Winter 2012-2013

News

Long term care needs reform: C. D. Howe Institute

November 2012

A new report from the C.D. Howe Institute calls for innovative reforms to prepare for the coming surge in demand for long-term care services that will be driven by aging baby boomers.
It poses two questions:

• What is the right combination of public and private coverage in long-term care?
• How could governments fund long-term care more efficiently and reduce costs in the healthcare system as a whole?

"Policymakers should tackle these tough issues now, before the first wave of baby boomers begins to draw heavily on long term care programs…..

"Reforms should improve efficiency by reducing waiting lists for beds and enhancing patient choice," said Ake Blomqvist, co-author of the report Long-term Care for the Elderly: Challenges and Policy Options, with Colin Busby.

"As we see it, that means steering more government funds directly to patients, in the form of cash or vouchers, as in the Nordic countries and France, and letting patients choose among home care, private care or waiting for a bed in government-subsidized long-term care facilities.”

As Canada’s society ages and demand for long-term care increases, policy-makers face the daunting challenge of balancing the fiscal burden on future taxpayers with the need to ensure that everyone with long-term needs receives proper care, notes the authors.

With tax rates projected to rise because of demographics and growing health costs, the cost to the economy from raising additional tax revenue will be high. For this reason, the authors say, the bulk of subsidies for long-term care services should go to those who lack the means to pay for care.

Public subsidies should shrink according to individuals’ ability to pay. However, they should be scaled back with more flexibility than they are under the current model of a dollar-for-dollar reduction when income rises above a threshold level.

Following the examples of some European and Nordic countries, provinces are more likely to get value for money if they channel more subsidies for long-term care directly to patients in the form of cash or vouchers, argue the authors. This would allow patients a greater role in choosing among competing suppliers.

Originally published on Advisor.ca. To read the full commentary: www.cdhowe.org/pdf/Commentary_367.pdf