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, according to a World Bank study presented in Sofia on December 9 2010.

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".

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:

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.
Institutional to community-based services: In most countries, there is a lack of community-based care like daycare, assisted living, and home-based care. Patients overwhelmingly prefer to be taken care of at their homes, and in many cases it is also the more cost-efficient solution.
Fragmentation to coordination: In particular, between the health and the social sectors where the fragmentation of financing and provision of long-term care leads to cost shifting between sectors at the expense of patients’ wellbeing. Patient-centered care coordination, in particular through joint needs assessments, is key.
Producing services to purchasing services: In the future, a large share of all these economies will evolve around taking care of their people. This cannot all be done by the public sector. The public sector needs to define its core competencies and buy those long-term care services from the private sector that are suitable for private sector production.
In-kind benefits to cash benefits and vouchers: Cash benefits put patients in charge of buying the right type of care services and can play an important role in supporting informal care and spurring private sector response.

 
"Unfortunately there is no consistent data available on current expenditures on long-term care in all EU member states," says Sarbani Chakraborty, World Bank Senior Health Specialist and one of the main authors of the report. "But, even without a deep financial analysis, it is easy to assume that the challenge of shrinking and aging population in these countries will soon create pressure both on state and individual families. Acting proactively to consider different policies and starting to implement them now provides an opportunity to mitigate against those pressures over the long-term."

* With the exception of Croatia, where two thirds of institutional homes for the elderly are privately owned.

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Bulgaria Case
Long-term care and other social services for elderly are provided through two distinct systems in Bulgaria – social and health. Long-term social care is defined as social services provided for a period of more than three months. Health services, on the other hand, are provided through different types of institutions such as hospitals for further and continuing treatment, hospitals for rehabilitation and hospices. There is no separate definition of LTC services in Bulgarian legislation at this time, nor an official classification of who qualifies for it.

Traditionally, long-term care and other social services for the elderly are categorized as formal and informal, institutional and non-institutional. The share of formal services provided in the community or home grew steadily from 17 percent in 2003 to 81 percent in 2008.

More than 90 percent of services are public, provided by either the state or municipal government. While institutional care is almost entirely public, NGOs and charities are increasingly involved in providing services at non-institutional centers for social rehabilitation and day care centers for adults. Home-based services are provided by individuals contracted by municipalities or the state, depending on the type of service.

Unlike other European countries like Austria, Bulgaria does not have a cash-based LTC allowance system for family members who care for their elderly relatives. Instead, the state supports a system of personal assistants and home helpers who are paid to provide basic cooking, cleaning, personal hygiene and shopping/errand help for people who do not require institutionalization but cannot meet these basic needs on their own. This system was originally established to provide relatives of elderly and disabled residents who need constant care with a salary and insurance coverage but it is open to third parties as well.

There has been tremendous growth in community and home-based social care services since Bulgaria reformed its social care system. In 2003 there were 21 community- or home-based social care providers. In 2008 the number was 369. With the addition of personal assistants, social assistants and home helpers, the number of beneficiaries of community and home-based care rose from just 570 in 2003 to 48,855 in 2008.

As of 2008 there were 11,750 places in 159 homes for adults and elderly needing institutionalized long-term care. Only five of 28 districts have all types of institutions and in some cases the institutions are outside towns, which further isolate residents.

Source: World Bank