Long-Term Care Policies for Older Populations in new EU Member States

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• published: 30 Mar 2012
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Long-Term Care Policies for Older Populations in new EU Member States and Croatia: Challenges and Opportunities SOFIA, December 9, 2010 ― Bulgaria, as well as the other new EU member states and Croatia are facing a challenge many Western countries have been facing for years – aging populations leading to increased demand for long-term care services. This is made doubly challenging because there are fewer potential caregivers to care for more dependent people; while at the same time, a decreasing working age population has to finance higher public expenditures on long-term care. Universal long-term care and better coordination are critical for these countries, according to the new World Bank study, “Long Term Care Policies for Older Populations in new EU Member States and Croatia: Challenges and Opportunities”, presented today in Sofia. In 2025, more than one in five Bulgarians will be more than 65 years old. On average, Bulgarians live 73.3 years, with men’s life expectancy at 69.8 years and women 77 years. Today, 2,192 million Bulgarians are retired pensioners, with the average Bulgarian pensioner at 71.2 years old. There are four working Bulgarians for every elderly resident, and by 2050 there will be less than two working persons for every Bulgarian over the age of 65. These facts trigger the obvious conclusion: soon there will be an increasing demand for long-term care services. The new World Bank report looks at who provides the care, and who pays for this care. Its findings were outlined today in Sofia for policy makers from Bulgaria, Poland, Latvia, and Croatia at a workshop co-organized by the Bulgarian Ministries of Labor and Social Services and Health. “In looking at how other countries have approached this problem, it became clear to us that there really is no ‘one size fits all’ solution,” explained Johannes Koettl, economist in the World Bank’s Europe and Central Asia Human Development Sector. “From tax-financed social safety nets like Medicaid in the United States, to universal entitlements financed either from taxes as in Austria or social security contributions as in Germany and Japan, what is clear, in all cases, is that some public risk-pooling is needed. Based on our review, we are suggesting that new EU member states and Croatia consider a universal system of basic protection for all individuals requiring long-term care service.” Countries have already begun to address the challenges their aging populations pose to their long-term care systems through a variety of policy interventions. The study examines whether these interventions will be enough, or if there is a need for broader systemic reforms, especially in the area of Long-Term Care (LTC) financing. And, the report asks what lessons can be learned from the experience of countries that have been dealing with these challenges for a while. Through an evaluation of the global literature on the financing and provision of long-term care services, the study develops a framework for public policy action on LTC. It applies this framework to four countries – Bulgaria, Croatia, Latvia and Poland – examining the current state of long-term care in these countries, and, by applying the framework, proposes possible options for policy-makers to consider. In particular, the study suggests that lessons learned from OECD countries might be the most useful for the new EU member states and Croatia. One of the main findings of the report is that in all four countries, the financing and provision of long-term care services straddles the health and social sectors. Provision of service is largely public, with a limited role for the private sector and NGOs . In addition, the study found that four countries also apply a combination of cash and in-kind benefits related to long-term care services. In all the countries, the cash benefits programs are managed through the social assistance system. In Croatia, Poland, and Latvia, the social assistance system also includes in-kind benefits in the form of financing for social welfare homes. If an older person is assigned to a social welfare home, the cash benefit is directly provided to the social welfare home. In Bulgaria and Poland, the benefits are spread across social and health sectors. In Bulgaria, the social assistance system provides cash benefits. But in Latvia, informal care providers are not covered through the cash allowance. In addition, all four countries seem to largely provide long-term care in institutions. Experiences from OECD countries suggest five broad directions for future policy reforms: (i) Medical to social services: Many dependent people and their families turn to the health sector, in particular hospitals, when really in need for social care. Long-term care provided by the health sector might both be inadequate and not cost-efficient. (ii) Institutional to community-based services: In most countries, there is a lack of community-based care like dayc