Facing Up to the Inevitable - How to Manage the Surge in Long-Term Care Needs

By C.D. Howe Institute —— Bio and Archives November 8, 2012

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TORONTO, - Innovative reforms are needed to prepare for the coming surge in demand for long-term care services from aging babyboomers, according to a report released today by the C.D. Howe Institute. In "Long-Term Care for the Elderly:

Challenges and Policy Options," authors Ake Blomqvist and Colin Busby recommend methods to fairly divide costs between care recipients and taxpayers, and to get more value for money. "Reforms should improve efficiency, by reducing waiting lists for beds and enhancing patient choice," said Blomqvist. "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, policymakers 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, note the authors. This is a challenge best confronted now, before the first wave of babyboomers begins to draw heavily on long-term care programs, in about 15 years' time. In an environment where tax rates are 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 it. 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.