Take your partners

6 April 2010 8:00 am | By Lee Jones

Four years after the Wanless report on long-term healthcare, a follow-up report from health thinktank the King’s Fund has found that funding for care for the elderly is getting worse.

The Department of Health is set to publish its white paper detailing plans to reform the funding of long-term health care in the next few weeks but the King’s Fund says the lack of action since the first report has made the situation considerably worse.

The report, written by former chief executive of the Care Services Improvement Partnership Richard Humphries, says: “Unmet need has increased, as has pressure on resources. The accelerating pace of demographic and social change has strengthened the need for reform. This is a long-term issue and current spending restraints are not an excuse for inaction. Politicians need to look beyond the current economic climate.

“Doing nothing is the least palatable option. Projections show that the cost of the existing system will almost double by 2026, yet without any improvement in the outcomes that could be achieved through radical reform.”

The existing means-tested system costs around £6bn a year. Based on the current system without reform, the new report projects costs will increase by just over £8.1bn in 2015, rising to £12.1bn by 2026.

This would be the cheapest option but the King’s Fund says that, without significant reform, more people will suffer from inadequate healthcare and it will be the middle classes with modest savings who will be hit hardest.

The report says it has found fresh evidence of the need for reform and reinforces the conclusion of the original report, penned by former NatWest chief executive Sir Derek Wanless, that the reform must be based on a “partnership” between the individual and the state.

The original report suggested a partnership model where the state funds 50 per cent of everyone’s care and support costs and matches every £1 contributed by the individual with a further £1. This, it said, minimised the advantages gleaned from those on the highest and lowest incomes and it also reduced the number of people whose care did not meet their needs.

The new report says: “The extent to which people have to spend their savings and assets to pay for care is greatest under the existing means-tested system, especially for residential care and for people on middle incomes and savings of more than £23,000. The partnership model helps these people significantly.”

Over the four years the King’s Fund has reduced its assessment of the demands on Government’s coffers and now says that the state could only give £1 for every £2 contributed by the individual.

This proposal is projected to cost £10.1bn in 2015, rising to £15.5bn by 2026 - 90 per cent more than the existing system would cost in 2015. But the King’s Fund says it would significantly reduce the number of people who do not receive the right care and it would also even the playing field with regard to means-testing.

This broad idea was a part of the green paper published by Health Secretary Andy Burnham at the end of 2009. It proposed, among other things, a partnership solution whereby the state paid for up to a third of a person’s care, allowing them to supplement the rest if they had the means. It also detailed an “insurance” plan where a proportion of care was met by the state but the rest could be met with the help of the private financial services sector or with the creation of a public insurance scheme.

Partnership managing director Chris Horlick says the partnership approach is the way forward but the King’s Fund proposals are too expensive for the UK while it runs a big budget deficit. He says by addressing problems of postcode lottery funding and wide-ranging differences in the assessments of care right away, the system would improve significantly.

He says: “State finances are not in great shape so we need address long-term healthcare problems in chunks. We need to sort out things that can be sorted out now right away and then consider longerterm issues further.”

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