delay of functional decline or absence of
avoidable hospitalizations, that may be important indicators of
quality. The choice of family and friends to provide care may
improve the quality of care because of the emotional bonds
that exist. However, public agencies and disabled individuals
have great difficulty disciplining poor-performing relatives. It is
difficult for government officials to insist that a daughter be fired.
How do workers fare in consumer-directed service
programmes?
Workers in traditional home care programmes receive their
salaries from agencies, work under agency rules, and are not
directly answerable to beneficiaries, whereas consumer-directed
workers are. Consumer direction most likely improves individual
workers relationships with beneficiaries, but leaves workers
at somewhat of an economic disadvantage compared to their
agency counterparts in terms of wages and benefits
(Benjamin, 1998; Tilly, Wiener & Cuellar, 2000).
Other public policy issues (continued):
KEY POLICY ISSUES
17
5 Conclusions
Informal care is the dominant mode of helping people with disabilities with
their long-term care needs. Throughout the world, policy-makers are
concerned about social and economic forces that may undermine the
provision of unpaid care and seek ways to shore it up. A major premise of
this support is that the disabled individual is usually not alone, but is embedded
in a web of family and other relations. (Where disabled individuals are truly
alone, their long-term care needs are likely to be especially great.)
Services and other initiatives aimed primarily at informal caregivers rather than
the disabled individual include:
education and training;
respite care;
regulation of business to make it easier for family members
to combine work and caregiving;
tax benefits and payments to informal caregivers; and
provision of pension credits for informal caregiving.
These services are designed to increase the level of knowledge and emotional
support of caregivers, provide relief from the unending burden of caring for a
disabled person, or provide financial benefits to those who take on this
responsibility.
Provision of aid to informal caregivers raises a number of difficult issues.
First, should public policy focus on individual persons
with disabilities or on the family of people with disabilities?
Despite the fact that most long-term care is provided by informal
caregivers, almost all public long-term care programmes in
industrialized countries consider only the needs of individuals with
disabilities and not those of the family in which the individual is situated.
In the United States, for example, services that principally benefit
the family and not the disabled individual cannot be reimbursed.
LONG-TERM CARE
18
Thus, help with the care of the children of disabled adults is not
covered. In part this reflects the individualistic character of
industrialized countries; in part it reflects the historical underfunding
of long-term care services. It is also a cost containment mechanism
since many long-term care services (e.g. housekeeping) have an
inherent desirability to people who are not disabled as well as to
those who are. The one area where many countries take the family
into account is in deciding how much service to provide, with
additional informal support leading to reduced formal services.
All of this ignores the fact that individuals live within families and
that the informal care provided imposes a substantial burden on
caregivers.
Second, how can public policy support informal
caregivers without monetizing family relationships?
Almost all informal care is provided voluntarily independent of any
public policy interventions. This is done for a wide variety of reasons,
of which a sense of family duty and love are important factors.
A key issue for policy-makers is how to support informal caregivers
without converting this non-monetary relationship into one dominated
by market characteristics where services are only provided if money
changes hands. While fear that monetizing family relationships
would destroy informal caregiving, there is no evidence that
supporting family caregivers will adversely affect how family
members relate to one another. Where family caregivers are paid,
however, there are questions about whether relatives will be fired
if they perform inadequately.
Third, can support for informal caregivers be increased
without costs exploding?
The great strength of informal caregiving is that there is so much
of it; it is the overwhelming source of care in the industrialized world
and virtually the only source of care for people with disabilities in
the developing world. But that means that the families of virtually
all disabled persons in the community might qualify for benefits
if provided (subject to financial and income eligibility standards).
KEY POLICY ISSUES
19
Thus, even small benefits provided to large numbers of people
(as is being proposed in the United States with tax benefits) will
result in substantial expenditures; substantial benefits provided
to large numbers of people will result in even larger expenditures.
Public spending (or tax loss) can be controlled by making the benefits
part of an appropriated programme without an entitlement to benefits,
but doing that violates horizontal equity. That is, fairness demands
that similarly-situated individuals be eligible for the same benefits,
a criterion that is not met if some persons are denied benefits
because the money has run out.
Fourth, what does support for informal care mean
for the role of women in developing societies?
In virtually every way, long-term care is a womens issue. Because
of greater longevity, long-term care is primarily needed by elderly
women, and women are overwhelmingly the main providers of both
informal and formal care. The fact that women are the primary
providers of informal care has led some critics to oppose support
for informal caregivers because they see it as a way of forcing women
to stay home and out of the workforce. Indeed, Japan consciously
chose not to provide for cash payments as part of its social
insurance programme for long-term care out of fear that doing so
would more tightly tie women to the task of providing informal care
(Campbell & Ikegami, 2000). Supporters of aid to informal
caregivers counter that the goal is to create more options for people
with disabilities and their caregivers. Moreover, they argue that
the reality is that most disabled people receive their care from women
relatives and those caregivers need help.
In sum, as developing countries address the ageing of the population,
a major issue is how to balance the provision of paid services with
support for informal caregivers. Given limited resources, trade-offs
between the two will likely be necessary, but a long-term care policy
that ignores informal caregivers neglects the elephant in the room.
LONG-TERM CARE
20
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KEY POLICY ISSUES
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2
THE SUPPORT OF CARERS AND
THEIR ORGANIZATIONS IN SOME
NORTHERN AND WESTERN
EUROPEAN COUNTRIES, Marja Pijl
1 Introduction
Carers are the pedestrians in the long-term care traffic. Like pedestrians,
carers have no specific vehicle or tool as do professional drivers, cyclists,
or train engineers.
1
Even less do they have any specific licence or diploma,
which qualifies them for the job.
One does not give much thought to being a pedestrian; and yet, everyone is
a pedestrian at times. One does not feel inadequate because of not having had
any training to be a pedestrian. Walking comes naturally.
Increasingly, however, it becomes necessary even as a pedestrian to have
some basic notions about traffic rules and regulations. Similar observations
can be made about carers.
Everyone may, at some point in life, be called upon to provide long-term care
for someone in their circle of relatives and friends. When this happens,
the offer of help is usually spontaneous.
Carers do not stop and worry about a lack of qualifications. Their help is needed,
and they give it. Learning comes on the job. Those who have become carers
will find themselves increasingly in situations in which they will come to realize
that they need more insight, knowledge, skills, and support.
The discussion in the initial section of this volume concerns support of carers
and their organizations in certain countries in northern and western Europe.
It is largely based on a research project commissioned by the Netherlands
Ministry of Health, Well-being, and Sports, in cooperation with two advisory
boards: the Council for Health and Social Service, and the Council for Social
Development in the Netherlands (Tjadens & Pijl, 2000).
1
References to these terms are derived from the subtitle of the Meeting on Long-Term Care Policy,
Bridging the LimousineTrainBicycle Divide, convened in Annecy, France in 2001. That subtitle refers
to a continuum of diverse long-term care systems, characterized by a range from the extremes of the
industrialized countries (limousines) to the developing countries (bicycles). In between are the trains,
those countries with established systems which are now confronted with diminished resources.
.
LONG-TERM CARE
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The main purpose of the research was to ascertain support that is given in
comparable countries in Europe, with a view to the development of new policy
initiatives vis--vis carers in the Netherlands. Included in the study were
Belgium (Flanders), Denmark, Finland, Germany, Ireland, the Netherlands, and
the United Kingdom. The data were collected in 1998.
Since that time, there have been many new policy developments in the
countries concerned. It has been possible to follow up what has happened in
some but not in all of these countries.
KEY POLICY ISSUES
27
2 Carers: what and who?
2. 1 Definitions of the concept of carer
It is important to define the concept of carer at the outset. The research project
(Tjadens & Pijl, 2000) adopted a definition which is more or less generally
accepted in the Netherlands. It reads:
Carers are persons who provide care, not in the context of a
care profession, to someone in need of care in their direct circle
of family and friends. The provision of care stems directly
from the social relationship.
The Government of the United Kingdom, on its web site for carers
(http://www.carers.gov.uk/), gives a more simple definition:
By carers we mean people who look after a relative or friend
who need support because of age, physical or learning disability,
or illness, including mental illness.
The word carer in itself may lead to confusion. A home help is also a carer.
In order to prevent confusion, two specifications are often used to designate
non-professional carers. These are informal carers and family carers.
Both terms, however, are inadequate. Carers themselves regard the term
informal as not doing justice to the importance and the actual burden of their
work. The prefix family is inadequate, because not only family members
but also neighbours and friends can be carers.
It is true that at present the majority of carers are family members, but it is not
unlikely that in the future their share may diminish. It is to be expected that
neighbours and friends will fill some of the gaps.
This section shall use the simple term carer, without the prefix informal or
family, when referring to carers who do not perform their work in the context
of a profession. It concerns long-term care provided in the home where the
dependent person lives. The carer may or may not live in the same household.
LONG-TERM CARE
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The foregoing definitions say nothing about the minimum time input per week,
or the length of time during which care should be provided before one
is considered to be a carer. If someone does the shopping for frail elderly
parents and devotes between one and two hours a week to it, is that person
considered a carer? Hardly. There is no generally accepted bottom line,
which makes it difficult to estimate the number of carers.
However, the number of hours spent caring can still be a criterion for eligibility
for a benefit. The English Invalid Care Allowance is an example. In order to
qualify, the carer has to meet a range of rather strict criteria, one of which is
that the carer must spend more than 35 hours a week on care activities.
Likewise, there is no agreement on how long one has to be involved in care
work before one is considered to be a carer. If ones partner is ill during
one or more weeks, obviously this creates problems. Usually, with some
improvisation, these problems can be solved. How long can one go on,
however, without structural adaptations?
Again, the research found that there are some provisions where a minimum
duration of the need for care is required before one becomes eligible for a
benefit. The German Pflegeversicherung an insurance for long-term care
which offers the person in need of care either services or a cash payment with
which the carer can be paid can only be obtained in those cases where care
is needed for more than six months.
Also, the definitions say nothing about the tasks which are performed by carers.
These include many simple but time-consuming activities. Regularly, however,
carers are required out of necessity to undertake complicated medical
tasks which professional home helps or nurses aides would not be allowed to
perform. Accordingly, the definition of a carer leaves much to be guessed.
2. 2 Numbers and characteristics of carers
It is not surprising that the researchers found few precise figures about the
number of carers. Moreover, most figures are estimates. For instance, in the
Netherlands one can read in almost any publication on the subject that 11% of
the adult population, or 1.3 million persons, are carers. However, these figures
are ten years old. Furthermore, they come from a survey that was designed
for other purposes than the study of carers (de Boer et al., 1994). In Finland,
it is estimated (by the Carers Association) that 6.3% of the population are
carers. In Ireland, an estimate was found of between 2.8% and 10% of the
population.
KEY POLICY ISSUES
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The United Kingdom has some more recent figures. In Caring about Carers.
A National Strategy for Carers (United Kingdom Department of Health, 1999),
figures from 1998 are quoted, but even this report refers to an estimate of 5.7
million persons. The percentages of the population vary per region between
11% and 17%. It may be assumed that in most countries of northern and
western Europe, the percentage of adults who have some structural caring
responsibilities is not too far from 10%.
What else do we know about carers? The UK National Strategy states:
3.3 million are women;
2.4 million are men;
carers are most likely aged 4564;
9 out of 10 care for a relative;
2 out of 10 care for a partner or spouse;
4 out of 10 care for parents;
half of all carers look after someone aged over 75; and
18% of carers look after more than one person.
From various research projects in the Netherlands, it is known that carers are
primarily women between the ages of 35 and 64, frequently with lower
educational and gross individual income levels (Tjadens & Pijl, 2000). The
present research has not focused on quantitative data in the various countries.
2. 3 On becoming a carer
Among carers in the Netherlands, one can often hear remarks such as
I did not choose to become a carer, it just happened to me. This is very true.
One becomes a carer because of an event in the life of someone else, who
then becomes a person in need of care. This event has not been planned.
It is something like the onset of a chronic illness, the birth of a child with a
disability, or an accident.
LONG-TERM CARE
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In the two former cases, the consequences of the illness or the disability
become apparent only gradually as for example in the case of caring for an
ageing parent. First, one will help with the shopping and an occasional odd job
around the house. Then, it will be the laundry or some cleaning of the house.
Eventually, as the loss of functions progresses, more and more tasks are taken
over by the carer: domestic work, personal care, paperwork, intimate care,
and possibly nursing. At some point in this process, the carer will stop and ask
What am I doing? When the carer has arrived at this point, it is usually too
late.
People from carers organizations report that this question arises only after the
carer has been overburdened for a certain length of time. The process, from
the moment when the carer begins to realize that something is wrong to the
point where adequate measures can be taken to reduce the burden, can be
quite long.
Because many caring processes start so gradually, carers do not realize
what they are getting into. Performing some caring jobs comes so naturally,
that most people (especially women) do not even think about it: they just go
and do whatever they think needs to be done.
The comparison with the pedestrian, mentioned at the outset, is a very
appropriate one. Does anyone ever think about walking, as long as one is
physically fit, and does not have to overexert oneself? Precisely because
caring is such a natural thing to do, many people who are carers do not
consider themselves as such. The mother of a handicapped child would
define herself rather as a mother than as a carer. Daughters who provide
much care to elderly parents will often say that they only lend a hand, and that
they are happy to be able to do so.
If carers do not consider themselves as such, it is hard to reach them and
even harder to establish effective policies. Awareness-raising is among
the first requirements of an effective policy to support carers. The media can
be very helpful in this respect.
3 An increased interest in carers
The reason the research was commissioned involved a concern by the
Netherlands Government and two of its Advisory Councils, that the volume of
informal care might shrink unless better conditions were created for carers to
stimulate them to continue providing care. Although it is known that carers
provide the bulk of care, reliable and precise figures are not available. A recent
White Paper of the Netherlands Ministry of Health, Well-being, and Sports
(VWS, 2001) states that three-quarters of all care is provided by carers.
KEY POLICY ISSUES
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Johansson (2001), in his paper Recent developments in caregivers support in
Sweden, estimates that two-thirds of all care to the elderly outside institutions
is being provided by carers.
In most European countries, there were considerable cutbacks in
publicly-financed social and health services during the nineties. What happens
in those cases where expected care is not provided can only be guessed.
Persons in need of care may have to lower their standards. They may also
resort to their informal network which may or may not come to their rescue.
It seems that governments have come to realize that it would be a disaster
if carers in great numbers gave up their work. That is why more and more
governments are seen to be making an effort to develop a carers policy.
Finland, Ireland, the Netherlands, Sweden, and the United Kingdom are active
in this respect, as is the Flemish part of Belgium. In other countries,
new policies are being developed that, while not aimed directly at carers,
may ease the burden for them, for instance through the introduction of care
allowances payable to the dependent person. France, Germany, and Italy
provide examples of this approach.
One of the conclusions of the research has been that policy measures do not
really stimulate carers, because carers who see the need and are in a position
to do so, will care anyway. There is no need for a stimulus.
In most countries in the research project, however, carers said they wanted
some kind of recognition. Increasingly, carers develop the insight that they
save their governments a lot of money. Therefore, they feel they deserve
some kind of a reward. Their first demand is recognition, and not payment for
their work. Paying the carer is a touchy issue, which will be addressed below.
Carers in most countries in the study feel that the government owes them
some sort of concrete resource, which would make their caring job lighter.
Such provisions would reduce tensions and increase their well-being.
The growing interest in carers does not come only from the care sector.
Policy-makers responsible for labour market policies begin to see the relevance
of reconciling paid employment and family life, if they are to stimulate
women to participate more fully in the labour market. It is obvious that policies
are contradictory if, on the one hand, women are expected to take part in the
labour market which is the current policy in the European Union (EU)
while, on the other hand, care policies rely heavily on non-professional carers.
The Scandinavian countries have solved this problem with regard to caring for
healthy children. The state has taken over the responsibility and is providing
sufficient facilities for child care to enable both parents to participate in the
labour market.
LONG-TERM CARE
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In some Scandinavian countries, like Denmark, the long-term care policy
is such that it takes into account the labour-market participation of the carer.
Formal services are made available when the carer goes to work. But this is
not (yet) the case in all Scandinavian countries. In an interview with the
Finnish Carers Association, it was made clear that caring for a child with a
disability while holding a job is quite a different story. There are no sufficient
provisions to care for such a child, and the parents have to be most
imaginative to compose a package of help that will allow them to remain in the
labour market. In almost all European countries, long-term care services are
at a lower level than in Scandinavia, so that in these countries it is even more
difficult to reconcile caring with paid employment.
The European Union seems to have become aware of this problem and
may well take a lead in trying to confront this rather complicated issue. In line
with its open method of coordination, the European Commission may stimulate
exchange of good practices. (See also Den Dulk et al., 1999).
4 Some results of the research project
4. 1 The research questions
The Ministry of Health, Well-being and Sports and the two Advisory Councils
wanted answers to certain questions. In large part, these questions overlapped.
Obviously, some of them were inspired by problems that were encountered
in the Netherlands; others served to compare initiatives in the Netherlands
with their European counterparts. The countries selected for the study were
neighbouring countries where interesting developments were expected to be
found.
The study employed topic lists rather than questionnaires, because the
situations varied considerably among countries. The questions revolved around
the following themes:
the relation between family and state concerning provision of care;
legislation and other formal arrangements which have an impact
on the (financial) situation of carers;
carers organizations, their aims, activities and funding; their
relationship with other organizations having to do with carers
(e.g. organizations of persons with certain diseases, or
associations of parents of children with learning disabilities, etc.);
vision of policy-makers concerning the position of carers; and
support for carers at the local level.
KEY POLICY ISSUES
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4. 2 Selected issues from the findings
The study found very diverse patterns in the seven countries, some of which
are discussed here. Basically, the interest of the Ministry was mostly directed
at concrete measures, such as the (financial) support of carers organizations,
or the (financial) support of volunteer organizations that play a role in
respite care.
The questions of the Advisory Boards tended more in the direction of a policy
for carers. Also emerging from the findings were the activities of carers
organizations and of other organizations that have played an important role in
supporting carers.
Since the research was mostly aimed at policy questions, the study did not
enquire into the contents of specific programmes for carers, although some
respondents gave some information about them. Described here, mostly on
the basis of the research, are:
Who is responsible for social care: family or state? (4.2.1)
The health care social care divide (4.2.2)
Financial support for carers (4.2.3 )
The role of carers organizations (4.2.4)
Respite care (4.2.5)
Awareness raising, counselling, training and education (4.2.6).
4.2.1 Who is responsible for social care:
family or state?
This is an important question when looking at the position of carers. In those
countries where the state is responsible, e.g. the Scandinavian countries,
the person who needs care is entitled to services which are available at no
cost or low user fees. Where sufficient publicly-financed services are provided,
the life of the carer is a lot easier than in countries where such services are not
available.
Denmark is a good example of a country where the state has taken on the
responsibility for long-term care. The municipalities are responsible for the
provision of care. This does not mean that carers do not play a role, but they
know that they can always fall back on the municipality in case of need.
LONG-TERM CARE
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Carers provide the care they want to give. If a carer wants to work, the
municipality has to help find a solution. The same is true when the carer
wants to go on vacation. The policy intends to enable carers to continue with
their own life and not to let caring interfere with normal activities.
The question arises, has this eroded the willingness of the Danes to provide
care? Rostgaard (1995) has made a comparison between spouses and
daughters as carers in Denmark and the United Kingdom. She has found that:
Spouses are no less important a source of support in Denmark
than in the UK. The difference in informal provision of care
arises with the help which children offer in personal care.
2
It is much more likely that children are involved in personal care
in the United Kingdom, whereas it is the home help in Denmark
who helps with personal care. The help of friends and neighbours
is limited to domestic tasks in Denmark. Children are likely
to provide material and psychological support.
Rostgaard (in: Tjadens & Pijl, 2000) concludes:
Formal care has to some extent replaced informal care
but only as regards personal care from children.
Spouses are involved in personal and material care
and even to a higher degree than in the United Kingdom.
The situation in Finland is comparable to that in Denmark with one
important difference: Finland has suffered from a severe economic recession.
This situation has resulted in drastic cutbacks in the social sector.
When the research was conducted in Finland, municipalities were having
difficulties in meeting the demand for care. In the particular local situation
described in the study, the municipal social services knowing that they
were obliged to provide services entered into a process of negotiation with
the person in need of care and his or her informal network. Efforts were
also made to share some responsibilities with the voluntary sector. It was the
function of the municipality to find a solution agreeable to all parties.
2
Rostgaard defines personal care as the intimate and physical tendering involving feeding, washing,
protecting and comforting the care recipient. Material support is defined as household tasks such as
hoovering, shopping, managing finances and contributing financially to living costs. Psychological support
is defined as caring for by visiting, calling or providing a feeling of safety.
.
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The situation in the Netherlands is similar to that in Scandinavian countries.
The major difference is that the Government is responsible for providing the
finances for long-term care, while care delivery is in the hands of private
organizations, which receive public money and are heavily regulated.
Still, the question of how far the responsibility of carers goes has been a point
of debate. This has manifested itself around the issue of assessment for
long-term care. With the introduction of independent assessment boards,
standards had to be developed, and one of the questions that arose involved
how to consider the work of carers.
Many boards started from the assumption that carers could continue to give
the care they were providing at the time of the assessment. While making their
decision about the amount of formal care to be provided they did not take account
of the needs that were being met by carers. This practically forced carers to
continue with their activities, even if they were more than overburdened.
Formally, this situation has now been redressed. A policy document by the
Deputy Minister of Health, Well-being and Sports, dated June 2001 (VWS, 2001),
reads (translation by this author):
Neither the state nor a professional organization can extort
(informal) care. Anyone faced with someone elses need
of long-term care has to answer the question whether or not
to provide it, and if yes, to what extent he or she wants to meet
this demand. The government should not and cannot make
this choice for them.
The letter accompanying this document states that the Government takes
as a point of departure the consideration that carers must be able to
participate normally in society. In theory, carers in the Netherlands can
themselves decide how much care they are willing to give. In practice,
it is difficult for them to realize this right due to enormous shortages in the
care sector. Recent research by Dautzenberg (2000) has shown that women
in the Netherlands are still quite ready to take care of their elderly parents.
The situation in Belgium and Germany is different, in that the family is held
responsible for financing care. If the person who needs care cannot pay for it
himself, then there is a legal obligation for relatives to pay. Only if relatives are
also unable to pay, can social assistance be provided. The obligation of the
family is somewhat mitigated in Germany by the long-term care insurance
(Pflegeversicherung), which pays for part of the care (see also Section 4.2.3).
The remaining part must be provided by the family.
LONG-TERM CARE
36
In Flanders (the Northern part of Belgium), a new care insurance scheme has
been introduced on 1 October 2001. Small amounts of money can be paid to
persons in need of care. This scheme is intended to compensate some of the
costs of professional and/or informal care. Apart from that, however, relatives
are still responsible for the costs of care. Still, the Flemish carers organization
appreciates this provision, since it represents recognition of carers.
The consequence of the financial obligation of family members, as in Germany
or Belgium, is that financial considerations place extra pressures on carers.
This can easily lead to disputes, as for example among the children of elderly
persons, about who must provide how much care.
Formal obligations to pay for the costs of care of relatives do not exist in Ireland
and the United Kingdom. Persons in need of social care must make income
dependent co-payments for their care. Local authorities target social care at
the most vulnerable, and those with low incomes. Others have to fend for
themselves, using their assets or mortgaging their houses in order to pay for
social care.
In the case of the United Kingdom, relatives of older people may find
themselves discussing the question of which is the financially more
advantageous option: providing informal care (mostly a womans job) and
leaving the assets for the inheritors or buying professional care and losing
the inheritance (see also Ungerson, 2000). Apart from financial considerations,
the moral obligation is felt in the United Kingdom as in other countries.
In Ireland, the Constitution refers to the duties of women in the home.
In this country, the family and especially its female members is held
responsible for care. It would appear that this principle is so firmly entrenched
in the Irish value system that it does not meet with much opposition.
Social services are scarce in Ireland, so pressure on (female) carers is higher
than in any other country in the study.
4.2.2 The health care social care divide
Packages of care for dependent persons living at home are usually made up
of quite a number of different services. A major part is played by home care
services, which comprise nursing, personal care, and domestic care.
In some countries, all these services are financed and supervised by just one
authority. This is the case in the Scandinavian countries, where municipalities
are responsible for both the finances and the delivery of the full range of care
services. In most other countries, there is a sharp divide between medical
services on the one hand and social services on the other.
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Medical services are insured or a state responsibility and are free or almost
free at the point of delivery, but social services come under a different regime.
They may differ from place to place, and require co-payments of the user.
Nursing is usually part of the medical services, but personal and domestic
care are mostly considered as social services. (The Netherlands is an exception
in this respect: nursing, personal care, and domestic care are all covered by
the Exceptional Medical Expenses Act (AWBZ) the Act which covers most
long-term care services. Other social services are the responsibility of
municipalities.) For the carer, this means apart from the financial
consequences that negotiations with more agencies are necessary and
that the arrangement of sufficient services becomes more complicated.
Sometimes there are disputes between the agencies about boundaries.
A well-known example is the debate in the United Kingdom about bathing a
dependent person. The medical services prefer to see it as a social service,
the social services say it should be a medical provision. The background of
this question is who will pay for it (Weekers & Pijl, 1998). Such disputes only
make the lives of carers more difficult. Fragmentation of the care system is a
major obstacle for carers.
4.2.3 Financial support for carers
Carers are likely to be financially less well off than those who do not have
to care for a dependent family member. There is usually a loss of earning
capacity. Dependent persons are unlikely to be in paid employment, and the
carer may have to reduce working hours or give up a job altogether. If the carer
and the dependent person live in the same household this may mean that
there is a double loss of income. Dependency can entail other costs as well,
such as house adaptations, higher costs for heating, dietary costs, costs of
assistive devices, equipment, or special clothing or shoes.
In the countries studied, different forms of financial compensation were found.
These will be described under four headings:
Income replacement or substitution payments.
Compensation for extra costs incurred by care.
Other financial arrangements.
Career break option.
LONG-TERM CARE
38
Income replacement or substitution payments
Under this heading are three different approaches:
income support;
compensation for loss of income; and
payment for work performed.
Income support
This means that carers who have no income or only limited income because
of their care activities receive an allowance. Examples include the
Invalid Care Allowance and the Carer Premium in the United Kingdom and
the Carers Allowance in Ireland. In the case of income support, allowances
are income-dependent. If a certain income level is exceeded, the allowance is
forfeited.
In the Irish case, not only is the carers own income taken into account, but
the partners as well. A married woman, caring for her mother, may lose her
entitlement to the allowance if her husbands income is raised and exceeds
the stated limit. Irish carers were quite angry about this. Both in Ireland and in
the UK, pension rights may be accumulated while receiving the allowance.
Compensation for loss of income
This kind of allowance was found only in Denmark, where a parent who cares
for a seriously ill or disabled child receives an allowance equivalent to the lost
income, plus any additional expenses. The minimum duration is one year.
There are two additional allowances in Denmark, the amount of which is
based on the forfeited income. They are an allowance for parents of a sick
child under 14 years, and an allowance for persons caring for a terminally ill
relative. These benefits are linked to the sickness benefit and have a time limit.
Payment for work performed
Examples of this approach were found in Denmark, Finland, Germany, and the
Netherlands. Since the study, this possibility has also been introduced in the
United Kingdom. In Denmark and Finland, the municipality can enter into an
agreement with the carer that he or she will perform a certain amount of work
and will be paid by the municipality.
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In Germany, the long-term care insurance may either provide services or a
cash payment. The cash payment equals roughly half the amount that would
be paid if one opted for services.
There are three levels of dependency and corresponding amounts of money.
The monthly payments in 1998 were:
Services Cash
Level 1 383.40 204.51
Level 2 920.32 409.00
Level 3 1431.62 664.68
In extreme cases the maximum for services can be raised to 1917.34 per
month. The cash payments are intended to serve as payment for the carer.
Additional benefits accrue to carers who spend at least 14 hours a week caring
and work less than 30 hours a week in paid employment. These include:
contributions towards the old age pension;
accident insurance; and
an allowance when caring has come to an end.
Carers who have worked twelve months can obtain substitute care for a period
of four weeks in order to take a vacation. There are also some provisions for
temporary substitute care in cases of crisis. Obviously, the payments to carers
of heavily dependent persons are far from enough to cover all costs or to be
considered as a real wage for the work they do.
In the Netherlands, persons in need of care can apply for cash instead of
services. If they choose the cash option they can hire and fire their own helpers.
They must make formal contracts with them, for which there are strict rules.
Contracts must meet the requirements of the labour market (e.g. wages
cannot be lower than the minimum wage, paid holidays must be provided,
etc.).
LONG-TERM CARE
40
Gradually the scheme is being improved in the sense that fringe benefits,
such as those provided to workers in the formal services, can also be given to
carers. Recipients of the care allowance can make a contract with spouses or
other members of the family.
This scheme is appreciated by those who opt for it because it allows for more
flexible care arrangements. Moreover, the relatives (if they are hired) are happy
with the payment.
The payment of carers is a touchy issue. This emerged most clearly in Ireland.
The fact that the carers allowance is a social assistance payment solely
intended to assure that the carer has a minimum income and not at all related
to the efforts made by the carer is considered most unfair.
While conducting the interviews in Ireland, this researcher discussed with
quite a few persons, among them carers and former carers, the question of
whether they would prefer wages, comparable to those in the care sector.
This idea was totally rejected. The moral obligation of caring was felt very
strongly and it seemed inconceivable that caring for relatives could be
considered as a paid job.
At the same time, carers asked very urgently for more recognition and for
a review of the carers allowance. In a way, it seems illogical on the one hand
to claim a better payment related to the efforts of the carer and on the
other hand to oppose the idea of a waged job for persons who care for a
family member.
Other sources also report that carers like to receive recognition and
appreciate something (not necessarily money) in return for their services
(e.g. Luijkx, 2001). Care allowance schemes, in which the care recipient has
the possibility to choose either services or cash with which the carer can be
paid, seems a reasonable solution.
Compensation for extra costs incurred by care
In Belgium and Denmark, the study found this kind of compensation for carers.
Other financial arrangements
Quite a few other ways in which the financial situation of the carer can be
improved were found by the study. Belgium, Ireland, and the Netherlands
have certain tax relief measures. These are not described in great detail,
because they presuppose some knowledge of the tax system.
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Other provisions encountered include:
increased childrens allowance for a disabled child;
supplementary payment on social security benefit;
accommodation adaptation or contribution towards this;
reduction on television and radio licences;
co-payment ceilings;
VAT exemption on car purchase; and
reduced or free public transportation fares.
As a rule, these provisions are aimed at very specific target groups.
Career break option
Employed carers may want to temporarily reduce working hours or take
leave. In Belgium, employees have the option of taking leave of absence on
five occasions, up to a maximum of a year, during their entire career.
During this time, they receive a monthly sum of 270. This scheme was
introduced in 1985 as a job-creation instrument.
The career break was introduced in the Netherlands in 1998. Employees have
the option of a full-time or part-time leave for a maximum duration of 18 months.
In the case of full-time leave, a maximum allowance of 434 may be paid.
An unemployed person must be taken on by the employer in the place of a
carer who leaves his or her job. This scheme has not proved very successful
as it is too complicated for employers.
Recently, the possibility of a ten-day paid leave was introduced as care leave.
This can be used when someone must care for a sick member of the household
or for sick parents. Discussion concerning long-term care leave is under way.
So far, it seems as though politicians are not ready to embrace this idea.
Eurolink Age (1999) conducted a project on carers in paid employment and
demonstrated that there are corporations which have carer-friendly policies.
Career breaks are among the options.
LONG-TERM CARE
42
4.2.4 The role of carers organizations
In Finland, Flanders (Belgium), Ireland, the Netherlands and the UK, there are
national organizations of carers, which are open to anyone who is a carer.
In Denmark and Germany, such organizations did not exist at the time of this
research. The gap within these two countries was filled by organizations such
as the Alzheimer Association and organizations of older persons. In four of
the five other countries, the carers organization is a membership group,
i.e. carers can join and the organization speaks on their behalf.
In 1998, the Dutch organization was the odd one out. However, at the end of
2001 this group changed its constitution and became a membership
organization as well. These organizations work in network structures, with
local and regional organizations and with other national organizations which
deal in some other capacity with caring issues. All organizations were
confronted with the problem that it was difficult to reach carers and
therefore not easy to attract new members. In 1998, the largest of all of these
organizations was the one in the United Kingdom, with 14 000 members.
In Ireland, the membership numbered about 2000; in Finland, about 3000.
There are many similarities in the way carers interests are advocated in the
various countries. Their methods include:
increasing awareness aimed at carers,
care professionals and others (including politicians);
providing information and advice;
legal support;
practical help; and
influencing the political agenda.
There is a noticeable direct link in Finland and the United Kingdom between
the carers organization and the political arena. Conversely, in Flanders
the organization is trying to maintain its independence and to avoid affiliation
with any particular political stream.
Finances are a problem for all organizations. All are financed from different
sources. These include annual subsidies from one or more government bodies,
or other official agencies (such as, in Finland, the Slot Machine Association)
and finances for specific projects from foundations.
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Money is also raised from publications, membership fees, and consultancy
work. In Ireland and the United Kingdom, sponsorship from the commercial
sector also enters the picture.
Carers organizations fulfil a significant role, both in awareness-raising and
in providing peer and other kinds of support. They also serve an important
function in making the voice of carers heard, and can become critical partners
of policy-makers.
4.2.5 Respite care
Respite care is care given to the dependent person with the aim of giving the
carer a break. Respite care can take various forms. It can be provided in the
home of the dependent person; but alternatively the dependent person may go
to a residential home, a nursing home, or some other place where that person
can receive the necessary care.
Such care can be provided for a period of a few hours, a day or several days,
or weeks. In many cases, it will be provided by the formal system, but there are
also schemes where trained volunteers provide the respite care.
Respite programmes for carers usually entail a weekend or a slightly longer
stay away from home. At the same time, care will be provided to the person in
need of care. There are also programmes where carers and care recipients
can go together and where there is a programme for both groups.
Respite care is extremely important because caring is a continuous job with
few possibilities for carers to have time of their own. Time pressure and a lack
of free time are among the strongest felt problems of carers. If they know there
is respite and that it is accessible, this reduces tension.
Forms of respite care were found by the study in all countries. In Denmark,
however, it is not provided under this name. It is considered normal that the
carer can go off for a break and the municipality will help to make the necessary
care available. In addition to the regular services, voluntary organizations may
arrange programmes. Described in the study was the example of a programme
organized by Daneage, in which volunteers are trained to give substitute care
to persons with dementia.
The volunteer is carefully introduced to the family where he or she will work.
Once the patient is used to the volunteer, the carer can leave him or her
in charge and take some time off. The volunteers are organized in small groups
and supervised by professionals from the care sector.
LONG-TERM CARE
44
Ireland has very many facilities for respite care, which are offered by voluntary
organizations. It is not unlikely that this has to do with the fact that there is a
low level of formal services. The voluntary sector has realized how restricted
most carers are and many organizations have set up programmes for carers.
A directory of respite care for the year 1997 mentions projects of no fewer
than 229 agencies at the national, regional, or local level.
Two special projects deserve to be mentioned here. First, the activities of
Soroptimist International (SI), a womens organization, which has played a key
role in drawing attention to the position of carers and which has been
instrumental in initiatives for research, programmes for carers, and action
towards policy-makers. SI has a network of members all over the country and
these have been involved in setting up activities for carers, among them respite
programmes.
Secondly, the FAS programme is an employment programme supported by
the European Commission, through which large numbers of jobs have been
created. FAS workers up to age 35 can remain one year in a FAS job;
older workers can remain three years. The jobs are for 19.5 hours a week.
The Irish Carers Organization has set up a programme in which they employ
some 100 FAS workers, who are trained and can then give care in the home
in order to give the carer a break.
In Finland, research has been conducted on respite care. Carers were given
vouchers with which they could get respite from a variety of providers.
Respite programmes varied in duration. Research showed that care recipients
preferred day care, whereas carers preferred breaks of four to six days.
It was also found that carers of very dependent persons were reluctant to
leave them in the hands of others. For the carers of dementia patients,
respite care was a delicate issue. Respite makes the demented person often
more confused, so that there is more work for the carer after the break.
For these patients respite care in their own home may be better.
Also in Finland, the study found an initiative in which volunteers participated.
This involved a service bank where participants could register and offer
voluntary care. They receive a guaranteed return when they themselves need
help.
In the United Kingdom, respite care has become a fairly well-integrated
element of the services offered by Social Services. There are both sitting
services and possibilities for short residential stays. Voluntary organizations
such as Crossroads or Age Concern provide substitute care in the home.
KEY POLICY ISSUES
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Also in the United Kingdom, a discussion has arisen concerning the concept
of respite care. Patients organizations have made clear that the term respite
may be felt to imply that the carer wants to get away from the care recipient.
In the United Kingdom, the term respite care is therefore increasingly being
replaced by the terms short stays or short-term breaks.
The respite care included in the German long-term care insurance has already
been described.
In the Netherlands, the Carers Organization will soon launch a large-scale
programme of respite weekends for carers. This initiative is intended to
establish balanced programmes with relaxation, recreation, and exchange
between carers, in combination with some educational or cultural activities.
Advice from carers is being sought about the contents of the programmes.
There will be some weekends during which carers and care recipients can
participate together. However, in the majority of cases substitute care for the
dependent person will be arranged in the home.
4.2.6 Awareness-raising, counselling,training, and education
The study was not intended to collect information on specific programmes
and their contents for carers or professionals. Although these have been
mentioned occasionally, they have not been elaborated upon because that
was not the assigned purpose of the study.
However, the LimousineTrainBicycle Meeting addressed the subjects of
counselling, training, and education. Accordingly, these subjects will also be
discussed on the basis of materials from the study and other sources.
It is evident that in most countries in the study and elsewhere, programmes
targeting these areas are being developed. Some of them have been
researched, and it is probable that a great deal could be learned from a more
concerted effort to investigate such programmes and their evaluations.
Moreover, to the three issues counselling, training and education, can be added
a fourth: awareness-raising. It has been explained under point 2.3 of this section,
that many carers are not aware of the fact that they perform this role. By the
same token, others who deal with them as relatives, friends, or in a professional
capacity may not be aware of them being a carer and the consequences
thereof for their lives.
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Before policies for carers can be implemented effectively, both the population
and, more specifically, carers themselves must know about the role of carers.
They must also know that they are entitled, not only to recognition, but increas-
ingly also to concrete services.
It is not only carers themselves who need information, training, and education.
There are other target groups as well. The researchers distinguish:
the general public;
carers themselves;
those who have to do with carers in another capacity
than as carers (e.g. in their capacity of employee); and
those who work with carers professionally or as volunteers.
Programmes encountered in the study, for each of these target groups,
include the following.
The general public
The general public should be made aware and be informed. Everyone may
become a carer at some point in life. In addition, most people will know
someone who is a carer. It is helpful if the public understands what it means to
be a carer and if they have some idea what services are available, so that they
themselves or people they know can use them when appropriate.
The use of the media can be very helpful in this respect. When advertisements
are used, one has the right to decide on the contents. By contrast, if one tries
to interest journalists or managers of radio or television programmes, one is
dependent on what they want to publish or broadcast.
In the Netherlands, a publicly-funded campaign is currently being prepared,
in order to direct radio listeners to the web site of the carers organization.
Another approach involves organizing events which will attract the attention
of journalists or broadcasters. The Irish Carers Organization has been quite
skilful in this respect. They have a Carer of the Year Award, with the principal
goal of creating opportunities to draw public attention to the work of carers.
Another event proudly mentioned by the Irish Carers Organization involved an
opportunity for a carers group to meet the President of the Republic at her
residence. This event yielded very good publicity.
KEY POLICY ISSUES
47
Carers
Awareness-raising
Carers will be reached by awareness-raising programmes for the general public,
but special efforts can also be made to reach carers with campaigns aimed
directly at them. Flyers or packages of information can be distributed in places
where one might expect to find carers (e.g. in offices of general practitioners
and in pharmacies, in supermarkets, and the information markets which are
held on many occasions). Womens organizations and organizations of
older people are other channels that can be used for this purpose.
Counselling
It is well known by all carers organizations that carers need someone who
listens to them. They want to speak about their experiences and their emotions,
and sharing these feelings with others can bring some degree of relief. They
may have good friends who are ready to listen, but generally exchange with
other carers or former carers is especially effective. This helps them realize
that most carers experience similar problems. They need not explain their
concerns to the others in the group: the others know from experience. Groups
for carers may be organized around themes familiar to them, and they may
take the form of educational programmes. The Flemish Carers Organization
offers a series of meetings under the following headings:
Home care is total care, a vision on care, and
those who are partners in care.
Bottlenecks in home care: seeking a balance.
Do children remain the children of their parents?
Loyalty between adult children and their parents.
Clear-cut agreements in home care are necessary.
Getting lost. What families should know about dementia.
The importance of tailored information.
Demand-led care: are the patient and his network heard?
Home care: you dont think about it, you do it.
LONG-TERM CARE
48
Meetings of this kind are generally offered at the local level, in cooperation
with, for example, a social work agency or a community centre. Other
organizations, such as patients organizations, home care agencies, womens
organizations and the like, may also offer such programmes.
Carers may need professional counselling when they have emotional
problems with the changed perspectives in their own lives, or with changes in
the relationship with the cared-for person. Such a provision was offered in
the experiment in Denmark, which sought to determine and meet all the needs
of carers. A psychologist worked with couples of which one partner was
disabled because of brain damage.
Learning new skills
Carers go into caring without any training for it. Yet, they must perform many
tasks for which particular skills are needed. An example which is frequently
given involves lifting a person without causing injury to ones back. Needed
skills will, to a large extent, depend on the disability of the person receiving
care.
Professional organizations, such as home care agencies, can provide this
kind of training. Such courses exist in the Netherlands. In Finland, rehabilitation
courses for carers, free of charge and lasting from eight to seventeen days,
are offered to carers who are suffering from some illness or disability.
Increasingly, information and communication technology (ICT) will play a role
in caring. Carers must learn to work with new instruments when these will
facilitate their task. They can use computers not only to obtain information and
for communicating with professional staff, but also to maintain social contacts.
An EU-funded programme in this connection is called Assisting Carers using
Telematics Interventions to meet Older persons Needs (ACTION). Information
can be found on its web site: http://www.hb.se/action/.
Acquiring information and knowledge
Carers will be looking for many kinds of information. Medical information is an
important subject for them. Carers want to know about the illness or disability
of the person they care for and the possibilities for treatment.
Patients organizations (which in fact are often the organizations of their carers,
such as the Alzheimer Association or the organizations of parents with an
intellectually handicapped child), usually avail themselves of much information.
They can therefore be of great help to carers.
KEY POLICY ISSUES
49
Carers will also want to know about services which are available for the
person receiving care. Some of this information relates to national structures,
but most services will actually be local. They may be organized differently from
place to place. In the countries studied, it was learned that it is increasingly
difficult to know what services exist and how they can be accessed.
An Information Bureau in the city of Mnster, Germany is described in the study.
It is a municipal bureau, but is considered to be independent because the
municipality itself does not provide any care services. Its motto is to shed light
on the jungle of care supply.
The Dutch Support Centres for Carers fulfil a similar function. Many of them
publish a local carers guide. Their tasks, however, are broader. They also
provide counselling and organize support groups. Providing information is a
good way of getting in touch with carers.
Many countries have telephone helplines, where carers can ask practical
questions. Callers can also find someone who listens to them.
As the social systems in which carers operate become more and more
complicated, carers may need legal advice. For instance, they may need advice
about the allocation of care, allowances, tax concessions, their rights as
carers, facilities at work to help them reconcile paid employment with their
caring jobs, and so on.
The Finnish carers organization provides such services. These services,
as well as a telephone helpline, demonstrate where the most important
bottlenecks for carers are to be found. As such, they can be used
simultaneously as an important input to the advocacy work of carers
organizations.
Professionals who meet carers in another capacity
It is clear that caring has a profound influence on peoples lives. It restricts their
use of time, and may cause them to become tired, distracted or depressed.
This may negatively influence their performance in other sectors, or it may
affect their health.
Professionals who deal with them (for example, teachers in school or bosses
at work) may not realize why carers suddenly begin to underachieve.
Professionals who meet large numbers of people are likely to meet some
carers among them. Therefore, it is desirable to inform these professionals
about the consequences of being a carer, and to advise them where to refer
carers if they cannot themselves provide help.
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A concrete example involves the special case of young carers. Even among
children in school, there are some who care for a disabled parent or sibling.
In Ireland, the Netherlands, and the United Kingdom, there are projects for
young carers. In this special case, teachers need to be reached as well.
Another example is the personnel department in labour market organizations.
Personnel officers should be aware of the fact that some of their employees
are carers. These personnel officers should be made sensitive to the special
facilities that carers may need if wanting to continue their job.
It would be desirable to give some attention to the position of carers in the
training of both teachers and personnel officers. The study did not encounter
such programmes.
Those who work with carers professionally or as a volunteer
Included in this case are professionals such as medical doctors, nurses, home
helps, physiotherapists, social workers, community workers, and the like.
Their professional training should contain at least a module about carers.
Recently, the Flemish Carers Organization developed an information kit for
teachers of professional workers in home care. It consists of a video, a guide
about home care which lists all services and facilities, and a book which helps
the teacher to prepare lessons on caring. Similar initiatives may have been
undertaken elsewhere.
If no module on caring is included in the initial training of these workers, it may
be worthwhile to attempt to organize programmes of recurrent training, which
are available for most professionals, to include at least a session about carers.
Some carers organizations maintain lists of carers who are prepared to speak
in such courses.
As mentioned above, volunteers play a rather important role in supporting carers,
especially by sitting with persons receiving care. Several such initiatives were
encountered in the study. As a rule, volunteers who wish to perform this kind of
work are carefully selected, trained, matched with a family, and supervised.
Also described above was a Danish project in which relatives of Alzheimer
patients received support from volunteers. Another Danish project was
developed within the context of the Lutheran Church. This project was initiated
by a nurse who had worked abroad, in developing countries and in the USA,
and who had become interested in the hospice movement. She adapted this
idea to the Danish situation and began to work with relatives of dying persons.
She extended her target group to relatives of chronically ill or demented
persons, and the bereaved.
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The nurse, who was still the project leader in 1998, reported that she
interviews potential volunteers and asks them about their motivation, their
experience, and whether they have some back-up at home. As she expressed
it, they must have clarified the major questions of life.
It was also required of volunteers that they be able to provide three hours at a
time, although they could themselves decide how often they chose to do this.
Volunteers in the Copenhagen area get together once every five weeks.
Twice a year, there is a one-day course for all volunteers in the entire country.
This course provides an opportunity for them to exchange experiences and
to obtain information on new developments from outside teachers.
When a family asks for help, the project leader visits them and tries to find a
volunteer to go there the day after the interview. Basically, the volunteer listens.
In some cases, the carer wants to go out. In other cases, the carer is so tired
that he or she only wants to sleep. In these cases, the volunteer stays with the
patient.
In other cases, the relatives simply want to talk and the volunteer uses the time
to listen. Quite often, the fact that there is someone with whom they can talk is
a relief to the family. The volunteers themselves, of whom quite a few are
former professionals from the health care sector, find this work extremely
meaningful.
This seemed a well-conceived project. During the course of the investigation,
the study found several other examples of projects run by voluntary organizations
that are similar to the one described above.
5 Some more recent policies for carers
When the data were collected in 1998, new initiatives targeted directly or indirectly
at carers were being prepared in almost all of the countries studied.
In Denmark, a three-year experiment was in progress. It was financed by the
Disability Unit of the Ministry of Social Affairs. The principal aim of the experiment
was to follow twenty couples under 60 years of age, of whom one of the partners
had a chronic illness, or a disability due to brain damage. The experiment
sought to determine the help that was available, and that which was wanted by
the couples. In those cases in which the couples wanted something that was
not available, the experiment could provide it. On the basis of the outcomes,
the project staff advised the Government concerning legislation. Another
function of the experiment involved assessment of the economic value of the
work performed by carers. Unfortunately, the outcomes were not yet available
at the time of this research.
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In Ireland, the Carers Allowance was under revision and an interdepartmental
group was examining the possibilities of tax relief for carers.
In Belgium, a discussion on establishing a long-term care insurance
programme was in progress at the time of the study. This discussion resulted
in the introduction of such insurance in Flanders on 1 October 2001.
This programme provides far less generous insurance coverage than its
German counterpart.
In Finland, a carers policy was also being debated at the time of the study.
In fact, Government plans were more far-reaching than those which were
realized at the time. Due to the economic recession, only small steps forward
have been taken.
Additional information about policies developed after 1998 is available for only
two countries included in the study, the United Kingdom and the Netherlands.
Sweden, which was not included in the study, is also active in developing a
carers policy.
5. 1 A national strategy for carers in the UK
In February 1999, the British government published Caring about Carers.
A National Strategy for Carers. In the foreword, the Prime Minister states:
The national strategy for carers the first ever by a Government
in Britain sets out what we have been doing, and what we are
going to do. It offers practical help in ways which are needed,
and which will work. Carers will have better information. They will
be better supported. They will be cared for better themselves.
This makes a decisive change from what has gone before.
While we will continue to make sure that help goes directly
to people who need it, we will now ensure that help is offered
to carers themselves as well because helping carers is often
a good way of helping those theyre caring for. Caring for carers
is a vital element in caring for those who need care.
The Strategy pleads for carer-friendly employment policies, and states that
the Government takes action by offering unpaid leave for family emergencies
for employees. All organizations involved with carers must now focus not just
on the client, patient, or user but must include the carer.
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Under the heading of information, the following initiatives are mentioned:
a new charter on what people can expect from long-term care
services: setting new standards;
improvement of the consistency of charging for services;
good health information;
NHS direct helpline for carer information; and
government information on the internet.
Under the heading of support can be read:
carers need to be involved in planning and providing services;
local caring organizations should be consulted; and
comment cards, advice surgeries, and carers weeks
are good ways to involve carers.
Under the heading of care can be found:
carers rights to have their own health needs met;
new powers for local authorities to provide services for carers;
helping carers take a break, for which an amount of
140 million for three years is targeted; and
review of financial support for working carers.
In addition, measures will be taken to entitle carers to a second pension.
There will be support for neighbourhood centres, including carers centres.
Extending help to carers to return to work will be considered. A new question
about carers is to be inserted in the census. There will be support for young
carers, including help at school.
LONG-TERM CARE
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The first commentaries were favourable, although several spokespersons said
it was not enough by far. The Association of Directors of Social Services stated
that many councils had to cut back on social services, and that this new policy
should not founder because there is simply not enough money in social ser-
vices mainstream budget.
Approximately one month after the appearance of the National Strategy,
another report was published, which also discusses the position of carers.
This report is entitled With respect to Old Age, and was published by the
Royal Commission on Long Term Care (1999).
Among the recommendations of this report is found the statement:
Better services should be offered to those people who currently
have a carer.
The Royal Commission found that large numbers of older people being cared
for by informal carers receive no services at all. They propose that older persons
living with a carer should get the same amount of help as older persons living
alone. They ask the assessment process to be carer blind.
The different approaches of the two documents are discussed by Linda Prickard
in an article in Social Policy and Administration (September 2001). The Royal
Commission stresses the importance of providing sufficient services to the
dependent person, as if there were no carer. The Strategy wants to improve
services for carers, but with the aim of providing better services for those in
need of care. Prickard comes to the conclusion that neither of the two
approaches to social policy for carers seems on its own to be sufficient:
A focus on the interests of carers may mean that the interests
of the people they care for are neglected. This is a problem
particularly associated with respite care, a major component
of both Caring about Carers and the note of dissent by two
members of the Royal Commission. Equally, a focus on the
interests of the people cared for may mean that the separate
interests of carers are neglected. This seems to have happened
in the case of the Royal Commissions recommendations for
carers. These limitations seem to have arisen partly from the
purposes for which the policy documents were developed.
Prickard recommends a comprehensive approach to policy for carers in which
the interests of both carers and cared-for are considered together.
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5.2 Care nearby a paper about the support
of carers in the Netherlands
This paper (Ministry of VWS, 2001) is not a government paper as is the one in
the UK, but rather one which sets out the intended policies of the Ministry of
Health, Well-being and Sports. It does not introduce new visions, but promises
an amount of more than 11 million yearly for the support of carers. Com-
pared with funding available to date, this represents a very significant amount.
The following actions are proposed:
Strengthening the support of carers by ensuring that the entire
country will be covered with a network of support centres for
carers. Additional funding for the Carers Association and two
other national agencies working in the interest of carers.
In the assessment of persons applying for long-term care,
it should be taken into account that carers must be able to
participate in society.
The infrastructure of volunteer organizations will be
strengthened.
Acute care should be made available in cases of crisis.
There should be better cooperation between professionals
and carers. Respite care needs to be made available, but it
will be necessary to first define the needs more clearly and to
look at the conditions concerning organization and finances.
An experiment will be conducted with respite weekends.
A centre of expertise on caring will be set up.
The effect of caring will be monitored. The central question
is to what extent informal substitutes for professional care.
Research will be conducted on the financial situation of carers.
With the employers who receive funding from the Ministry and
with municipalities, agreements will be made about measures
which facilitate the reconciliation of paid employment and care.
Professional organizations in the social and health-care sectors
will be made more aware of the position of carers.
The Ministry will initiate, with the Carers Organization, an
information campaign targeted at (potential) carers.
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5.3 Support policy in Sweden
Johannson, in a paper presented at the Conference of the International Asso-
ciation of Gerontology (Vancouver, 2001), describes the growing interest in
Sweden in the work done by carers. There are three main types of support
available in Sweden:
economic support, in the form of allowances for the cared-for
person or for the carer and the possibility to take time off work to
care for relatives with compensation from the social insurance
system;
respite care, both as residential and day care; and
counselling and personal support, largely consisting of support
groups arranged by voluntary organizations.
Since 1998, the revised Social Service Act includes a new paragraph, which
states that:
the local authorities should support families and next of kin,
when caring for elderly, sick and dependent family members.
During the period 19992001, an extra financial input has been provided, in the
amount of 300 million Swedish Kroners for 3 years ( 11 million per year).
Respite services are now available in practically all municipalities and the
number of support groups has increased considerably.
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6 Conclusions
It would appear that carers are beginning to reach the national political agenda
in the countries studied. This is mainly due to two developments:
An increasing demand for care, whereas in most countries
there have been considerable cutbacks in services.
This means that the demands made on carers are more
pressing. Governments are concerned that carers will opt out.
Increasing participation of women in the labour market.
Labour market policy-makers begin to be aware that
there will be growing numbers of employees with
caring responsibilities. Policy documents recognize
that paid employment and family life must be reconciled.
In some countries, a carers policy is being developed. The most notable
example is the United Kingdom, where a National Strategy for Carers has been
adopted. With reference to the British example, we have briefly discussed the
question as to whether a policy needs to be developed for carers or whether a
good care policy aimed at persons in need of care should be sufficient. In fact,
both will be needed. Even if sufficient care for the dependent person can be
made available, the special position of carers demands that some specific
services be provided for them.
There are no grounds to conclude that people in the countries studied would
no longer be willing to care. They do care, without even realizing they are carers.
Therefore, awareness-raising is necessary, so that policies aimed at carers
will actually reach them. Carers do not need to be stimulated, but they need
to be recognized and supported.
LONG-TERM CARE
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The study found different forms of support in the various countries.
The following categories can be distinguished:
emotional support and counselling;
information, advice, training and education;
respite care;
financial support; and
newer, and not yet well developed, measures
to help carers reconcile paid employment and family life.
Carers organizations can play an important role in the formation of carers
policy. They help to make carers visible and can speak on the latters behalf.
Carers and their organizations should be actively involved in the development
policy which concerns them.
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References
De Boer AH et al. (1994) Informele zorg. [Informal care.] Rijswijk,
The Netherlands, Sociaal en Cultureel Planbureau.
Dautzenberg M (2000) Daughters caring for elderly parents
[Dissertation]. University of Maastricht, Netherlands.
Den Dulk L et al., eds. (1999) Work-Family Arrangements in Europe
Amsterdam, Thela Thesis.
Eurolink Age (1999) Employment Options for Carers: Opportunities
in the New Century. Brussels/London, Eurolink Age.
Johansson L (2001) Recent developments in caregivers support
in Sweden. Paper presented at the 17th Congress of the International
association of Gerontology, Vancouver.
Luijkx K (2001) Zorg; wie doet er wat aan. [Care: who does
something about it?] Dissertation. Wageningen Universiteit,
The Netherlands.
Ministerie van Volksgezondheid, Welzijn en Sport [Ministry of
Health, Well-being and Sports] (2001) Zorg Nabij. Notitie
overmantelzorgondersteuning. [Care nearby. Paper about the support
of carers.] The Hague, The Netherlands.
Ministerie van de Vlaamse Gemeenschap [Ministry of the Flemish
Commmunity] (2001) 20 vragen over de Vlaamse zorgverzekering.
[Twenty questions about the Flemish care insurance.] Brussels, Belgium.
Prickard L (2001) Carer Break or Carer-blind? Policies for Informal Carers
in the UK. Social Policy & Administration, 35:4. London, Blackwell
Publishers Ltd.
Rostgaard T (1995) The Caring Bond. Family Care for Elderly in Denmark
and the United Kingdom. [Dissertation]. Bath University, England.
Royal Commission on Long Term Care (1999) With Respect to Old Age.
London, The Stationery Office.
Tjadens F, Pijl M (2000) The support of family carers and their organisations
in seven Western-European countries. Utrecht, NIZW [Netherlands Institute
of Care and Welfare].
LONG-TERM CARE
60
Ungerson C (2000) Thinking about the Production and Consumption
of Long-term Care in Britain: Does Gender Still Matter? Journal of Social
Policy, 29:4. Cambridge, Cambridge University Press.
United Kingdom Department of Health (1999) Caring about Carers.
A National strategy for Carers. London, HMSO.
Weekers S, Pijl M (1998) Home Care and care allowances in the European
Union. Utrecht, NIZW [Netherlands Institute of Care and Welfare].
Werkgroep Thuisverzorgers (vzw) [Working group home carers] (2001)
Zorg & Thuiszorg. [Care and Home Care]. Vormingsaanbod [educational
programme]. Flanders, Heverlee.
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ISSUES OF
INTEGRATION
AND
COORDINATION
CHAPTER 3
THE INTERFACE OF LTC
AND OTHER COMPONENTS
OF THE HEALTH AND
SOCIAL SERVICES SYSTEMS
IN NORTH AMERICA
Robert L. Kane
CHAPTER 4
LTC INTEGRATION
IN FOUR EUROPEAN
COUNTRIES: A REVIEW
Dennis L. Kodner
CHAPTER 5
ACHIEVING
COORDINATED AND
INTEGRATED CARE
AMONG LTC SERVICES:
THE ROLE OF CARE
MANAGEMENT
David Challis
P
a
r

t

t
w
o
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1 Introduction
The provision of health care is shaped by several forces:
the concept of disease;
design of the health care system; and
the payment system.
Although it is customary these days to expect that economics drives all
behaviour, the solution to the problems of better coordinating the acute and
long-term care sectors will require more than a change in payment policies;
it demands a revamping of the fundamental care infrastructure. Exclusive
reliance on payment-based solutions threatens to address the cost of
everything and the value of nothing.
2 Integrating medical and long-term care
A basic first question should be the extent to which we really want to see an
integration of medical and long-term care. Many fear that such an integration
would mean too great a loss of autonomy for one sector; few think it would
be health care. There are already concerns expressed about the dominance
of the medical model and the inherent losses in quality of life that it implies.
Is it feasible to seek the best of both worlds?
There are certainly differences in the goals and perhaps the underlying values
represented by the prototypical health and social service providers. The former
are driven by a desire to cure, whereas the latter are more reconciled to cope
with extant situations. In the medical context problems are interesting to the
extent they are deemed treatable. It is hard to sustain enthusiasm for managing
clients who are perceived not to benefit. Medical care is less accustomed to
resource restrictions or to thinking in terms of costbenefit.
3
THE INTERFACE OF LTC AND OTHER COMPONENTS
OF THE HEALTH AND SOCIAL SERVICES SYSTEMS
IN NORTH AMERICA, Robert L. Kane
LONG-TERM CARE
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One can outline a spectrum of integration that includes the following levels:
Incorporation
Integration
Coordination
Cooperation
Tolerance
Truce
Incorporation and even integration implies more surrender of autonomy
than either side would likely find acceptable. Tolerance seems too weak a
commitment. Perhaps cooperation is a more realistic goal than true integration.
A further caveat for this exploration is the recognition that the priorities in
developing countries may differ from those in industrialized countries. Countries
still operating in a survival mode may view talk of integration as a luxury.
When integration occurs, it must be on a very basic level. The integration may
actually occur more naturally. For example, indigenous health workers may
have more rapport with social issues than do highly trained physicians.
Indeed, one might argue that training cadres of sophisticatedly educated
physicians may widen the gap between health and social care.
From a policy perspective, there are several different opportunities to
redistribute effort and resources. Within a sector such as the health
sector one might decide, for example, to place more emphasis on palliative
care in exchange for less intensive acute care; or more efforts might be directed
towards better primary care for chronic disease instead of emphasizing
technologically complex intensive care.
Alternatively, one might seek to actually shift resources across sectors,
using former health dollars. Examples include the purchase of food or housing.
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3 The North American experience
In the United States (and to a lesser degree in Canada) the integration of
acute and long-term care has depended on integrating the medical and social
care funding streams. There is a fundamental belief that such integrated funding
is the basis for programme integration. More accurately, it is necessary but
not sufficient. Successful integration requires a major reorganization of the
programmatic infrastructure, which can then be reinforced with funding
approaches. Simply merging funding streams will not suffice.
Bringing about this level of integration is difficult. The predominant vehicle has
been some variant of managed care, by which is meant a pooling of funds to
support an organized approach to providing care. Managed care supersedes
traditional health insurance to the extent that it takes direct responsibility for
the way care is actually delivered, rather than simply paying for it. Unfortunately,
much of what has been launched under the banner of managed care has
been primarily minimally modified health insurance with little active intervention
(Robinson, 2001; Kane, 1998).
Although there are examples of managed care staff model group practices,
like Kaiser, the modal approach has typically featured some variant of
subcapitation or hiring a large number of vendors (physicians and medical
groups), none of which serve enough of any given target group to make it
efficient to change their approach to care to accommodate to the needs of
this subpopulation. In essence, each practitioner is only marginally engaged
and hence is not motivated to change practice patterns. There is little
accountability or direction. Without this investment in infrastructure reform,
altering financial arrangements is unlikely to have a substantial impact.
In theory, managed care should be a great facilitator of better integrated acute
and long-term care. Its capitated basis should offer incentives more closely
aligned with the goals of good chronic care than those under fee-for-service.
Specifically, managed care should support an investment philosophy.
Better primary care, including comprehensive assessments where warranted,
are means to achieve this. It can achieve ultimate savings by reducing the
subsequent use of expensive services. Indeed, the success of comprehensive
geriatric assessment has been demonstrated in both medical and financial
terms (Stuck et al., 1993).
Managed care can also provide a vehicle for the effective use of geriatric
services. Whereas such care does not generate substantial income under
fee-for-service arrangements, it can be used in a leadership capacity under
managed care to provide both referral and consultation services and to provide
overall guidance in terms of guidelines or other clinical management assistance.
Managed care can afford the management information infrastructure that can
help practitioners to take a more extended temporal approach to their care.
LONG-TERM CARE
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Information systems can demonstrate change in patients status over time
and compare their actual to expected clinical courses.
Managed care can provide the oversight to assure that appropriate care is
being rendered. It can encourage and assist in seeing that patients and their
families play an active role in decision-making, by providing structured
environments for them to gain relevant information and explore their values
about possible outcomes achievable by alternate strategies.
All of these needed shifts in emphasis and care strategy can be supported by
a managed care environment to the extent that they also make good business
sense. In essence, their costs (in terms of both money and disruption)
must be justified by their potential (and demonstrable) benefits.
However, even in the face of growing evidence that such care is cost-effective,
Medicare managed care has shown little inclination to undertake the
transition to a chronic care model (Kane, 1998). Geriatrics is not actively
pursued (Friedman & Kane, 1993). Case management is rudimentary
(Pacala et al., 1995).
The reason for this apparent indifference can likely be traced to the shift in
sponsorship. When managed care became an investment opportunity,
traded on the stock market, its operating premises changed. Like other
publicly-traded programmes, the major concern of its management was
to increase the support of shareholders who, in turn, relied on the forecasts
of Wall Street analysts.
In essence, quarterly returns became the dominant issue. Changes in operating
structures, which require far more than three months to implement and function,
were impediments to short-term profits. As a result, the gap between the
proprietary and non-profit Medicare managed care operations widened,
but even the latter were reluctant to make heavy investments in changing
practice styles without some clear promise of quick rewards.
One major disincentive to developing better chronic care models is the lack of
adequate risk adjusters. A managed care company that becomes skilful in
managing complex chronically ill persons faces the likelihood of attracting such
a clientele. An industry that has done well through favourable selection is not
anxious to embrace adverse selection. Without some way to appropriately
compensate them for the added costs of caring for more difficult and
expensive clients, managed care organizations will be reluctant to develop
programmes that will attract them.
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4 Models of integrated care
Some models of integrated care are available. There is some limited data to
suggest that they produce both financial and clinical benefits, but much still
remains to be explored.
4.1 Program for All-inclusive Care of the Elderly (PACE)
PACE stands as perhaps the best model of truly integrated care (Kane, 1999;
Eleazer & Fretwell, 1999; Eng et al., 1997; Wieland et al., 2000; Pacala et al.,
2000). Developed originally to serve an elderly frail Chinese population in
San Francisco, PACE has become a federally-certified Medicare managed
care programme. It was designed to serve a niche market, persons eligible for
both Medicare and Medicaid who were deemed eligible for nursing home care
but still lived in the community.
As might be expected, this is a very small target group of high-risk persons
whose capitation rate is substantial. About two-thirds of the money comes
from Medicaid, but the Medicare rate is a generous multiple (almost two and a
half times) of the base rate. This pool of resources allowed for the establishment
of an integrated approach to care, which featured physicians working on
salary and a clinical base in adult day health care.
A central part of the model was the active inclusion of all those involved in any
aspect of the enrollees care as part of the core team, with regular team meetings
and active information sharing. Innovative efforts were made to avoid the use
of either acute or long-term care institutions. Creative ways were found to tap
all available resources to permit housing support from other means and to
integrate care into that housing.
Because the medical care is provided by PACE physicians, enrollees must
forsake their regular providers in order to join. This provision has proved a
deterrent to enrolment. Newer versions have been created that are testing the
feasibility of replicating the PACE approach but employing physicians under
contract, more akin to independent practice associations and downplaying
the role of adult day care. The evaluation of the original PACE demonstration
project encountered logistical difficulties, but its results suggest that the
programme was able to reduce dramatically institutional use with no
diminution in care quality (Chatterji et al., 1998).
A few states have attempted to merge the funding for these so-called dually
eligible recipients who are covered by both Medicare and Medicaid. This
population is considerably broader and more heterogeneous than the mandate
for PACE, which is restricted to those eligible for nursing-home care but living
in the community. The dual eligible population includes people living in the
community at various levels of disability and those residing in nursing homes.
LONG-TERM CARE
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4.2 State programmes
Minnesota had capitated the care of all its Medicaid population some years
ago, covering almost all services except nursing-home care. They then took
the next step of merging funding for Medicare and Medicaid. Because all effort
to enrol Medicare recipients in a managed care programme must be voluntary,
enrolment in this merged entity is voluntary.
In the Minnesota Senior Health Options (MSHO) programme, the care is
administered by health plans who subcontract with other programmes to
provide care elements. The main advantage of this approach is the potential
flexibility obtained to develop necessary solutions unconstrained by payment
regulations. To provide more coordination, the plans must employ some
degree of case management for all enrollees; the intensity corresponds to
the level of impairment (Kane et al., 2001).
Wisconsin has developed a somewhat different approach to addressing
the dual eligible population. It has implemented a variation of the PACE model.
Under the Wisconsin Partnership Program (WPP), managed care programmes
operate PACE-like approaches with one major difference; instead of utilizing a
physician hired by the programme to provide primary care, the WPP model
allows enrollees to use their regular primary care provider. Active case
management is provided by a team of nurse, social worker, and nurse
practitioner. The latter is responsible for interacting with the primary care
physician to replicate the effects of the team meetings under PACE.
Arizona has operated a prepaid system of care for its Medicaid recipients
for some time. Those individuals who need long-term care are cared for by
county plans that coordinate the acute care paid under a fee-for-service
arrangement with Medicare with the capitated LTC. An evaluation of this
approach has suggested it has proved quite effective (McCall, 1997).
Texas has also introduced a managed care programme in Harris County
(Houston) for its Medicaid recipients. Here too, Medicare is not formally
included, but those dually-eligible recipients who elect to receive their medical
care through the same health maintenance organization (HMO) receive a richer
set of prescription benefits than would otherwise be available.
In Canada, the province of Quebec has launched an innovative
demonstration programme, the Systme Intgr pour Personnes ges
(SIPA), which creates a simulated capitated pool of funds to cover virtually all
the medical and social costs of care (Bergman et al., 1997). The first years
experience with this demonstration project indicates that it has produced
great consumer satisfaction, but it has not been able to show a major shift
in the utilization of hospitals or emergency rooms (beyond a reduction in
bed-blockers), or an improvement in health status.
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4.3 The Social Health Maintenance Organization
Another programme that provides at least some coordination between acute
and long-term care is the Social Health Maintenance Organization (SHMO).
Under this programme, managed care organizations receive the full capitated
amount (instead of 95%), with the expectation that the additional 5% will be
used to provide at least a modest long-term care benefit. The SHMO is not
targeted specifically at dually eligible persons, and only a small number of
Medicaid beneficiaries are enrolled.
After the initial evaluation showed little impact (Harrington, Newcomer & Moore,
1988; Manton et al., 1993; Newcomer, Harrington & Friedlob, 1990; Newcomer
et al., 1995), a second generation of SHMO projects was launched in the hopes
of creating a model of care that emphasized more geriatrics and case
management (Kane et al., 1997; Wooldridge et al., 2000).
4.4 EverCare
Another area of innovation in integrated care features coordination more
than true integration. Several companies have developed special programmes
that offer Medicare managed care to nursing-home residents. The pioneer in
this area was EverCare, a programme operated by United Health Care (Kane
& Huck, 2000). The inducement for such programmes is the higher capitation
rates Medicare pays for nursing-home residents.
Although analyses indicate that nursing-home residence per se is not a risk
factor for higher Medicare costs (in fact nursing-home residents have lower
Medicare costs than persons with the same disease and disability burden
living in the community), nursing-home residence has served as a convenient
administrative marker for such increases in disability. The higher payment,
together with a conviction that better primary care can prevent, or at least
reduce, the use of hospital care, serves as the rationale for these programmes.
The basic model is based exclusively in areas of Medicares responsibility.
Payment for nursing-home care is restricted to only that mandated by Medicare
(i.e. skilled care after hospitalization) and an inducement payment for extra
nursing-home care provided in lieu of a hospital admission.
As noted earlier, the strategy for providing more intensive primary care relies
heavily on using nurse practitioners as primary caregivers. These nurses
are paid for by EverCare but work under the supervision of private physicians
with whom EverCare contracts to provide all needed primary care.
An evaluation of this programme is currently under way.
LONG-TERM CARE
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5 The chronic care paradigm
The relationships between acute and long-term care are determined by the
very constructs that underlie these terms. The predominant acute disease
paradigm is an anachronism. It is shaped on a 19th century notion of illness as
a disruption of the normal state produced by a foreign presence or external
trauma, e.g. infection or injury.
In this context, illness is a transient phenomenon that leads to death or recovery.
Technology (an inclusive term that ranges from biotechnology to prayer) is
used to increase the organisms ability to respond to the insult. Under this
model, acute care is that which directly addresses the threat. As soon as the
threat is gone, or the battle is clearly lost, care transitions to long-term care,
with a consequent loss in excitement and attention.
In fact, modern epidemiology shows that the prevalent health problems
of today (defined in terms of both cost and health impact) revolve around
chronic illness. Most of the money spent on health care, especially
among older persons, goes towards the treatment of chronic diseases
(Hoffman, Rice & Sung, 1996).
However, medical practice seems to ignore this epidemiological reality.
A transformation to a strategy designed to deal effectively with chronic
disease would require major changes in the fundamental approach to care,
including the end of the artificial distinction between acute and long-term care.
Time
As the name implies, an important difference between acute and chronic
care is the role of time. Chronic care operates over time. The definition of
treatment is measured less in events than in episodes. The expectation of
pay-off likewise includes a broader window. Actions taken at one point may
yield important benefits later. In the area of geriatrics, for example, a large
body of literature demonstrates the value of comprehensive geriatric evaluation
and management in reducing subsequent use of both acute hospitals and
nursing homes (Stuck et al., 1993; Rubenstein et al., 1991; Rubenstein, Wieland
& Bernabei, 1995).
The extension across time implies a value for continuity of care, although this
benefit has rarely been established empirically (Wasson et al., 1984).
Nonetheless, the segmentation of care by specialty and site of practice has
been understandably decried (Manian, 1999). The emergence of hospitalists
in the United States suggests a system more akin to that found in the
United Kingdom, but without the strong role of primary care providers.
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Goals
Chronic care also redefines the goals of care. Disability displaces disease
as the central focus. Because the diseases are not likely to be cured,
emphasis shifts to identifying ways to prevent their impact on peoples lives.
A World Health Organization classification system emphasizes the relationship
between disease and disability in terms of a series of transitions (WHO, 1980).
A disease is associated with an impairment at the organ level. This
impairment can create a functional problem, or disability. This disability can
lead to a handicap if the social demands on the person cannot be met or the
environmental supports are inadequate. Efforts to ameliorate the environment
to maximize functioning have been dismissed as halfway technologies
(Thomas, 1979) by adherents to the acute care model.
Chronic care implies a different relationship between client and caregiver
(Reiser, 1993). Physicians are just transient figures in the clients life.
Observations and reactions to disease occur constantly. Active client
involvement is crucial to effective disease management (Lorig et al., 1999).
This active role may include compliance with prescribed regimens or
adjustments to respond to changes in status. No single strategy for improving
compliance works consistently (Roter et al., 1998). Involved clients must also
be empowered clients. Decisions cannot be made unilaterally by providers.
Decision-making
To play an active role in decision-making, patients must have good information.
They need to know the consequences of alternative actions and the full range
of alternatives available. Ironically, this seemingly simple list far exceeds the
information base for most chronic illnesses. It points to the limitations of medical
knowledge and the inability to practise medicine from an empirical basis.
One encouraging approach has been the development of the programme for
shared decision-making, a carefully structured technique that affords
consumers impartial balanced information about various conditions and
the risks and benefits of alternative treatments, where it is not clear which of
several treatments is most appropriate. It is designed to supplement, not
supplant doctorpatient communication (Kasper, Mulley & Wennberg, 1992;
Barry et al., 1988).
Videotapes are used to offer information at a level and depth that patients can
understand. The tapes are endlessly patient. Users can watch them as often
as they wish, reviewing elements as needed. Equally important, the entire
process takes the decision off-line; it allows more time for more careful
consideration of options.
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Decisions can be made at various levels. Much attention with regard to frail
older persons has been focused on advance directives and end-of-life care
(SUPPORT Principal Investigators, 1995; Luptak & Boult, 1994). Part of the
rationale for this emphasis has been a concern about preserving the autonomy
of persons no longer able to express their wishes, but much of it also seems to
be hidden rationing (Emanuel & Emanuel, 1994; Teno et al., 1997). It is ironic
that more effort is spent assuring the rights of the comatose than those for
persons able to express a preference. When asked, many older patients
strongly favour treatment (Tsevat et al., 1998).
Another important and neglected area of decision-making occurs around
hospital discharge planning. Ideally, this is a time of careful insight, with
important options to be considered. Careful discharge planning can make a
substantial difference in patient outcomes (Naylor et al., 1999).
Different levels of consideration should be given separately to the most
appropriate modality of post-hospital care and the best vendor of that modality
(Potthoff, Kane & Franco, 1998). Different factors are involved in each of
these discussion points. In practice, these crucial decisions are made under
great time pressure with little opportunity to explore feelings and preferences,
let alone options.
In much of long-term care, clients may be substantially limited in their ability to
play an active role in their own care. They may rely on others, paid and unpaid,
for assistance. However, physical limitations do not necessarily imply a loss of
decision-making. Unless they are severely cognitively compromised, frail older
persons can still play an active role in determining their care. In some cases,
the decision-making responsibilities are shared with family. In these
circumstances even more time and effort is needed to achieve a useful level
of accord.
A greater consumer role in planning and implementing care implies a shift
in responsibility for the outcomes of that care as well. An important question
involves the degree of liability professionals retain under this arrangement.
Can they be held accountable for poor results? It is hard to see them as totally
devoid of responsibility, but it seems equally unfair to blame them for the failures
of their clients.
On the other hand, they have an obligation to teach and inform. We would not
chastise a teacher for the poor performance of a single student, who may
have chosen not to attend the lessons; we would question the prowess of a
teacher whose entire class failed the test. Likewise, the chain of accountability
for providers of care is best seen in the mean performance of groups of patients,
not in single instances.
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Managed risk
A new paradigm, termed managed risk, has begun to emerge in some of the
more innovative aspects of long-term care (e.g. assisted living). Under this
arrangement, a specific contract is developed that makes explicit the
risks involved in opting for care that may be less safe than the most orthodox
approach, for example staying at home or going to a place with less clinical
supervision rather than entering a nursing home (Kane & Levin, 1998; Kapp
& Wilson, 1995). By signing the document, the client acknowledges the risks
and agrees to hold the provider harmless for the consequences of that
choice; but the levels of accountability for actual services rendered under
that arrangement still need to be refined.
5.1 Primary care
Chronically ill persons, especially those receiving long-term care, require
active and aggressive primary care. One of the modern paradoxes is the
assumption that such care is wasted on such people. Too often they receive
superficial attention under the belief that nothing can be done to change
their clinical situation, when just the opposite is true.
Frequently, these people have numerous simultaneous problems, which
require close management (Redelmeier, Tan & Booth, 1998). Careful attention
can improve their status. At a minimum, iatrogenic complications can be
averted, such as overmedication. Evidence of undertreatment can be readily
found.
For example, a quarter of nursing-home patients with cancer were found to
have inadequate pain medication (Bernabei et al., 1998). Demented patients
with unrelieved pain may exhibit behaviours that are falsely attributed to their
cognitive state. Early recognition of infection can avoid serious complications
and unnecessary hospitalizations. Few physicians have had extensive training
in how to manage such patients and react to them with avoidance or indecision
(McNamara, Rousseau & Sanders, 1992; Gold & Bergman, 1997).
Most of the medical care delivered to nursing home patients in the
United States is provided by physicians with little special training in geriatrics.
Geriatrics has never flourished in this country (Reuben & Beck, 1994; Institute
of Medicine, 1993). Its role has been ill defined; it is neither a specialty nor a
branch of primary care (Burton & Solomon, 1993). Geriatricians represent a
very small proportion of practising physicians and their numbers are not growing.
LONG-TERM CARE
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While there is some evidence of better trained and better motivated physicians
assuming positions as medical directors of nursing homes, most of the direct
care is still in the hands of persons not prepared for this role. Physicians
complain that Medicare payment regulations (designed to prevent gang visits
and other means of fiscal exploitation) make practice in nursing homes
unaffordable. Nonetheless, some physician groups have emerged that make
a business out of just such care.
One encouraging response to the need for better primary care in long-term
care situations has been the emergence of the geriatric nurse practitioner
(GNP). These GNPs combine the basic training of nurses with more advanced
training in assessment and disease management. In theory, they would retain
the person-centred practice of nursing, with its heavy emphasis on prevention
and respect for personal values, with skills that would allow them to manage
many of the common problems of long-term care patients and to obtain timely
help when they need it.
Early reports of their work in nursing homes suggest that GNPs have had
positive effects, working both as nursing-home employees and as part of
physician practices (Kane, Garrard, Buchanan et al., 1989; Kane, Garrard,
Skay et al., 1989; Garrard et al., 1990; Burl et al., 1998). However, it is not clear
whether such personnel can avoid the same environmental pressures for
productivity that plague physicians in this role.
A growing model of care, best known in conjunction with the EverCare
programme (described above), uses these nurse practitioners as a key part
of a strategy to provide better primary care to nursing-home patients whose
Medicare coverage is capitated in the expectation that such care will save
money by reducing hospital use (Kane & Huck, 2000).
The underlying concept of consolidating care should not be lost. Dedicated
teams of physicians and nurse practitioners have been shown successful in
improving nursing- home care (Reuben et al., 1999). In the context of managed
care, much of the primary care is rendered by physicians who participate in
some type of contracted arrangement whereby only a small portion of their
total effort is directed to the enrollees and especially to aged enrollees. Such a
limited penetration into the physicians practice is unlikely to motivate any major
changes in practice styles to accommodate geriatric techniques.
One argument for refocusing attention on chronic care in lieu of ageing is
to increase the numbers of primary care patients affected, and thereby to
increase the chances that physicians would see the needed changes in
practice patterns as more warranted.
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5.2 Role of prevention
Another response to the rise of chronic illness has been greater advocacy for
prevention. This cause has been taken up in several ways. Building on a thesis
of compression of morbidity (Fries, 1983; Vita et al., 1998), some have argued
for more direct efforts to change health-related behaviours in an effort to forestall
disability.
Some evidence of success in changing such behaviours, even in older persons,
has been demonstrated with positive costbenefit ratios (if modest effect sizes)
(Fries et al., 1998). Others have argued that the key role for prevention lies in
preventing the onset or worsening of disability.
In this model, care is directed towards maintaining or improving a persons
function. It is more akin to rehabilitation. A particular concern focuses on
disability acquired through disuse. Indeed, some work shows at least
modest functional improvements among very frail nursing-home residents who
engaged in minimal structured exercise programmes (Fiatarone et al., 1994).
Traditional primary prevention applied to ageing would include attention to
such problems as falls, smoking, osteoporosis, and flu shots. The literature
on falls prevention is mixed. A recent Cochrane Collaborative Review
suggests that there is some preponderance of evidence favouring interventions,
but the case is far from overwhelming (Gillespie et al., 2001). An at least
equally promising strategy for high-risk subjects may be wearing hip protectors
(Parker, Gillespie & Gillespie, 2001).
The data on smoking suggests that stopping even at advanced ages is
associated with health benefits (Jaijich, Ostfeld & Freeman, 1984).
New medications, like bisphosphonates, and estrogens have provided new
ways to supplement the basic role of calcium (with vitamin D) and exercise
(Larson, 1991). Although there is great enthusiasm for the benefits of influenza
vaccine and pneumococcal immunization, some data show a paradoxical
increase in hospitalization rates for older persons for influenza and pneumonia
just as the immunization rates are increasing (Hebert, 2001).
5.3 Iatrogenesis
Discussions about the costs of care have generally failed to appreciate the
central role of iatrogenic events. The inappropriate use of services not only
adds directly to the costs, it creates a series of potential problems that multiply
the overall cost (Fisher & Welch, 1999).
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Iatrogenic events can be both overt and covert. Some attention has been paid
to the extent of errors associated with hospital care (Leape, 1994; Steel et al.,
1981; Kohn, Corrigan & Donaldson, 2000). These add to the costs of such
care, but many more problems go unappreciated. Technological imperatives
place older people in intensive care units where they can be closely monitored
but at the risk of becoming disoriented (Inouye & Charpentier, 1996; Inouye et
al., 1999). Aggressive drug therapy can address a variety of physiologic
perturbations, but the cumulative negative effects of numerous medications
are rarely appreciated.
Data on the wide variation in practice patterns has been cited as evidence of
the likelihood of overzealous treatment (Wennberg & Gittelsohn, 1982;
Wennberg, Freeman & Culp, 1987; Wennberg & McAndrew, 1996), but no
estimates have yet been made of the savings that could be achieved in
both costs and quality if unnecessary marginal care was reduced.
However, in the context of chronic care, perhaps the most direct goal for
prevention is to avoid catastrophic events, which have both fiscal and
health implications. Good chronic care should be able to manage problems in
such a way as to allow early detection of changes in patients status that can
serve as a trigger to early interventions. These changes in management can
avert costly and dangerous hospitalizations.
5.4 Rehabilitation
The role of rehabilitation in the context of integrated care may raise some
issues. The more socially-driven models of care often seem to emphasize
compensation over active efforts to improve function. In those situations,
care planning involves an assessment of limitations and a plan to provide
services to compensate for the areas of functional impairment. Such a
compensatory strategy can feasibly promote dependence in the long run.
A rehabilitative strategy is more likely to work on improving the patients ability
to function independently. Clearly, a balance is needed.
Rehabilitation in the United States is provided under a variety of venues.
Most often, it occurs as a follow-on to an acute hospitalization and is referred
to as post-acute care (PAC). PAC can be provided in a formal rehabilitation
unit, or in a nursing home. It can be offered at home through a home health
agency or it can be given on an outpatient basis. Part of the decision is based
on funding coverage and part on availability of resources, but much of it also
seems to depend on professional preferences. There is substantial geographic
variation in the use of PAC in general and in the type of PAC used (Kane, Lin
& Blewett, 2001).
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In one study of PAC, it proved difficult to predict what patient characteristics
were associated with receiving different venues of PAC (Kane et al., 1996).
However, different forms of PAC are associated with better outcomes and
with more cost-effective care (Kane et al., 1998; Chen, Kane & Finch,
Winter 2000/2001; Kane et al., 2000).
The rapid growth in PAC expenditures under Medicare has prompted
changes in the way this care is reimbursed. Prospective payments systems
have been introduced for nursing homes and home health care under
Medicare, with a third approach planned for rehabilitation. Each of these
approaches is self-contained despite the fact that many patients use several
different types in the same episode of care (Kane et al., 1996), and that the
various approaches in effect compete with each other.
A closely-related subject is the geriatric evaluation and management unit.
This has been a well-studied area, but the results of multiple randomized
controlled trials (RCTs) do not paint a clear picture. In general, there seems to
be a large body of evidence that such an investment can pay dividends (Stuck
et al., 1993; Rubenstein et al., 1991), but it is not clear that it will save money
(Boult, Kane & Brown, 2000). Moreover, efforts at targeting such care to those
most at risk are not necessarily associated with the best results; while
seemingly modest efforts with unselected subjects seem to produce quite
dramatic effects (Stuck et al., 1995; Hendriksen, Lund & Stromgard, 1984).
5.5 End-of-life care
Beliefs about how to manage the end of a persons life have changed
dramatically over the last decades. Much of this transformation can be credited
to the hospice movement (Westbrook, 1980; Pickett, Cooley & Gordon, 1998)
and the growing interest in thanatology (Kbler-Ross, 1969).
End-of-life care is closely related to rationing in that it offers a way to limit
expensive, perhaps futile, care in an ethical context driven by consumer
empowerment. Efforts to encourage less aggressive care at the end of life
have met with mixed success (SUPPORT Principal Investigators, 1995).
To the surprise of some investigators, many older people are not anxious to
cede access to potentially life-saving technology, even if the likelihood of
benefits is slim (Tsevat et al., 1998). Federal law (the Patient Self Determination
Act of 1990) now requires that all persons entering a hospital or a nursing
home be given an active opportunity to establish their advance directives.
There is an important distinction between advance directives and active
decision-making at the end of life. The former may involve making hypothetical
choices about feared outcomes that may end up robbing the patient of valuable
options.
LONG-TERM CARE
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Indeed, making decisions about situations that have not been experienced
may cause the person to weight potential consequences more strongly than
would be the case when they were actually confronted (Kane, 1996).
The hospice movement introduced the concepts of modern pain management,
where adequate analgesia is provided without false fears of creating drug
dependency (Gloth, 2001). Likewise, palliative care is directed towards making
patients and their families as comfortable as possible through a combination
of symptomatic treatments and emotional support. Hospice patients, once
they are assured of responsiveness in times of emergency, are often very
anxious to die at home.
Ironically, what began as a counter-cultural movement (hospice) has become
a victim of its own bureaucracy. In some communities hospice care is given
by home health agencies, which find it easier to operate without a formal
hospice licence and all the problems associated with obtaining one.
5.6 Information systems
Chronic care requires an information platform. It is essential to track
changes in patients status over time and to relate outcomes to treatments.
Clinicians observations need to be structured and directed to emphasize
salient information in the midst of so much data on so many conditions.
Information needs to be shared among the variety of involved parties.
Duplicate efforts to collect the same data need to be eliminated and care
better coordinated.
Computers and electronic networks provide a promising mechanism to
achieve these ends. It is now feasible to introduce information systems that
can track clinically relevant parameters and indicate when the patients course
is significantly straying from what is expected (Kane, 2000).
Early indications of deviations from an expected course provide an opportunity
for modest mid-course corrections. Patients can actually provide much of the
data directly and thus become more actively involved in their own care.
Ironically, a substantial body of research has been devoted to testing
innovative approaches to providing better chronic care. The results of many
randomized clinical trials are shown in Table 1, which is based on an earlier
review (Boult et al., 2000).
The paradoxical observation that follows from this review is that despite often
strong evidence of efficacy, very few of these innovations have been widely
implemented. At the same time, case management, which is the approach
with the least supportive evidence, has been actively embraced as a prerequisite
for most efforts to integrate medical and social care.
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Table 1. Effectiveness of interventions in chronic conditions,
as shown in randomized clinical trials
+
+
+
+
+
+
=
+
+
+
+
=
=
-
+
+
+
+
+
+
=
+
=
+
+
+
+
+
+
=
+
=
=
=
=
=
=
=
Adapted from Boult et al., 2000
Satisfaction Function Utilization Costs Mortality
Geriatric evaluation
and management
Interdisciplinary
home care
Self
management
Group
care
Home
hospital
Disease
management
Professional dyads
in nursing home
Acute care for
elderly wards
Transitional
care
Case
management
Key:
+ : significant increase or significantly greater
: significant decrease or significantly less
= : no significant difference
LONG-TERM CARE
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6 Conclusions
Long-term care is basically a social service directed at persons with severe
chronic health problems. As such, these people are also likely to require active
medical care, which should be closely coordinated with their supportive care.
Indeed, nursing-home residents, for example, use on average about three times
as much care as non-residents. This difference is due to their disability status
rather than their residential location.
If the chronic care model is realized and applied, those providing supportive
care be they paid or unpaid should do so in conjunction with medical care
providers. There should be a shared set of objectives. Each component may
emphasize its own particular aspects, but each should be aware of the others
and neither should conflict. Too often, the two groups exhibit philosophically
different approaches to care. The long-term care providers appear to work
from a premise that their goal is to compensate for their clients deficiencies
(primarily functional). Good care produces services that address these
inadequacies without incurring any complications. Thus, the well-tended frail
older person who is free of pressure sores and urinary infections may be viewed
as a success. Medical care providers tend to assume a more aggressive stance.
Although most do not expect to achieve cures, they do aim for a change in the
clients clinical trajectory as a result of their efforts. In many cases, the benefit
is best expressed as a slowing in the rate of decline.
This same therapeutic orientation can and should become a goal for long-term
care. However, demonstrating such success can be difficult. It requires some
point of reference, because the only visible evidence is often of decline.
The evidence of success lies in comparing the actual course to what can be
reasonably expected.
An important component of chronic care is early intervention. Caregivers, both
formal and informal, need to be sensitized to detecting early signs of change in
status and intervening before a crisis is reached. Such a surveillance system
requires systematic collection of information and education of users. At present,
substantial effort goes into data collection, especially in nursing homes and
home health care, but little of that information is used to direct care. Ironically,
while many American nursing-home personnel complain about the burden of
data collection from the Resident Assessment Instrument (RAI),
1
others who
use the same information system in other countries voluntarily extol it as a
great leap forward (Ribbe et al., 1997; Sgadari et al., 1997; Phillips et al., 1997;
Fries et al., 1997).
1
The RAI has two components: the Minimum Data Set (MDS), which is a standardized set of
observations, and the Resident Assessment Protocols (RAPs), which are lists of items to consider
in evaluating a potential problem suggested by the MDS.
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Part of the problem may lie with its mandatory imposition from outside, but
another part derives from its lack of clinically-useful information to track disease
status. It needs to be translated into a simple tracking system that will allow
caregivers to focus on relevant items more frequently without being burdened
with a comprehensive measure.
Coordination of acute and long-term care is impeded both culturally and
programmatically. We have already noted the differences in philosophy between
medical and long-term care providers. Often the long-term care professionals
see themselves as protecting their clients from overly-aggressive medical
activity. Because the price of failure (an untoward event) is higher than the
rewards for success, an aura of therapeutic nihilism sets in. Long-term care,
especially nursing-home care, is actively regulated. Most of the regulations
penalize mistakes; few reward caring.
A major source of schismatic care is payment. In general, acute care
(even if it is for chronic problems) is covered by Medicare, whereas
long-term care is predominantly paid for either by Medicaid or out-of-pocket.
These different payment sources come with different eligibility rules,
different measures of success, and different incentives. In general, long-term
care payment is based on the clients level of disability.
2
Medical care is usually
paid for on a piece-work basis. Both are increasingly being brought under various
forms of prospective payment. Under the long-term care prospective payment
models, greater care needs (reflected usually in greater levels of disability)
generate greater payments. Hence, the unstated incentive is to create or
maintain disability, although everyone vehemently denies that any provider would
actually respond to such an enticement.
For both groups, the time horizon is usually short. Prospective payment for
nursing homes is calculated on a daily basis. Home care may eventually use
episodes as the basis for the calculations but no decisions have yet been
made. Neither has built-in incentives to employ some concept of investment,
whereby more care at an early stage might produce benefits later.
Coordinating payment is a necessary but not sufficient condition to effect
integration of acute and long-term care. Major changes in the infrastructure
are required. Before those changes can be even attempted, it is necessary to
gain the physicians attention. As long as physicians view care of older persons
as at best only a modest portion of their practice activity, they will not be
receptive to considering the sweep of practice changes needed to effectively
address chronic disease.
2

Medicaid eligibility first requires a stipulated level of poverty, expressed in terms of income
and assets.
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However, most physicians have been extremely reluctant to embrace geriatrics.
In the United States, for example, some physicians who took and passed the
certification for added qualifications examination kept that fact a secret,
lest they be expected to see a preponderance of geriatric patients. The answer
may lie in redefining the issue, away from geriatrics per se to the broader
purview of chronic care.
6.1 Potential for integrated care
Many observers of contemporary chronic care recognize the disadvantages of
uncoordinated care. Beyond the effort that may go into cost shifting and the
potential for duplicate billings, there is the promise of greater efficiency. There
is considerable interest in seeking ways to integrate such care, especially for
the so-called dual eligibles (those covered by both Medicare and Medicaid).
Several demonstration projects designed specially to respond to this integrated
funding opportunity have been authorized; a few are under way.
Integrating medical and long-term care is not as simple as it at first seems.
Each faction views the other as a rich potential source of resources to be
redirected its own way. Historically, long-term care has emerged as the junior
partner. Medical care is more dramatic and seems to be able to argue for the
lions share of the resource pool.
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4
1 Introduction
Ageing is a global phenomenon. Whether in the so-called developed or
developing world, nations are experiencing, or will ultimately experience,
the societal consequences of an ever-increasing elderly population, including
the challenges of chronic illness, disability, and long-term care.
The frail elderly, for demographic, economic, and quality reasons, have elevated
long-term care to an issue of especial importance in many industrialized
countries.
1
It is only a matter of time before developing countries
2
face the
very dilemma of how to best finance, organize and deliver long-term care
services.
Long-term care (LTC) is part health care and part social service. It
encompasses a broad array of primarily low-tech services provided by paid
professionals and paraprofessionals as well as unpaid family members and
other informal helpers to individuals with chronic, disabling conditions who
need help on a prolonged basis with daily activities of living.
These activites include personal care (e.g. bathing and grooming), household
chores (e.g. meal preparation and cleaning), and life management
(e.g. shopping, medication management, and transportation) (Feder, Komisar
& Niefeld, 2000; WHO & Milbank Memorial Fund, 2000).
LONG-TERM CARE INTEGRATION
IN FOUR EUROPEAN COUNTRIES:
A REVIEW, Dennis L. Kodner
1
The issue of long-term care is important to people with disabilities of all ages. However, since
disability increases with age, the group most likely to need services and the preponderance of users
will be aged 65 and over (Jacobzone, 1999). This discussion will focus on the elderly population.
2
More specifically, countries categorized by the United Nations Development Programme (UNDP)
as either Medium Human Development or Low Human Development.
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In addition to direct, hands-on personal care and ongoing supervision,
long-term care services include the use of skilled nursing and therapies
(e.g. physical and occupational therapy) to treat and manage chronic conditions,
assistive devices (e.g. canes and walkers), more advanced technologies
(e.g. emergency alert systems and computerized medication reminders), and
home modifications (e.g. ramps and hand rails) (Stone, 2000).
This mix of services, whether delivered in home, community-based,
or institutional settings, is designed to minimize, restore, or compensate
for the loss of independent physical, cognitive, and/or mental functioning.
Industrialized countries, despite differences in health and welfare policies
(i.e. social services, income maintenance, and housing), financing
arrangements, and programme frameworks, are to varying degrees struggling
with issues related to long-term care access, resource allocation, coordination,
spending, and the division of responsibility between state, family and private
sectors (Tilly & Stucki, 1991; OECD, 1994; Brodsky, Habib & Mizrahi, 2000;
Baldock & Evers, 1992).
The fragmentation of long-term care services and the lack of continuity within
and between the health and social service sectors have emerged, in particular,
as major themes.
This section will:
first explore the problems of coordinating
long-term care at the structural, service delivery,
and client levels, and the need for strategies
to improve the integration of services;
then, examine and compare various
state-of-the-art approaches to long-term care
integration in four industrialized countries
Denmark, Germany, the Netherlands, and Sweden
including their respective policy, financing,
and service delivery contexts; and
finally, conclude with a discussion of the general
lessons from this analysis of the experiences
of these select countries.
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Clearly, in shaping long-term care systems, countries must respond to their
own values and resources. Nonetheless, we can learn from each other, despite
the various limitations inherent in cross-national comparisons (Kodner, 1999a;
Kodner, 1999b). As Kane, Kane & Ladd (1998) state:
Developing nations simply cannot afford the patterns of long-term care
that have been established by their wealthier counterparts. One hopes
they can learn from the experience of those that have already passed
through this demographic revolution and avoid some of the mistakes
that predecessors have made.
2 The logic of integration in long-term care
Integration of health and social care, especially for the frail elderly, became
one of the buzzwords of the 1990s (Kodner & Kay Kyriacou, 2000). Integrated
care is receiving increasing attention in the policy and practice arenas of both
North America and Western Europe as an important framework for addressing
the unique needs of the long-term care population, as well as other groups
with chronic conditions.
Like a Rorschach test, the term integrated care has many meanings.
For present purposes, this section considers integrated care to be a discrete
set of policies, methods, and organizational models designed to create
connectivity, alignment, and collaboration within and between the cure and
care sectors at the funding, administrative, and/or provider levels.
3
The main goals of integrated care are to:
enhance quality of care and quality of life; and
improve system efficiency for clients whose complex
problems cut across multiple systems and providers.
The need for integrated approaches to care is partly a function of the nature
of systems per se, and partly a reflection of the specific characteristics of
target populations and their fit with the existing infrastructure of health and
social care. From a general perspective, all systems are comprised of
interdependent parts, which are supposed to play complementary roles
(Scott, 1961; Thompson, 1967).
3
Adapted from Kodner & Kay Kyriacou (2000).
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However, the division, decentralization, and specialization frequently
encountered in the architecture of more complex systems often interfere with
their efficiency and effectiveness. Therefore, the fulfilment of system aims
necessitates cooperation among and between the various parts of the whole
(Andersson & Karlberg, 2000). When it comes to the overall health system,
the lack of integration means that patients get lost, needed services either
fail to be delivered, or are delayed, and there are less than optimal outcomes
(Berwick, 1991).
The community-dwelling frail elderly are an especially vulnerable group,
and are most likely to benefit from integrated care. They have complicated
and ongoing health needs, experience difficulties in everyday living, require
a mix of medical services and social supports, and receive care in and out of
various institutional settings (Kodner, 2000).
For both clients and family carers, the mostly incurable, unpredictable, and
costly nature of the chronic, disabling conditions from which the clients suffer
presents difficult challenges in terms of arranging care, preventing, and
managing crises, transitioning from one type or level of care to another, and
maintaining health and functioning (Kodner, 1995).
The challenges are equally daunting on the provider side. Regardless of
the country, system or setting, difficulties are encountered with obtaining
comprehensive assessments, putting together service packages,
monitoring health status, supporting carers, coordinating services from multiple
providers during periods of acuity, maintenance, rehabilitation, and
transition, and performing all of these activities within existing funding
constraints (Kodner, Sherlock & Shankman, 2000).
The challenges cited above reflect shortcomings that are more or less found
in the health and social service systems of virtually all industrialized nations.
This is because services are the responsibility of many jurisdictions, institutions
and professionals, and the various components of both systems work in parallel
with separate funding streams and budgets, and frequently conflicting
regulations.
Moreover, health and social care distinctly differ in terms of language, clinical
roles, responsibilities, and service approaches (Brickner et al., 1987).
The end-result is that the delivery of needed long-term care is often fragmented
and uncoordinated, and can also create confusion and discomfort for the frail
elderly and their families (Brodsky, Habib & Mizrahi, 2000).
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An oft-recommended antidote is the creation of a so-called continuum of
care. This comprises a connected and coordinated array of services capable
of matching, over time and at various stages of disability, the needs and
preferences of long-term care clients with the most appropriate settings of
care (Evashwick, 1987).
4
Integration is at the core of this concept, and occurs at various levels of intensity
and completeness. According to Leutz (1999), there are three available
integrating strategies:
linkage;
coordination; and
full integration.
In linkage, health and social service institutions and providers work
together as best they can, usually on an ad hoc basis, within the context of
existing, fragmented financing and delivery arrangements. This is the
minimalist, least-change approach.
Coordination, on the other hand, is a more formal structure designed to form
a bridge between clients and services, by minimizing or, at times, eliminating
some of the identified organizational and administrative barriers. Nonetheless,
this is also done within existing frameworks.
Finally, full integration represents the complete overhaul and consolidation
of all or most responsibilities, resources, and funding for long-term care
client management and care. This is most often accomplished through the
creation of a single, new, community-based system with broad clinical and
financial responsibility and accountability over the entire continuum of health
and social care.
4
Although much of the gerontological literature advances the idea of a continuum of care, some experts
(for example, Kane et al., 1998; and Stone, 1999) suggest that the paradigm is overly restrictive. Their
argument is that there is an essential interchangeability between many services and settings. Therefore,
needed care can be provided in any number of ways, depending on a variety of individual, familial, and
policy factors (Stone, 2000).
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A widely held belief, most prevalent in the United States, is that the fully
integrated continuum of care model sketched above is best equipped to provide
comprehensive services to long-term care clients. This is due to its capacity,
at least theoretically, to improve care coordination and continuity; streamline
disjointed services and systems; eliminate duplication; reduce administrative
and service costs; and promote the more equitable allocation of resources
(Kodner & Kay Kyriacou, 2000).
However, as pointed out by both Brodsky, Habib & Mizrahi (2000), and Stone
& Katz (1996), three main concerns have been expressed about this approach:
Long-term care, both needs and services, might receive
less priority or be neglected in a system in which they are
subsumed by general health care and acute medical needs.
It is questionable as to whether an appropriate financing
mechanism can be developed to adequately compensate
for the costs of long-term care, as well as eliminate any
disincentives to avoid complex, high-risk, high-cost clients
or shift their costs to the medical side of the system.
There is a general discomfort with applying the same
cost-containment principles found in medical care to
the provision of long-term care services in such global
systems.
In response to these critiques, some proponents have suggested a partial
approach to full integration as a first step, namely, the integration of home- and
community-based long-term care services (with or without the folding-in of
homes for the aged, nursing homes, and special housing).
None of the national models described in the next section fits under the rubric
of full integration. However, the section will include examples, though not
exhaustive, of various linking and coordination approaches used in the four
countries under review.
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These models fall into one or more of the following categories:
Administrative consolidation
When the responsibility for long-term care is fragmented
among multiple agencies and levels of government, this
affects client responsiveness, as well as quality and care
outcomes (GAO, 1994). Therefore, long-term care integration
can be facilitated by efforts to consolidate (and decentralize)
key functions (e.g. client assessment, care planning, service
coordination, quality management, and financial oversight)
in a single agency at the level closest to the target population.
5
The reorganization of the above activities can help eliminate
complex and overlapping programmes and services, including
differences in eligibility criteria, service levels and availability, as
well as simplify long-term care access, improve the coordination
and continuity of care, and better manage system resources.
Co-location of services
The fragmented nature of long-term care causes numerous
obstacles for both clients and providers. By locating multiple
agencies serving the frail elderly under one roof (in a so-called
community centre or service centre), the potential is created
to simplify access to needed services (e.g. by centralizing
information, intake, and referral activities), and enhance ongoing
interagency communication, cooperation, and teamwork.
The synergies thus created can, at least informally, contribute
to ensuring that long-term care clients and their families
encounter fewer service barriers and gaps, and also receive
the support they need, when and where appropriate.
In addition to these client-centred benefits, the strategy can also
assist in improving local planning for long-term care, and encourage
more efficient use of community resources. These are important
system-wide integration goals, in and of themselves.
5
The devolution of administrative responsibility for long-term care services to a single
organization or government agency at the local or regional level sometimes involves oversight
and/or management of public funds. Clearly, such financial responsibility, especially when located
closest to the client population, can be a powerful integrating tool. While this section will include
examples of this type, a more detailed discussion of funding for long-term care is found in a WHO
report by Brodsky, Habib and Mizrahi (2000).
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Care network
A care network is a group of legally separate health and social
service institutions established to pursue important, shared
delivery system goals that could not usually be attained by
a single organization acting alone (Scott, 1993). Networking
is a major method to improve the way organizations work
together (Alter & Hage, 1993), and is increasingly found in
health and hospital systems in the United States and other
countries (Shortell & Kaluzny, 1994).
Organizational collaboration in these strategic alliances is
achieved, both vertically and horizontally,
6
through a variety of
mechanisms, some more formal and/or integrated than others:
common ownership; affiliations and contracts; joint planning;
and interagency programmes, services and provider teams
(Evashwick, 2000). A major emphasis is on creating and
sustaining an effective, client-centred continuum of care.
Well-designed care networks, operating within the context
of committed leadership and firmly established working
relationships, offer the potential to improve client care through
better coordinated services. Nonetheless, according to CSHSC
(2000), only sketchy evidence to date exists (in the American
context) on the effectiveness of such networks, particularly with
respect to their ability to create the much-hoped-for experience
of seamless care. (For more on this concept, see Chains of care,
opposite.) This probably reflects the considerable challenges
involved in meshing different and varying organizations, cultures,
resources, and personnel.
Case management
Also known as care management, case management is a
comprehensive and systematic process of assessing, planning,
arranging, coordinating and monitoring multiple long-term care
services for the individual client across time, setting and discipline
(Kodner, 1993).
6
Vertical integration means combining two or more organizations that have different positions
in the distribution channel, e.g. a hospital and a home care organization. Horizontal integration,
on the other hand, means combining two or more organizations that have the same position in
the distribution channel, e.g. two home care organizations (Mission: Medical, 2000). Obviously,
the former strategy is more geared to building a continuum of care.
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The process operates at the administrative, service delivery
and clinical levels, and has several goals: to enhance choice
and flexibility in service delivery; improve coordination between
services; and increase the efficiency and effectiveness of
home and community-based care (Davies, 1994).
Case management activities are performed by an individual case
manager, or by a team of health and social service professionals.
It is also undertaken in a variety of organizational environments
(e.g. in a freestanding local or regional entity with formal or
informal responsibilities for brokering long-term care services;
an insurer or other funding agency; a provider institution like a
home care organization, medical clinic or hospital; or supportive
housing). Finally, the case management function can stand alone,
or can be bundled with other administrative and client management
activities as, for example, when it is part of a chain of care
(see below).
While case management should not be considered a panacea
for what ails the long-term care system, an international review
of case management experience by Davies (1992) suggests
that this integrating approach can help long-term care clients
remain in the community, as well as positively impact
effectiveness and efficiency (see Chapter 5 in this volume).
Chains of care
Chain of care means the successive clinical steps (usually
guided by clinical guidelines, protocols and care maps) and
supporting organizational arrangements necessary to coordinate
services, as well as manage client transitions on a longitudinal
basis within and between agencies/providers in the health
and social service systems (Andersson & Karlberg, 2000).
The purpose is to achieve seamless care, that is, the smooth
and uninterrupted provision of necessary care (Southworth,
1992; Hibberd, 1998; Burda, 1992). One variant of the chain
of care idea is disease management.
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Disease management is a systematic, population-based
approach to patient care and outcomes improvement by
coordinating clinical interventions and resources throughout
the life cycle of a particular disease or condition and across
the entire health care continuum (Kodner, 1998). At the core
of both approaches is the use, in one form or another, of
multidisciplinary or interdisciplinary teams,
7
and case/care
management (see above).
The chain of care approach is applicable to all patient/client
groups, but most especially to vulnerable individuals with
serious chronic conditions. This group, including the frail elderly,
often receives a mix of health and social services, and requires
the care of both medical generalists and specialists in various
clinical settings. The population also experiences day-to-day
problems which, in part, can be ameliorated by lifestyle changes
or prevention.
Service-enriched housing
Housing is the where in long-term care (Kodner, 1996).
For the frail elderly, the presence or absence of elderly-friendly
and elderly-capable housing arrangements (i.e. physical
environments that are flexible, adaptive and supportive of
independent living as disability levels change over time)
augmented with appropriate services, can make the
difference between continued community living or admission
to a nursing home (Pynoos & Liebig, 1995; Brink, 1998).
According to Pynoos (1992), housing and long-term care
have long been considered as separate domains, each with
its own set of programmes, regulations, and funding sources.
During the past two decades, however, the notion that housing
is solely bricks and mortar has begun to change internationally.
7
An interdisciplinary team is a highly structured and intensely collaborative group of professionals
who are jointly responsible for the coordination and management of a clients care (Williams et al.,
1987). The multidisciplinary team is usually a less full-blown approach to communication and
cooperation between providers (Kodner & Kay Kyriacou, 2000). However, both terms are
sometimes used interchangeably.
KEY POLICY ISSUES
101
More and more, housing is viewed as a viable long-term
care resource, despite continuing and unresolved boundary
issues on the policy, regulatory, and funding levels.
The re-conceptualization of housing as an important element
in the continuum of care reflects recognition of the special
needs of the frail elderly and growing demands for more
quality-of-life-enhancing and cost-effective alternatives to
long-term care institutions (Regnier, 1994).
8
There are two main strategies available to enhance the
capacity of housing programmes to support the frail elderly
living in the community. One option is to bundle health and
social services with housing, thus providing a support system
in the particular setting. While this may enhance accessibility
and efficiency, it can also limit residential choices.
The other option is to unbundle services from the housing.
Portable services, delivered by outside agencies, can provide
the elderly with broader choices of where to live, and which
are more in keeping with lifestyle, socialization, recreation,
and care preferences (Pynoos, 1994).
To make the latter idea tenable, however, in-home personal
care, the services of a day centre, and transportation must,
at a minimum, be affordable and readily accessible. Case
management can also be helpful in assisting residents in
managing the entire environment, including their housing,
health, and human support needs (Heumann & Boldy, 1993).
8
While the integrating role of housing is the focus of this section of the chapter, another interesting
and related approach is the use of nursing homes as the base for community outreach.
Nursing homes, which arguably represent a type of housing with the widest and most intensive range
of services, can be used to provide a variety of home and community-based services to frail elderly
persons living in surrounding neighbourhoods.
LONG-TERM CARE
102
3. A review of LTC integration models
in four countries
3.1 Denmark
3.1.1 Background
As of 1997, Denmark had a population of 5.3 million, 0.8 million (14.9%)
of whom were age 65 and over. Of these, 359 000 (6.8%) were age 75 and
over (OECD Health Data, 1999).
Denmark was one of the first industrialized countries to adopt a community
care policy which places heavy emphasis on both self-determination and
deinstitutionalization, and also gives priority to domiciliary (home) care
(Petersen & Rostgaard, 1999). Today, Denmark stands out as having one of
the most progressive programmes for the elderly, even among its very generous
Nordic neighbours (Kane, Kane & Ladd, 1998).
Health care in Denmark is generally considered to be a public responsibility.
Virtually all services (including primary and specialty physician care,
hospital care, and pharmaceuticals) are financed, planned and operated by
the 16 county (province) level regional authorities within the framework
established by the national government through its Ministry of Health.
9
Health care funding derives primarily from general taxation (about 85%), and
all residents, regardless of age, employment or socioeconomic status,
have free access to nearly all medically-related services under the Public
Health Security Act (Friis, 1979; van Kemenade, 1997; Ministry of Health of
Denmark, 2001).
In addition to a very limited health care portfolio, the 275 municipalities
(in Danish, Kommune), are totally responsible for running the local social
service system. This includes long-term care and housing services for the
elderly and other age groups. For most social services, the main legal basis
is the 1998 Social Service Act, which the Ministry of Social Welfare oversees
at the national level. Another important legal framework is the 1987 Act on
Housing for Older and Disabled Persons, which governs housing provision.
This law is noteworthy for its measures to prohibit the building of new nursing
homes, and the support provided for their gradual replacement by different
forms of special housing for the frail elderly (Gottschalk, 1995).
9
The Danish health care system, which is characterized by far-reaching administrative decentralization,
gives the responsibility for certain services (home nursing, and preventive programmes such as public
health nurses, school health, and child dental care) to the local (municipal) level.
KEY POLICY ISSUES
103
The lions share of social service costs is financed by local taxes, although the
municipalities receive additional reimbursement by means of block grants,
equalization grants, and temporary subsidies from the national government to
promote the selective expansion of services (Petersen & Rostgaard, 1999).
User fees (for home help services) and rents (for institutional and housing
services) are levied, but play only a minor role in the social service funding
scheme.
3.1.2 Models and examples
The municipalities are responsible, under the social service
rubric, for the planning, organization, delivery, and financing
of care and help at home (both home help services paid for
with social service funds and home nursing services paid for
with health care funds), and in day homes and centres, nursing
homes, and various forms of housing for the elderly. The majority
of these services is publicly provided, that is, directly operated
and delivered by the municipalities. However, depending on the
municipality, some services are outsourced or contracted out to
local non-profit organizations. Under this structure, training and
staffing by municipal workers is centralized, and human resources
are somewhat interchangeable.
In many municipalities, the community centre is the base for
home help (and, sometimes, home nursing) services,
10
and
also sponsors other activities geared to the community-dwelling
elderly (Lindstrom, 1998). The latter can include various health
services (e.g. health promotion, and rehabilitation services),
information and referral, day care, meals (both congregate and
home-delivered), hairdressing and pedicure, transportation,
volunteer services, and a variety of social, cultural, and
recreational activities. A mix of independent and frail elderly
usually attend these neighbourhood-based centres, and
intergenerational programming may also be involved.
10
The terms home nursing and home help are used throughout this section. Home nursing refers
to the medically necessary treatments (e.g. injections and wound care) provided by professional
nurses at home, usually as prescribed by a physician. Home help refers to the personal care services
(i.e. ADL assistance) and domestic tasks (e.g. shopping, meal preparation, and cleaning) provided
by a range of paraprofessionals, including personal care workers, homemakers, and housekeepers.
LONG-TERM CARE
104
Care networks
For a brief discussion, see the section on Service-enriched housing
below.
Case management
Denmark has adopted a comprehensive system of assessment
and client management for elderly persons living in the community
(Petersen & Rostgaard, 2000). According to Merlis (2000) this
model entitles everyone age 75 and older to at least two preventive
visits annually from a case manager employed by the municipality
in order to evaluate individual needs, and assist with planning
for independent living. Clients needing formal care are further
assessed by a home care manager, and the resulting care plan
ends up as a contractual specification for needed services. If the
client disagrees with this service allocation, it can be appealed.
Home-help workers and home nurses also work closely together
to coordinate their services, and ongoing care is regularly
monitored by the home care team. Back-up consultation from
the medical side of the system is often provided by hospital-based
geriatricians or geriatric teams, particularly when home care clients
present complex problems or institutional placement is indicated
(Nussberg, 1984; Stetvold et al., 1996).
As discussed earlier, nursing homes (and other more institutional
types of housing called sheltered housing) are in the process of
being phased out. Various forms of service-enriched housing
are being developed in their place with the active support of
the municipal and national governments. The goal is to create
non-institutional, but supportive living arrangements for the
elderly with varying levels of functioning. Such housing is often
located near, and linked with existing nursing homes, sheltered
accommodation, day homes or day centres and/or community
centres in order to maximize the use of personnel and facilities,
as well as ensure convenient access to home help, home nursing,
and other community services (Landsberger, 1985; Gottschalk,
1995; Merlis, 2000). Some of these vertically integrated
arrangements are designed to promote ageing in place, and
some are beginning to function as nascent care networks
(Petersen & Rostgaard, 1999).
KEY POLICY ISSUES
105
3.2 Germany
3.2.1 Background
As of 1997, Germany had a population of 82.2 million, 12.6 million (15.4%)
of whom were age 65 and over. Of these, 5 141 000 (6.3%) were age 75 and
over (OECD Health Data, 1999). Before 1994, Germanys system of public
support for long-term care was institutionally-biased, means-tested, and
administered at the provincial level by the states (known as Lnder)
(Scharf, 1998; Hughes, 2001). Three main issues (the increasing fiscal
pressures on the states; the growing perception that the then-existing system
compromised the German notion of social solidarity; and the bel i ef that
the supply and quality of formal services was inadequate) led to the 1994
enactment of legislation creating a universal social insurance programme to
cover long-term care (Schneider, 1999; Brodsky, Habib & Mizrahi, 2000; Vollmer,
2000). The programme, known as Social Dependency Insurance (SDI)
(in German, Soziale Pflegeversicherung), is financed through mandatory,
income-related premiums. The system, which gives priority to care in the
home over institutional care, became operational between April 1995 (for
home care) and July 1996 (for institutional care).
Beneficiaries can receive needed home care benefits in the form of in-kind
services, cash, or a combination of both. This major reform put long-term
care on equal footing with Germanys enduring, and internationally acclaimed
model of acute care (Cuellar & Wiener, 2000). While some of the key features
of the new German long-term care insurance system will be sketched below,
a full-scale discussion of its organizational principles, eligibility criteria and
benefits package is beyond the scope of this chapter.
11
In Germany, comprehensive health services (i.e. medical, dental, inpatient
hospital care, pharmaceuticals, home nursing, rehabilitation, and limited
preventive care) are covered through a universal social insurance programme.
12
The system, which was established more than a century ago as part of
Bismarks grand design for social security, is administered by approximately
1200 sickness funds (in German, Krankenkassen), that is, quasi-public,
quasi-private health insurance organizations, and overseen by the Federal
Governments Ministry of Labour and Social Affairs (Graig, 1999). All elderly
pensioners are protected by this system against the financial risks of illness.
11
For detailed information, readers should consult Brodsky, Habib & Mizrahi (2000) and Cuellar & Wiener
(2000).
12
The statutory system protects about 89% of the population who have incomes below the
government-set limit (US$ 43 000 in 1999) and therefore are mandated to join a sickness fund
(van Kamenade, 1997). The remaining 11%, who have incomes above the specified income level,
may obtain insurance coverage from private companies. In reality, virtually all Germans are covered
through some form of health insurance.
LONG-TERM CARE
106
The sickness funds represent patients in their dealings with health care
providers, collect income-related premiums, and pay regional provider
associations from these revenues. Health care services themselves are
delivered through a mixed publicprivate system. Hospitals are mostly public
institutions run by state and local governments, universities or charitable
institutions (Lassey, Lassey & Jinks, 1997). Physicians practise in both hospital
and ambulatory settings. Ambulatory care physicians, many of whom are
focused on primary care, generally serve as gatekeepers to medical specialists
and hospital-provided services; they are usually restricted from hospital
practice (Busse, 2001).
Patients have free choice of sickness funds and office-based primary care
physicians. Hospitals, physicians and other health care providers are
paid by the sickness funds (according to regionally negotiated fee schedules
or rates), but there are also individual co-payments (subject to a maximum
out-of-pocket amount) for certai n i tems such as hospi tal stays,
pharmaceuticals, and rehabilitation services (WHO, 1999).
Before turning to the various examples and models of integrated long-term
care below, three key points must be made about the fragmentation traditionally
found in both the acute and long-term care systems in Germany. First, hospital
and physician care are thought to be poorly integrated, and this is of ongoing
concern to policy-makers, providers, and insurance funds for both quality and
cost-effectiveness reasons (Kirkman-Liff, 1996). Second, long-term care,
and especially home and community-based services, persist in being
inadequately coordinated (Enquette-Kommission, 1994; Scharf, 1998). Third,
the connections between health and social care (particularly between general
practitioners and other community care providers) tend to be weak, and
unsystematic (Bundesministerium, 1993).
There are several reasons for this prevailing pattern of care. According to
Schunk (2001), Germanys entitlement culture reinforces the influence of
regulators, insurers, and providers. As such, it emphasizes the standardization
and consolidation of insurance coverage rather than finding ways to shape
the delivery of care or make services more responsive and personalized.
The delivery system more or less reflects this mindset. Services, although
generally available from a wide range of non-profit and for-profit organizations,
have long tended to be organized and provided in a relatively inflexible manner.
Another impediment is the notable absence of case management.
Even under the long-term care insurance programme, no mechanism exists
at the client or administrative levels to advocate for clients, assist them in
making care choices, target and allocate resources based on need, or provide
information and referral to housing, health care, or other community services
(Cuellar & Wiener, 2000). Therefore, integration is a major challenge in the
German context, particularly as it affects the frail elderly.
KEY POLICY ISSUES
107
Under the reformed long-term care financing system,
responsibility for administering SDI is incorporated into
the sickness fund structure described earlier (GAO, 1994).
To simplify administration, individuals must select the same
sickness fund (or private insurer, as appropriate) for both
acute and long-term care coverage. Physicians and other
long-term care professionals, working for the medical office
of each such fund or private insurance company, perform
requisite client assessments using detailed eligibility criteria
specifically written in the law. The entities are also responsible
for contracting with and reimbursing long-term care provider
organizations, and also play a role, though minimal, in quality
assurance.
On the surface, this arrangement would appear to facilitate
coordination between the medical and long-term care sides
of social insurance. However, the two forms of insurance are
legally separate, function with different benefits and rules, and
have their own funding streams.
Moreover, there are concerns about possible cost-shifting
between the medical and long-term care programmes,
especially in the area of rehabilitation services. Consequently,
little interaction actually takes place between both programmes,
whether at the sickness fund level or in the health and social
systems at large (Cuellar & Wiener, 2000). It is clear from
the experience to date that the full benefits of administrative
consolidation cannot accrue unless the fuzziness between
the health and long-term care systems is somehow resolved,
at least from a financing perspective.
The social station (in German, Sozialstation) has played an
important role in the organization and delivery of community
services for the elderly since the early 1970s, when they were
originally established by the individual states to reduce the
demand for inpatient hospital care (Diek, 1995; Scharf, 1998).
LONG-TERM CARE
108
Social stations are community centres, usually staffed by
nurses and social workers, which coordinate a broad range of
non-institutional long-term care services, including homemaker
and other home help services, counselling, shopping assistance,
transportation, equipment loan, meals-on-wheels, day care, and
information and referral (Landsberger, 1985; Tilly & Stucki, 1991).
They may also arrange home nursing and psycho-geriatric nursing
services prescribed by the sickness funds. Such services are
either provided directly by centre staff, or by other organizations
in the community.
The approximately 4000 social stations are sponsored by six
national welfare organizations,
13
and serve catchment areas with
20 00050 000 inhabitants in cities and 15 00025 000 inhabitants
in rural districts. Their activities are funded by a combination of
state and municipal funds, user payments, and reimbursement
received from sickness funds under the medical and long-term care
insurance schemes (Bauer-Sllner, 1991; Karl, 1994; Scharf, 1998).
However, there has been a dramatic decline in state and municipal
funding for the kind of community services arranged by the social
stations (Cuellar & Wiener, 2000).
14
While some tradition-bound
social stations lack a client-centred focus (and continue to fit clients
into existing services), many more centres are beginning to provide
needs-led services, particularly as a means of addressing the new
realities of long-term care insurance (Scharf, 1998). One of these
new realities is the emergence of a competitive market for home
and community-based services. The SDI programme has removed
the long-standing priority given to non-profit providers, and now
formally places non-profit and for-profit organizations and institutions
on the same level (Backhaus-Maul & Olk, 1991). This measure,
coupled with the shift in purchasing power over community care to
consumers and the substantial reduction in state and municipal
subsidies, has created a difficult environment for social stations.
Under these circumstances, they will have to become more
customer-driven and market-oriented.

13
These organizations and their affiliations are: Caritas (linked to the Catholic Church); Diakonie
(linked to the Protestant Charch); Deutsches Rote Kreuz (the non-confessional German Red Cross);
Arbeiterwohlfahrt (linked to the labour movement); Parittische (an umbrella group representing
approximately 7000 smaller voluntary organizations); and, Zentralwohlfahrtsstelle der Juden in
Deutschland (serving the Jewish population).

14
According to Cuellar & Wiener (2000), there are still a number of persons (primarily nursing-home
residents) who are receiving social assistance for the costs of their long-term care under the old
system. However, it is believed that this is a transitory issue. The proportion requiring home care
is negligible.
KEY POLICY ISSUES
109
Another innovative, but more recent iteration of the co-location
model is found in the senior citizen cooperative (in German,
Seniorengenossenschaft), ten of which are found in the State
of Baden-Wrttemberg. Senior citizen cooperatives represent
what Kane, Kane & Ladd (1998) refer to as a natural community
systems approach. They are organized and run by a combination
of local volunteers and staff, and are designed to complement
informal and formal care (Scharf, 1998).
These programmes differ from community to community,
but include one or more of the following features: mobilization
of neighbourhood help to provide simple domestic tasks
(e.g. cooking, cleaning, and making beds); home repairs;
home visiting; telephone reassurance; self-help groups
(e.g. for families taking care of relatives with Alzheimer disease);
and, transportation services (e.g. to the doctors office, and
for shopping). Some of the more sophisticated programmes
are involved in planning and developing enriched housing
programmes and day care centres.
To emphasize the voluntary and cooperative nature of these
programmes, most of these senior citizen cooperatives use
a form of payment for services based on the receipt and
exchange of time credits. Under this scheme (previously
introduced in Canada, the United States, and other countries),
individuals who provide help are able to earn credits which
they can redeem in the future for needed services, either
for themselves or for another family member (Cahn, 1992;
Kodner & Feldman, 1996).
In Germany, sheltered housing (in German, Betreutes Wohnen) is
a form of service-enriched accommodation found on the continuum
between independent housing and nursing-home type facilities
(Diek, 1995). Such housing consists of purpose-built flats adapted
to the needs of the elderly with physical and/or cognitive disabilities.
They are usually planned by the municipalities, operated by the
municipalities or non-profit groups, and are geared to lower-income
individuals. To help with housing costs, elderly tenants (depending
on household size and income, as well as housing costs) receive
a direct financial subsidy under the national governments system
of housing benefits (in German, Wohngeld) and/or a combination of
housing and social assistance from the states (Altenbericht, 1993).
LONG-TERM CARE
110
The service structure of these sheltered housing developments
varies. Most of the programmes help tenants to organize needed
services. However, the services themselves are provided from
the outside, either through the local social station or by a
neighbouring home for the elderly or nursing home (run by the
same non-profit sponsor) (Diek, 1995).
One other housing model bears mentioning. It is based on the
sheltered housing concept, but is oriented to the elderly with
higher incomes. Also operated by non-profit organizations
(but outside the social housing programme described above),
these highly integrated complexes offer a wide range of services,
including barrier-free flats, full-fledged hotel services (e.g. meals),
entertainment and recreational activities, self-help programmes,
and on-site nursing and medical services.
These housing arrangements, which look and operate like
an American innovation known as continuing care retirement
communities, are financed through a combination of monthly
maintenance fees and a relatively large, up-front, lump sum
payment (a type of insurance) to finance care services over
the long term.
According to Diek (1995), there has also been experimentation
along the same lines for the elderly with more modest incomes.
These so-called service houses attempt to offer a modicum
of on-premise services with the goal of enhancing independent
living and keeping tenants in the community for as long as
possible. Tenants pay rent, an additional monthly service charge
(which entitles them to a minimum level of service), and additional
fees on a pay-as-you-go basis if more help is required.
These programmes are operated by non-profit groups, but are
not connected with long-term care institutional sponsors, as above.
Moreover, since the model is less integrated, they tend to obtain
the bulk of services from local old-age clubs, day-care centres,
respite programmes, and social stations.
KEY POLICY ISSUES
111
3.3 The Netherlands
3.3.1 Background
As of 1997, the Netherlands had a population of 15.7 million, 2.1 million (13.3%)
of whom were age 65 and over, of whom 897 000 (5.7%) were age 75
and over (OECD Health Data, 1999).
The Netherlands is widely recognized for its high level of innovation in elderly
care (Baldock & Evers, 1992). Three main factors account for this very active
profile.
First, health care in general, and care of the elderly
in particular, involves a very wide range of actors in the
governmental, non-profit, and commercial sectors, which
have been likened to a patch quilt (Ottewill, 1996).
Second, the elderly population expects a high level of service,
and is protected by an extensive, insurance-based entitlement
to care (particularly for hospitals and nursing homes).
Third, because of these characteristics, the costs of care
are relatively high.
In this pluralistic, complex, fragmented and costly system, innovation is highly
valued, especially initiatives which are designed to achieve downward
substitution of services, enhance collaboration within and between health and
social care, and achieve tailor-made care (in Dutch, zorg op maat). Given the
consensus-driven nature of Dutch society, the national government and
sickness funds offer grants, subsidies and extra resources to coax, but not
pressure, provider organizations to cooperate with one another, as well as to
develop and experiment with new approaches.
The need for policy and delivery system reforms in long-term care have
received major attention in the Netherlands for over twenty years (Coolen, 1993;
Schrijvers et al., 1997). However, the 1994 Government report, Care for Older
People in the Future (Commissie Modernisering Ouderenzorg, 1994) was
instrumental in making the needs of the frail elderly a national priority (Nies,
2001). In the report, the Commission on Modernizing Care of the Elderly called
for a better and more coordinated system of care in which more individualized,
community-based services would be made available. Many of the groups
recommendations were eventually adopted and implemented by the Dutch
Government.
LONG-TERM CARE
112
Since much of the services that the frail elderly (and the rest of the population)
receive in the Netherlands is social insurance based, it is essential to
understand the framework within which the health care system operates.
Under the Sickness Fund Acts, all Dutch inhabitants under a certain yearly
income level (roughly US$24 000) are covered on a compulsory basis for
routine, non-catastrophic health care needs through a regional, non-profit
sickness fund (in Dutch, Ziekenfond) of their choice.
Approximately 64% of the population receive their care under this sickness
fund scheme, which provides basic coverage for general practitioner care,
specialty medical services, physiotherapy, pharmaceuticals, and inpatient
hospitalization (up to one year) (van Kemenade, 1997). Premiums are mainly
income-related, and generally deducted from salaries or social security
benefits (in the case of pensioners, a reduced rate); employers make a matching
contribution. There are also varying co-payments, but after a nominal
deductible (lower for pensioners and low-income persons), services are free
of charge.
Similar benefits for the remaining 36% of the population who are essentially
higher-income employees (with salaries above the legal cut-off) or
self-employed individuals, are covered by private insurance companies;
such coverage is not required (although most take out insurance).
The premiums paid by households in this group are to a certain extent
risk-related. According to Kirkman-Liff (1996), the insurance costs for the
elderly in the above system are cross-subsidized by younger insured
households.
Irrespective of income category or employment status, every resident is
protected against catastrophic health risks under the Exceptional Medical
Expenses Act (in Dutch, Algemene Wet Bijzondere Ziektekosten, or AWBZ),
which was originally introduced in 1968. AWBZ is especially important to the
frail elderly and other persons with long-term and high-cost conditions.
This universal programme insures against so-called exceptional expenses,
such as nursing homes and (since 1997) residential homes for the elderly,
institutions for disabled persons, home health and (since 1989) home help
services, mental health services, and prolonged hospital stays (over one year)
(Huijbers & Martin, 1998). The AWBZ premium paid is income-related and
fixed (i.e. between 8.85% and 9.6%, depending on monthly income), with a
maximum ceiling per wage-earner. Employers pay the majority of this
premium for their employees, with the remainder being collected through
income tax. The self-employed pay on their own through the income tax
system, and pensioners are exempted. Co-payments are also charged, and
vary by the recipients income level. Finally, general tax revenues are also
used to fund the ABWZ programme.
KEY POLICY ISSUES
113
A regional assessment system has been in place since 1998 to determine
eligibility for in-home and institutional long-term care services covered under
AWBZ (Brodsky, Habib & Mizrahi, 2000). Assessments are performed
by professional teams employed by a Regional Assessment Organization
(in Dutch, Regionaal Indicatie Orgaan or RIO) (Schrijvers & Ravelli, 2001).
The provision of health care services is generally regarded as a joint
responsibility between the national government and private initiative, although
provincial governments also have a role (primarily in the planning area).
The Ministry of Public Health, Welfare and Sport sets policy for, regulates,
and oversees the entire system, and the Agency for Healthcare Tariffs
(in Dutch, College Tarieven Gezondheidszorg or CTG) plays a powerful role
in rate-setting.
The Netherlands has a well-developed primary care sector, broadly consisting
of general practitioners (GPs), home care organizations (providing both home
health and home help services), physiotherapists, social workers, and other
generalists. Every person is registered with a GP, and is free to select the
physician of his or her choice. They serve as gatekeepers to hospital-based
specialists, and do not have hospital admitting privileges. GPs are generally
self-employed, solo practitioners (although group practice is growing in
popularity in urban areas), and have capitation payments for their sickness
fund patients and fee-for-service payments for their private patients.
The majority of medical specialists practise in the hospital setting, although
there is a new tendency to private practice in the community. About 90% of
medical specialists are self-employed, organized in partnership arrangements,
and receive fee-for-service reimbursement (van Kemenade, 1997). The rest
are salaried employees.
Two other points should be noted specifically with respect to the long-term
care aspects of the above system:
First, individuals are expected to join their local home
care organization as members. This covers the home care
cost-sharing requirement, and also facilitates a closer
connection between community providers and consumers.
Second, a personal budget programme (in Dutch,
Persoonsgebondenbudget) was introduced in 1995,
which enables certain disabled clients to purchase needed
home care from the provider of their choice (i.e. from regular
home care organizations, private home care providers, or
informal carers) (Weekers, 1998; Schrijvers, 2001).
LONG-TERM CARE
114
The AWBZ scheme for long-term, catastrophic care
(including home care, nursing-home care, and care in residential
homes for the elderly) is administered by the sickness funds
(on behalf of their members), and by private health insurers
(on behalf of their insured). Sickness funds have pooled this
responsibility through regional care offices (in Dutch, Zorgkantoor
or Verbindingskantoor) (Okma, 2001). Their mission is to simplify
programme administration at the level closest to care recipients,
oversee the regional budget for AWBZ covered services, and
ensure appropriate resources to meet regional needs.
While this arrangement appears to enhance coordination
between care provided under the basic (largely medical) and
catastrophic (largely long-term care) insurance packages
described earlier, there is no evidence that this is occurring
(Nies, 2001). The integrating potential is widely recognized by
the government, sickness funds, and private insurers. However,
the two programmes continue to be legally separate and distinct.
Furthermore, there are still several grey areas, for example, how
care offices and RIOs are supposed to relate to one another.
Without a clear mandate, it is unlikely that this potential will ever
be fully exploited.
Community-based organizations known as Welfare Services
for Older People (in Dutch, Stichting Welzijn Ouderen, or SWO)
operate out of neighbourhood centres run, in part, by the local
elderly. In addition to recreational, educational, and cultural
activities, the SWOs give information and advice (on housing,
health and social care, and financial matters); arrange home
nursing and home help services (through the local home care
organization); and may also provide community services directly.
Services include day care, meals-on-wheels, alarm systems,
laundry services, pedicures and hairdressing, assistance with
bathing and showering, and various forms of volunteer help
(Huijsman, 1993; Graveland et al., 1996; Nies, 2001). Centres
also supply services to nearby residential homes for the elderly.
Funding from the municipalities (with which SWOs closely
cooperate) plays a major role in these programmes.
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115
Care network
The changing face of Dutch health care/elderly care includes an
increasing tendency towards vertical and horizontal integration
within and between the health and social care sectors (Konig, Nies
& Timmer, 1996; Fabricotti, 1999; Juch et al., 1999; Nies, 2001).
There are several relatively recent examples of hospitals,
nursing homes, residential homes for the elderly, home care
organizations, and even housing providers joining together to
establish umbrella organizations. More frequently, mergers
have taken place between groups of nursing homes, residential
homes, and housing programmes.
The integration of home health agencies (the former Cross
Associations) and home help providers began even earlier,
that is, after the merger of their two national organizations over
ten years ago (van der Linden & van Dam, 1997). Moreover,
between the late 1970s and early 1990s, there were several
demonstration projects which attempted to develop a virtually
integrated system of care services for the frail elderly.
The Venlo project is, perhaps, the best known (Coolen & de Klerk,
1993). The organizations involved in this project (home care
organizations, SWO, and residential homes for the elderly)
pooled their resources, and established one central site in the
community to centralize intake, assessment, care planning,
and service coordination activities. Many of the experiences of
these programmes have been incorporated into the more
contemporary model of the care network.
There are three major reasons for this emerging trend in the
Netherlands. Networking is viewed as an important foundation for
building chains of care (see below) in order to better address the
fragmentation and continuity problems encountered by the frail
elderly and younger persons with complex, chronic conditions.
The model is also increasingly valued as an enhancer of
operational efficiency. Finally, it is considered a potentially
useful social marketing strategy in a health care environment
marked by growing competition.
LONG-TERM CARE
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Case management
Case management was imported to the Netherlands from the
United States and the United Kingdom over a decade ago
(Kodner, 1991; Koedoot & Hommel, 1993). Health care and
social service providers have been using variations of this
coordination approach as part of ongoing programmes and
demonstration projects ever since (Schrijvers, 2001).
15
These programmes are too numerous to describe here. Suffice
to say that many of todays existing care networks, home care
organizations, transmural care programmes and centres (see
below under Chains of care), and housing providers have integrated
case management in their delivery systems as a core function.
Chains of care
Transmural care (in Dutch, transmurale zorg) is the Netherlands
version of a chain of care. The concept was introduced in the
Netherlands at the beginning of the 1990s, and has been a rapidly
growing field since then (van der Linden & Rosendal, 2001).
By 1999, the majority of hospitals, general practitioners, home care
organizations, institutions for the elderly, and care networks have
or were in the process of developing transmural care programmes
(van der Linden, Spreeuwenberg & Schrijvers, 2001).
The need for the approach was first identified in 1994 by a
Government Commission (Commissie Modernisering Curatieve
Zorg, 1994). In 1995, the National Advisory Council on Health
Care (NRV) defined transmural care as:
care geared to the needs of the patient, provided on the
basis of cooperation and coordination between general
and specialized caregivers, with shared responsibility and
specification of delegated responsibilities. (NRV, 1995)

15
There is an extensive literature on elder care innovation in the Netherlands, including experiments
with case management. The reader is referred to the following English-language publications:
Coolen, 1993; Romijn & Miltenburg, 1993; and Home Health Care Services Quarterly,1995:15(2).
KEY POLICY ISSUES
117
The NRV definition encompasses a wide range of initiatives
where home-based and institutional-based providers, traditionally
working apart from one another, join together to improve quality
and efficiency in care delivery.
16
Demonstration initiatives are
now becoming permanent programmes, many of which are
operated by newly established so-called transmural care centres.
These centres are partnerships between health and social care
providers (especially hospitals and home care organizations)
in a particular region. Much of the activity in transmural care
targets post-hospitalized patients, such as stroke patients, and
elderly patients recovering from total hip replacement surgery
(Nies, 2001).
However, there are also more social models for frail elderly
patients, and psycho-geriatric patients (Nies, 2000). Typically,
clients are followed throughout the course of their disease or
disability by an interdisciplinary/multidisciplinary team using case
management techniques to coordinate care at various phases
of the condition and in various service settings. Needed services
are delivered from specially designed care packages, and there
is often a health education and training component for clients and
their family carers.
The development and sophistication of transmural care is expected
to increase in the future, particularly with respect to individuals with
long-term, chronic, and disabling conditions. However, according
to experts, this further evolution will be hampered somewhat by the
structural fragmentation inherent in the Netherlands system, as well
as the lack of integrated financing for health care and social services
(Nies, 2000).
16
An excellent English-language summary is found in the recent study by van der Linden (2001).
LONG-TERM CARE
118
An unusually large segment of the elderly population in the
Netherlands (approximately 10%) resides in institutional settings:
residential homes for the elderly and nursing homes (van Vliet,
1995; and van Egdom, 1998). However, since the 1970s,
the Netherlands Government has advocated a policy of
de-institutionalization.
This policy was augmented in the 1980s by a call for
downward substitution. The idea was to enable the elderly
to live in the least restrictive environment, as well as promote
more cost-effective alternatives to long-term institutional care
(Tunissen & Knapen, 1991). In order to achieve these policy
goals, the supply of home and community-based services
was greatly expanded, along with the availability of a wide
range of so-called sheltered housing arrangements.
Sheltered housing is an intermediate form of purpose-built
housing for the elderly who need some on-site assistance
and support (Nussberg, 1984). These accessible apartments
are mostly rental units, although ownership options are also
available. The multi-story housing complex is usually
developed and managed by a non-profit housing corporation
(including sponsorship by various grassroots groups),
although commercial operators are entering this market
(van Vliet, 1995).
The shelter that is given consists of an apartment,
around-the-clock monitoring by a caretaker, extra services
such as housekeeping and meals, and a guarantee that any
additional care will be organized by the housing provider and
be promptly delivered (van Egdom,1998). There are many
arrangements for service provision.
For example, there are dwellings that are functionally integrated
with residential homes for the elderly. These facilities link
housing tenants to a unified alarm system, and offer them a
place to go for meals and social activities. Other developments
contain a central service centre (sometimes also serving the
immediate neighbourhood), which coordinates and arranges
a broad range of health and social services (van Vliet, 1995).
KEY POLICY ISSUES
119
The local SWO also plays a service role in these sheltered housing
projects. There are, however, limits to service integration in these
supportive accommodations, as it is the national governments
policy to separate the funding of housing from services (van Egdom,
1998). Nonetheless, the Ministry of Housing subsidizes sheltered
housing rents for certain low-income households (van Vliet, 1995).
As indicated above, some residential homes for the elderly reach out
to provide supportive services to semi-independent elderly living in
their own homes in surrounding neighbourhoods (de Weert-Oene
et al., 1997). These institutions provide a package of recreation,
meals and other services (e.g. laundry, pedicures and hairdressing),
as well as limited home help services. Elderly clients participating in
these outreach programmes (many of whom are on facility waiting
lists) pay a nominal monthly membership fee for the basic services,
and are charged on a fee-for-service basis for any additional services
provided (e.g. temporary housing).
Finally, various combined housing and service innovations have
attempted to integrate independent living, residential care, and
nursing-home care under one roof (Coolen et al., 1993). The flexible
concept is known as the care house (in Dutch, Zorghuis).
One project, Zorghuis W. Drees, was developed on the site of a
former nursing home in The Hague. This care house consists of
119 independent housing units providing accommodation for single
individuals or couples. A total of 150 tenants (eligible for admission
to a nursing home or residential home for the elderly, or interested in
sheltered housing) receive various levels of care, from some help to
full nursing care. There are also on-premise nursing units to provide
around-the-clock care; these units are reserved for couples who
would otherwise be forced to live separately. The project, which
is sponsored by the municipality, takes over all of the health and
social care tasks, including general medical treatment. An extensive
effort is made to integrate neighbourhood services as much as
possible into the housing programme (e.g. home care), and a
variety of subsidies were provided by the municipal government,
Ministry of Housing, and Ministry of Health during the experimental
phase. While the project did not achieve the kind of success that
planners and policy-makers had expected, it was found that elderly
tenants were in greater control of their lives, and fewer applied for
institutional admission.
LONG-TERM CARE
120
3.4 Sweden
3.4.1 Background
As of 1997, Sweden had a population of 8.8 million, 1.5 million (17%) of whom
were age 65 and over. Of these, 730 000 (8.3%) were age 75 and over (OECD
Health Data, 1990.
17
Sweden is recognized throughout the world as a nation with a strong
and generous commitment to publicly funded and delivered health and social
services for citizens of all ages (Zappolo & Sundstrm, 1989). A central tenet
of the Swedish welfare state is that the elderly are guaranteed financial
security, adequate housing, social services and health care according to their
needs (Johansson, 2000). Care of the elderly, in particular, is viewed as a
cradle-to-grave system of government support (Johansson, 2001).
Two major government policies are particularly relevant to the needs of the
frail elderly and the integration of long-term care services. The far-reaching
1992 Elderly Reform (in Swedish, dre-reform), moved the financing and
administration of nursing homes and home nursing from the counties to the
municipalities (which already provided social services and housing), and also
gave them the financial responsibility for elderly long-term patients in the acute
inpatient setting (Johansson, 2000).
18
This delegation of responsibility was designed to consolidate health and social
care for the elderly at the local level, and was aimed at both de-medicalizing
elderly care and enhancing the coordination of services (Andersson & Kalberg,
2000). (The implications of this decentralization strategy for both administration
and service delivery are discussed later in this section in greater detail.)
This was followed in 1998 by a National Action Plan on Policy for the Elderly,
in which the Parliament identified the need for further structural changes in
the Swedish system of elderly welfare.
The plan places major emphasis on ensuring good caring services for
the elderly, that is, the elimination of what it calls the grey zones related to
poor coordination of care between providers of health and social services
(Ministry of Health and Social Affairs of Sweden, 1999).
17
Sweden is one of the oldest countries in the world (Johansson, 2000).
18
The municipalities were given the option of providing home nursing services directly or keeping this
service in the county-run health system (Andersson & Karlberg, 2000). In either case, the municipality
retains ultimate financial responsibility for the delivery of this service.
KEY POLICY ISSUES
121
One of the main pillars of Swedish elderly care is the health system. Sweden
has a national health system for the entire population, which operates within
the policy framework mandated by the Health and Medical Services Act, 1983.
Financing for health care is derived mainly (approximately 87% of the total)
from proportional income taxes levied at the county level (the tax rate is about
11.5%).
Other sources include the national insurance system (80% paid by employer
contributions, and 20% by central government contributions); and various patient
co-payments. Co-payment fees differ by service and by county; are limited by
individual ceilings; and certain populations, including persons with chronic
illness, are exempted from payment (van Kemenade, 1997).
The central government oversees and evaluates the health care system
through the National Board of Health and Welfare (in Swedish, Socialstyrelsen).
However, it is actually organized and administered at the county (i.e. provincial)
level; county populations range from 60 000 to 1.7 million inhabitants.
The 21 elected County Councils are each responsible for the financing,
administration, and delivery of a comprehensive package of services.
Services include a broad range of ambulatory and inpatient services.
Beside primary and specialty medical care and inpatient hospitalization, the
nati onal i nsurance programme al so covers preventi ve servi ces,
pharmaceuticals, rehabilitation, dental care, and mental health services
(van Kemenade, 1997).
Approximately 80% of county budgets are devoted to such services, and the
counties have wide latitude in terms of how they are organized regionally.
Health care institutions, including hospitals and health centres, are mostly
publicly operated. Private sources of care are minimal, but some counties
have begun to encourage their development on a contract basis in order to
expand the supply of services, shorten waiting times, and reduce costs
(Lassey, Lassey & Jinks, 1997).
For the most part, primary health care services are provided by general
practitioners practising in district health centres. These primary care physicians
do not act as gatekeepers to specialized care; at the moment, patients are
free to go directly to hospital-based specialty clinics.
Hospitals, which are organized hierarchically (i.e. district county hospitals,
central county hospitals, and medical-school-affiliated regional hospitals),
provide both inpatient and outpatient medical care. Because of the large elderly
population, there has been a growing emphasis on geriatric medicine, with
hospital-based departments playing an important role in geriatric assessment
and rehabilitation (Sundstrm & Thorslund, 1994).
LONG-TERM CARE
122
In this publicly-run system, physicians are mostly salaried. Health care centres
operate on a budgeted basis. Hospitals, on the other hand, are reimbursed
through a variety of systems: global budgeting; purchases by health centres;
or purchases by health districts. The purchaserprovider model (reflected in
the latter two approaches) has been available to county councils since 1995,
and is meant to reduce referrals to hospital specialty clinics, shorten waiting
times for specialist consultations, promote better links between primary and
secondary care, and generally enhance patient satisfaction (Jones, 1996;
Kirkman-Liff, 1996).
As indicated earlier, social care (including housing and the elderly care services
transferred under the Elderly Reform) are the responsibility of the municipalities.
This local system operates within the legislative framework created by the
1992 Social Services Act, and is supervised nationally by the previously
mentioned National Board of Health and Welfare. The 289 local governments
finance, organize, deliver, and arrange a wide range of services.
This range includes home care (home nursing and home help services),
care in day centres, various forms of special housing (i.e. nursing homes,
old-age homes, service houses, group homes, etc.), and assistive devices
(e.g. walkers, wheelchairs, security alarms, and housing adaptations)
(Johansson, 2001). In addition, the municipalities are liable for the costs
of hospitalized long-term care patients. This statutory obligation was designed
to encourage the care of so-called geriatric bed-blockers in non-hospital
settings, thus reducing the high costs attributable to this population
(Johansson, 2001).
Under this scheme, the municipalities are relatively autonomous with respect
to how services for the elderly are administered, organized, allocated, and
provided. Most of the care is delivered by government workers, although
some municipalities contract with the private sector (non-profit or for-profit
organizations) to deliver some of the services.
This extensive support system is funded for the most part by local taxes
(about 8085% of the total costs), although the central government provides
tax-funded subsidies and grants to cover the remaining 1520% of the costs.
There are also user fees (varying by municipality, and income adjusted and/or
subject to out-of-pocket maximums) which, while becoming increasingly
popular among local governments, pay only a fraction of these costs.
Before turning to the next topic, it should finally be pointed out that the Swedish
system is beginning to move away from its universal model of social care for
the elderly (Johansson, 2001). Swedes are living longer, and it is becoming
increasingly difficult to shoulder the increasing costs of welfare services through
the straining tax base.
KEY POLICY ISSUES
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In order to address this challenge, greater emphasis is being placed on
improving the targeting of services; developing more efficient delivery modes;
strengthening the case management function; contracting with private
organizations to provide publicly-funded services; and shifting some more of
the costs to its citizens (via income-related charges and co-payments).
Johansson (2001) speculates that continuing cost containment pressures
may ultimately lead to the creation of a government regulated quasi-market in
which elderly consumers would use vouchers to obtain needed social services
from a mix of competing public and private providers.
The purpose of the Elderly Reform, summarized above, was
to create better value for what are essentially long-term care
services through the consolidation of programme administration
and public funding at the municipal level (GAO, 1994).
This 1992 mandate gave local government new taxing authority
to fund elderly care services; additional staff to deliver them
(by transferring county employees to the municipalities);
primary responsibility for the planning, delivery and coordination
of services; and total control over the supply of services.
It is now possible to identify some of the main effects of this
integration strategy.
First, the former problem with bed-blocking has diminished
substantially, in some counties by as much as 50%
(Andersson & Karlberg, 2000; GAO, 1994). This has been
made possible by more appropriate and timely transfers to
nursing homes and community care providers.
Second, there has been a considerable increase in the supply
of special housing (especially non-nursing home type options),
and home care resources.
Third, the municipalities have enhanced the capacity and
quality of the home care service. This has been made possible
by the transfer of home nursing personnel from the counties
to the municipalities, and the legally-mandated special medical
nurses function to monitor quality of care at the local level.
LONG-TERM CARE
124
Overall, these accomplishments reflect the impact of fiscal
incentives built into the Elderly Reform, as well as improvements
in service coordination. In addition to improved communication
and collaboration at all levels, the key role of case management
has been upgraded and professionalized (Johansson, 1993).
(For more on these developments, see Case management,
below.)
Administrative consolidation, nonetheless, has not solved
everything; there are also new problems as a consequence.
Coordination at the intersectoral level still remains somewhat
of a problem, especially in municipalities which have not
assumed direct responsibility from the counties for home
nursing (Andersson & Karlberg, 2000).
Moreover, the Elderly Reform left untouched the general
fragmentation which has traditionally existed between the
acute side of the system (i.e. hospitals and medical providers)
and long-term care. In addition, because of growing budgetary
pressures and government-imposed limits on the levying
of taxes, the municipalities are shifting more of the costs
of care to consumers. For example, between 1991 and 1993,
out-of-pocket payments increased from 4% to 10%
(GAO, 1994).
In some communities, home nurses employed by the
municipality continue to be out-stationed at, or attached
to local health centres, which are operated by the counties
(Lassey, Lassey & Jinks, 1997). These so-called
district nurses coordinate the home health services
they deliver in the home with the care provided at the
health centre by the patients general practitioner
(Sundstrm & Thorslund, 1994).
In addition, they perform night patrols to monitor
medically-unstable elderly patients as adjuncts
to both the primary care and social service systems
(Sundstrm & Thorslund, 1992).
KEY POLICY ISSUES
125
Case management
Case management has become a core activity in Swedish
elderly care, particularly as a means of improving service
targeting and coordination, and enhancing the outcomes
of in-home support for long-term care clients. Multidisciplinary
care planning teams (along with hospital discharge planning
routines), which began to appear in virtually every municipality
in the 1980s, are now in the process of being re-worked into
full-blown case management teams (Johansson, 2000).
Operating within the broader Elderly Reform framework, these
teams now cover the housing, service, and care needs of their
elderly clients, and have wider responsibilities: outreach, case
finding, needs assessment, care planning, service coordination,
and monitoring. There is also better training for case managers.
In some municipalities, these functions are performed within
the context of a purchaserprovider split, that is, the local
government decides on eligibility and the access to services,
but the actual care is delivered by private contractors.
While this may be a more cost-effective arrangement,
the resulting bifurcated structure presents some logistical
challenges from the case management point of view.
The national government and the municipalities have been
giving increasing recognition to the importance of housing
plus service arrangements as a way of maintaining elderly
long-term care clients in the community (Ministry of Health
and Social Affairs of Sweden, 2001). A wide range of housing
choices (known as special accommodation, or Srskilda
Boendeformer in Swedish), are available to fit the environmental
and service needs of physically and cognitively disabled
individuals (Swedish Institute, 1999). Various institutions
(including nursing homes and old-age homes), as well as
service blocks
19
and flats, and group homes (primarily for
persons with dementia) fall under this housing category.
19
A service block is a group of flats or apartments for the elderly that are located in a regular housing
development with primarily younger tenants.
LONG-TERM CARE
126
The municipalities own and operate this housing stock.
However, the supply and types of housing available, and
the access to these resources (except the qualification
that the elderly person must be in extensive need of care
and supervision) vary from municipality to municipality.
Local governments receive some funding from the
central government to subsidize new construction,
modernize existing buildings, and maintain these facilities
(on a very limited basis) (Lundin & Turner, 1995).
Including the above subsidies, the municipalities end up
covering about 90% of total housing costs, and the
remaining 10% is paid directly by individual tenants.
Depending on the kind of accommodation and the
municipality in which it is located, these direct payments
can include rent and/or other charges for food and services.
Meals, apartment cleaning, recreational services, and local
transportation (sometimes) are provided by the housing
management. Needed home nursing and home help
services are arranged with the municipality, as are other
community-based services (e.g. day care). These services
are integrated with the housing programme as much as
possible (Tilly & Stucki, 1991).
In addition to these traditional housing options, some
municipalities have experimented, or are experimenting
with alternative forms of living and service. For example,
non-profit, cooperatively-owned housing complexes
(aimed at higher-income pensioners) are responsible,
not only for the maintenance of dwellings and housing
estates, but also for on-site home help and medical care
(Lundin & Turner, 1995).
This model represents a more comprehensive and customized
package than the other programmes sketched above, and
is already being adapted by some local governments for
low-income inhabitants.
KEY POLICY ISSUES
127
4 Summary and lessons
The integration of health care, social services and housing is considered a
major variable in designing and operating efficient and effective long-term care
systems, given the complex nature of the frail elderly population and their needs.
Yet, relatively speaking, all industrialized countries face similar problems with
respect to integrating the long-term care sector, namely, poor coordination,
lack of continuity, less than optimal outcomes, and difficult-to-control costs.
There are a variety of strategies available on the financing, administrative,
organizational, service delivery, and clinical levels to address these
shortcomings. However, the priority given to solving this dilemma, and the
approaches actually taken, depend largely on the nature of a particular
countrys health and welfare policies, financing and delivery systems,
administrative arrangements, funding and resources, and societal expectations
and demands.
The four European countries presented in this chapter (Denmark, Germany,
the Netherlands, and Sweden) were selected because they have, or
are in the process of developing more integrated long-term care systems.
Despite the obvious contextual differences between these four countries,
they have pursued a number of common directions. A wide range of innovations
have been described in this section.
These include various national approaches to administrative consolidation,
co-location of services, care networks, case management, chains of care,
and service-enriched housing. In addition, we have, in some cases, presented
available evidence on the impact of these initiatives.
While the examples described focus on the elderly, it is possible nonetheless,
to apply many of these basic concepts to the needs of younger persons with
disabilities. However, in doing so, policy-makers, planners, and programme
managers must be sensitive to the major differences usually found
between elderly and younger long-term care populations.
These differences involve their feelings of dependency, ethos of autonomy and
self-direction, sense of consumerism, and disposition to the formal system of
care (Kodner, Sherlock & Shankman, 2000).
LONG-TERM CARE
128
There are several general lessons that can be drawn from this analysis.
There is no single solution to the problem of long-term care
integration. Because of the various complexities involved,
multiple approaches are needed to enhance the quality and
cost-effectiveness of care for the frail elderly on both the system
and client levels.
The consolidation (and decentralization) of administrative
functions is an important integrating strategy. However, the
boundaries between the various sectors comprising the long-term
care system (health care, social services, housing, etc.) must
be reconciled and aligned in order to obtain optimum results.
There are various organizational and service delivery models
available to bring the long-term care services needed by the frail
elderly under one roof, as well as to link them in a seamless
manner. Whatever the model(s) chosen, most long-term care
policy-makers, planners, and providers believe that some form
of case management is necessary to effectively target the
population-at-risk and coordinate their services.
Integrated home care is one of the linchpins of a
well-organized and effective long-term care system.
A critical element is the coordination of home nursing and
home help services at both the administrative and client levels.
This can be accomplished through a variety of integrating
strategies, including the harmonization of home care funding;
close collaboration between, or merger of home nursing and
home help organizations; joint training of home care workers;
and the use of home care teams.
Purpose-built housing and, to a certain extent, residential
care institutions, show promise as the base for organizing more
integrated long-term care services for tenants, but also for elderly
residents in the surrounding community.
Volunteers (especially the elderly) represent an important,
but largely untapped long-term care resource. In addition to
mobilizing the communitys natural support network, volunteers
can also assist in linking and coordinating informal help with
professional services.
KEY POLICY ISSUES
129
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5
ACHIEVING COORDINATED AND INTEGRATED
CARE AMONG LTC SERVICES: THE ROLE
OF CARE MANAGEMENT, David Challis
Preface
The perennial concern of governments has been to identify means of
achieving coordinated and integrated long-term care. This may be examined
at different levels in the care system: interagency coordination; interprofessional
coordination; and case level coordination (Challis et al., 1995). None of these
may be separated completely from the others, but the focus of this chapter is
upon the third of these.
This chapter, which builds upon commentaries such as Challis (1992a,b;
1993a,b; 1994a,b,c; 1999a,b; 2000), attempts to bring together material about
the definition and specification, context and content of care management with
a focus upon issues of implementation. Although it necessarily draws from
the implementation experience of care management in the United Kingdom,
it addresses issues which have a wider resonance.
The chapter is organized as follows:
an introduction;
a discussion of the definition of care management;
a summary of the issues arising from implementation in the
United Kingdom;
a discussion of some extrinsic factors which may shape
implementation;
a discussion of intrinsic factors such as the specific features
of care management relevant to implementation; and
a discussion of issues emerging which are critical
to implementation.
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1 Introduction
There are major developments in long-term care occurring in many countries
and some broadly similar trends can be discerned. In their study of emerging
patterns of change in services for elderly people in the Netherlands,
Sweden, and the United Kingdom, Kraan et al. (1991) noted three broad trends:
a move away from institution-based care;
the enhancement of home-based care; and
the development of mechanisms of coordination
and case management.
In the care of elderly people in many other countries such as Australia, Canada
and the USA, a similar trend can also be observed (Challis, 1992a,b). In the
mental health services, the reduction of institutional provision and focus upon
community-based services is clear (Huxley et al., 1990).
Long-term care policy for other client groups has also taken not dissimilar
forms, with the desire to develop community services being stressed (DHSS,
1983; Cm849, 1989). Underlying this is a major debate about the extent to
which community services complement or substitute for institutional care.
Concern for coordination has been longstanding and in the United Kingdom
took the form principally of attempts to improve interagency coordination, chiefly
health and social care, through such initiatives as joint care planning and joint
financing. The focus upon coordination at the client level came considerably
later being less evident in a setting where most services were provided by
two main agencies, health and social services.
For people with mental handicaps or learning disabilities in the USA, discharge
from hospital and developing continuity of care have been key themes, with
case management made mandatory to improve coordination of care after
discharge (Intagliata, 1982). The rationale for this is cited by Miller (1983) who
quotes the conclusion of the US Presidential Commission on Mental Health for
case management:
Strategies focused solely on organizations are not enough.
A human link is required. A case manager can provide this link
and assist in assuring continuity of care and a coordinated program
of services. (Miller, 1983, pp.56.)
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In general, therefore, the origins of case management lie in the need to
coordinate delivery of long-term care services to individual clients (Austin,
1983, p.16).
Moxley (1989) cites six factors underlying the development of case management:
de-institutionalization;
the decentralized nature of community services;
growing numbers of clients with multiple needs living at home;
fragmentation of care services;
a growing awareness of the importance of social supports
and carers; and
the need for cost containment.
Care management and coordination are thus central to the achievement of
the goals of community-based care. The United Kingdom White Paper Caring
for People (Cm849, 1989) described assessment and case management as
the cornerstones of community care and the Audit Commission has referred
to it as the lynchpin.
Care management is thus in a crucial position in the new care arrangements,
being the mechanism designed to achieve both the move away from institutional
provision and the strengthening of home-based care. It is the point at which
welfare objectives and resource constraints are closest together. Therefore,
care management has a pivotal role in the integration of social and economic
criteria at the level of service provision, where the balancing of needs and
resources, scarcity and choice must take place (Challis, 1992b).
It should not be seen as a panacea (Callahan, 1989) nor a silver bullet (Austin,
1992) for the ills of community care, but rather a particular device which,
dependent upon the manner of its implementation, offers a means to manage
some intractable policy and practice dilemmas. Much is therefore dependent
upon the coherence, form, style, and structure of the care management
processes to effect community care changes. The debate about the forms
and nature of care management which will be appropriate in different
environments for different client groups will continue.
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Here, an attempt is made to clarify and define the nature of care management
and to consider some factors that appear to be associated with more or less
effective implementation. In essence, there are four broad areas for
consideration:
the definition of care management and its associated
expectations;
an overview of issues emerging in care management
in the United Kingdom from its implementation in the 1990s;
features of the context within which care management is
located, which may be described as extrinsic factors; and
factors within the system of care management itself,
which may be described as intrinsic factors.
The degree of fit between the extrinsic and intrinsic factors of a care
management system is an important and valuable area for examination.
2 Defining the nature of case or care management
Beginning with definition is useful, since it helps to identify the types of domain
where variations in assumptions about care management may commence.
There are a number of high quality reviews of care management (Kodner, 1993;
Applebaum & Austin, 1990). However the definition of care management
remains far from easy. Definitions abound and even terminology changes.
In the United Kingdom, the Griffiths Report (Griffiths, 1988) talked of
care management and the subsequent White Paper (Cm849, 1989) used
the term case management. Later, the Department of Health guidelines
published for managers and practitioners (DOH, 1991a,b) refer to care
management, justifying this in terms of the fact that it is the care which is being
managed and that the word case may be perceived as demeaning.
A similar point is made in the Care Management Standards of the
National Institute on Community Based Long Term Care in the USA
(NICBLTC, 1988). The debate about nomenclature also occurs elsewhere.
One major organization in the USA, Connecticut Community Care, has used
the terms Case Management and Care Managers. Alternatively, the
State of Wisconsin is providing a Care Management Program, but has
employed the terms Care Manager and Case Manager interchangeably.
Washington State uses the term Case Management.
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Conversely, in the Canadian Province of Manitoba the term Case Coordinator
is employed (Fineman, 1992). In British Columbia, the term Assessor in the
Continuing Care Programme was changed to Case Manager, reflecting
increasing dependency in the needs of the primary client population and
the need for continuity of care (BCMH, 1992). What is important is less the
precise terms which are used and more the clarity of meaning which is attached
to different aspects of the process.
The origins of care management then, lie in the immediate need for
coordination of home-based care, albeit with a broader range of objectives
including client-centred care and effective use of resources (Challis, 1992b).
Six criteria may be identified which together constitute a more precise definition
(Challis et al., 1995; Challis, 1994a, 1999a,b):
the performance of a set of core tasks;
the function of coordination;
explicit goals for care management;
a focus upon long-term care needs;
particular features which differentiate care management
from the activities of other community-based professionals; and
the dual function of care management at client level and
system level.
These criteria are discussed below. They attempt to answer the questions:
What is undertaken in care management?
Why is care management employed in the care system?
How is care management done?
For whom is care management provided?
What makes care management different from other
community-based work?
What impact does care management have on the service system?
Each of these would seem to be an important component of the definition.
LONG-TERM CARE
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2. 1 The functions of care management
In overall functional terms, Austin (1983) defines case management as:
. . . a mechanism for linking and coordinating segments of a service
delivery system . . . to ensure the most comprehensive programme
for meeting an individuals needs for care. (p.16)
This involves continuity of involvement and is based upon comprehensive
assessment of the individuals needs (Kane, 1990).
Moxley (1989) usefully defines case management as:
. . . a dedicated person (or team) who organizes, coordinates and
sustains a network of formal and informal supports and activities
designed to optimise the functioning and well-being of people with
multiple needs. (p.17)
More generally, Modricin, Rapp & Poertner (1988) describe it as the
achievement of a better fit between:
. . . the persons needs and the resources available in the community.
(p. 307)
The United Kingdom Department of Health Guidance (DOH, 1991b) defines
care management as:
. . . the process of tailoring services to individual needs. (p. 11)
It then refers to specific core tasks.
Similar criteria to these are identified by Rothman (1992), Geron & Chassler
(1994), and Rothman & Sager (1998).
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2. 2 The goals of care management
Moxley (1989) notes three goals of case management:
improving client utilization of support and services;
developing the capacity of social networks and services
to promote client well-being; and
promoting service effectiveness and efficiency.
Ten key benefits are listed in the British Governments Social Services
Inspectorate Practice Guidance (DOH, 1991a,b, para. 18). These range from
client-related benefits such as tailoring services more closely to needs or
enhanced choice, to more service-related goals such as improved integration
of response both within and between agencies, or greater continuity of care.
These are not dissimilar to those cited by the National Institute for Community
Based Long Term Care in the USA (NICBLTC, 1988) which cover both client
centred activities such as enhanced service access, coordinated care,
independence and community tenure as well as more system-focused goals
such as improved service availability, reaching a specified target population,
and cost containment through use of appropriate community-based services.
These recognize the potential for goal conflict such as between client
and carer or between cost containment and client responsiveness, and specify
the need for mechanisms to resolve such conflicts. These include family
meetings, advocacy, case manager peer group support, and effective
supervision.
Where system-focused goals are important, the issue of service development
emerges (Moxley, 1989; Applebaum & Austin, 1990; DOH, 1991a,b; Kendig et
al., 1992). This can take the form of shaping changing the ways in which
services operate, rendering them more sensitive to the needs of consumers,
such as altering the range of activities undertaken, the way they are undertaken,
or the times when they are available.
LONG-TERM CARE
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The Province of British Columbia defines case management as
. . . a specific set of client-related functions that include intake and
screening for eligibility, assessment of functions and needs, mutual
service planning and goal setting, efficient linkage with available
resources, quality assurance through ongoing monitoring, review
and evaluation, and discharge policy. (BCMH, 1992, p.26.)
Overall, there would seem to be across the literature a broad general consensus
that the core tasks of case management are case-finding and screening,
assessment, care planning, implementing, and monitoring the care plan.
2.3 Key differentiating features of care
management
Applebaum & Austin (1990) note that many organizations report that they do
case management and in fact they do undertake some of the relevant activities.
In the United States context, it has been argued that case management is
what most social workers do in most fields of practice most of the time
(Roberts-DeGennaro, 1987).
In the United Kingdom, an obvious example of this is the role of the key worker
within multidisciplinary teams. However, it is important to discriminate among
different roles of different staff for people with different levels of need.
There are important differences between activities such as key worker
approaches, which aim to coordinate a single service or team more
appropriately to individual needs often on a short-term basis, and case
management, which aims to coordinate multiple services and providers,
usually on a long-term basis (Rothman & Sager, 1998).
Applebaum & Austin (1990) identify three factors which differentiate long-term
care case management from these key worker approaches:
intensity of involvement, reflected in relatively small caseloads;
breadth of services spanned, covering more than one service,
team, or agency; and
length or duration of involvement, being a long-term commitment.
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Another key element is that case management is concerned with meeting
the needs of people with long-term care problems or multiple needs
(Steinberg & Carter, 1983; Moxley, 1989; Geron & Chassler, 1994; Raiff & Shore,
1993; Rothman & Sager, 1998).
The definition of this group is not easy. Davies & Challis (1986) characterize
long-term care populations as those using a high proportion of health and
social care expenditure, individuals with multiple and varied needs, recipients
of multiple and inflexible services of which social care tends to be the largest
component.
Ballew & Mink (1986) describe case management as concerned with people
experiencing multiple problems that require multiple sources of help, and who
experience difficulty in utilizing that help. The role of care management is thus
seen as combining brokerage with interpersonal skills, since it is focused both
. . . on the network of services needed by multi-problem clients and the
interaction between members of the network (p. 8). Therefore, care
management is concerned with providing services to a specific target group
and need not be seen as the mechanism for providing all forms of care for
those who need assistance in coping with everyday living (Kane, 1990).
2. 4 The organizational context of care
management: a multi-level response
A final but crucial contextual element is identified by Miller (1983) who notes
that a focus on client-level activities is insufficient since it does not address the
case management system. As Moore (1990) argues, the degree of horizontal
integration achieved by case management practice needs a degree of vertical
integration at system level in order to be effective. Kane (1990) links case
management practice with system-level activities through the use of
comprehensive assessments to provide aggregated information for
needs-based planning by agencies.
In short, case management is designed not just to influence care at the
individual client level, but also at the system level through the aggregate of
a myriad of care decisions at the individual client level which exert pressure
for change upon patterns of provision themselves. An underlying objective is
to render those patterns of services more relevant to individual needs
(Austin, 1983; DOH, 1991b; Steinberg & Carter, 1983).
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2.5 Towards a composite definition of care
management
In the United Kingdom in the 1990s, the context in which care management
was practised resulted in it being described as having
a pivotal role as the setting where the integration of social
and economic criteria must occur at the level of service provision,
where the balancing of needs and resources, scarcity and choice
must take place. (Challis, 1992a)
Table 1 describes the characteristics discussed above, which together
distinguish care management from other service-related activities.
Table 1. Defining care management
Key attributes of Distinctive
care management features
Functions Coordination and linkage of care services;
tailoring resources to needs.
Goals Providing integrated care with continuity;
increasing the feasibility of care at home;
promoting client well-being;
making better use of resources.
Core tasks Case-finding and screening; assessment;
care planning; monitoring and review;
case closure.
Target population Those with long term care needs;
multiple service recipients;
those at risk of losing community tenure.
Differentiating features Intensity of involvement;
breadth of services spanned;
duration of involvement.
Multi-level response Linking practice level activities with broader
resource and agency level activities.
Sources: Challis et al., 1995; Challis, 1999b.
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KEY POLICY ISSUES
From this definition, it is helpful to examine the implementation of care
management as part of a new community-care policy in one country, the
United Kingdom. In subsequent sections of this chapter, the experience of
care management developments is examined to identify factors associated
with variation in implementation, both extrinsic and intrinsic to care management.
3 Care management in the United Kingdom:
an example of policy implementation and development
3. 1 Policy origins and guidance
Service changes in the United Kingdom reflect the common international trends
(Challis, 1992a,b; 1994a). In 1989, following a rapid growth of publicly funded
residential and nursing-home based care, predominantly for older people,
financed through the public sector with no control over eligibility on the basis of
need, the British government produced a major policy paper entitled Caring for
People (Cm 849, 1989). This paper identified six key objectives (para. 1.1.1):
to promote the development of day, domiciliary and respite services
to enable people to live in their own homes where possible;
to ensure providers give high priority to the needs of caregivers;
to build upon high quality assessment and case (later care)
management as the cornerstone of community care;
to promote a flourishing independent sector alongside public
services;
to clarify agency responsibilities (principally between health
and social care agencies); and
to achieve better value for money by reducing a funding bias
in favour of institutional care.
New levels of funding and responsibilities were given to the Social Services
Departments, the main agencies for the provision of social care, which
are managed through local government. They were made responsible
for undertaking assessments of need, the design and packaging of
services tailored to meet such needs, and for the provision of care managers
to monitor, review, and act as a single point of contact for those receiving
services.
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150
This policy was principally driven by the budgetary pressures of an ageing
population and funding anomalies which produced a bias in favour of
placement of older people in institutional care, rather than the pursuit of a long
standing policy objective to provide home-based care (Challis, 1993a,b).
Government guidance about care management was provided in separate
documents for managers and practitioners within agencies (DOH, 1991 a,b).
A more recent White Paper, Modernising Social Services (Cm 4169, 1998)
re-emphasized the role of care management. Policy guidance in this and other
documents continues to stress the priority of maintaining independence in older
people, including preventing unnecessary admission to homes.
3. 2 Funding, providers, and organization
Care management for older people is predominantly the responsibility of
publicly-funded local government Social Services Departments. There are
currently 150 of these departments in England.
They are the main employers of social workers and care managers,
who have the responsibility to assess and arrange packages of care,
including residential and nursing-home care, for vulnerable older people.
These staff undertaking care management are located in Social Services
Department offices, primary care, or hospital settings.
Social Services Departments are both purchasers and providers of a range of
home and residential care services. Although care management may be part
of a purchased service, in practice there is very little evidence of such
developments in older peoples services.
3. 3 Evidence of care management before
implementation of the reforms:
the PSSRU studies
Several studies of care management for highly vulnerable groups were
undertaken by PSSRU prior to and spanning the community care changes.
These early studies of care management in the United Kingdom were the
Kent, Gateshead and Darlington schemes (Challis & Davies, 1986; Challis et
al., 1990, 1995, 1997; Davies & Challis, 1986).
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The model of care management that was developed in these schemes was
designed to ensure that improved performance of the core tasks of care
management could contribute towards more effective and efficient long-term
care for highly vulnerable people (Challis & Davies, 1986; Challis et al., 1990;
Davies & Challis, 1986). The devolution of control of resources to individual
care managers, within an overall cost framework, was designed to permit more
flexible responses to needs and the integration of fragmented services into a
planned pattern of care to provide a realistic alternative to institutional care for
highly vulnerable older people.
The first two studies undertaken were focused upon case management in
social care. The later initiatives also involved joint health and social care case
management interventions, both in primary and secondary care, covering
geriatric and old age psychiatry settings.
In the social care studies (Challis & Davies, 1986; Challis et al., 1990), this
approach reduced the need for institutional care of vulnerable elderly people
significantly. There were marked improvements in the levels of satisfaction
and well-being of elderly people and their carers and these were achieved
at no greater cost to the social services, the National Health Service (NHS),
or society as a whole.
Integrating health and social care at the practice level meant that integrated
care management approaches were required. Within the case management
service in Gateshead, a pilot health and social care scheme was developed
around primary care (Challis et al., 1990), incorporating inputs from a nurse
care manager and part-time junior doctor. Outcomes were the same as those
noted in the main scheme. A similar approach to care management was also
tested in a multidisciplinary scheme for very frail elderly people based alongside
a geriatric service (Challis et al., 1989, 1991a, b, 1995). Here, care managers
employed by the Social Services Department were members of a geriatric
multidisciplinary team, most of the rest of whom were health service employees.
The care managers in this service not only deployed a flexible budget, but
also were able to allocate the time of multipurpose care workers who combined
the roles of home help, nursing aide, and paramedical aide. Improvements in
the well-being of elderly people and a lower level of carer stress were
observed for those receiving this new service compared with patients in
long-stay hospital care. These gains were achieved at a lower cost than was
normally expended upon such patients (Challis et al., 1995) reflecting the higher
cost of hospital care compared with other institutional settings.
The Lewisham scheme was established to develop a similar model of care
management for older people with a diagnosis of dementia in a community
based service for mental health of older people (Challis et al., 1997).
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152
The scheme appeared to have only an effect of improving the probability
of remaining at home in the second year of support, compared with existing
services. Hence, the community tenure effect appeared more muted than
in the other PSSRU care-management studies. However, it was clear
that both experimental and comparison group patients were receiving support
from a relatively resource-rich community-based old age psychiatry service,
by no means typical of that to be found in most of the United Kingdom.
There was evidence of improved well-being for the older people and more
markedly so for the carers receiving the intensive care-management support.
However, the cost of obtaining these gains in well-being was significantly higher
for the experimental group.
Overall, the findings of these PSSRU intensive care-management
studies suggest an increased efficiency in the provision of social care with
improved outcomes at similar or slightly lower costs. The evidence should
not, however, be generalized to a broader application of the care
management approach to less vulnerable individuals.
Key elements associated with the outcomes demonstrated included:
a differentiated type of care management response to need;
appropriate targeting;
devolution of budgets;
continuity of involvement of care manager with service user; and
appropriate links with specialist health care expertise.
3. 4 National policy implementation after 1993
However, the implementation of care management by social service agencies
has proved to be more broadly defined and provided for a wider target population
than in the PSSRU studies. The official Department of Health Guidance
to managers and practitioners on care management (DOH, 1991a,b) was not
explicit as to the nature of care management and the types of service user for
whom it was an appropriate response. In these documents care
management was broadly defined as a process of tailoring services to
individual needs, with assessment seen as an integral part of the care
management process.
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KEY POLICY ISSUES
Assessment was identified as one of a set of seven core tasks, which
resonate with the care management literature in most countries. These were:
publishing information;
determining the level of assessment;
assessing need;
care planning;
implementing the care plan;
monitoring; and
review.
It could well be argued that such a definition of care management
contains the necessary elements. However, it is not sufficient in itself (Challis
et al., 1995), and inevitably risked the over-generalization of care management
models designed for intensive support to a wider population of service
recipients. This appeared to have occurred.
Assessment remained a problem. The most comprehensive review, which
involved analysis of 50 existing comprehensive assessment documents used
by social service providers across the United Kingdom, revealed that the
majority were generic, and that under a quarter of them were used by both
health and social services. The evaluation revealed wide variation in content
and quality of the information and no clear linkage between identifying problems
and formulating a proper response. Assessment of common features of
psychiatric disorder, such as depression and anxiety, was very variable and
often neglected. Cognitive impairment and behaviour were assessed in a very
variable fashion and specific aspects of physical ill health, such as continence
and mobility, were less well specified on generic forms. The only reasonably
consistent feature involved activities of daily living, although this was not
always recorded in a structured fashion.
It was concluded from this detailed analysis that variability of assessment
tools is high and their comparability and capacity to generate standardized
information is low (Stewart et al., 1999). There was little integration of health
and social care information and marked variability between assessment
documents. These ranged from structured to unstructured, generic to
specialist, and included documents in which major domains were omitted.
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154
A national survey of care management arrangements in England (Challis
et al., 1998a,b, 2001a,b) revealed a number of concerns about care
management. Specialist documentation was least likely for older people and
most likely in mental health. In terms of care planning, ceilings upon
expenditure per case for community services were most common in older
peoples services (76% of authorities). These ceilings were lower for older
people and mental health than for physical disability and learning disability
services.
Intensive care management targeted upon individuals requiring high levels of
support through staff with small caseloads was very rare. Fewer than 20% of
Social Services Departments provided an intensive care-management
service, and even fewer purchased one. These services were focused on a
number of specific user groups, most commonly people with mental health
problems and rarely on older people. Caseloads were likely to be higher in
older peoples services than for other client groups, particularly mental health
services. In mental health care there was confusion over whether health or
social care should coordinate care for patients, and over which approach to
employ.
Overall, there was relatively little evidence of intensive care management,
particularly in older peoples services and little evidence of the involvement of
health care staff in care management, particularly specialist health care inputs
such as geriatric medicine.
It could be concluded that the United Kingdom has focused more upon the
development of a more general approach to care management than an
intensive approach. Paradoxically however, the model of care to which many
agencies have aspired is more appropriate to intensive care management.
Hence in many areas there would appear to be a misfit between the model
of care management used and the purpose and target group of care
management.
Government guidance has increasingly taken the form of advising agencies to
focus care management upon those most in need and to redefine care
management as intensive care management so as to ensure that this
costly activity is only provided to those for whom there is a probable benefit.
Box 1, on the opposite page, cites recent policy guidance:
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KEY POLICY ISSUES
Box 1.
Recent United Kingdom policy guidance
on care management
Social Services Departments should differentiate between the
co-ordinating and intensive types of care management. They
should ensure that the latter is limited to those people who need it.
(DOH, 1997)
While the care of all older people should be managed appropriately
and effectively, the most vulnerable older people will often require
fuller assessment and more intensive forms of care management.
(DOH, 2001, para. 2.39)
Care management to be redefined as Intensive Care Management
and reserved for people with complex or frequently changing needs.
(Scottish Executive, 2000)
A Government review concluded that no single model suits all levels of need
or service user groups and identified three types of care management, each
necessary to an integrated and comprehensive approach:
an administrative type, undertaken by reception and/or
customer service staff which provides information and advice;
a coordinating type, that deals with a large volume of referrals
needing either a single service or a range of fairly straightforward
services which should be properly planned and administered; and
an intensive type, where there is a designated care manager
who combines the planning and coordination with a therapeutic,
supportive role for a much smaller number of users who have
complex and frequently changing needs.
The review concluded:
. . . the crucial objectives are to ensure that long term care
management is devoted to those people who need it and
that decisions about the skills of staff to be deployed and
about monitoring and reviewing arrangements reflect this.
(Social Services Inspectorate, 1997, p. 30.)
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3.5 Linking the health and social care agendas
Although care management in the Unted Kingdom has been associated with
assessment as one of the cornerstones of the implementation of community
care policy, the precise contribution of health care (and particularly of secondary
health care services such as geriatric medicine and old age psychiatry) to
this process was not clearly specified and is subject to local arrangements.
There is a lack of evidence of the appropriate influence of health care
professionals in the assessment process and even less in care management
itself. Except in the field of mental health, the PSSRU national study found
little evidence of integrated care management arrangements. Care
management systems devised in agency isolation and lacking access to
appropriate expertise for assessment are unlikely to be fully effective,
particularly when dealing with individuals with complex problems.
Integration of health and social care provision on the basis of differentiated
care management offers more fruitful possibilities (Challis et al., 1998c). It is
fully consistent with recent policy initiatives to develop partnership between
health and social care by enabling mechanisms such as pooled budgets and
integrated provision (Cm 4818-I, 2000). Vertical integration of systems of health
and social care focused upon particular need groups (such as dementia
sufferers) may make feasible links between care management, secondary
health care and social care, and thereby further the recent emphasis upon
improved assessment, rehabilitation, and prevention of inappropriate
hospitalization for older people (Cm 4818-I, 2000; Department of Health, 2001).
It may also permit the effective pooling of budgets around a common
constituency of concern, while avoiding the possible distortions that may arise
when health and social care resources are integrated (Challis et al., 1998c).
For example, there are possible perverse outcomes from integrating acute
and long-term care funding, which might further disadvantage long-term care
due to the relative power of the two modes of care.
The structure of the local health service delivery system will offer differing
opportunities and settings for the delivery of care management. Factors such
as the style and extensiveness of provision of geriatric, psychogeriatric,
and community nursing will be relevant. The nature of the district itself,
based upon such criteria as the degree of rurality, will also be influential.
The expectations of the local health care providers, patterns of their
organization, degree of shared working practices, and perceived shared goals
will influence the style and type of location of care management. The history of
service development shows us already only too clearly how the opportunity
to develop services for a particular client group will be very dependent on
the degree of welcome or lack of support from key service providers such as
geriatricians and psychiatrists.
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As in most other countries, there is an expectation that case management will
offer a degree of downward substitution from institution-based to home-based
care. The extent to which this goal is pursued is likely to vary among
authorities, some hoping to make substantial shifts, some relatively more
minor shifts.
In others, the logic of the need for downward substitution would be less evident
and care management will be perceived more as a service coordinatory
mechanism rather than a mechanism for shifting the pattern of provision.
4 Aspects of variation within care
management systems
Surveying many of the currently-published British studies on case
management as well as some major studies from elsewhere a number of
common concerns may be discerned. Seven areas of concern were
identified as present in much of the work (Challis, 1993a, 1994a; Stein & Test,
1985; Hoult et al., 1983; Hoult, 1990; Muijen et al., 1992; Mcdowell, Barniskis &
Wright, 1990; Kemper, 1988; Weissert, 1988; Challis et al., 1995, 1997, 1998a,
2001a,b). These are:
targeting;
caseload size;
location of case management;
practice style of case management;
degree of influence of case managers upon service providers;
management standards and quality; and
management information standards and quality, and the logical
coherence of the case management arrangements as a whole.
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4.1 Targeting
The Audit Commission (1992b) cites four target populations as suitable for
care management:
those at high risk of entry to institutional care
(including those with chronic mental health problems);
those with stressed informal carers;
those requiring resettlement from long-stay institutions; and
those requiring intensive short-term support
following illness or injury.
Applebaum & Austin (1990), reviewing 20 long-term care projects, noted
that the most common client-related eligibility criteria were:
functional impairment (14);
risk of nursing home placement (10);
potential for nursing home discharge (8); and
hospital discharge (7).
In the Wisconsin Community Options Case Management Programme, the
same criteria are used to assess eligibility for the case management
programme as for nursing homes (McDowell, Barniskis & Wright, 1990). These
criteria include (COP, 1992):
the presence of a severe unstable medical condition and long-term
illness; or
substantial medical and social needs including the inability
to perform activities of daily living; or
a need for supervision and care, usually for people with dementia.
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KEY POLICY ISSUES
The lack of reliable, valid, and efficient indicators of need for institutional care
suggests the combination of a general eligibility criterion of need for services
with the exercise of discretion over which service mode any given individual
receives. In the Wisconsin Mental Health Programme (Stein & Test, 1980),
where the target population comprised individuals with chronic mental health
problems, neither diagnosis nor severity of illness were seen as sufficient
indicators, although most patients suffered from schizophrenia. Rather, the
focus was upon the specific determinants of service mix. Seven criteria were
identified (Stein, Diamond & Factor, 1989):
willingness to come for services;
medication compliance;
need for structured daily activities;
ability to self-monitor;
frequency of crises;
need for professional psychological support; and
degree of case management.
In some Canadian Provinces, several categories of need have been
developed, corresponding to intensity of service provision. However,
allocation among categories involves the exercise of professional judgement
rather than the use of rigid formulae (Kane & Kane, 1991). Thus, in the
Manitoba Home Care Programme three criteria determine eligibility: hospital
discharge; risk of entry to hospital care; or risk of entry to nursing-home care
(Fineman, 1992).
Similarly, in the United Kingdom some care management schemes used agreed
guidelines for referral. However, recognizing the complexity of circumstances
which constitute conditions such as need for institutional care, no rigid
pre-entry threshold of dependency was specified and accountability for targeting
was monitored post-entry.
Clearly such an approach has the advantage of permitting discretion, but it
requires careful monitoring and is potentially subject to dispute. Managerial
scrutiny of such decision-making processes is particularly necessary and
requires the development of improved information systems, including
information on client characteristics. The development of mechanisms for
achieving effective targeting is thus likely to be linked with debates about
assessment.
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4. 2 Care management and intensive care
management
This issue raises almost the obverse of the targeting question which was
considered in the discussion of definitions of care management. Most care
management services have been intended for those people at risk of
admission to institutional care settings, reflecting the policy of downward
substitution pursued by a number of different societies. However, if it is
accepted that care management by individual workers designated as care
managers is relevant only for those individuals with complex or severe needs,
then it is important to be clear about how services are to be organized for other
less dependent elderly people who require social care services.
Therefore, it is important to discriminate between intensive care management
and the more effective organizational procedures for assessment, individual
care plans, and regular reviews so that the core tasks are effectively carried
out for all other service recipients. Equally important for a rational service
system is to avoid the complete separation of services provided for the less
dependent from services provided for more vulnerable groups and to permit
cross-fertilization. Failure to achieve this runs the risk of establishing new
boundary disputes in care, with consequent loss of continuity of care.
However, the practical resolution of this is far from easy. Lack of clarity in this
area can lead to a process of definition of care management which might
be described as of the old wine in new bottles variety. In the face of
organizational change, many front-line service providers, and their managers,
may display considerable inertia and attempt to redefine the changes as
incorporating (rather than challenging) existing roles and practices. As such,
it is unlikely to lead to a reshaping of services or substantial enhancement of
home care.
4. 3 The location of care management
Care management has been located in a variety of different settings. These
settings include Social Service Departments, hospitals, geriatric and
psychiatric multidisciplinary teams, primary care, independent agencies,
and even independent actors. Effective implementation of care management
will need to identify appropriate settings to provide case management for
individuals with different kinds of needs.
Primary care may offer improved accessibility, access to the primary health
care team in assessment, and home support. On the other hand, the
numbers of people requiring intensive care management would be small on
any one GPs list or in any PHC clinic.
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KEY POLICY ISSUES
In these cases, intensive case management might be better located in
secondary health care settings such as geriatric services (Challis et al., 1991
a,b). This might facilitate access to health care staff for activities such as
assessment and care planning.
Similarly, care for those suffering from schizophrenia may be better provided
as part of the community mental health service where care managers are part
of a psychiatric service. Similar arguments apply to community mental
handicap teams (Audit Commission, 1992b).
There may also be a case for arguing that people whose needs are relatively
rare within the catchment area of one local authority may have those needs
better met by a specialized service. Perhaps this other service would be
located in a non-profit agency covering several local authorities.
An example of care management for physically-disabled people provided by
an independent agency is described by Pilling (1992). In the United Kingdom,
the development of direct payments to vulnerable people to organize their own
care, and of insurance schemes in a number of countries, may lead to further
such developments (Ikegami, 1997).
The mid-term review of the Australian Community Care reforms for older people
suggested the need to link care management and long-term care services to
hospital discharge, to prevent the risk of bed-blocking (Gregory, 1991).
Alternatively, the British experience is one which suggests another risk.
The goals of the long-term care system can be distorted if there is too close a
linkage with the resolution of the problems faced by the acute sector of hospital
discharge (Gostick et al., 1997; Challis, 1999b).
An important link exists between intensive care management and secondary
health care services such as psychiatry, old age psychiatry, and geriatric
medicine. The development of the Aged Care Assessment Teams as part of
the Aged Care Reforms in Australia provided such a context which could
facilitate such developments.
Such links and co-location can contribute to effective targeting and to the
promotion of a more community-oriented mode of practice in these critically
important long-term care specialties (Challis et al., 1995, 1998c, 2001a;
Ames & Flynn, 1992; Kendig et al., 1992).
It is noteworthy that the United Kingdom, which was one of the early pioneers
of geriatric medicine, has made few such links with the exception of special
studies (Challis et al., 1991a,b, 1995).
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4.4 Style of care management:
brokerage or more extensive approaches
Some implementations of care management sometimes appear to consider
the core tasks more as administrative activities (involving mainly brokerage
and service allocation) rather than integrating these with tasks such as
support and counselling (requiring staff with human relations skills). This is
evident in discussions about the separation of purchaser and provider roles
where a rigid distinction considers the provision of human relations skills and
emotional support as only a provider role.
However, this is quite inappropriate in good practice (Challis, 1992a,b,
1994a,b,c). Such concerns influenced the planning in several Scottish Local
Authorities in the 1990s (Buglass, 1993). An alternative formulation is that of
clinical case management (Kanter, 1989; Harris & Bachrach, 1988) which
offers a broader combination of roles. It seems that most services fall at some
point between these poles (Bachrach, 1992).
Studies consistently indicate that more than brokerage functions are required
in practice, even if this were not made explicit in the initial planning or job
descriptions (Applebaum & Austin, 1990; Dant & Gearing, 1990; Dant et al.,
1989) and that case managers were successful in performing the core tasks
through combining practical care with the use of human relations skills,
including counselling and support, not only to carers and users but also to
direct care staff (Challis & Davies, 1986; Challis et al., 1988, 1990, 1991a,b).
Rothman (1991) notes that case management
. . . incorporates two central functions: (a) providing individualised
advice, counselling and therapy to clients in the community and
(b) linking clients to needed services and supports in community
agencies and informal helping networks. (p.523)
Similarly, the British Columbia case management guide (BCMH, 1992) states:
Case managers do both direct services and allocate
contracted services on behalf of clients. The direct services
are generally counselling, teaching, supporting and crisis
intervention. (p.25)
The US National Standards documents indicate that case managers are
expected to assume most or all of the roles of service coordinator, advocate,
counsellor, and gatekeeper (NICBLTC, 1988).
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KEY POLICY ISSUES
Moxley (1989) notes that
. . . ignoring the clinical and interpersonal practice dimensions
of case management is counterproductive. (p.144)
He argues that effective case management needs a caring and individualized
relationship between client and case manager, the use of interpersonal skills,
intervention in crises, and knowledge of the clinical expertise of other
disciplines.
In their review of case management programmes for frail elderly people,
Steinberg & Carter (1983), reviewing the experience of programmes for the
elderly, conclude that:
Case managers must be clinically oriented, be skilled in
establishing and sustaining personal relationships, like and
respect older people, be able to coordinate medical, social
and instrumental needs and services, participate in
assessment and carry through with implementation. (p.139)
Although there is considerable debate about the roles required of case
managers and the specific skills and training which they require, it would seem
that there is a scarcity of appropriately trained personnel. In many settings
nurses and social workers are the predominant occupational groups
(Raiff & Shore, 1993; Rothman & Sager, 1998).
However, without deliberate planning such scarcity of appropriate staff could
well influence the style of care management that develops. An explicit
commitment to a clinical model of care management could act as a helpful
counter to the risk of over-formalization and insensitivity in the new care
arrangements. This is perhaps more likely in some client groups than others.
For example, it may be that a pure brokerage model is less readily accepted
for people with mental health problems than it is for elderly people, because of
the visibility of factors such as relationship difficulties.
4.4.1 Degree of role specificity
The extent to which the role of care manager has become specifically
differentiated from other roles varies, probably due to contextual factors such
as degree of rurality but also reflecting the form of care management
development occurring. Thus some agencies may wish not to differentiate
the role of care manager as a specific job, seeing it rather as a role within
existing job descriptions (Buglass, 1993).
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Another approach has involved some staff defined as having different jobs
for different clients, for example as social worker for some and care manager
for others. Some studies suggest that such role mixing or part-time care
management could lead to a less effective functioning on the part of the case
manager (Challis et al., 1990, 1995; Kendig et al., 1992).
4.4.2 Balance of work
In order to maintain continuity of responsibility throughout all the phases of a
clients career with the service, care managers could be made responsible
for continued monitoring and review after entry to institutional care. While such
an approach offers continuity, it could lead to increasing caseloads and a sharper
focus upon institution-based work than upon community-based work. For
example, in one setting case managers remained responsible for an elderly
person after entry into a nursing or residential care home. Since the level of
reimbursement to homes is based upon client dependency, there is an incentive
for homes to request frequent reviews, with inevitable refocusing of staff time
away from home-based care. Unless effectively managed, there is a risk that
such pressures could militate against a policy of increased community care.
Another area where balance of work could be of importance, involves
hospital-based SSD staff such as social workers. While an important focus of
work is upon hospital discharge and nursing-home placement, the hospital
setting also confers opportunities for developing community-based work within
relevant multidisciplinary teams. This is particularly so in the mental health
field but also in geriatric settings (Challis et al., 1991a,b, 1995; Challis, 1998c).
4.4.3 Staff mix
Training has been mentioned as indicative of the expected style of care
management. However, staff mix itself could also indicate an important
aspect of variation in care-management practice. For example, some
Scottish authorities with predominantly rural catchment areas were
developing primary assessment teams with staff from both Health Boards and
Social Work to undertake assessment and care coordination (Buglass, 1993).
In a number of care-management programmes for older people, staff tend to
be mainly from social work and nursing backgrounds. However, patterns of
professional employment can cause distortion of effective utilization of staff.
For example, staff employed in certain settings where peer group support is
unavailable, may experience difficulty in maintaining their continuing
professional education (DOH, 1994).
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KEY POLICY ISSUES
A mixed staff group can permit the targeting of particular staff types with
particular client needs within programmes (Rothman, 1992). For example, in
one British programme for older people, social workers usually managed cases
where mental health and carer problems predominated, whereas nurses
tended to manage those where physical health problems predominated
(Challis et al., 1990).
4.4.4 Caseload size
Targeting policy will also affect caseload size, which is likely to influence both
the quality and style of care management (Rothman & Sager, 1998). Caseloads
are likely to be determined by client group, intensity of duration and service,
and geographical area (Rothman & Sager, 1998; Challis et al., 1994a).
Indeed, this indicator has been one quality standard used to ensure that
sufficient staff time is allocated to each case. A number of factors appear to
have influenced decisions about caseload size (NICBLTC, 1988):
the characteristics of the client group served;
complexity of care plans, type of area served (urban/rural);
degree of clerical support;
availability of community services and responsibiliy; and
control over funds.
Caseload size in the Thanet, Gateshead and Darlington studies was around
2530 cases; in some mental health programmes it is much lower, around
12 cases, reflecting the expectation of much greater work in human
relationships such as engagement. Washington State had a maximum of
50 cases per worker in the age care programme (Washington State, 1986);
and the average in the Wisconsin Community Options Programme was
40 (McDowell, 1990). However, only programme goals and resources can
determine caseload size (Massie, 1996; Rothman & Sager, 1998) and thereby
the trade-off between scale and quality.
Applebaum & Austin (1990) note the variability in caseload size in long-term
care of elderly people, ranging from 3585 cases per worker. They cite
surveys of case managers indicating preferred caseload sizes of 3050 cases
and note the evidence of a decreasing capacity to perform follow-up,
monitoring, and review as caseload size increases. Similar variability is
evident in the United Kingdom (Challis, 1999a,b).
LONG-TERM CARE
166
Clearly, there is a trade-off between caseload size and effective performance
of these activities which will concern those implementing programmes.
Caseload size is likely to determine the feasible style of case management
(Bachrach, 1992), which is discussed later. Caseload size is of course more
problematic to define when a team approach to case management is
adopted for particularly demanding clients in some mental health programmes
(Stein, Diamond & Factor, 1989). Raiff & Shore (1993) have detailed some of
the complexities of the team approach.
4.4.5 Continuity
One area of debate is whether the core tasks of case management should be
undertaken or coordinated by a single designated worker, or by several people.
For example, one of the dangers of separating those who make assessments
and prescribe solutions from those who implement and monitor the care plan
is the loss of learning through time. In such a model, assessors may fail to
receive feedback from the results of their assessments because they do not
have continuity of contact with the service user.
Nonetheless, the separation of tasks provides a tempting model for
organizations with a limited number of trained and experienced staff.
There is an understandable desire to invest the time of the best-trained and
experienced staff in the assessment process, because it is perceived as the
most critical activity in decision-making. The risk of this approach is the loss
of continuity and accountability which may be crucial factors in maintaining a
vulnerable person at home (DOH, 1991a,b).
In the mental health field, there are models of shared case management
undertaken by all members of a mental health team. These appear to have
worked successfully in the context of supporting people with severe
impairments, but it is usually not the individual tasks which are shared but
rather the overall role of case management (Stein & Test, 1980; Raiff & Shore,
1993). Rothman (1992) suggests that it is inappropriate to argue for one
approach being generally superior to the other.
Among the trade-offs is that between continuity and focused responsibility on
the one hand, and pressure and risk of staff burnout on the other (Raiff &
Shore, 1993). The key question relates to targeting for which clients do the
additional costs of continuity provide significantly greater benefits?
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KEY POLICY ISSUES
4.4.6 Documentation
Although documentation is not frequently discussed as part of care
management practice, it is part of the practice environment and can contribute
to setting horizons and parameters to activities. The right kind of
documentation may facilitate improved practice in areas such as assessment,
care planning, and review. In British surveys of assessment study there was
little evidence of documentation which could assist staff in moving from the
task of information gathering towards activities such as needs formulation and
care planning (DOH, 1993; Stewart et al., 1999).
4. 5 Degree of influence upon service providers
Crucial to the effective implementation of care management is the degree of
influence which care managers have over the form and content of services
provided. Arnold (1987) has argued that a brokerage model alone is
insufficient to effect influence, and Austin (1992), criticizing pure brokerage,
concludes that:
Case managers who cannot deliver the services they
prescribe in their care plans are not very likely to be very
effective. (p.11)
Dant & Gearing (1990) observe that effective care management requires the
care manager to control the supply or availability of services and other
resources. A common conclusion is that care management should be
separated from the immediate activity of service provision, to render it more
client-centred than service-focused.
The evidence would indicate that control over resources is an important factor
in enabling case managers to respond more effectively to the varied individual
needs of elderly people (Challis & Davies, 1986; Challis et al., 1990; McDowell,
Barniskis & Wright, 1990). At worst, in the absence of control of resources,
the case manager can merely make requests to the providers of other
services but has relatively little power in effecting the kinds of negotiation
necessary to ensure that services are sufficiently responsive to meet clients
needs adequately (Hodgson & Quinn, 1980) and consequently effective
coordination is not possible (Pijl, 1991).
It is the capacity to influence both the type and content of service available
that permits genuine individualization of care. Furthermore, a devolved budget
has to cover a substantial proportion of care costs otherwise it is liable to be
merely used for topping-up care or for single and unique items of expenditure.
LONG-TERM CARE
168
Such topping-up of existing services with individual unique expenditures
(McDowell, 1990)
requires little change in the function of service providers;
improves individualized care plans only at the margin; and
diminishes the service users greater influence in the
planning of care.
However, budgetary devolution can raise some difficult questions.
Premature devolution of previously centralized budgets without reference to
past patterns of expenditure and estimates of need is risky, and the alignment
of finance and management responsibility at the same level seems to be
crucial (Audit Commission, 1992b). Indeed, sometimes devolution of budgets
has been necessary as a means of effective budgetary scrutiny and control
which, paradoxically, was not feasible with centralized allocation and control.
In terms of practice at the field level however, effective utilization of budgets
is likely to be influenced by the level at which decisions can be made and
the procedures for accessing funds.
The devolution of budgets to individual case managers would seem to be
a crucial element of the development of more responsive patterns of care.
It remains to be seen whether organizations can achieve effective
decentralization of decision-making and balance this with effective
accountability. The challenge of making such changes should not be
underestimated, particularly in view of organizational traditions and the
bureaucratic hierarchies of public sector organizations.
The separation of purchaser and provider was seen as an important part of
the development of services in the United Kingdom, with care management
seen as a purchaser role (DOH, 1990, para. 4.5). As such, its role is designed
to influence the pattern of provision in more appropriate ways. The distinction
between purchaser and provider is deceptively simple and different levels of
separation may be discerned.
One aspect involves macropurchasing, the form of purchasing most
commonly associated until the present time with health authorities contracting
with particular providers to provide services for a district or an area.
Such purchasing procedures may be similarly developed by local authorities.
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KEY POLICY ISSUES
Indeed, care management itself could be purchased on such a basis for
particular client groups or for particular areas of the local authority. This
process of managing an overall market and purchasing supply to meet the
needs of a population within an area should be distinguished from the
micropurchasing role whereby care managers individually disperse their
budgets (DOH, 1991a, para. 1.18).
However, the separation of purchaser and provider roles at the micro level
raises more problems than at the macro level and there are dangers in the
pursuit of too rigid a separation. Some roles and activities may span the
purchaser/provider divide and blur an apparently clear distinction. An obvious
example is that of counselling and support; conceptually it might be possible to
define supportive counselling as a provider function. Such confusion appears
to have affected the planning of care management in some Scottish
authorities (Buglass, 1993).
However, in most settings this process engaging a person, forming a
relationship with him or her, and comprehending the depth of problems so as
to establish the right mix of support and services needed proves to be a
purchaser function. Indeed, to make such an activity an exclusive provider
function would inevitability push care management towards an administrative
or brokerage role. Thus, the needs of effective practice do not always lead to
organizationally neat solutions.
Again, in the care of a cognitively impaired elderly person, a hands-on carer
(provider) might be used to contribute to assessment and other core tasks
such as monitoring well-being, routine, diet, or medication intake because
of his or her proximity to the elderly person over a considerable period of time.
Therefore, the nature of these relationships between provider and purchaser
needs to be explored carefully so that the process of separation does not
lead to new problems of inappropriate care. One helpful way of viewing the
separation is to be clear about the different roles of care management
(including casework) and service management, traditionally blurred in
agencies, which underpin the functions of purchaser and provider.
The separation is of less significance in the United Kingdom currently and has
been seen to be similarly less so in the United States (Geron, 2000).
LONG-TERM CARE
170
The issue of influence is particularly relevant in the context of service
development, an often neglected facet in the literature. It is possible to
conceive of service development in care management at three levels:
at the level of an individual service user, to ensure that services
are individually tailored to assessed need;
at an intermediate (team) level, to ensure the development of
local services to meet identified needs of a group of service users;
at an authority-wide level, to achieve an infrastructure of services
within a community in order to allow people to live at home as an
alternative to residential care or nursing-home admissions.
4. 6 Management: standards and quality
Much discussion of care management focuses upon the performance of the
core tasks of case management in client-level work and upon styles and types
of fieldwork practice. However there are important issues of the management
of care management, acknowledged in the separate guidance for practitioners
and managers (DOH, 1991a,b). Changes will be required in financial and
monitoring systems (Audit Commission 1992a,b; Financial Management
Partnership, 1992) and in the ways in which such information is deployed.
For example, the monitoring of eligibility criteria and targeting policy will require
imaginative information collation and use of data. Other required areas of
change in management practice include style of supervision and the use of
peer group review.
Of less visibility in debates is the nature of quality assurance. In a context of
greater devolution of authority and possibly flatter organizational hierarchies,
there will be a need for managers to focus less upon traditional methods of
procedural adherence and more upon outcome-focused approaches a
focus more upon ends and less upon means. The focus is likely to be
increasingly upon interagency activities, as well as those at the client/worker
and the agency level (Steinberg & Carter, 1983).
Consequently, development of approaches to quality assurance and supervision
which differ from much previous practice will be needed at the managerial
level.
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KEY POLICY ISSUES
The Department of Health guidance (DOH, 1991a) states that:
Middle managers . . . will also have to develop new skills
in the promotion of a more entrepreneurial approach by
practitioners . . . important though cost consciousness will
be, it should be balanced by an appropriate concern for the
quality of care that is being provided. (para. 3.29)
Where the focus of managers is only upon costs (the most easily measured
and recorded indicator) perverse incentives could easily emerge, such as
the manipulation of the target group by individual care managers to attract
less-costly cases onto their caseloads. The Guidance for Managers
(DOH, 1991a) argues that standards should be incorporated into the
specifications for all services, and such careful monitoring should also be
applied to the care management process itself, as well as to the services
organized by case managers. This will require the development of
record-keeping systems to monitor process, cost, and outcomes.
Indicators of quality have traditionally been seen as indicators of structure,
process, and outcome (Donabedian, 1980). Structural indicators are
concerned with inputs such as staff numbers, qualifications and training,
presence or absence of certain services; process indicators cover such
factors as response time and patterns of client/worker interaction; and
outcome indicators refer to the effects of services upon clients and their
carers.
It follows, therefore, that while indicators of outcome are the most important
for assessing the effectiveness and quality of a service, they are also the most
difficult and expensive to obtain. Agencies will therefore tend to use indicators
of structure and process with a type of validity which requires that a
relationship between these indicators and effective outcomes is either known
or reasonably presumed.
Case management agencies have begun to develop standards for practice,
which are usually indicators of structure and process, and it is instructive to
examine some of these. The case management standards developed by the
State of Washington (Washington State, 1986) offer examples of several
structural indicators.
LONG-TERM CARE
172
These include:
suitable office accommodation to permit private
interviewing;
administrative minimum standards;
case management staff possessing a relevant
degree with two years experience of providing
services; and
maximum caseload size of 50 cases per worker.
The same document includes process standards such as eligibility criteria
for entry, frequency of supervision, ongoing training of 40 hours per year,
speed of response to a referral and time taken to commence assessment
and develop care plans, review periods, and the maintenance of records.
These are similar to the proposed standards developed by the National
Institute for Community Based Long Term Care (NICBLTC, 1988).
Additionally in terms of outcomes, the proposed National US standards
include questions such as whether care plans are designed to provide
adequate and appropriate services in a cost-effective manner and whether
services provided meet client needs (NICBLTC, 1988).
Applebaum & Austin (1990) suggest five broad quality assurance questions
that can be pursued once standards have been agreed and made explicit:
How well are eligibility and targeting criteria implemented?
Are assessments and care plans completed in sufficient time?
Do service plans meet clients needs?
Are service plans actually implemented?
Are clients satisfied with the care received?
These bear some similarity to the different components of efficiency in Challis
& Davies (1986) and cited in the UK Managerial Guidance (DOH, 1991a).
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KEY POLICY ISSUES
4.7 Logical coherence of care management
arrangements
As discussed earlier in this chapter, the managerial, agency, and funding
environment within which such practice takes place will tend to determine
what are perceived as possible and reasonable solutions to meeting need.
Dant & Gearing (1990) note (p. 344) the conclusion of many observers of the
US scene:
Case management (alone) cannot produce coordinated care,
a necessary pre-requisite is the integration of funding sources.
More broadly, four elements (Aiken et al., 1975) need to be coordinated in a
fully coordinated system:
programmes;
resources;
clients; and
information.
Some programmes attempt to tackle this integration. The Manitoba Continuing
Care Programme Policy Guidelines link philosophy, objectives, and principles
with detailed features of administration and operation (Manitoba DOH, 1991).
The Madison Mental Health Service illustrates clearly how the practice
environment and perceptions of what is possible are influenced by the context
of funding. The goals of the service are linked through organizational
principles to clinical principles to offer a complete system of care (Stein & Test,
1985; Stein, Diamond & Factor, 1989). Hence, practice content is likely to be
determined by the nature of the practice context, and a tendency to discuss
care management at the level of practice content alone (Fisher, 1991) can only
provide a partial understanding of the forces at work.
LONG-TERM CARE
174
Contextual factors such as degree of managerial support for the development,
which agency employs the care managers, their span and degree of
budgetary control, where they are located and what choice of target population
is made, will again influence the content of what care managers see as
realistic and viable choices. The effective implementation of a care
management model requires a coherent logic which clarifies the relationship
among structure, location, target group, practice model and likely day-to-day
pressures and incentives and expected outcomes. As Davies (1992) has noted
from case management studies in the United Kingdom and the USA:
The experimental inputs of the most successful projects
were ideational as well as structural. They were substantially
about commitments, values and skills. What the structures
(including the resources) were intended to do was to enable
and encourage people to apply the commitments, values and
skills of the new community care philosophy; that is, provide the
incentives and rewards which harness individual motivations to
achieve the equity and efficiency goals of public policy. (p.118)
Several case management studies, either directly or indirectly, raise the issue
of internal logical coherence a relationship between values, desired outcomes
or goals, and the practice and managerial incentives arising from structures
and resources. The factors discussed earlier are all interlinked for example,
targeting policy influences caseloads which in turn influence feasible styles
of the case management process.
The analysis of the logical coherence of care management programmes
should therefore be a concern of managers and planners in reviewing the
development and performance of care management in their service systems.
This includes analysis of practice incentives within service systems, so as
to ascertain the extent to which the day-to-day coping behaviour of staff is
congruent with, or at variance to, the overall goals of the care management
system.
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KEY POLICY ISSUES
5 Conclusion: developing care management
in long-term care
Most evidence arising from evaluation research of care management
programmes has been concerned with the intensive support of high-risk or
high-need groups in both mental health and ageing. These studies have focused
upon populations with high probability of admission or readmission to hospital
or nursing-home settings. Despite this diversity and the difficulty of producing
reliable and robust definitions of attributes such as severe mental illness or
risk of nursing-home placement, there is a considerable degree of consistency
in the findings.
From these studies several factors may be identified which appear to be
associated with effective outcomes in long-term care management
(Challis, 1999b). These are shown in Box 2, below.
As can be seen, these include integrated funding for the programme,
clarity and precision of target population, clear service objectives, continuity
of involvement, and logical linkages between the model of care management,
its objectives, and the incentives which the structures present to the
practitioners implementing the programme. At the practice level, this may
refer to such factors as appropriate caseload sizes and the means to be able
to respond creatively to identified needs, through such mechanisms as
devolved budgets.
Box 2. Some factors associated with
effective outcomes in care management
Integrated programme funding.
Logical linkages between model of care, objectives
of programme, and practice-level incentives.
Clear service objectives.
Precision and clarity of target population.
Continuity of involvement.
LONG-TERM CARE
176
Integrated funding can avoid some artificial boundaries and perverse
incentives arising from organizational pressures to remain within narrow
budgetary confines.
Clarity of target population, combined with systems of screening and
assessment, can ensure that care management with its inevitably higher
overhead costs is provided to those for whom it is most appropriate.
Clear service objectives provide a focus for managing and monitoring care
management programmes whether in terms of needs of recipients, service
processes such as costs, or outcomes such as hospitalization, community
tenure or quality of life.
Continuity of involvement offers the basis of practitioners remaining
responsible for assessing, monitoring and reviewing cases and gaining the
benefits of feedback from effective and ineffective strategies, whether at the
individual case level or more generally.
Logical linkages between programme goals, environment and practice
incentives reflect the necessity for congruence between practice environment
and overall objectives.
For example, such components as flexible patterns of response, perhaps by
means of devolved budgets, need to be available to care managers if a
programme goal is for individually-tailored services. In the absence of such
flexibility, or where there is marked difficulty in providing other than standard
responses, the incentive for practitioners will be to respond in a very standard
fashion rather than to individualize care.
Kane (1999) identified related factors associated with more effective long-term
care programmes which are also relevant. These include coherent values,
a single point of access, flexible and responsive services, available personal
care, and acceptance of risk.
Key factors discriminating care management arrangements were identified in
a review for the Department of Health in 1994 (Challis, 1994). The issues
identified are shown in Box 3. The evidence from findings to date suggests
that a number of these issues remain very pertinent.
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KEY POLICY ISSUES
Definition of the nature, structure and goals of care
management.
Influence of external contextual and environmental
factors.
Target population, including user group; targeting
methods, including assessment.
Care management as process and intensive case
management; the balance between these two activities
Location of care management: SSD, NHS, external;
access to NHS staff.
Style of care management; administrative or more
extensive?
Operational aspects of care management; role specificity;
balance of activities between assessment and review;
caseload size; continuity; documentation.
Influence over providers; devolution of budgets;
range of service mix.
Management of care management; quality assurance;
supervision; peer group review.
Clarity of organizational arrangements; practice
incentives; logical links between values, goals,
care management service.
Box 3. Key features of care management development
Source: Challis (1994b)
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The rationale for any society in the implementation of care management as a
mechanism to integrate care is also likely to vary. For example, when care
management was introduced into the United Kingdom in the late 1980s,
community services were nearly all provided by two public sector sources
the National Health Service and Social Services Departments.
The need for coordination was not self-evident, since there appeared to be a
simple situation of two providers of care. However, the internal divisions of
service providers reflected through various professional and service hierarchies
(social work, nursing, home care, day care, day hospital, etc.) caused the
experience of service users to be fragmentary. Nonetheless, the environment
made the establishment of care management in a lead agency relatively easy.
Conversely, in the USA the presence of a myriad of different service providers
made the issue of coordination almost self-evident. In a context where there is
very low provision of community services, coordination is of less significance
than service development as one of the functions of care management.
However, care management is no panacea (Callahan, 1989; Hunter, 1988),
but rather a mechanism which, if effectively implemented, can offer one way
to manage the tension between social objectives and economic constraints
in long-term care services. This can never be a comfortable process.
The elements discussed in this chapter cover some of the critical areas
which need to be addressed in implementation, if this approach is to achieve
the desired goals for community and long-term care.
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KEY POLICY ISSUES
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HUMAN
RESOURCES
CHAPTER 6
HUMAN RESOURCES
FOR LONG-TERM CARE:
LESSONS FROM
THE UNITED STATES
EXPERIENCE
Rosalie A. Kane
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6
HUMAN RESOURCES FOR LONG-TERM CARE:
LESSONS FROM THE UNITED STATES EXPERIENCE
Rosalie A. Kane
1 Introduction
Long-term care, in common with most forms of endeavour, depends on the
abilities, motivations, and attitudes of those who do the work. Human resources
are at the heart of most privately or publicly funded human-services provision,
including long-term care. This, in turn, has led to a worldwide understanding
that investment in human potential is extraordinarily important.
Such investments begin with child development services such as day care
and preschools, and include child health care and basic education at all levels
(elementary school, secondary school, colleges, and professional or technical
education). Investing in human potential also includes continuing education,
and on-the-job staff development, which is particularly important in two
circumstances that apply to long-term care: when the knowledge needed to do
ones job changes because of advances in technology, and when a person
enters employment with minimal education only. Finally, labour practices
and general social and family services that support and sustain the workforce
are part of an overall strategy to develop and sustain that workforce.
Developing and sustaining a long-term care labour force is particularly
challenging because long-term care relies heavily on human labour.
Moreover, this human service must be provided in disparate decentralized
locations, seven days a week, and at unusual times of the day and night.
Sometimes the need for human help cannot even be scheduled: people must
simply be on hand in case a need arises for their assistance.
Certainly efficiencies can be achieved in the need for long-term care labour
through use of prosthetic equipment, and well-designed buildings, fixtures,
and furnishings that increase the capacities for people with disabilities to
perform self-care and be independent. Efficiencies can also be achieved
by state-of-the-art management information and communication systems
that permit information to flow to decision-makers in centralized locations.
In the end, however, the need will remain for a large cadre of people to form a
long-term care labour force. Long-term care work tends to have less prestige
than hospital work for health professionals, and the frontline workers in
long-term care enjoy even less prestige.
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This chapter discusses the type of human resources that a country might
need for long-term care, emphasizing lessons about developing and
sustaining a long-term care workforce drawn primarily from the United States
experience.
The chapter argues that rigid formulas for human resource needs are a
disadvantage because they stifle innovation and prohibit organizations from
interchanging personnel with different training, or configuring the labour force
in a way that takes advantage of particular strengths in a geographic area
and resolves particular problems or challenges.
Labour force characteristics often vary locally. In the United States and Canada,
for example, the supply of qualified persons desiring to perform various tasks
differs across and within states and provinces. Moreover, labour supply
issues are far from static; the supply of nurses, therapists, and frontline
nonprofessional workers in ageing and long-term care will fluctuate depending
on the labour market in general, leading to periods of relative plenty and relative
scarcity.
Developing personnel formulas to be applicable internationally is particularly
presumptuous. Each country will have its own demographic imperatives
based on the age, gender, and ethnicity structure of the population, the
educational and literacy levels of the working-age population, the
employment patterns, and the amount of regional variation in all of the above.
Thus, any recommendations must be general. However, it is possible to state
more specifically what kinds of skills and abilities are needed in any countrys
labour force for long-term care. It is also possible to describe issues that must
be considered in planning and shaping any countrys long-term care labour
force, and the kinds of information that would be useful to assemble for
guiding national and local planning on human resources for long-term care.
When possible, empirical data are offered to support suggestions on human
resource development. Unfortunately, most of the wisdom from industrialized
countries on labour force issues for long-term care is based on expert opinion
rather than driven by data. When data are available, such as for example
data that link quality in nursing homes to resident-to-staff ratios of various
types of nursing personnel, analyses never take into account the possibilities
of substitution of non-nursing personnel for some of the nursing functions.
The lack of citations to research in this chapter reflects the absence of helpful
research on the topic.
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2 Defining the knowledge and skills base
One way to approach the daunting task of deciding what knowledge and skills
(and, therefore, what occupations and expertise) are needed in the long-term
care labour force is to undertake the somewhat simplistic task of considering
what tasks need to be done. It is useful to define general tasks before
identifying the professional occupations and job titles that may be necessary.
Tasks can be divided into two categories:
those usually performed by persons with professional degrees;
those usually performed by persons without advanced or
specialized education. When these individuals work directly
with older patients, they are sometimes called frontline workers.
3 Professional or specialized
human resources
3.1 Tasks to be performed
Below is a list of somewhat specialized tasks with a brief accompanying
discussion of the persons typically involved in performing them in
Diagnosis, treatment, and monitoring of acute illnesses and
chronic health conditions of persons receiving LTC
Physicians and nurses largely perform these functions, though
other personnel can help them with monitoring changes in chronic
conditions for example, home health aides or care personnel
in congregate residential settings. Physicians who fulfil these
roles may work directly for long-term care programmes, such
as nursing homes or home care programmes, or they may be
part of a countrys general system for delivering primary care
and hospital care.
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Ordinarily, some physicians with advanced training in geriatric
medicine are needed to teach, deliver specialized care on
referral, consult with primary care physicians, and the like.
In countries where specialized advance-practice nurses,
such as geriatric nurse practitioners, are available and
permitted to work quasi-independently under the general
supervision of a physician, nurses may perform many of
the functions otherwise performed by physicians, including
prescribing medications.
Monitoring for change in health conditions is particularly
important in long-term care. Nurses and physicians may
do such monitoring directly, or they may also teach patients,
family members or nonprofessional caregivers to notice
relevant changes and thus assist in monitoring the health
of those needing long-term care.
Rehabilitation services to improve or maintain body
functions, including capabilities to swallow and speak,
to promote activities and participation, and to prevent
development of complications and greater disability
These functions include an interdisciplinary team approach and
some of them are largely performed by physical therapists (for
large motor functions), occupational therapists (daily living activities
and fine motor functions), and speech therapists (for speech and
swallowing). In the United States, certified physical therapy aides
(PTAs) and certified occupational therapy aides (COTAs) perform
many of the functions of professional therapists, under their
supervision. It is also possible for nursing assistants and persons
with relatively little training, including friends and relatives, to provide
most of those and other similar activities as part of an overall plan.
Rehabilitation includes the prescription and provision of assistive
devices such as wheelchairs, orthotics and prosthetics, to
guarantee mobility and to improve function and quality of life.
The more sophisticated the equipment used to improve mobility
and independence of the person with functional disability, the
more important it is that a network of individuals is available
to repair and service that equipment. Traditionally, not much
thought is given to the availability and distribution of personnel
who are capable of repairing assistive devices.
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Management of or assistance with medication regimens
If the older person cannot take his or her own medicines,
the task of administering medicines is usually carried out
under the supervision of a registered nurse, particularly if
the older person receives injectable medicines or medications
of the kind that need careful monitoring and titrating (such as
sliding scale insulin for persons with diabetes, or anticoagulants).
Management of medications is one of the most difficult
components of long-term care to put in place because
depending on the legal standards as to who may administer
medications, and the complexity of the regimen expensive
nursing personnel may be required to be on hand many times
during a day.
The difficulty in determining a way to efficiently manage
medications in long-term care is ironic because family
members typically administer medications when such family
is available to do so. Besides a need for personnel to work
directly with patients in administering medications, other
persons (typically pharmacists) are needed to dispense
medications and to inspect the adequacy of prescribing
and dispensing practices, including guarding against
prescribing incompatible medications.
Testing of hearing, and fitting and monitoring of hearing aids
This suggests a need for audiologists and hearing aid
specialists who understand how to work with all hearing
impaired, and in particular, elderly patients.
Testing visual functions, providing surgical and refractive
services and low vision care
This requires ophthalmologists and optometrists/opticians
able to provide eye care to all vision impaired as appropriate,
according to eye care conditions: surgical services for cataracts;
refractive devices (spectacles) for uncorrected refractive errors
for distance and near vision; low vision services for those with
late consequences of glaucoma, age-related macular degeneration,
diabetic retinopathy, and/or other retinal degenerative conditions.
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Dental care, including fitting of dentures
This suggests a need for dentists and dental assistants with
expertise in and willingness to work with older people and
with often difficult patients, as the mentally ill or handicapped.
Diagnosis and treatment of psychiatric conditions, which
may be the primary reason for needing long-term care or
an additional complicating condition
Psychiatrists, psychologists, social workers, and specially
qualified psychiatric nurses are all involved in this function.
Treatment could include medications, behavioural management,
and individual, group, or family therapy.
Many older people needing long-term care have conditions
that result in memory loss and generalized impairment in
decision-making. The extent to which care personnel should
be specialized or generalists is a matter of some controversy.
Evaluation of fundamental needs and development
of care plans
This task is often performed by nurses or social workers, and
is sometimes performed by an elaborate multidisciplinary team.
Sometimes the individuals who do care planning (alternatively
called service planning) have the job title case manager.
It is not clear whether the assessment and care planning
task should be done by each organization that provides care
(for example, each nursing home and home care provider),
or whether greater continuity can be achieved by the
establishment of assessment and care planning functions
that are freestanding and consider care delivered by all
organizations. Decisions for how this function is performed
cannot be made in a vacuum, but will be highly dependent
on the way services are organized and funded in the country.
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Team management
Geriatric assessment and management (GAM) units have
been established in many cities in industrialized countries
to perform a deluxe assessment on either an inpatient
or outpatient basis. Such assessments are often targeted
to those older people who have achieved maximum benefit
from acute-care hospitalization but who have functional
problems and chronic diseases that together make
post-hospital planning difficult. Multidisciplinary teams
using a variety of techniques (interviews, performance tests,
laboratory tests) may be involved, and the assessment
can last for a period of many days.
Such teams have been perceived as particularly justified
when they have the potential to alter the trajectory of persons
who were perceived as management problems or in need
of more protected settings. Such freestanding, often one-time,
assessment and care management should be distinguished
from the ongoing assessment of needs, and planning for
services that occur regularly for persons receiving LTC.
Making arrangements for the delivery of care
at home or in special congregate settings
This kind of coordinating and allocation function is also
often done by persons with the job title of case manager
or care coordinator, sometimes in conjunction with
assessment and care planning. The most frequent
academic preparations for the role are social work
or nursing, though often no postgraduate requirements
or professional degrees are needed to enter into this
occupation.
If personnel who arrange for care are located outside
theorganizations that provide care, they may also have
a quality assurance function. That is, they may judge
and try to assure or improve the quality of the help the
older person gets, a function even more likely if the case
management organization has been involved in purchasing
the care.
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Providing recreation and stimulation
It is debatable whether this task, which occurs in senior
centres, adult day care centres, and various congregate
living settings like nursing homes, is really part of LTC.
It could be considered more of a general societal function
and one that is not necessarily age-specific.
However, adult day care is sometimes prescribed specifically
to achieve goals of recreation, socialization, and stimulation,
and recommendations for relocation in senior housing or
assisted living are often made for the same purpose:
to combat isolation in old age. Moreover, when people
are encouraged to relocate in nursing homes to meet
health and functional needs, they are often cut off from
their social moorings and some programmatic help is
thought necessary to bring or restore interest to their lives.
The skills needed to perform such tasks are also debatable.
Individuals with bachelors or masters degrees in recreational
therapy approach this work as an individualized prescriptive
therapy. Those less dedicated to a medical model may also
perform the functions effectively in a less prescriptive mode.
For example, individuals with skills in music, art, and adult
education have worked effectively in offering stimulation and
recreation to persons receiving long-term care. It is also
probable that generalists without any advanced or specialized
education in activity work can fulfil the functions required,
although some special skills may be needed to develop
programmes, recruit and train volunteers, and the like.
Administering long-term care programmes
Home care agencies, day care centres, senior centres,
assisted living programmes, nursing homes, home-delivered
meal programmes, and so on, all need to be organized and
administered according to sound financial principles and
sound principles of managing human resources.
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It is unclear how much the knowledge for these tasks is
specific to long-term care programmes; for example, those
who have administered a school or a hospital, a social service
agency, or many other kinds of organizations may have the
requisite skills. Furthermore, the kind of personnel needed
to manage long-term care programmes will vary according
to the complexity of the organizations and the size of the
budgets.
Often, people with practical experience in a field, such as
nurses and social workers, ascend to management, and
these individuals often bring useful particular knowledge
and commitment to the tasks. However, they may need
additional skills to meet the complicated expectations
of a large long-term care programme, including personnel
management, budgeting, strategic planning, and quality
assurance.
It is certainly possible to develop a system with specific
licences to administer programmes such as nursing homes
or assisted living settings, and base that licensing on
education prerequisites and specific training.
3.2 Issues raised by specialized
personnel and their tasks
The various tasks outlined thus far all rely on a somewhat specialized
knowledge base or on a set of skills. They have in common the fact that they
raise the following issues:
To what extent should each function be provided within LTC
settings versus being organized outside such settings, and
be made available to the perons with long-term care needs?
The answer to this question will dictate the extent to
which primary health care will be the vehicle for some
of the specialized services needed by the LTC patient.
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Although many industrialized countries have duplicated
services for LTC programmes and settings, an argument
for both quality and effiency could be made for providing
the services at the community level. This is especially
true because developing countries may not wish to
replicate the high level of institutional arrangements
found in industrialized countries.
To what extent is it necessary to infuse content specific
to disability and ageing and services appropriate for
these client groups into all curricula of health professionals
(e.g. physicians, dentists, nurses, therapists, pharmacists,
social workers, administrators) for them to be effective in
a geriatric and LTC practice?
Practice wisdom asserts that there are deficits in the extent
to which generalists in any professional field understand
the challenges of disability and ageing. However, LTC needs
are growing rapidly and people with chronic conditions should
be able to expect appropriate care in all settings.
If curricula need to be reoriented to reflect changing needs
as the population ages and chronic conditions increase
should this be done separately by each profession, or
should this include interdisciplinary teaching/learning?
To what extent can nurses and other professionals substitute
for or augment the work of physicians? If nurse practitioners
or physician assistants are to be developed, how can their
jobs be structured to maximize their effectiveness?
To what extent can the work of professionals be replaced by
less-qualified non-professional personnel, and what would
be the implications for supervision and for assuring quality
of care?
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4 Nonprofessional workers
Other sets of tasks in long-term care relate very directly to the assistance
people need with everyday life because of their disabilities. Although some
skill and training to perform these tasks are needed, it is important to
remember that family and friends without particular training can perform many
tasks, and that many tasks can be performed interchangeably by people with
a wide variety of educational backgrounds.
In the rest of this chapter, we use the term frontline worker to refer to those
without professional credentials who perform work in long-term care and who
work directly with the disabled/older person. It is useful to think of frontline
paid personnel as providing services similar to those often provided by family
members.
It is widely understood that uncompensated family members provide most of
the worlds long-term care. The difficult task of frontline workers is to serve as
surrogates for family members when the latter are not available.
4.1 Tasks performed by frontline workers
The following LTC tasks can be undertaken by frontline workers:
assistance with mobility, bathing, dressing, using the toilet,
transferring, eating, and positioning in bed as necessitated
by the persons condition;
housekeeping, cooking, and laundry assistance as
necessitated by the persons condition;
shopping for or with a person needing care;
providing transportation and/or escort for a person
needing care;
supervision of safety and prevention from harm; and
assisting with financial management (paying bills,
reviewing accounts).
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The work involved in some of these tasks consists of activities that are
widely familiar to many adults (driving a car, cooking, shopping, laundry,
bed-making, house-cleaning, handling money or balancing a cheque book);
training needed would be minimal and often specific to the particular person
being helped (e.g. training on special dietary needs or restrictions). Other skills
can be readily taught (dressing, help with using the toilet, transferring, bathing,
feeding) with reference to how to perform the tasks so that both the person
doing the work and the person receiving the care are comfortable and safe.
Sometimes, the teaching needs to be specific to the special challenges and
risks of the specific person being helped or the conditions that necessitate
the need for help. For example, a frontline caregiver may need particular
knowledge about general issues such as skin care for those who are
immobile, or how to assist with mobility for specific conditions such as
Parkinsons disease or arthritis. Sometimes, skills are needed in managing
special equipment, such as urinary catheters, ventilators, and equipment
used for ostomies.
In some societies, many of these kinds of tasks are performed by registered
nurses, whereas in many countries less trained assistants with job titles like
home health aide or nursing assistant do the bulk of the work.
4.2 Subdivision of tasks of frontline workers
Sometimes direct care work is subdivided. The most common divisions are:
personal care services, i.e. those that bring the worker
into contact with the body of the person receiving care; and
all other help that these services involve, i.e. homemaking
activities and those that involve the persons possessions
and physical environment.
Further subdivisions are possible for both the personal care side (e.g.
medication technicians), and the homemaking side. The latter is more likely to
be subdivided in congregate living situations where it becomes feasible to have
waiters, cooks, housekeepers, laundry personnel, and so on, dividing the tasks.
For care at home, such specialization may be dysfunctional. The advantages
and disadvantages of segmenting the labour force are discussed below.
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4.3 Generic attributes required
of frontline workers
Although it is apparent that tasks such as cooking, cleaning, laundry and
even personal care are not specific to ageing or long-term care, some
challenges apply to frontline workers in long-term care settings regardless of
whether their tasks are segmented or more general.
First, the individuals performing everyday routine care also form relationships
with the person receiving long-term care. The relationships can be positive,
affording the disabled/older person a sense of companionship, pleasure, and
security. In contrast, the relationships may be impersonal or neutral, or at
worst negative making the individual receiving care fearful, anxious,
misunderstood, humiliated, and hesitant to request help. Basic human
qualities of sensitivity, genuineness, reliability, kindness and practical
intelligence are thus of prime importance.
Second, the persons performing everyday routine care are also in a position
to observe changes that are relevant to health status. From this it follows
that two rather general skills are needed for frontline long-term care workers:
communication skills and observation skills. Both of these skills need to be
tailored to the clientele and conditions being served. Particular challenges are
involved in communicating with people who may have hearing, speech, and
cognitive impairments. In addition, changes in all chronic conditions need
monitoring.
Third, some degree of literacy is also needed to perform the tasks of long-
term care. Frontline long-term care workers need to be able to read and speak
the language in which the work of the programme is conducted. Long-term
care work is often a beginning job for new immigrants to a country.
It is possible that some of these workers are literate and relatively well
educated in their own country yet unable to speak the national language. In the
United States, some nursing homes have even begun teaching English as a
second language to its caregiving staff; others arrange for such training
elsewhere. The more literate and articulate the frontline labour force is,
the less dependent the programmes are on supervision by professional
personnel.
4.4 Issues raised by tasks of frontline workers
This discussion of the tasks of frontline workers raises the general issues
described in the questions raised on the following page.
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How should the frontline jobs in long-term care be constructed
in terms of generalist versus specialist expertise?
Should the frontline jobs in long-term care be constructed
differently depending on settings? For example, should the
jobs be differently defined and supervised, perhaps with
different requirements, for organizations like nursing homes
where professional staff are on hand, compared to in-home
services?
Where will the labour force come from for these positions?
What general and particular challenges arise in a country, to
recruit persons to frontline LTC and retain them in the positions?
Should frontline long-term care work be viewed as a relatively
short-term position (a matter of months and years, rather than
decades or entire careers) or should it be possible for persons
to have a financially and psychologically rewarding long-term
position providing or supervising frontline long-term care?
Is some mix of long-term and short-term workers most
desirable?
What kinds of qualifications are needed at entry for frontline
long-term care roles?
What kinds of orientation, staff development, and continuing
education would work best? Who should be responsible for
offering such ongoing training. Who should pay for it?
How particular should it be to the actual circumstances
of care settings and current clientele?
How can communication and observational skills best
be taught? How, if at all, can empathic skills be taught,
or is that a matter of selection of the right individuals?
How can adequate literacy levels in frontline personnel
be assured? What level of literacy is needed, and is it
needed for all personnel? Are there ways to organize jobs
and record systems so that they are easier to use by
people with less ability to read and write in the language
of the country?
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5 Specialization
The sections on task-related requirements for professional/technical
personnel and for frontline personnel each ended in a list of issues. In this
section, a somewhat different set of crosscutting issues is discussed. Most
relate to both professional or technical personnel and also frontline personnel.
Each of the issues in developing human resources discussed in this section
is overlapping. The way one is solved will influence other issues on the list.
As countries evolve long-term care labour forces, they face most of these
problems.
5.1 Professional versus
nonprofessional personnel
As stated already, many of the tasks needed for long-term care are familiar to
and within the skills of a lay person. Different decisions may be reached about
the extent to which professionals, such as qualified physicians, nurses, social
workers, mental health personnel, or therapists are needed to perform various
tasks. If nonprofessionals serving as frontline workers receive good initial and
ongoing training, if they are recruited from people with good basic education,
and if a relatively high caliber of personnel is attracted to the jobs because of
the salaries and benefits he or she can command, there will be less need for
professional supervision and oversight.
In practice, varying standards are developed for the training and supervision of
the personnel who perform direct care tasks. Some may be expected to have
extensive training (for example, two years of training and a specific credential,
such as residential care worker, is common in the United Kingdom) or,
by contrast, they may be required to have only 90 hours of training, such as for
certified nursing assistants in the United States.
In most countries, certain expectations and prerogatives attach to professional
occupations, which are licensed by public bodies and typically monitored
by their peers. Professionals are expected to have mastered a body of
knowledge, acquired specified skills, and subscribe to a code of ethical
behaviour established by the profession.
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The argument for requiring a registered nurse to perform certain tasks is
related both to his or her presumed ability to perform skilled assessments
and also to the confidence placed in the ethical behaviour of members of the
nursing profession.
Similarly, qualified social workers (who in some countries are required to have
a college degree and often have a masters degree, and in other countries
may be prepared through various kinds of technical training) are expected to
have mastered some basic skills in working with individuals, families, and
groups. Social workers are expected to have a theoretical understanding of
human behaviour and of the range of resources available in the society, and to
subscribe to a professional code of ethics. Tasks that are performed by nurses
and social workers are also performed by people without those qualifications.
Each country is challenged to decide what must be done by which
professional, and what can be done by people not licensed in the profession.
It is also important to determine what responsibility if any the professional
has towards others who are performing the tasks on a paid basis, an unpaid
basis, or both.
5.2 Specialists versus generalists
within a profession
The issue of how specialized or generalized the long-term care labour force
should be pertains both to professionals and to frontline workers. In terms of
professionals, vigorous debates have been held about the need for geriatric
physicians, geriatric nurses, geriatric social workers, and so on.
The answers depend on the role envisaged for the specialist. Will geriatric or
rehabilitation specialists care for older/disabled people directly, provide direct
care for just a segment of the population (perhaps those who are very old or
who have complicated conditions) or will they largely provide consultation to
primary care physicians and other specialty physicians?
If geriatric/rehabilitation specialists are to serve largely as consultants and
educators, some competence in ageing and rehabilitation needs to be
developed in all physicians. Similar issues arise for nursing, social work,
psychiatry, and a host of other disciplines. Pragmatism may dictate the
answers. In most instances, it will be impossible to provide personnel
specialized in geriatrics, rehabilitation and long-term care to work with each
disabled or older person.
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5.3 Specialists and generalists
among frontline workers
As already stated, many societies distinguish between the work that
involves contact with a patients body as opposed to contact with the patients
possessions and environment. Thus housekeeping, cooking, and cleaning
may be done by one category of personnel, and personal care by another.
Such division of labour is sometimes deemed efficient, yet another school of
thought holds that it is better to avoid fragmenting frontline care into multiple
jobs. For home care, the fragmentation typically turns out to be inefficient
because of costs of travel for multiple people, each to do a small task.
Furthermore, ludicrous situations can arise with segmented labour, such as
in the example where one category of personnel gives a bath and another
cleans the tub.
In congregate living situations, division of labour is more feasible, especially for
somewhat large programmes, which may have a personal care staff,
a housekeeping staff, a laundry staff, a kitchen staff for cooking and washing
up, and a waiter staff for serving meals. Even for congregate settings,
however, current thinking is encouraging a more universal worker who
assists a small group of residents with a wide range of tasks from personal
care, to serving food, to cleaning rooms, and doing the laundry. The thought
is that such generalists are better able to come to know the resident well,
form positive relationships, and become better able to communicate and
observe, than would occur in the case of a segmented labour force working
with a much larger population of residents.
6 Credentials, licensing, and certification
6.1 Professional personnel
Professionals personnel with technical or professional roles usually
receive their training in post-secondary educational institutions, and these
institutions are typically responsible for certifying their beginning competence.
This usually entails some combination of review of credentials and/or a
qualifying examination.
Beyond that, governments may establish a licensing authority and exact
additional requirements such as job experience or periodic refresher training
for those who hold the licence. Levels of practice within a job category can
also be licensed. Also the professional and technical disciplines themselves
may wish to certify or accredit their practitioner, or governments may cede the
licensing and policing authority to the professional groups.
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Generally, licensing and certifying of personnel is thought to be a way of
maintaining quality, though if certain activities can be performed only by those
holding special certification, provider organizations have less ability to
improvise and innovate. In the United States, there has been recent attention
to whether the role of case manager should be licensed or certified, and, if so,
what the minimum educational requirements and demonstrated competency
should be.
Licensing requirements for various kinds of professional and technical
personnel also have a guild-like quality of protecting those already licensed in
the occupation from others who wish to do the work, or, in some cases,
even to enter the occupation in a given geographic area. In the United States,
this issue has arisen particularly with reference to nurse practice statutes and
licensing regulations.
These have sometimes been interpreted to mean that only a registered nurse
may administer a medication or do various other kinds of nursing procedures
that have been performed within families and neighbourhoods for decades.
The issue particularly comes to a head when administration of medications
or tasks defined as nursing are performed by paid non-family personnel
perhaps those already assisting in the setting with personal care and
housekeeping tasks.
In the United States, each state jurisdiction governs professional practices,
and some have modified or clarified their laws or their regulations to permit
nurses to teach and delegate a variety of tasks to nonprofessional personnel,
even when they are not immediately or intensively supervising the tasks
(Kane, Baker & OConnor, 1995; Reinhard, 2001; Wagner, Nadash
& Sabatino, 1997). Such nurse delegation is thought to help keep costs low
enough for the older person to remain in the community and to promote quality
by keeping nurses involved in teaching and monitoring.
An alternative is to formally exempt certain persons or situations from the nurse
practice act, such as household servants, attendants for younger people with
physical disabilities, and the like. One formal evaluation of a nurse delegation
programme in the state of Washington reported positive results (Young et al.,
1998).
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6.2 Frontline workers
Whether and how frontline workers should be certified is a more vexing
problem. Training may occur at centralized locations such as community
colleges and technical training academies.
Sometimes, provider organizations themselves become approved to provide
entry-level training to their own employees and those of other organizations.
Indeed, one strategy for nursing homes to maintain their labour force of
nursing assistants is to operate their own training programme. Since frontline
workers often have low incomes and scant savings, a pre-employment
training requirement for which they pay out-of-pocket may deter them from the
field.
Often provider organizations pay for tuition, training, and wages for their
employees while they are being trained. Governments may become involved
by certifying local training locations (including providers) and mandating a
particular curriculum.
Frontline personnel are sometimes required to become certified by a
governmental body (usually at a lower than national level) largely so that
authorities can develop a registry. Because of concerns about the vulnerability
of the people served and the typically low requirements for entry into the
occupation, personnel are often required to undergo checks for criminal
backgrounds, provide health information, and the like. Personnel who are
derelict and terminated from employment for that reason could then be
removed from the registries so that they do not recycle to other employers.
Such registries are required for nursing home and home care personnel in the
United States, though they are often poorly maintained. Some commentators
caution against potential harm from registries and note that personnel must
have a way of appealing adverse judgements that affect their ability to work
in a field.
7 Retaining a labour force
of frontline workers
If unemployment is high, unsatisfying frontline jobs in long-term care may still
be filled. In a tight labour market, workers may prefer other relatively unskilled
occupations, such as working in hotels, restaurants, and tourist industries,
becoming part of a retail sales force, or even working in some unskilled
manufacturing jobs. Shortages tend to be cyclical.
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In the United States, for example, long-term care providers have reported
difficulty in recruiting or retaining frontline personnel, beginning in about 1999
and extending through 2001, with the difficulties being exacerbated in some
markets where unemployment is almost nonexistent. When such shortfalls
are found, typically there is still variation in the ability of various employers to
retain staff.
There is some anecdotal evidence that respect for workers helps to explain
which programmes keep their labour force. Recently, various states in the
United States have done their own labour force analyses, attesting to
shortages and suggesting a range of strategies to improve jobs and job
conditions (Faculty Workgroup, 2001; Frank & Dawson, 2000; Leon, Marainen
& Marcotte, 2001; North Carolina Division of Facility Services, 1999).
In the face of shortfalls of frontline workers, one strategy is to import workers
through a guest worker programme or through relaxed immigration
restrictions. Another is to try to improve the nature of the jobs not only in
terms of their pay scales, working conditions, and benefits, but also in terms of
making the jobs interesting and respected.
7.1 Respect, rewards, and career ladders
for frontline workers
In general, long-term care commands low levels of prestige. Physicians,
nurses, social workers and others in long-term care may command less
respect and lower salaries than their counterparts in other settings such as
hospitals.
The roles do not ordinarily involve working directly with the newest and most
exciting diagnostic and treatment technologies. They often take personnel into
backwaters of health care provision, in older buildings, and far away from the
stimulation of grand rounds, high-profile case conferencing, and the trappings
of modern medicine. Nurses and therapists and others employed directly in
long-term care settings may have less access to continuing education and
less opportunity and eventually motivation to remain up-to-date in their own
fields.
Lack of respect from others may lead to lack of self-respect. One way of
guarding against this is to make sure that invidious wage distinctions
disadvantaging those employed in long-term care do not develop. Of course,
if physicians are quasi-independent practitioners whose income is partly a
function of the procedures they perform (as is the case in the United States),
incomes for those working in long-term care will never ascend to the incomes
of those who work, say, as surgeons.
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The stock-in-trade of the best geriatric/chronic care personnel is their ability to
listen and make judgements, the essential ingredients of which are a prepared
mind and time for encounters with patients. Indeed, patients often do better if
procedures (such as catheters and tube-feeding) and medications are
discontinued rather than initiated.
The prestige issue is exacerbated for nonprofessional employees. The people
on the front lines of the long-term care labour force have difficult jobs.
At times, their work involves hard physical labour and heavy lifting; and/or
disagreeable clean-up tasks. Sometimes they need to adapt to difficult
patients and to almost abusive behaviour from clientele, especially if the
patients served have lost their inhibitions because of cognitive impairment.
Frontline personnel may have little authority, especially if their jobs are
construed as following the plans of nurses and other professionals, but they
do have substantial responsibility. They may work in a patients home far from
any professional personnel, or they may be responsible for a group of nursing
home residents at night without any professional personnel on hand. It is up to
them to decide what problems to communicate to their supervisors, and what
constitutes an emergency in which specialized help is needed right away.
In a group residential setting, they will be called upon to allocate their time
among competing requests and needs of several residents.
A common complaint of frontline workers in industrialized countries is that they
get little recognition or respect for their work (Wilner, 1998). Salaries are often
low and fringe benefits lacking. Also galling is lack of respect for their opinions.
In some nursing homes, frontline workers are prohibited from reading the
medical record let alone contributing to it. Aides and housekeepers typically do
not participate in care planning even though they may have uniquely accurate
information about a patients needs and preferences based on more sustained
interaction.
7.1.1 Career ladders
Closely related to the issue of treating frontline workers with respect is the
challenge of providing opportunities for advancement. Many positions in
long-term care have little room for the worker to advance to a higher position.
To counteract this problem, various jurisdictions in the United States are
attempting to develop career ladders for frontline workers to advance to
positions of greater authority. Typically, employers bear much of the cost for
this effort in terms of paying for tuition and/or offering paid release time to
workers in exchange for a commitment of continuing employment. For such
a system to work, the additional training must be available at convenient hours
to enable the trainee to maintain employment. Also, there needs to be a
continuing stream of people willing to perform entry-level jobs.
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If frontline workers advance to other jobs, somebody needs to stand on the
bottom rung of the career ladder. Immigrants are one likely source of labour.
Another possibility might be to attract young people just leaving secondary
school and who are uncertain of their career goals. It is even possible to
consider some kind of public service commitment for youth, akin to military
service, in order to fill entry-level conditions.
7.1.2 Turnover of frontline workers
The subject of career ladders raises the question of its opposite: high turnover.
Turnover of personnel is costly to care organizations, and it has become a
truism to deplore the high turnover rates often found in long-term care facility
staff in industrialized countries. Yet turnover may not be all bad, if there is also
a core of personnel who remain for continuity and if the turnover is planned.
For example, if highly motivated people can be attracted to the roles for
short periods, perhaps during life transitions, this approach might round out
and upgrade the long-term care workforce in a most helpful way. Recent high
school graduates, recent college graduates, homemakers with young children,
even recent retirees from the labour force, and certainly recent immigrants,
might be attracted to long-term care work for a year or so.
If jobs can be fashioned as less than full-time, the likelihood of attracting
college students, homemakers, and retirees is higher. There is little research
on these issues to help determine the best mix of short-term and long-term
frontline workers in long-term care.
7.1.3 Effectiveness of programmes to improve
and retain frontline workers
It is easier to be in favour of career ladders for frontline personnel than to
determine where the rungs of the ladder might lead. If the career ladder is
meant to allow frontline workers to climb into various professional and
technical roles, then it will be necessary to develop opportunities for some
people to complete their general college and perhaps high school educations,
which would often be a prerequisite to getting training as a nurse, a social
worker, or an administrator. This kind of career ladder away from the frontlines
may respond to the needs and wishes of some frontline workers.
However, it is also possible to design a system with new roles for frontline
workers as supervisors, teachers, and mentors so that they remain close
to the direct delivery of care. Such positions would need to be properly
compensated, of course.
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Research on the effectiveness of programmes to promote frontline workers
into leadership roles is sparse, though descriptive accounts of innovations are
plentiful. Such concepts are just beginning to emerge in isolated examples in
the United States.
For example, one nursing home known to the writer has designed a role of
cluster manager for selected certified nursing assistants. In this nursing home,
the cluster managers are responsible as the primary care coordinator for eight
nursing home residents. They have been taught the computer skills to
manage the assessment database, and are the ones in the frontline of
communication with residents, family members, and others in the health care
team. The day-shift cluster manager hands over the mini-unit to the evening
cluster manager. These roles can be accessed by people whose training
is received on-the-job, and do not need to go back to school to complete a
college education or to embark on a professional track.
Similarly, in small assisted living programmes, people with experience in
building maintenance, personal care, housekeeping, and the like, have
been advanced into administrator roles after receiving specialized training,
a possibility more likely in a large firm committed to promote from within
(as long as governments do not exact requirements for administrators).
Other examples like this need to be developed and carefully tested to see
what kinds of career ladders are truly feasible for frontline personnel.
8 Personnel ratios
To determine how many personnel with various kinds of training are needed,
it is tempting to try to derive a ratio of workers to the number of persons served.
This can be done prescriptively with reference to individual organizations,
e.g. there could be a requirement for a minimum ratio of nurses to residents
or activity personnel to residents in nursing homes. It can also be done
to forecast the desired number of professionals needed for a society,
e.g. the number of geriatric physicians per 1000 people over age 65.
Used in the second sense, ratios may be useful as crude planning tools or
goals. Used in the first sense, that is, requiring minimum staffing ratios for
certain types of organizations, staffing ratios are more problematic. They are
better if adjusted for the acuity levels of the clientele, but typically they are not
based on clear data about the numbers and mixes of personnel needed to
perform tasks and achieve results. Moreover, staff ratios usually satisfy the
protective instincts of particular professions without considering the extent
to which various kinds of personnel are interchangeable. The Institute of
Medicine studied the topic of desirable nurse ratios for hospitals and nursing
homes and could not reach a sound consensus for the nursing home settings
(Wunderlich, Sloan & Davis, 1996).
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9 Family members as human resources
Family members provide substantial long-term care services, as discussed
in Part one, Chapters 1 and 2 of this volume, by Joshua Wiener and Marja Pijl,
respectively. A conscious strategy to encourage, train, and support unpaid
family caregiving reduces the need for a paid labour force. Direct payment
to family members is also a possibility, and one that is widely used in
industrialized countries (Linsk et al., 1992).
If a limited amount of public dollars is available to pay for long-term care
services, authorities may be loath to pay family members for what they
would otherwise do without compensation. On the other hand, family mem-
bers may be unable to afford foregone wages to give extensive care.
Direct cash allowances to those needing services find their way into the hands
of family members in more than half the cases in most direct payment
programmes. In a market with low unemployment rates, family payment
may be a solution that increases the labour force, since a variety of kin and
neighbours may work on a flexible schedule to meet the need.
Arguably, if wages are at the market rate for frontline workers, opportunity costs
will be such that those who can command higher wages will not opt for the
positions. Some commentators see payment of family caregivers or direct
payment to consumers as a sort of income support to low-income families.
10 Multidisciplinary teams
The multidisciplinary team has almost become a clich of long-term care.
Like most clichs, it emerges from a certain truth. It is true that many different
kinds of expertise are needed to plan and manage the care of an older person
who is likely to have complex, interacting problems.
It is also true, however, that teamwork is a luxury when human resources are
scarce. It is beyond the scope of this chapter to discuss teamwork in detail.
Much has been learned about the skill-building and maintenance activities
needed just to have teams function with adequate communication and mutual
respect to get their work done towards common goals (Drinka & Clarke, 2000;
Mezey et al., 2002). Much has also been learned about the hazards of
teamwork, particularly the propensity to forget the main goal and substitute
team-member satisfaction rather than consumer outcomes as evidence of
success.
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A review of the literature suggests the following guidelines as teams are forged:
Consider ways to get multidisciplinary input, for example
in a comprehensive assessment tool, without necessarily
having a multidisciplinary group perform the task.
Develop teams only when they are needed.
Make sure that core teams are no larger than necessary.
Recognize that various persons can be interchangeable
and avoid orthodoxy about which disciplines are needed
and who should lead the team.
Try to develop effective information systems that cut down
the need for, and maximize the effectiveness of, expensive
face-to-face meetings of the whole group.
For ongoing long-term care settings, recall that frontline
personnel may have a great deal to contribute to the
collective effort.
11 Case Managers
The ideal of case management or care coordination has emerged over
the last 20 years in industrialized countries and has engendered some
enthusiasm in countries newly articulating a LTC programme. This is
somewhat ironic, because industrialized countries have recently been
rethinking their views about case management, spurred in part by consumers
who are resentful about the intrusiveness of some representative of an official
programme managing the details of their lives under the guise of managing
their care.
Thus, the role of case manager is being reconsidered in countries such as
the United States and Canada. There will always be a need for someone to
allocate benefits (if the system has benefits) based on objective criteria,
and there will always be a need for those who help older people and their
families make complicated decisions and gain access to services.
Those LTC consumers with cognitive impairment or extreme physical frailty,
and particularly those who lack involved kin or friends, will need more case
management on a more sustained basis than those with fewer care needs
and/or involved family agents.
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Any case management or care management capability needs to be developed
in conjunction with the particular system of care in the country, and also
developed cautiously (Campbell & Ikegami, 1999). It would, however, be a
grave mistake to begin with a care management system at the expense of
evolving the services that need to be managed. For a detailed discussion of
case management see Chapter 5 of this volume, by David Challis.
12 Culture
Long-term care is intensely personal. The greater the disabilities of the person
needing long-term care, the more dependent they are for large aspects of daily
functioning on the presence of others. Long-term care workers finish by
shaping the day of the long-term care consumer, determining where they go
and when, even to details of where and what they eat, and when they get up or
go to bed.
Because there is likely to be a great deal of interaction between the person
providing frontline care and the consumer, mutual trust is important. Imagine
the stress of receiving care in such intimate detail from someone regarded as
an enemy. Imagine the difficulty a care consumer might have in asking
questions or raising objections to a nurse or physician who is regarded as of
much higher prestige based on cultural differences. Imagine the difficulty a
care provider might have in raising an issue with either the consumer or
members of other disciplines if that care provider speaks a different language,
is part of a different culture, and particularly if he or she feels devalued.
Many developing countries are composed of heterogeneous societies with
different languages, religious traditions, class structure, and historic
animosities. Many countries may be composed of subgroups that differ from
each other in their views of the appropriate roles that men and women should
play in communicating serious news and delivering personal care to members
of the opposite gender.
In industrialized countries, these issues have also plagued the delivery of
long-term care. This has given rise to much discussion about the culturally
competent organization, in which personnel are prepared to deliver long-term
care to all societal groups.
In New York City, in Miami, in San Francisco and in Los Angeles, it is possible
to identify large numbers of distinct ethnic and language groups who both
give and receive long-term care. A growing literature is appearing on cultural
competence in human services in general, and long-term care in particular
(Lynch & Hanson, 1998).
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Cross-cultural competence can be considered on a variety of levels.
Knowledge about dominant patterns within a subculture is necessary for
understanding about how health problems and care problems, including
discussion of death and illness and dealing with intimate functions, are likely
to be understood.
Also necessary are attitudes that recognize that an individuals preferences
and quality of life with long-term care are likely to be shaped by their own
cultural norms. It may also be necessary, at least in the short run, to try
to develop programmes that are staffed and managed particularly to serve
heterogeneous groups within a society.
This is particularly true for group residential settings. In turn, this may require
special demands for labour force development in terms of recruiting and
retaining human resources at various levels that are distributed in particular
ways across ethnic groups and gender.
13 Staff development and continuing
education
It appears that systematic orientation and on-the-job training, punctuated by
more formal continuing education opportunities, will be essential to maintain
a labour force for long-term care. Various long-term care organizations have
developed their own competency-based training materials and have evolved
approaches that include on-the-job mentoring. Some large multi-site nursing
home or home care firms retain centralized training personnel.
Nursing homes in the United States are required to have a staff development
programme, and a certain content is mandated for repeated sessions.
However, great diversity is found in how the staff development role is
structured, including the number of staff development hours per resident,
the extent to which the training is individualized and is based on diagnosis of
need, and the actual programmes themselves.
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14 Conclusion and possible lessons
for developing countries
Each country will need to assess its own current and future long-term care
labour force against its own current and anticipated needs for care. It is
possible to conduct such an assessment by considering the range of tasks
that must be performed and the variety of personnel available to perform them,
and to project both the likely population needs and the likely personnel
availability into the future.
One problem in making such forecasts is the difficulty of knowing whether
nurses, social workers, and other similar professionals will remain in the
labour force in their current occupations. Nursing shortages are difficult to
forecast because they, in particular, often migrate to other countries, leave the
labour force entirely, or take up different kinds of work.
The age of the workforce in any discipline is also relevant. In the United States,
for example, it is often noted that practising nurses are on average a
somewhat older group and that retiring nurses are not being replaced in
adequate numbers (Aiken et al., 2001).
Countries that are developing long-term care systems have unique
opportunities to consider freshly the labour force needed. The content of this
chapter suggests that no single formula can be developed that will be applied
to all, and that there may be opportunities to avoid developing a system with
some of the problems found in industrialized countries like the United States.
WHO has devised a framework for analysing the factors affecting the
development and implementation of human resources for health (HRH)
policies and strategies, which addresses the wide variety of factors affecting
the organization and quality of personnel. When discussing human resources
in LTC, it is important to keep this broader HR context in mind (Egger, Lipson &
Adams, 2000).
Some of the issues which countries will need to address are discussed in the
recent general HRH literature (Van Lerberghe, Adams & Ferrinho, 2002). These
issues include skill mix (Buchan & Dal Poz, 2002), poor working conditions
and their effect on the workforce (Van Lerberghe et al., 2002) and, last but not
least, the effects of health sector reform for human resource development
(Alwan & Hornby, 2002).
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For long-term care in particular, the problems to avoid based on lessons from
industrialized countries include:
discrepancies in prestige and wages between
long-term care and other health settings;
a long-term care programme that makes
enormous distinctions in wages and prestige
between professional/technical personnel
and frontline workers;
dead-end jobs for frontline workers; and
disregarding the crucial role of families, friends,
and communities.
Changing demography, epidemiology, and social realities such as
urbanization, growing poverty, migration, changes in family structures and
growing participation of women in the labour force must all be taken into
account when planning human resources for growing long-term care needs.
In general, answering the crucial human resources development questions
has a lot to do with efficiency and cost-effectiveness considerations that are
specific to a given country or locality. No single formula can be developed that
will be applied to all. However, while developing a system it is important to take
into consideration some of the problems found in industrialized countries such
as rigid job descriptions and overly requiring credentials.
An appropriate mix of manpower and its cost is obviously a key element in the
design of LTC systems, with crucial consequences for affordability and
feasibility particularly in developing countries. A number of issues to be raised
include those listed as questions, on the following page.
LONG-TERM CARE
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What are the levels of training and education appropriate
to developing countries in relation to various long-term
care roles and how should they differ from industrialized
countries?
What are the possiblities of integating long-term care roles
with other roles existing within the health or social services?
How to support traditional caregiving values?
How to support families and communities so that they will
be able to continue their traditional caregiving roles?
What is the role of volunteers/semi-volunteers and how
do they integrate with paid staff?
What is the role of traditional healers? In many societies,
traditional healers already fulfil roles that may be
considered long-term care (psychological counselling
to patients and caregivers, physiotherapymassage, etc.).
Additionally, these healers are often respected and
trusted members of the community.
Policy-makers will need to consider all of these issues in planning their future
LTC workforce. Resources include the recent WHO publications entitled
Home-based and Long-term Care (WHO, 2000) and Lessons for long-term
care policy (WHO, 2002).
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References
Aiken LH et al. (2001) Nurses Reports on Hospital Care in Five Countries.
Health Affairs, 20 (3):4353.
Alwan A, Hornby P (2002) The implications of health sector reform
for human resources development. Bulletin of the World Health
Organization, 80(1):5660.
Buchan J, Dal Poz MR (2002) Skill mix in the health care workforce:
reviewing the evidence. Bulletin of the World Health Organization,
80(7):575580.
Callahan JJ, Jr. (2001) Policy perspectives of workforce issues and older
people. Generations, 25 (1):1216.
Campbell JC, Ikegami N (1999) Long-Term Care for Frail Older People:
Reaching for the Ideal System. New York, Springer.
Drinka JK, Clark PG (2000) Health Care Teamwork: Interdisciplinary
Practice and Teaching. Westport, Connecticut, Auburn House.
Egger D, Lipson D, Adams O (2000) Achieving the right balance: the role
of policy-making processes in managing human resources for health
problems. Human resources for health: issues in health services delivery.
Discussion paper No.2. Geneva, World Health Organization.
Faculty Workgroup on Peopling Long-Term Care (2001) Peopling Long-Term
Care: Assuring an Adequate Work Force for Minnesota. Minneapolis,
Minnesota, University of Minnesota Center on Aging.
Frank B, Dawson SL (2000) Health Care Workforce Issues in
Massachusetts. Boston, Massachusetts, Health Care Forum.
Kane RA, Baker MO, OConnor CM (1995) Delegation of Nursing Activities:
Implications for Patterns of Long-Term Care. Washington, DC,
American Association of Retired Persons.
Kane RA et al. (1988) Geriatric nurse practitioners as nursing home
employees: Implementing the role. The Gerontologist, 28(4):469477.
Leon JJ, Marainen J, Marcotte J (2001) Pennsylvanias Front Line Workers
in Long-term Care.
Linsk NL et al. (1992) Wages for Caring: Compensating Family Care
for the Elderly. New York, Praeger.
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Lynch EW, Hanson MJ (1998) Developing Cross-Cultural Competence.
2
nd
ed. Baltimore, Maryland, Paul H. Brookes.
Mezey M, Cassel C et al., eds. (2002) Ethical Patient Care: A Casebook
for Geriatric Health Care Teams. Baltimore, Johns Hopkins Press.
North Carolina Division of Facility Services (1999) Comparing State Efforts
to Address the Recruitment and Retention of Nurse Aide and Other
Paraprofessional Aide Workers. Raleigh, North Carolina, Division of Facility
Services.
Reinhard SC (2001) Consumer Directed Care and Nurse Practice Acts.
New Brunswick, New Jersey, Center for State Health Policy,
Rutgers University. (Draft report dated June 2001.)
Van Lerberghe W, Adams O, Ferrinho P (2002) Human resources impact
assessment. Bulletin of the World Health Organization, 80(7):525.
Van Lerberghe W et al. (2002) When staff is underpaid: dealing with
the individual coping strategies of health personnel. Bulletin of the
World Health Organization, 80(7):581584.
Wagner D, Nadash P, Sabatino C (1997) Autonomy or Abandonment:
Changing Perspectives on Delegation. Washington, DC, National Council
on Aging. (Proceedings of a conference sponsored by the UD Department
of Human Services, Assistant Secretary for Planning and Evaluation).
WHO (2000) Home-based and Long-term Care. Geneva, World Health
Organization (Technical Report Series, No.898). Available on web site
http://www.who.int/ncd/long_term_care/index.htm
WHO (2002) Lessons for long-term care policy.
Geneva, World Health Organization (WHO/NMH/CCL/02.1). Available on
web site http://www.who.int/ncd/long_term_care/index.htm
Wilner MA (1998) Paraprofessionals on the Front Lines: Improving
Their Jobs, Improving the Quality of Long-Term Care. Washington, DC,
National Association of Retired Persons.
Wunderlich GS, Sloan FA, Davis CK, eds. (1996) Nursing Staff
in Hospitals and Nursing Homes: Is It Adequate? Washington, DC,
National Academy Press.
Young H et al. (1998) Nurse Delegation: Final Report. Seattle, Washington,
University of Washington School of Nursing.
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c
h
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f
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ACHIEVING COORDINATED
AND INTEGRATED CARE
AMONG LTC SERVICES:
THE ROLE OF
CARE MANAGEMENT
Professor David Challis
University of Manchester
United Kingdom
chapter
three
EVALUATING
LONG-TERM
CARE
CHAPTER 7
APPROACHES
TO EVALUATING
LTC SYSTEMS
Itziar Larizgoitia
P
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t

f
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7
1 The need for long-term care
Coinciding with the United Nations International Year of Older Persons
in 1999, the World Health Organization and the Milbank Memorial Fund
prepared a Consensus Statement that would initiate the development of
a coherent international policy on long-term care (WHO, 2000a). That
Consensus Statement established a series of guiding principles for policy,
among which the following essential point for shaping long-term care
assistance emerged:
assurance that long-term care is of high quality
and is offered by culturally sensitive providers.
Traditionally, long-term care has not been among the main concerns of health
policy-makers. Cost-containment issues, a perhaps excessive focus on
medical specialized care, and the fact that families have always been and
remain the major providers of long-term care (WHO, 2000b), have
contributed, among other factors, to a slower development of public long-term
care services, or to a heavier reliance on private care. Nevertheless, needs
and demand for LTC are growing steadily, and the need for increased access
to effective long-term care is becoming a pressing issue in practically all
societies.
In industrialized societies, the ageing process represents one of the major
public health concerns, both for ensuring an adequate level of care to satisfy
todays needs as well as for ensuring the systems sustainability in the near
future (Srensen & Pinquart, 2000). According to a forecasting study on the
public health status of the Netherlands population, chronic somatic and
psychiatric diseases account for about 80% of the number of unhealthy years.
The same forecast reveals that by 2015 the total number of people with chronic
diseases will have increased by 2060% (van den Boss & Triemstra, 1999).
APPROACHES TO EVALUATING
LTC SYSTEMS, Itziar Larizgoitia
LONG-TERM CARE
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However, needs for long-term care are not restricted to industrialized societies
and the ageing process. Technological advances in medicine coupled with
the epidemiological transition experienced in many regions of the world
have contributed to shift the balance towards care for the chronically ill
(Dutton & Levine, 1989), including among these the growing sector of AIDS
patients in almost all societies.
Increasingly, all over the world, more people survive diseases that were
fatal some decades ago. Furthermore, the burden of disability is aggravated
by the persistence of pervasive conflicts and violence which especially affect
the developing world. A recent WHO study shows vast increases of need for
long-term care over the next decades, in all developing countries (WHO, 2002).
Societal factors, related to changing family roles and caring patterns, as well
as the growing expectations of the population for more and better services
also increase demand (Jette, Smith & McDermott, 1996). Demand is also
increased by reforms in the health system, which tend to restrict acute sector
services (e.g. shortened hospital stays) towards the goal of seeking higher
efficiency.
The need for reconsidering the role of long-term care is imperative as the
burden of disease inexorably evolves towards higher levels of chronic
disability and dependency, and as societies demand better and more
professional care. Health systems must reorient their services to provide more
care for the chronically ill and disabled, expanding the focus of health
care from adding years to life to adding life to years. The need to provide
effective coverage of long-term care must be among the priorities of
policy-makers.
2 The idiosyncrasy of long-term care
Driven by the specificity of long-term care goals, the resources, organization,
and processes involved in the delivery of long-term care services adopt
in turn distinctive characteristics. Understanding these characteristics is
fundamental for the management, planning, or assessment of long-term care
services:
(The goal of long-term care) is to ensure that an individual
who is not fully capable of long-term self-care can maintain
the best possible quality of life, with the greatest possible
degree of independence, autonomy, participation, personal
fulfilment and human dignity.
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The former is a definition given by a group of experts convened in 1999 by
WHO (WHO, 2000b). This panel also described the type of care as follows:
(Long-term care) includes activities undertaken for people
requiring care by informal caregivers (family, friends and
neighbours), by formal caregivers, including professionals
and auxiliaries, and by traditional caregivers and volunteers.
Similar definitions have been given by others (Kane & Kane, 1988).
Long-term care addresses many different types of conditions and disabilities,
whose common denominator is either physical or mental dependency.
The target groups of long-term care (Clyburn et al., 2000) include:
people who are chronically ill, including HIV/AIDS patients;
individuals with disabilities, of whom a numerically
important group are the elderly;
people with sensory limitations;
mentally ill individuals, including people with dementia;
substance-dependent individuals; and
informal caregivers, mostly female family relatives
at risk of suffering themselves from limited autonomy
and adverse outcomes.
Long-term care is never uniform. It involves a variety of services, both
personal care and social services, in response to the multiple needs of
patients, and embodies a broad range of activities and providers.
Unlike the acute sector, many of these are unspecialized, labour-intensive,
and relatively unskilled. Most long-term care activities are performed by
paraprofessionals with a variety of skills (home assistants, housekeepers,
nurse assistants, activities staff, or informal caregivers). Skilled workers
(nurses, social workers, physical and occupational therapists, administrators,
and physicians) are involved to a degree which is significantly less than that
in acute care even though the need for their services is considerable.
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Similarly, the level of equipment, medical devices, and support technology
is much less sophisticated. Long-term care is considered a low technology
type of endeavour.
Many of the core long-term care activities are concerned with helping with
basic functioning or with improving patient autonomy in performing the basic
or instrumental activities of daily living. The diversity of settings where care is
provided (which are usually organized as small facilities, many of which are
independent) is another factor to consider.
Long-term care is rendered over a sustained period of time. This prolonged
temporal relationship, determined by the persistent nature of dependency,
disability, and chronic conditions, is one of the best defining attributes of
long-term services. It influences the interpersonal relationships created
among patient, families, and providers.
This time factor also determines the physical adaptation of the home or
the infrastructure of facilities to accommodate or attend patients on a
long-standing basis. Care is more continuous, thus requiring greater
coordination between different segments of care and carers.
3 Effective and sensitive care
Optimal care could be expressed as effective care, appropriate to consumer
needs, delivered competently and with sensitivity (Quality in Health Care,1997).
WHO, in its framework for assessing the performance of health systems
(WHO, 2000c; Murray & Frenk, 1999), defines the quality of health systems by
the achievement of the two main health system goals:
improvements in health status; and
responsiveness to the legitimate expectations of populations.
This broad definition is consistent with classical interpretations of quality
of care, which identify quality as the care yielding the greatest expected
benefits in health, and considers the interpersonal relationships between
patient and provider a key factor in the care delivery process (Donabedian,
Wheeler & Wyszewianski, 1982).
WHO regards both aspects, health and responsiveness, as desirable outcomes
of health systems, thus reinforcing the need for patient-orientated care.
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The general WHO framework enables conceptualizing the quality of LTC as
the care that achieves gains in health, and is responsive to the legitimate
expectations of LTC recipients. It seems necessary to identify the specific
subset of outcomes, both in the health and responsiveness domains, which
may be directly attributable to the LTC received.
The very nature of long-term care often relates to coping with disability,
compassion, and accompaniment on the path to death. LTC attempts to
contribute to:
alleviating suffering;
maintaining the best possible quality of life;
reducing discomfort;
improving the limitations caused by disease and disability; and
maintaining the best possible levels of functioning.
In this context, improvements in functional ability and in the perceived quality of
life (pain, discomfort, other symptoms) can be considered as some of the
health dimension outcomes of LTC.
The construct of responsiveness encompasses the domains of dignity,
autonomy, confidentiality, prompt attention, quality of basic amenities, access
to social support networks, and choice of provider. For the extremely frail and
the mentally ill, the assurance of basic civil rights may, however, be one of
the most relevant issues to consider. Illustrated below are the principal quality
outcomes of LTC.
Health dimension Functional ability
Other health status measures
specific to major conditions
. Health-related quality of life
Responsiveness dimension Dignity and human rights
Autonomy, confidentiality
Quality of basic amenities
Access to social support networks
Choice of provider
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4 Ensuring the quality of long-term care
Ensuring quality long-term care implies ensuring an acceptable achievement
of the specific outcomes that have been identified previously. The classic
conception of structure, process, and outcomes components used for the
analysis of health services (Donabedian, 1988)

is also useful in understanding
the scope of quality improvement measures.
The achievement of quality care will necessarily be defined by achievement
of desired outcomes of care, but activities designed to improve the processes
or the underlying structure may also contribute to that achievement, if specific
direct links with outcomes are established. The underlying notion is that
the way in which the structural and process components of care interplay is a
key to achieving the desired outcomes of care.
Many mechanisms have been developed to ensure an acceptable level of LTC
services. The most basic interventions involve measures which are addressed
to establish basic legislation and standards aiming in general at achieving
acceptable deployment of resources in institution long-term care:
minimum staffing ratios and qualifications;
skill-mix;
minimum infrastructure and safety conditions;
minimum content of long-term care services; and
data collection requirements.
In many countries, compliance with certain regulations is required for licensing
(Commonwealth of Australia, 1997). The effectiveness of these regulations
in contributing to acceptable quality of care is highly dependent on their
enforcement and compliance

(Mukamel, 1997), an aspect which is hampered
by the atomization of settings and low-skill base of some of the workforce.
However, it has been shown that some factors, such as nursing staffing or
nursing hours per day, are positively related to better quality (Harrington et al.,
2000). The negative relationship between unlicensed facilities and quality of
care has also been identified (Fleishman et al., 1999).
Excessive reliance on structural measures such as these, however, may not
necessarily be related to better outcomes. It is important to understand that
the relationship between the two dimensions, structure and outcomes,
needs to be established. Structural criteria are better viewed as minimum
standards that need to be in place in order to ensure safe environments
and acceptable conditions to satisfy both technical and personal expectations.
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Classic Quality Assurance or Total Quality Management are interventions
directed to ensure that the chain of processes of care delivery is performed in
a satisfactory manner. Quality Assurance interventions provide frameworks
for staff to critically assess everyday practice in order to identify gaps,
deficiencies, and scope for improvement in order to act accordingly
(Challiner, 1997).
These sets of interventions are organization management tools which aim at
providing improved services by ensuring that patients needs and expectations
are the focus of most care processes. They involve a set of mechanisms to
identify gaps (through epidemiological methods and data collection),
processes of verification and the planning of corrective actions, followed by
implementation and reassessment (Williamson, 1988).
Completion of the cycle leads to continuous improvements in daily practice.
These tools are successful if there is sufficient motivation among the key
staff either self-motivation or stimulated through external incentives to
participate and comply with changes, and if the organization assumes
responsibility and leadership for excellence.
A link between current practices or processes of care and the goals of
long-term care must be made to ensure that they are oriented in the right
direction, and in addition that Quality Assurance activities are well oriented
(Evidence-Based Care Resource Group, 1994). Assessment and synthesis
of the current evidence, and subsequent standardization of practices,
are important mechanisms to identify and implement effective practices
(Rosenberg & Donald, 1995).
Practice guidelines are systematization of processes, based on evidence,
that attempt to reduce the variability in care provision. They are especially
useful when there is wide variability and uncertainty in the processes of care
and when there is enough evidence to support one determined path of action;
otherwise, they may be problematic. They can then be useful in defining
treatment protocols and assessing the effectiveness of care.
There exists a danger if guidelines are only a codification of clinical judgement,
and in such cases they should be discarded (Grimshaw et al., 1995).
The introduction of guidelines in daily practice is improved by the extent of
participation of the workforce, either in their development or adaptation
to specific environments.
Specific educational interventions and continuous education of the workforce
may also facilitate their effective incorporation (Grimshaw & Russell, 1994).
The education of the workforce, with special emphasis on evidence-based
practice, is an important step on the path towards quality improvement
(Evidence-Based Medicine Working Group, 1992).
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5 Outcomes assessment
For many reasons, the above-mentioned interventions, structural regulations,
quality assurance activities, continuous education, and the evidence-based
movement, may not be successfully implemented, enforced, or adopted.
The assessment of the actual outcomes of care remains a necessary
instrument to measure the achievement of care, as well as to render providers
accountable for their performance. Information on the outcomes of health care
is needed in order to understand the extent of goal achievement, so that further
corrective action can be adopted on a more empirical basis. Currently, there is
an important movement towards outcomes assessment in accordance with a
greater emphasis on advancing the empirical evidence for health care policy
and planning, management, and clinical decision-making (NHPC, 2001).
Outcomes assessment poses some challenges as well. When outcomes
occur with a lag-time after health care interventions, or when other
determinants may influence their occurrence, the attribution of specific
achievements to specific care processes remains difficult (Lohr, 1988).
To avoid this difficulty, many practitioners and researchers propose
identifying outcomes that are directly related to health interventions and occur
within a reasonably short period after the intervention.
The focus of outcome selection is also important. Since LTC patients tend
to present a combination of problems, isolated outcomes concerning
specific conditions may not provide a complete picture of the impact of care.
Examining functional abilities across a comprehensive series of dimensions
may give a more accurate indication of long-term care achievements.
Outcome measures aimed at specific aspects of organ function are not as
useful as those aimed at overall function across physiological, functional,
and cognitive domains (Boston Working Group, 1997).
The most widely-used general functional measures are the activities of daily
living (ADLs) and instrumental activities of daily living (IADLs), which are
good approaches to measuring functional level and (over time) variations in
functional capacity. Other outcomes of interest in long-term care are the level
of pain and discomfort, the level of cognition, as well as social activity, social
relationships, and affect (Kane, 1995). There are several instruments which
measure those domains and that are available in a number of languages
(Landi et al., 2000; Arling et al., 1997).
Expected outcomes are a function of the patients condition prior to the
intervention. Accordingly, outcomes assessment should be adjusted
according to patients baseline level of health status or functioning. Thus,
one way of assessing outcomes could be by measuring the difference
between the observed and the predicted outcome rate for each facility
(Mukamel & Brower, 1998).
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Outcomes must be adjusted prior to the intervention. Such adjustments
must be made according to the patients characteristics that may affect the
occurrence of those outcomes. Otherwise, comparisons are not meaningful.
Those patients characteristics, or case-mix, encompass a number of factors
which modify the individual risk of a patient experiencing specific adverse
outcomes. The purpose of the adjustments is to remove the effects of patients
risk from the effects of the intervention. Interfacility differences should also be
taken into account, if comparison across settings is intended.
Systems for case-mix adjustment must take into account the main
determinant factors of the specific outcomes of interest (Iezzoni, 1997).
In long-term care, outcomes should be adjusted by various prognostic factors,
including the severity of the condition. Demographic characteristics, such as
age and sex, or primary diagnosis as used in acute care, may not be sensitive
enough to determine patients risk of experiencing functional and symptoms
outcomes.
The Resource Utilization Groups (RUG) is one of the most highly developed
case-mix measurements for long-term care (Stineman, 1997). However, less
sophisticated approaches may be used. Measuring baseline functional level
through an ADLs type of measure and stratifying patients according to the
baseline level of functional limitation may be an easier and useful approach
(Cooper et al., 2001). That is, patients can be classified as high- or low-risk
and rates calculated within strata.
A problem may arise if risk factors used for adjustment are themselves a
function of poor care quality or if they represent problematic care practices,
such as faecal impaction or pressure sores. Those risk factors may be
consi dered i n themsel ves outcome i ndi cators of senti nel events
(i.e. adverse outcomes, occurrence of which indicates low quality of care)
(Porell & Caro, 1998).
Some basic items usually measured in functional and cognitive scales include:
ADLs Self-performance in: bed mobility,
mobility to/from bed/chair, locomotion, dressing,
eating, toilet use, personal hygiene, continence.
IADLs Self-performance in: meal preparation,
housework, use of phone, use of transportation,
shopping, managing basic finances, taking medications.
Cognitive scales Orientation, attention, memory,
judgement, language, and praxis.
LONG-TERM CARE
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There is an important and unanswered debate on whether outcome
assessment is sufficient to inform on the quality of care. Many authors
proclaim that process measures are needed as well, to better identify gaps
in the performance of care practices. Most experts will suggest combining
outcome with process, or even structural measures, so as to produce
empirical information concerning the different analytical levels of health
care organizations, providing that there is a sufficient empirical base to link
process or structural measures with outcomes.
Some of the processes of long-term care which have proven such a
relationship (i.e. certain preventive immunizations, avoiding unnecessary
restraints) illustrate the benefit of their use as quality measures.
Assessment of patients expectations is the second domain of long-term care
goals. WHO conceptualization of responsiveness implies a service that
provides respect for persons and is client-orientated (Murray & Frenk, 1999).
In considering responsiveness, WHO distinguishes between elements related
to the respect for human beings as persons, and more objective elements of
how a system meets certain concerns of patients and their families as users
of health systems.
These categori es are subdi vi ded i nto seven di sti nct el ements of
responsiveness. Respect for persons includes:
respect for the dignity of the person;
confidentiality; and
autonomy to participate in choices about ones health.
Client orientation includes:
prompt attention;
amenities of adequate quality;
access to social support networks; and
choice of provider.
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237
The sustained relationship between patients and providers that characterizes
long-term care, stresses the importance of the responsiveness domains
as desired LTC outcomes. Respect for persons including the basic
maintenance of civil rights and confidentiality acquires special relevance for
long-term patients. Also specially relevant for these patients is the quality of
the basic amenities with which many of them live for a long time.
Access to support networks is a key outcome for burdened caregivers
(Miller & Guo, 2000). Assessment of patients expectations is sometimes
conducted through patient satisfaction questionnaires (Geron et al., 2000),
although their use needs to be complemented with other more objective
measures.
These objective measures are necessary to compensate for patients coping
mechanisms, their level of accommodation, their personal level of expectations
(Branch, 2000), or other factors that may affect the response pattern, such as
intimidation. Objective measures may be necessary in the case of cognitive
frail patients (observable indicators of well-being, such as absence of agitation,
screaming, crying, and the like).
6 Coverage and needs assessment
Effective coverage of effective and responsive health interventions is perhaps
the best defining expression of quality of care. The concept of coverage, as
opposed to the quality of care which refers to individual patient care, implies a
population dimension.
Coverage refers to the proportion of the population which receives a certain
service. It also reflects the proportion of those who did not receive that service.
Coverage of effective interventions refers to the proportion of the population
which receives specific quality services, or services which are effective in
improving health.
The extent and distribution of effective coverage also defines the extent of equity
within the system. Long-term care is one of the areas of health systems
traditionally characterized by lower public coverage.
The mixture of social and health domains, with often different lines of
accountability but not always clear boundaries between them, the
traditional reliance on families as caregivers, and other factors, contribute
to an explanation of lower levels of development of long-term care services
and, in some countries, the greater influence of private initiatives. Lack of
accessibility and financial barriers hamper the adequate coverage of disabled
patients in many countries.
LONG-TERM CARE
238
Assessment of the quality of long-term care, from a population viewpoint,
must consider the effective coverage of chronically ill and disabled persons.
A crucial step involves identifying population needs through instruments for
needs assessment, such as population-based health and responsiveness
surveys. It is important to recognize that needs assessments must be based
on needs of persons with a chronic condition and their family caregivers alike,
rather than on the availability of services.
7 Steps forward
There are indications that the quality of long-term care has not been optimal in
some countries (Dickinson & Brocklehurst, 1997), with accounts of patients
dignity and autonomy undermined in health care settings (Lothian & Philp, 2001).
A recent review undertaken by WHO in selected health care systems based
in social insurance schemes concluded that quality of long-term care is the
weak link in all countries reviewed (Brodsky, Habib & Mizrahi, 2000).
Some of the key issues that may explain the lower quality of care may relate to
a weak quality improvement approach, provider fragmentation, and lack of
common standards. Countries may need to examine their long-term care
services and move towards a greater quality improvement initiative in order
to provide effective and responsive coverage of long-term care.
Recommendations to move forward include the following.
1. Any health system should define the scope and extent
of its long-term care coverage.
2. All primary care services need to also address the
long-term care needs of people with chronic conditions
and disabilities, along with adequately responding to
their needs for preventive and curative care.
3. Long-term care coverage should be based on an
assessment of needs of the person requiring LTC.
However, as the bulk of LTC is provided by informal
caregivers and dependent upon their health and
well-being, caregiver needs must also be assessed
in order to plan resource allocation.
KEY POLICY ISSUES
239
Recommendations (continued)
4. Regulatory systems should establish the minimum
standards for long-term care facilities, including aspects
such as the level and qualifications of staff, the minimum
staffing levels and skill-mix, procedural standards, and
infrastructure specifications. Some countries may wish
to regulate the rights of patients to long-term care, both
in terms of technical care and in terms of civil rights.
Compliance with standards should be enforced.
5. Standards or Protocols should be established where
sufficient evidence is available, and research encouraged
to expand the knowledge base necessary for quality LTC.
6. Interventions to improve care, such as Quality Assurance
and Continuous Education, need to respond to changing
needs and realities.
7. Some measure of outcomes assessment may need
to be implemented in order to measure the extent of
outcomes achievement and thus to improve care
accordingly. Agreement over outcomes definitions
should be established. The International Classification
of Impairments, Disabilities, and Handicaps (ICIDH)
(WHO, 1980) and The International Classification of
Functioning, Disability and Health (ICF) (WHO, 2001)
may provide a method approved by WHO Member States.
8. The responsiveness to the legitimate expectations of
persons with chronic conditions and disabilities, and
the responsiveness to the legitimate expectations of
their informal caregivers, must be translated into the
continued improvement of services.
9. Evaluation of the extent of effective coverage across
disability groups, and across social determinants that
may hinder access to long-term care (such as age or
gender, social and economic status, race, ethnic or
religious groups, geographical residence, or other criteria )
should be performed.
LONG-TERM CARE
240
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ACHIEVING COORDINATED
AND INTEGRATED CARE
AMONG LTC SERVICES:
THE ROLE OF
CARE MANAGEMENT
Professor David Challis
University of Manchester
United Kingdom
chapter
three
CHOOSING
OVERALL LTC
STRATEGIES
CHAPTER 8
CHOOSING
OVERALL
LTC STRATEGIES:
A CONCEPTUAL
FRAMEWORK
FOR
POLICY
DEVELOPMENT
Jenny Brodsky
Jack Habib
Miriam Hirschfeld
Ben Siegel
Yael Rockoff
P
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t

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e
KEY POLICY ISSUES
245
8
CHOOSING OVERALL LTC STRATEGIES:
A CONCEPTUAL FRAMEWORK FOR POLICY
DEVELOPMENT, Jenny Brodsky, Jack Habib,
Miriam Hirschfeld, Ben Siegel, Yael Rockoff
1 Introduction
There is a broad range of design issues that arises in developing a LTC system.
Some are common to all social service systems and some are specific to
long-term care. An algorithm of these key issues was developed to analyse
available policy alternatives and identify factors relevant to the choice among
them. Some of the major key policy issues identified include:
the relative priority of LTC among other needs;
which LTC services should be prioritized;
state vs. family responsibility;
service delivery strategies;
nature of entitlements, targeting and financing;
strategies for achieving integrated or coordinated care; and
human resource strategies.
Each design issue may itself be resolved in a number of different ways, as
illustrated in the previous chapters in this volume. The numerous issues and
ways to resolve them yield a very large number of alternative overall policy
strategies.
The resolution of the set of issues defines an overall LTC policy. It is therefore
not sufficient to assist policy-makers in understanding each specific issue.
They require guidance as to how to deal with the choice of an overall policy.
LONG-TERM CARE
246
Furthermore, policy-makers need to take into account the fact that the
resolution of the individual issues is not an independent decision. These
issues are interdependent, and therefore the choice of a resolution of one issue
affects the resolution of others.
Therefore, policy-makers also face the practical question of where to begin:
on which issues they should focus first. Given the interdependence among
the resolution of the issues, the choice of a beginning point can be of critical
importance.
This overview represents an effort to go beyond the discussion of specific
design issues to present broad paradigms of alternative systems that combine
various ways of resolving these specific issues. We attempt to address the
complexities of the policy-making process by considering the following broad
questions:
Is it possible to identify major broad LTC policy strategies
and reduce the significant number of alternative strategies?
Is it possible to suggest key starting points in developing
an overall strategy? We shall term these primary issues.
What are the key interdependencies in the resolution of
LTC issues and what role do they play in defining
alternative strategies?
We identify two broad primary issues:
principles of eligibility; and
integration of LTC services with general health
and social services.
After defining the scope of LTC (1.1), we discuss the principles of eligibility in
Section 2. We then go on to consider the question of service integration between
LTC and the basic health and social services and among components of LTC
in Section 3. We conclude by discussing the interaction between these two
aspects of LTC policy design and its implications for overall LTC policy
strategies.
KEY POLICY ISSUES
247
1.1 Scope of LTC
Long-term care refers to the provision of services for persons of all ages with
long-term functional dependency. Dependency creates the need for a range of
services, which are designed to compensate for their limited capacity to carry
out activities of daily living. Dependency also results in difficulties in accessing
health care and in complying with health care regimes. It impacts on the ability
of the individual to maintain a healthy lifestyle, and to prevent deterioration in
health and functional status. Dependency creates additional emotional needs
and strains which must also be addressed. Social needs also arise from
limitations in maintaining regular social contacts.
Unique health problems arise in part from the fact that either single or
multiple chronic diseases may be the source or result of the disability. These
in themselves require complex health services and special regimes of chronic
care management. Moreover, when combined with functional limitations,
the challenge becomes even greater. Just two examples are mobility limitations,
which may require services to be brought to the home, and cognitive
impairments, which prevent the individual from maintaining compliance with
complex medical regimes.
Central to the care of dependency is the role of the family in providing that care,
and the resultant impact on the family. The need to address dependency
impinges not only upon various aspects of family function, but also upon
relationships within the family. It creates a need to manage relationships
between the disabled person and the family, as well as those between and
among family members according to their respective roles in providing care.
The need to address such dependency also has emotional consequences for
family members and for their relationships with one another.
All of these circumstances and their consequences require significant efforts
to support, guide, educate, and inform the disabled person and his or her family.
Dependency creates a complex range of needs for services, which in turn
creates a need to coordinate access to and management of these multiple
services. This care management function creates still another need in itself.
2 Principles of eligibility
In thinking about principles of eligibility, we believe that there are two major
underlying decisions that provide useful starting points in developing an overall
strategy. In this section, we first define these two basic decisions that we view
as primary issues. We then show how in combination they define five basic
options. We then examine how the choice between these strategies influences
the resolution of a number of significant other design issues.
LONG-TERM CARE
248
Two basic strategy decisions involve the following questions:
Should support be provided only to the poor, or also
to the non-poor?
Should access to services be based on an entitlement?
2.1 Supporting the poor, or the non-poor as well
This issue arises with respect to all areas of social need. Unique to LTC is the
additional possibility that the family might meet these needs for many individuals.
This is not an option in the same way for many other services such as medical
care. Therefore, the decision to provide LTC assistance is based in part on
assessments as to whether the family can, will, and should be expected to
provide care.
This decision is related to the issue of public or individual/family responsibility
for financing or providing LTC. Two questions arise. What is the responsibility
of the individual or his family to use his own income and assets? What is the
responsibility of the spouse and family to provide the care directly? Although
not discussed here, its resolution underlies the alternatives (see Chapter 1).
The decision with respect to poor/non-poor gives rise to three options:
Option 1: A desire to support the poor, and provide
programmes only for the poor.
Option 2: A desire to support the poor as a primary goal,
but financing through frameworks that include the non-poor.
Option 3: A desire to support both the poor and the non-poor,
as a primary goal.
The choice among these options is often presented in terms of the choice
between selective (or means tested) and universal approaches to social service
provision.
Support for the poor is obviously based on a concern for their inability to
purchase these services and can lead to an exclusive focus on this group
(option 1). Even if support for the poor is the primary goal, this approach can
lead to a strategy that supports the non-poor.
KEY POLICY ISSUES
249
Including them in a more universal programme might be the best way to
mobilize support for the poor, and avoid the stigma associated with programmes
devoted exclusively to the poor, such as low quality (option 2). Interest in
assisting the non-poor as well can be a primary goal (option 3).
Support for the broader population can have several rationales, including:
Social insurance
1. There is an interest in the population insuring itself against
LTC risks. Thus, some form of compulsory national insurance
is adopted to address these risks viewing it a normal life risk
on a contributory basis. This rationale is reinforced by the
difficulties encountered in developing private insurance.
2. The potentially catastrophic nature of LTC costs can result
in broad segments of the population having difficulty paying for
them, becoming impoverished and, once their resources are
depleted, becoming a burden on public programmes.
General social philosophy
3. The general belief that social needs should be financed
through collective tax-based financing mechanisms, rather
than on a private pay basis.
Service substitution
4. Interest in reducing the utilization of more costly acute care
(particularly hospitalization) services by substituting LTC.
Role of family in provision of care
5. Concern with the broader social costs of care provision, and
an interest in easing the burden on families and particularly
on female caregivers who provide much of the care with a
related interest in preserving family care by providing assistance
to help them sustain their caregiving.
6. Concern for the decline in the availability of family support
because of separate living arrangements, fewer children,
womens participation in the labour force, changes in values in
relation to caring, and breakdown of the traditional family structure
as a result of the increase in one-parent families and HIV/AIDS.
LONG-TERM CARE
250
Alongside the consideration of all these rationales, it is necessary to also
consider the costs involved in serving the greater population in light of the
relative priority assigned to LTC versus other health and social needs.
We next consider the decision with respect to entitlements.
2.2 Entitlement or budget-constrained services
A second key question is whether access to LTC services should be based on
an entitlement. When examining the importance of providing a LTC programme
on an entitlement basis, it is necessary to understand the definition of an
entitlement programme.
In this context, we are employing a concept of entitlement that goes beyond
simply meeting eligibility requirements. The distinction we are making here
relates to whether the ability to receive a service is constrained by available
budgets.
Entitlement programmes imply that everyone who fulfils the eligibility
criteria (regardless of available budgets) must be granted benefits, and such
programmes are almost always established through specific legislation.
Costs can be contained only through changes in eligibility criteria, which
usually require changes in legislation, and not by denying or delaying service.
Non-entitlement or budget constrained programmes imply
that the service does not have to be provided once the budget runs out, even
for those who meet eligibility requirements. Requests for services within a
given budget year can either be denied, or applications put on a waiting list.
Costs can be contained through planned budget allocations and not only by
adjusting eligibility criteria.
Entitlement approaches are most common in income support programmes,
particularly in the context of social security systems, and budget constrained
approaches are most common for programmes that provide services. A major
exception to this rule lies in health services which are provided in the context
of contributory social health insurance.
Yet, the nature of an entitlement is less explicitly defined when it relates to an
in-kind service; the more diffuse the service, the more diffuse the entitlement.
Health services programmes can define broad types of care guaranteed under
an entitlement. But the type, amount, frequency, and timing of the care is subject
to discretionary decisions by health providers.
KEY POLICY ISSUES
251
Moreover, some degree of waiting for care is considered reasonable, although
not easy to define and monitor. At the same time, failure to provide what
is perceived as reasonable access can be legally challenged, and those
responsible are under pressure to be responsive.
Many LTC services can be defined explicitly. These include access to a defined
number of hours of personal care, number of meals-on-wheels per week,
days and hours of weekly attendance at a day care centre, or even access to
an institutional placement.
Therefore, entitlements for LTC are more easily implemented. Thus, entitlement
programmes fall along a continuum with different levels of restrictions, depending
on the nature of the service and the consumers ability to demand care.
Choosing between entitlement and non-entitlement programmes
One of the considerations in choosing between entitlement and non-entitlement
based programmes is the broader philosophy with respect to social
service provision: the preference for rights-based versus budget-constrained
service provision.
The rights-based (entitlement) approach grows out of the human rights
perspective. It also stems from the practical motivation to protect access to
social services in the political process. That is, it arises from the belief that
these services should be defined as rights, and protected from the general
budgetary process, versus the belief that they should be subject to controls
based on budget allocations that can be more flexibly adjusted to fit the budget
situation.
A second consideration involves the ability to control costs. This reflects a
concern for the degree of controllability of costs, and not only the level of costs.
Thus, in entitlement systems the level of cost is not easily predictable or defined,
as it is determined by the number of eligible applicants.
Equally significant, however, is the fact that changes in eligibility criteria require
changes in legislation rather than administration. This means that these
changes are much more subject to public debate and more difficult for
governments to bring about if there is a recalcitrant legislature or significant
opposition. By definition, these processes take longer.
LONG-TERM CARE
252
Table 1 summarizes the alternative strategies for designing long-term care
eligibility principles and their implication for seven design issues (i.e. financing,
income testing, family support, flexibility, level of benefits, coverage by
disability, and cash benefits).
The first and primary design issue is whether to target the poor only, or the
poor and non-poor as well. The two approaches to entitlements are consistent
with either resolution of the poor/non-poor issue, so that five basic options
emerge.
Options 1a and 1b are based on the assumption of supporting
the poor, which may be implemented on either an entitlement (1a)
or non-entitlement basis (1b).
Options 2a and 2b are based on the assumption of supporting
the poor and non-poor 2a on an entitlement basis, and 2b on
a non-entitlement basis.
A fifth (combined) option (2c) provides for a more complex system
in which there are two complementary programmes one based
on an entitlement, and the other not.
KEY POLICY ISSUES
253
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LONG-TERM CARE
254
2.3 The link with seven additional design issues
We now consider how the choices among different approaches to eligibility
criteria impact on the resolution of a further set of issues that arise in designing
LTC policies. These principles are not iron-clad rules to which we must adhere.
Rather, they represent central tendencies behind which are strong rationales.
Diverting from these principles is possible, but requires special effort either
to justify or to market politically.
2.3.1 Financing (row 1, Table 1)
Entitlement programmes that serve the general population are more generally
fi nanced through contri butory i nsurance-type payments, whereas
non-entitlement programmes are almost always financed through general
taxation.
This is because a pre-paid premium payment is viewed as granting a right to
service, while general taxation does not necessarily give the individual the same
claim to a right. A second reason is that it may be easier to promote public
support and finance for a programme that serves the general population if it is
based on direct contributions and principles of compulsory social insurance.
Indeed the relationship works both ways. Concern for the ability to finance can
lead to the preference for contributory programmes, which leads to the need
to adopt an entitlement aproach.
For this reason as well, there is a concern that entitlement programmes will be
less subject to control. The basis for opposition to benefit reductions becomes
not only the need for the service and its priority, but the fact that the potential
recipients have paid through their contributions, and changes in eligibility criteria
are a breach of contract. While this argument does not have legal validity in
public insurance schemes, it carries political weight.
Entitlement programmes that focus on serving only the poor will be financed
on the basis of taxation rather than contributions.
2.3.2 Income testing of the eligibility for benefits or their
amount (row 2, Table 1)
A second implication is with respect to income testing. Programmes that target
the poor, whether provided on an entitlement or non-entitlement basis, obviously
require income testing. In programmes that include the non-poor, there may
still be some degree of income testing to exclude the very high income population
or to vary the level of benefits with income. In service programmes, this may
take the form of variation with income in co-payments.
KEY POLICY ISSUES
255
When these programmes are financed on a contributory entitlement basis,
there should not be any or at most a very liberal income test which would
exclude from benefits many who had contributed to financing the programme.
Somewhat stricter means tests can be included in tax-based programmes.
2.3.3 Family support as eligibility criterion (row 3, Table 1)
As noted, what is unique to LTC is the possibility that the family might meet
these needs for many individuals. This is not an option in the same way as for
many other services. Thus, the decision whether or not to provide LTC
assistance may be based in part on assessments as to whether the family
can or is willing to provide care.
Family support is usually not taken into account under an insurance framework,
so as not to exclude someone who has paid for their services, and because it
is a very subjective factor implying the use of discretion, which is avoided in
insurance frameworks. In non-entitlement programmes, the availability of family
support is usually a factor in eligibility for services.
2.3.4 Flexibility of criteria and degree of discretion
(row 4, Table 1)
For the same reason, eligibility criteria in an entitlement system will tend to be
rigorously defined in terms of precise measures and cut-off points that do
not allow for discretion. Generally, a few discrete levels rather than a full
continuum of support will be defined. By contrast, in non-entitlement systems
it is easier to adapt services to each case and use discretion.
2.3.5 Generosity of support (level of benefits) and disability
thresholds (coverage by disability) (rows 5 and 6, Table 1)
In entitlement programmes, as income testing and family support are not used
to contain costs, there will be a tendency to use other means to achieve this
goal. This is often by either restricting the level of benefit per recipient, or by
efforts to restrict the number of recipients by setting relatively high disability
thresholds as requirements for eligibility. The implication is that recipients
without family support may have significant unmet needs and that the less
severely disabled will not receive support even though it is needed.
2.3.6 Provision of cash benefits (row 7, Table 1)
Most LTC programmes provide the benefits in the form of direct services or
vouchers that enable the individual to purchase services. However in recent
years there has been more interest in cash grants that are not restricted to the
purchase of services. This approach is more common in insurance-based
programmes and is a way of avoiding problems with service availability.
It is very common in private insurance programmes.
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256
2.4 Five alternative strategies for designing
LTC systems
We can now summarize the strategic options as defined in Table 1.
Option 1 represents the paradigm of a programme
focused on the poor and financed through general
taxation on a non-entitlement basis.
Option 2a represents the opposite approach with support
for the broader population on an entitlement basis, and
contributory finance.
Options 1 and 2a represent the two extremes and have opposite characteristics
in every dimension.
Option 1 is based on general taxation and will generally be
provided on a non-entitlement basis. It includes family support
as a criterion and uses more discretion to allocate resources
based on need. It tends to provide a potentially high level of
benefits to those in high need of public support, and includes
a broader range of disability levels. It will generally not adopt
a cash approach to benefits.
Option 2a is a universal programme, on a social insurance/
contributory basis. Eligibility criteria will tend to be rigorously
defined, which does not allow for discretion based on need.
Availability of family support would rarely be used as an eligibility
criterion. Because these programmes are targeting the entire
population, they tend to include a relatively lower level of benefits
per recipient, and set a higher disability threshold. Cash benefits
are also common in this type of system.
Option 2b is more between the characteristics of option 1 and option 2a.
It supports the broader population but on a non-entitlement basis. Option 2b
has tax-based finance and therefore can address all the other design issues
more similarly to option 1. It will have stricter income testing for eligibility or
level of co-payment than 2a, but still serves a broader population range than
option 1.
KEY POLICY ISSUES
257
Option 2b may or may not use family support as a criterion and can be more
flexible in its eligibility criteria. Like option 1, it can offer higher benefits
because it has budgetary control over costs and may target by availability of
family support. But it will be much more costly for the same level of benefits
than option 1, and therefore may provide somewhat lower benefits, or be more
likely to limit the levels of disability that are eligible for services under the
programme.
The difference in the eligibility criteria among the options presented in Table 1
add up cumulatively to basic differences in how support is targeted. Programmes
that focus on the poor on a non-entitlement basis and are financed through
general taxation will concentrate resources on those most in need as defined
by low income and limited family support, but will include a broad range of
disability levels.
Programmes that support all groups will, by definition, spread benefits over a
larger group, but these programmes will tend to limit more strictly the disability
levels that are eligible. This will impact the most on the moderately disabled
with low incomes, who will be excluded from eligibility, and the severely disabled
with weak family support, who will receive relatively low support despite their
extensive needs.
However, despite these differences in the extent of targeting the poor, in the
final analysis it is not fully clear under which systems the poor will fare
the best. The process of allocating resources in the political system is not a
zero-sum game, because the level of total resources also varies with the nature
of the system. Sometimes programmes not aimed at the poor will be able to
generate more resources per person.
The question is: Will the extra resources mobilized in a system that is less
targeted (option 2) be sufficient to yield higher benefits for the poor than in a
system that is highly targeted but with less total resources (option 1)? This is
an empirical question.
In order to provide resources to the poor and also share in the costs of LTC for
the general population, it is possible to adopt a strategy that combines two
programmes.
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258
Combining a universal programme with a supplementary,
highly-targeted programme (Option 2c)
Option 3 combines options 1 and 2 into a single overall strategy. Thus, we
combine a more universal programme, with modest benefits and limited or no
income testing, with a supplementary programme that is highly targeted in
terms of income and family support but serves all levels of disability and can
provide high levels of assistance. These two systems can be implemented
under the same or separate auspices, but generally will be implemented under
different auspices.
The case for this approach is along the following lines. In option 2, only modest
support is available, and therefore supplementary assistance is needed for
the two groups that have the greatest needs under this scheme: the poor without
family support who need larger amounts of public support; and the more
moderately disabled when they have low incomes and limited family support.
This support would be provided by the supplementary programme on the basis
of income and family support criteria. The supplementary programme could
be more residual. Individuals would first realize their rights under option 2a,
and then if they meet the criteria receive further support under an option
1a programme (these are combined in option 2c).
Another consideration of systems that combine more than one set of eligibility
principles is that different principles may be viewed as desirable for different
services. In the discussion up to now we have implicitly assumed that only one
principle is applied to the various LTC services. In fact this is often not the case
for a number of reasons.
One reason is that health-related services are more likely to be included in
systems for the general population and provided on an entitlement basis than
in services provided in social systems, which are often budget constrained
and based on income testing. The distinction between these two kinds of
services is discussed more fully in Section 4.
This reasoning is relevant to the distinction between home health, which is
viewed as health related, and the more functionally related LTC services, which
are sometimes viewed as of a more social nature. Thus, one often finds that
two services are provided by different programmes and subject to different
eligibility criteria (see Pacolet et al., 1999).
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259
3 Integration of LTC services
Interest in integration arises out of concern for the quality and efficiency of
care. One of the defining characteristics of the challenge of integration is that
LTC includes a broad range of services. For the purposes of this discussion,
we find it useful to differentiate between three forms of LTC services:
Home health health-related care in the home.
Home care care provided in the home related to daily
functioning such as personal care (eating, bathing)
or homemaking, which we shall refer to as daily functioning
long-term services.
Institutional services.
In this discussion, we distinguish between two dimensions of integration.
1
Integration among the various types of LTC services
In LTC systems, it is common to find various forms
of fragmentation. Home health is often provided
separately from personal care and homemaking services;
home care is separated from institutional care; and even
the personal care and homemaking services are
sometimes separated.
Integration between LTC services and the general
health and social service systems
LTC services may be independent of these general systems,
or may be integrated either as a package or individually in the
general health or social services.
1
Note that there are two potential forms of fragmentation: different service components are
provided in separate frameworks; and the same service is provided in more than one
framework. Both of these are common.
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260
A further major dimension in discussing integration is that there are a number
of programmatic components that can be integrated: finance, administrative
responsibility, and organization of care (including gatekeeping, assessment,
and direct provision). Integration can imply the unification of one or all of these
components. For example, unified administrative responsibility need not imply
pooled finance.
2
There are three broad patterns of integration.
Integrated system
Only when the basic health and social systems
are themselves unified is it possible to have a fully
integrated LTC system. At least partial integration
may be achieved through a special budget pooling
arrangement between the health and social systems.
Another variant is that all LTC services are integrated
into one of these two systems, so as to integrate the
various components of LTC.
Independent LTC system
An independent LTC system can provide an opportunity
for integration among the service components of LTC.
Fragmented LTC services, components of which are
integrated into different systems
Because there are strong health and social systems in
industrialized countries, this is the most common pattern.
In particular, home health is generally integrated with the
health system, homemaking services with the social system,
and personal care with either. Moreover, even if there is
an independent system for providing LTC, it generally will
not include home health services. Furthermore, institutional
services are divided between the health and social systems
based on the level of care required.
2
There is also a distinction between integration at the national, regional or local level.
We refer here in particular to integration at the local level that can be reinforced and
facilitated in various ways at the national or regional level.
KEY POLICY ISSUES
261
The general conclusion is that it is not easy to achieve full integration along all
these dimensions and there may be a need to make choices. Thus, there is a
need to decide which elements of integration are more important.
3
3.1 Considerations in determining a policy on integration
The integration of each of these types of LTC services with general health or
social care systems can be governed by different considerations. The interest
in integration arises out of a number of concerns for the quality and efficiency
of care. These include the ability to provide coordinated care packages;
to combine services and to consider alternative services in the most appropriate
and optimal way; and to ease the access to services by offering one-step
easily identified sources of provision (see Chapters 3, 4, and 5 of this volume).
Integration also makes it possible to use personnel in more flexible and efficient
ways combining roles when appropriate. This can be particularly useful for
personnel going into the home for which travel time and travel expenses are an
important part of costs.
Links with the health systems can create a continuity of care with general
health care and with home health. It makes it possible to take advantage
of health providers that will be going into the home for health reasons
(see Chapter 6 of this volume). It can make it possible to reduce acute hospital
stays and thus free resources to finance LTC. It creates an incentive to provide
adequate home health care, or to provide rehabilitation if the health care providers
can capture the benefits of reduced home and institutional long-term care.
On the other hand, when they are in a separate system, health service savings
cannot be easily used to finance them, and health providers cannot rely on
access to them. (See Chapter 3 of this volume.)
At the same time, there are concerns about linking LTC with primary health
care that generate interest in independent models of LTC. For example,
there is a concern that long-term care services might be neglected if they
were integrated into the general health system, since acute health care would
receive greater priority. The incentives to provide adequate LTC in an
integrated system are not unequivocal or easily predicted.
3
In the absence of full integration, there arises the need for some form of coordination
mechanisms. These themselves involve a range of options, and in recent years there
has been much discussion of the introduction of a case management function
(see Chapter 5 of this volume).
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262
Health systems tend to be biased towards addressing acute care needs or
more medical-oriented needs, as opposed to those that are more function
related. The system may not perceive the potential savings of providing more
LTC, or be able to overcome the conflicting interests. In this case, the provision
of LTC services might be less than appropriate or efficient. An additional
concern is that LTC services could become overmedicalized, and as a result
more costly. For example, skilled nurses may be paid to provide basic personal
care; or LTC that could be provided in a LTC institution might be channelled
to more expensive hospital settings.
The question of how to assure the most appropriate level of LTC financing is
an important consideration in discussing their integration. The nature of the
general political processes in the country by which social budgets get
determined will influence the extent to which more funds will be allocated to
LTC when financed through separate or integrated budgets. Will the integration
with the health or social system enable it to command greater resources even
if there are biases in the allocation of resources within these systems?
Will more resources be allocated to LTC when it is integrated with health and
social care, or will there be a greater tendency to finance and support an
independent LTC programme?
Another factor that influences integration of LTC services is the distinction
between services that are more social in nature, and those that are more health
related. This is part of an unresolved ongoing territorial conflict between health
and social systems that is not restricted to LTC. The question is not only where
to draw the line, but whether these lines should be drawn at all.
There has been a trend promoted by WHO to view health in broad terms, and
to consider the social aspects of health. WHO defines health as
a state of complete physical, mental, and social well-being and
not merely the absence of disease, or infirmity.
This definition involves a mandate to include social as well as medical aspects
of health. Similarly, various health professions (such as nursing) have expanded
their view of their roles to address the social dimensions of care and include
emotional support and guidance to caregiving networks. This debate also
involves conflict between professions.
KEY POLICY ISSUES
263
A further difficulty in integration of LTC in health systems based on entitlement
principles without defined budgetary constraints is the difficulty in predicting
the cost of long-term care. This becomes a major issue when the health
providers are nongovernmental and financed on a capitation basis.
The implication of full integration of LTC with health systems is of course that
health providers would have to attend to the range of LTC services that
includes those that tend to be viewed as more of a social nature. While home
health is naturally viewed as a direct extension of the general health
services, other LTC services are sometimes viewed as more social in nature.
Personal care is often seen as part of health care. By contrast, homemaking
services, various forms of day-care, arranging informal care, and various forms
of residential care that cater to the less dependent and have a social emphasis,
are usually seen as part of social service. Emotional support to families is
often seen as part of both health and social services.
As more and more forms of housing arrangements for the disabled emerge,
their inclusion would also need to be considered. The willingness of health
systems to assume such roles, and the competition with social systems around
this professional territory, thus become additional integration issues.
We have discussed a number of considerations relevant to the resolution
of the issue of integration. We now consider how the resolution of this issue
is also related to eligibility criteria.
4 The link between the principles of service
eligibility and principles of integration
Up to now, we have separately discussed principles of eligibility and the issue
of service integration. However, the resolution of each issue is mutually
interdependent. In this section we discuss the nature of this interdependence
and the implications for the policy-making process.
When LTC is integrated with the health or social systems, a link is created
between the principles of eligibility, entitlement and finance for LTC and the
broader systems. This influences the decision as to whether LTC should be
integrated with the health or social systems.
The health or the social systems are often based on different principles.
While social service systems are always non-entitlement, budget restricted
and targeted towards the lower income populations, health systems are
commonly based on insurance principles which target the broader population.
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264
For example when health services are insurance based, then LTC must also
be insurance based if finances are pooled. Thus, the question of integration
becomes a choice of eligibility principles, and not only one of organizational
advantages and provider incentives. If there is an interest to provide LTC on a
non-entitlement basis, the option of integration with the social service system
becomes more attractive.
In order to choose an overall strategy that combines an approach to eligibility
and integration, we need a structured decision-making process that can help
deal with the complexity of this decision.
We envision a four-stage process:
Stage 1
Decide on desirable principles of eligibility without concern
for integration (discussed in Section 2); and decide on
desirable principles of integration without concern for
eligibility (discussed in Section 3).
Stage 2
Determine whether desired principles of eligibility are
consistent with current systems of health and social
service provision.
Stage 3
Examine the compatibility between desired principles
of eligibility and desired principles for integration.
Stage 4
If the desired principles are not consistent, consider
which principle has the higher priority.
KEY POLICY ISSUES
265
Stage 1 was discussed in the previous sections of this chapter. We now
proceed to elaborate on the other three stages. To simplify the example,
we focus on the integration with the health system.
In analyses of compatibility, it is also necessary to take into account the fact
that health systems may include several different public programmes (and of
course additional private ones) that may operate under various financial and
entitlement principles. There may be a particular interest in integration of LTC
with the system that has a dominant role among the poor.
Stage 2 requires an examination of the desired principles for LTC that were
decided upon in Stage 1, and a comparison with the actual principles of eligibility
that characterize the existing health system within the country.
Stage 3 presents several possibilities depending upon the interaction
between desired principles of eligibility in LTC and the existing eligibility principles
in the health system.
When there is complete consistency between the desire to integrate into the
health system, and the health system is based on the desired eligibility principles
for LTC, the decision to integrate is easier.
When there is a conflict between the desired resolution of the two
design issues, it is necessary to decide which is more important.
If integration with the health system is the highest priority, it may be optimal to
compromise on the desired principles of eligibility. Otherwise, the integration
of LTC into the social system, or the creation of an independent system needs
to be explored.
Thus one can compromise on eligibility principles to achieve the goals of
service integration, or compromise on service integration to achieve the desired
principles of eligibility. The final outcome represents a system, which can be
considered optimal in the sense of the most reasonable compromise
(sub-optimization under constraint).
In Table 1 (option 2c), we also pointed to hybrid strategies that combine different
eligibility principles. This can allow for an approach that would integrate LTC
services into both the health and social systems. This can arise when,
as illustrated earlier, there is interest in supplementing the services provided in
insurance systems on an entitlement basis with services provided on the basis
of non-entitlement budget constraints.
Up to now, we have presumed there is a common view of the desired eligibility
principles for all components of LTC. However, this is not necessarily the
case for a variety of reasons. Moreover, the concept of the desired integration
of LTC services can also differ by type of service.
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266
Therefore, there can also be a case for integrating various components of
LTC into the health and into the social systems separately. This can explain
some of the existing fragmentation in service integration to which we referred
in the previous section.
In addition, with respect to home health, the issue of family as an alternative
provider does not arise as it does with function-related services. Therefore,
there is more willingness to provide home health on an entitlement basis within
health care systems, although this is at the expense of fragmenting LTC.
In summary, there may be a trade-off between the desire to integrate fully
LTC services with the general health and social services, and the desired
principles of eligibility for LTC services. It would seem that an important reason
that LTC services are not generally integrated into general health services is a
result of this trade-off.
5 Examples from industrialized countries
In this section we illustrate how various industrialized countries have resolved
the two primary issues of eligibility and integration against the background of
the alternative strategies identified in this paper.
There are a number of examples of countries that focus support for LTC on the
lower income groups (option 1a in Table 1). The United Kingdom and Australia
are examples of option 1a, as they target support on the lower income groups
and provide LTC on a non-entitlement budget restricted basis. The Medicaid
programme in the United States is an interesting example of a system that
focuses on the poorer groups, financed by general revenues, but recipients
have a legally recognized entitlement (1b).
These programmes have taken different approaches to integration. In Australia,
LTC is provided in a system that is independent of the health and social services,
but integrates a broad range of LTC health and function-related services.
In the United States, there is also an independent system for the elderly, but it
provides a narrower range of services. In the United Kingdom, LTC services
are divided between the health and social service systems.
KEY POLICY ISSUES
267
The Scandinavian countries provide support to the broader population financed
through general taxation, and therefore represent option 2b. Although there is
not an entitlement in the same sense that exists in the contributory programmes,
they do have a strong commitment to adequately budgeting these programmes
so as to meet the needs. The LTC services are integrated partly within the
health system, and partly within the social service system, although the general
health and social services are sometimes more closely coordinated at the
local level than in other countries.
In recent years, a number of countries have adopted LTC legislation. Germany,
Israel, and Japan provide LTC services to both the poor and the non-poor
through a legally recognized entitlement that is financed on a contributory basis
(option 2a). Germany and Japan provide a broad range of LTC services
within the law, and in Japan it even extends to health-related LTC services. In
Israel, the law only provides for community-based services and does not include
institutional care or health-related services. In all three countries the programme
is independent of the general health and social service systems. In Israel, it is
part of the social security system.
Germany and Israel, however, have combined this entitlement programme
with a second complementary programme that targets the low-income groups,
and is financed through general taxation. They thus represent option 2c.
This programme is integrated into the social service system.
In all the above-mentioned countries the pattern of interrelationships among
the eligibility issues is consistent with that presented in Table 1.
The eligibility principles of the Austrian system for LTC do not exactly fit into
the models presented in Table 1. It provides support to both the poor and the
non-poor on an entitlement basis, but is financed through general taxation.
It provides an unrestricted cash benefit that can be used to finance any type of
LTC needs. This system is independent of the general health and social service
systems.
The Netherlands is also an interesting exception. It provides service on an
entitlement basis to the broader population financed through contributions,
as in 2a. However, it has adopted additional eligibility criteria that characterize
non-contributory tax-based programmes. It allows for significant discretion in
determining the level of support, and includes availability of family support
as one of the criteria for determining the amount of service. The Netherlands
is also an interesting variant in its approach to integration. The LTC services
are integrated administratively within the health system, but have a separate
budget and designated financial base.
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268
In examining together the way the principles of eligibility and integration have
been resolved, we can make the following broader observations.
Countries that have adopted more of an entitlement approach serving the
broader population have clearly preferred more separation into an independent
system. This is exemplified by Austria, Germany, Israel and Japan. As
mentioned, it is even partially true of the Netherlands, which while integrating
LTC into the health system maintains a separate budget and designated
financing scheme.
We also see that most LTC services have generally been fragmented between
the health and social services systems. Home health integrated within the
health system and sometimes health-related institutional care is based on
the same eligibility principles as the health system. Function-related services
are commonly integrated into the social service system, based on its eligibility
principles.
It would seem that principles of eligibility also play a role in decisions about
integration; however this works in multiple ways. On the one hand, systems
that want to provide LTC services on the basis of a strong entitlement refrain
from linking LTC with the social, or even the health system, and have created
independent systems. On the other hand, systems that prefer to provide the
function related services on a non-entitlement basis are not inclined to link
them with the health system. They adopt a more fragmented approach by
dividing LTC services between the health and social services.
Among the only countries that have really integrated the more health- and
function-related services are Australia, Japan, and the Netherlands.
It is important to also emphasize that countries with a more fragmented
approach to LTC make various efforts to coordinate services, as discussed in
previous chapters of this volume.
KEY POLICY ISSUES
269
6 Conclusion
The papers in this volume illustrate the complexity of the design of a LTC
system, and the many issues that need to be addressed. This chapter has
tried to address one central dilemma: how can we help policy-makers deal
more effectively with this complexity? In the process, we also illustrate
how different countries have addressed some of the major strategy issues.
Our analysis has demonstrated a number of general lessons that may be useful
in designing a policy framework.
It is possible to identify a smaller number of overall strategies
to narrow the range of choice.
There are important interactions between major design
issues that must be addressed in resolving them.
In particular, the issues of eligibility and service integration
cannot be separated.
The issues on which you decide to begin the design
process can make an important difference in finding
your way through the maze of issues. It is possible
to identify useful starting points.
The basic principles of the general health and social
service systems and the degree of coordination between
them will have an important impact on the design of an
LTC service system.
We should emphasize that this analysis relies primarily on the experience of
industrialized countries. The conditions in the developing world and their initial
experience in developing LTC systems are quite different. Thus, not only the
resolution of the basic LTC design issues, but even the strategy for defining
and analysing these strategies needs to be different. These issues are explored
more fully in three companion volumes that have been described in the Preface.
LONG-TERM CARE
270
Bibliography
Organisation for Economic Co-operation and Development (1996)
The development of long-term care policy. In Caring for Frail Elderly
People Policies in evolution. Paris, OECD.
Organisation for Economic Co-operation and Development (1999)
A Caring World The New Social Agenda. Paris, OECD.
Pacolet J, Bouten R, Lanoye H, Versieck K (1999) Social Protection
for Dependency In Old Age In The 15 EU Member States And Norway.
Synthesis report commissioned by the European Commission and the
Belgian Minister of Social Affairs. Leuven, Luxembourg, Higher Institute
of Labour Studies Catholic University of Leuven.
Royal Commission (1999) Respect to Old Age: Long Term Care Rights
and Responsibilities. A Report by The Royal Commission on Long Term
Care (Chairman: Professor Sir Stewart Sutherland). London, HMSO.
Wiener JM (1999) Long-Term Care Reform: An International Perspective.
In Health Care Reform: the Will to Change, Health Policy studies No. 8.
Paris, Organisation for Economic Co-operation and Development.

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