UK: Can Funding Reform Improve The Fairness Of The English Health And Social Care System?

Last Updated: 19 September 2014
Article by Karen Taylor

Most Read Contributor in UK, August 2017

In recent months, many health and social care commentators have called for a fundamental reform of care funding. While there has been much debate about some of the proposed solutions, there has been limited information or financial modelling on the cost and impact of the different options.

The 2013 Barker Commission was established by the King's Fund to explore what a new settlement for health and social care might entail. Last week it published its final report, confirming its interim view that England should move towards a combined health and social care system, singly commissioned, with a ring-fenced budget and entitlements that are equitable and fair1. The report dismisses the idea of introducing a range of new charges or a hypothecated health tax; instead it proposes that a greater proportion of social care costs should be met by the taxpayer (after all current proportion of GDP spent on healthcare is only nine per cent compared to 11-12 per cent of comparable economies)2.

The Commission supports the underlying principle of a partnership approach in which costs are shared between the individual and the state with the costs of the new settlement met by:

  • improving productivity and delivering better value for money through a single local commissioner and the greater use of personal budgets
  • taking some existing public expenditure, such Winter Fuel Payments, and diverting it into health and social care
  • removing allowances, such as free TV licences from better off pensioners, revamping prescription costs, and continuing to charge National Insurance (NI) contributions when people work on past state pension age and a one pence increase in the rate of NI for the over 40s.

It suggests that these measures could pay for the first parts of the new settlement, funding all care needs defined as 'critical' and ending the current distinction between NHS Continuing Healthcare and social care. Further, as the economy improves, care free at the point of use should be extended to include those with 'substantial' needs. This is estimated to cost an additional £3 billion a year rising to £5 billion by 2025. Even if we had no change in entitlements costs are predicted to rise by £3 billion by 2025. Full implementation, extended to people with 'moderate' needs subject to a financial assessment, however, would require other tax changes, namely new wealth taxes and these changes would be phased in over a decade.

At the heart of the Commission's report is the desire to create a fairer more transparent care system. The consequences of not providing additional public funding for health and social care are considered untenable, with more people having to pay for care themselves leading to further inequalities. Furthermore, continuing to under-fund social care would lead to increasing demand on the already beleaguered NHS which would find itself unable to provide timely access to quality care.

Around the same time as the Barker Commission's final report was published a YouGov survey of some 4,500 people in England, commissioned by the Care & Support Alliance, found around 70 per cent of over 60s were not confident they will receive good care. With support for older and disabled people identified as one of the biggest priorities for increased Government expenditure3. Adding fuel to the fire, the London School of Economics shows that since 2008, the number of people receiving social care has fallen year-on-year with, almost half a million older and disabled people who would have received social care five years ago, receiving no support in 2013. With the majority of councils restricting care to those with the highest needs4.

Those hoping the new Care Act, coming into effect in 2015, might address the dramatic increase in the rationing of care are starting to realise that the eligibility criteria will mean only those with the most serious needs will qualify for state-funded support. This is despite evidence that supporting people with moderate and low-level needs makes economic sense.

The argument for the Commission's recommendations is that the current generation of pensioners are much better off than their predecessors and will be the main beneficiaries of the proposals, and should therefore contribute towards the additional costs. However, our evaluation of current research suggests this perception of a better off older generation is far from the case. Increasing numbers of over 65s are still working to supplement meagre pensions. The wind fall benefits of home ownership in the south aren't as evident in the north and there are significant numbers who are not home owners or whose homes fail the decent homes standard. There is also long-held belief that a social insurance model that spreads actuarial risk throughout the population and reduces the burden on individuals is fairer.

Demographic changes mean more people need care, yet fewer people are getting it, due to year-on-year rationing of support. Meeting the rising demand from increasing numbers of frail older people will require increased funding, whether funded publicly or privately. The Barker Commission provides a platform from which to launch a full public debate on funding health and social care, including a 'national eligibility threshold'. Whether you agree with its proposals or not, one thing is abundantly clear, change is needed – equitable access to good quality care is likely to be an election issue and potentially the next Government's first big challenge.






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