Integration, funding and resource flows in the care system
Market analysis and system management
Quality measurement and productivity and efficiency analysis
Integration, funding and resource flows in the care system This theme looks at arrangements for raising funds for social and health care and how the funds are used to provide services. For example, we explore how the costs of providing long-term care will be met in future as population needs grow; the way in which better co-ordination of health and social care services may improve outcomes for patients, as well as reducing costs; the relationship between informal and formal care; and the determinants of health care expenditure.
Workstream 1: Funding and resource flows in the care system - 2018 Projects
1. Disentangling the relationship between social care and unpaid care for older people in England
Project lead: Olena NizalovaContext and problem statement
An increasing need for long-term care combined with modern family dynamics and recent evidence on the impact of caregiving onto carers’ lives raise an inevitable question about the optimal combination of unpaid (informal) care provided by family and friends and social (formal) care. As the decision on the use of the two care modes can be made in any order or simultaneously, one has to understand the full set of implications of any initiative which affects one or the other mode of care, so that in the end we do not end up with a catastrophic increase in unmet needs.
Project aims
The aims are to understand the causal relationship between social care and unpaid care, and to investigate how the relationship between social care and unpaid care differs accordingly to the level of need..
2. Projecting future levels of social care clients and expenditure in England
Project lead: Raphael WittenbergContext and problem statement
The continuing rise in the number of older people and people with learning disabilities, together with uncertainty about the future supply of unpaid care, have led to concern about the sustainability of public expenditure on care. The Department of Health and Social Care has regularly asked ESHCRU to produce updated projections of future expenditure on adult social care. These have informed spending reviews, provided an input to the Department's own projection model, and fed into the Office for Budget Responsibility (OBR) annual long-term fiscal sustainability report (FSR). The Department will require projections in 2018 for policy development after the Green Paper and for the OBR’s next Fiscal Sustainability Report.
Project aims
The aim is to produce robust projections of future demand for long-term care for older people and younger adults and associated public expenditure, under a range of assumptions and scenarios about future mortality and disability rates, future policy on the living wage, future availability of unpaid care, future policy on the balance of care, and potential funding reforms.
3. Characterising end-of-life health care expenditure
Project lead: Nigel RiceContext and problem statement
End-of-life (EOL) medical spending is often viewed as a major component of aggregate medical expenditure. Unnecessary EOL care is often perceived to be an important cause of high spending fuelling debates regarding the intensity and quality of care. Population ageing, increased patient demand, and funding pressures have placed greater focus on pursuing efficiency savings and EOL health care expenditure continues to attract attention. However, despite the relevance of health care spending for individuals leading up to death, little is known about the patterns or trajectories of spending at EOL. Accurate measures of EOL expenditure, their detailed breakdown, and how these vary over morbidity characteristics is scarce. Do trajectories of expenditure at EOL vary in meaningful ways? For example, are certain conditions associated with a pattern of decline that might be reflected in spending? More detailed information about the profile of spending near EOL can provide important insights about the drivers of expenditure and shed light on potential strategies to mitigate costs while preserving high-quality care for people who are dying.
Project aims
While EOL hospital expenditure is known to significantly elevate health care costs, little is known about the breakdown of such expenditure. This project will document EOL expenditure in the final (up to two) years leading to death by considering distinct profiles of spending. Such profiles will allow patients to be categorised into groups based on their trajectory of spending, for example, persistent, progressive and late rise users of EOL care. We will explore how such profiles vary across patient conditions (e.g. chronic and acute, and multiple conditions) and patient and provider characteristics.
4. Understanding the interdependencies between health and social care resources and arrangements
Project lead: Jose-Luis Fernandez, Anne Mason, and Stephen AllanContext and problem statement
The policy emphasis on the interaction between the health and social care systems stems from the long-standing recognition of the impact on care outcomes of a truly seamless care experience, and from concerns about the negative consequences on the NHS of the recent reductions in social care expenditure and in the number of older people receiving state-brokered social care.
Evidence about substitution and complementarity effects between health and social care, and about the way in which different system configurations affect the performance of the care system is limited. This project has three strands
- The effect of social care on outcomes of hospital discharge
- The relationship between public funding of social care, and healthcare utilisation, focusing on older people with dementia
- Interdependencies between social care and NHS continuing care
Project aims
The proposed project aims to improve our understanding of the nature of the interrelationship between the health and social care system by quantifying the impact of changes in social care resources on performance, as well as to improve the coordination of the two systems and therefore efficiency of the care system as a whole. The project will address following overarching questions:
- What are the consequences on the NHS of variations in social care activity and expenditure?
- What are the consequences on NHS performance indicators of differences in local system configurations?
5. Assessing the use of linked, longitudinal-health and social care administrative data to evaluate equity and efficiency in the care system
Project lead: Jose-Luis FernandezContext and problem statement
There are gaps in our understanding of the effectiveness and cost-effectiveness of the social care system. Better individual-level evidence on the relationship between user characteristics, services and outcomes would help service commissioners and policy makers to develop the most appropriate services to meet social care needs, and to target social care resources in the most cost-effective way for the health and social care system.
Project aims
The project will examine how administrative records can be used to evaluate equity and efficiency in the care system. It will also assess how gaps in these data could be addressed through additional data collections/surveys. We will also consider:
- What are the typical “care journeys” across health and social care for people with different needs? What are the implications for the distribution of lifetime care expenditures?
- Are there differences in the patterns of service use between public and private users?
- What is the impact of different services on outcomes for users with different needs?
- What is the substitution and complementarity between health and social care services in the production of outcomes?
6. Regulatory Incentives across the system: Managing deficits
Project lead: Martin Chalkley, Hugh Gravelle, Luigi SicilianiContext and problem statement
Hospital providers are increasingly incurring deficits. Payment systems such as the national tariff largely presume that hospitals will receive sufficient revenue to cover their costs. Where prices are set as low as possible to reflect efficient costs, factors such as unanticipated cost inflation and/or variation in case-mix will result in deficits
Given an outcome where many providers have incurred deficits there are a number of alternative mechanisms for restoring financial balance. Providers could receive cash injections equal to their deficit, or they might receive a top-up to the national tariff which would entail a cash injection that is related to the volume and type of activity they have undertaken and which has given rise to the deficit. The regulatory question is which of these – or other alternative mechanisms – should be adopted. Answering that question requires an understanding of what factors contribute to particular trusts incurring deficits, what the implications of those deficits are for performance and how different mechanisms for restoring balance impact on incentives.
Project aims
The project aims to support policy makers in establishing advice and guidance for managing hospital deficits where these are endemic and systemic rather than a consequence of failure to perform. Our initial investigation will be the relationship between Trust characteristics and their tendency to incur operating deficits. We will then consider the relationships between performance and deficits.
7. Drivers of Health Care Expenditure
Project lead: Anne MasonNigel Rice, Martin Chalkley (York); Raphael Wittenberg, Jose-Luis Fernandez (LSE)Context and problem statement
Year-on-year rises in the real value of healthcare expenditure are thought to be one of the greatest challenges to long-term fiscal sustainability. Drivers include demographic factors, income and wealth effects, technology and cost pressures.
Evaluations of the drivers of the demand for health care typically infer demand from measures of activity and / or expenditure. However, this captures only ‘expressed’ demand which differs from ‘true’ demand because of unexpressed or unmet need (i.e. latent demand). In addition, some elements of expressed demand are potentially avoidable.
This project will seek to identify the drivers of past health care expenditures (HCE), explore how these vary by setting, and identify the steps needed to develop an aggregate model of demand for health care that can inform spending projections.
Project aims
We will address following research questions.
- What are the drivers of past trends in healthcare expenditure in terms of demographic change, technology, rising expectations, pay etc. and how much has each of the drivers contributed to past increases in expenditure?
- How much has each type of service, such as primary care, pharmaceuticals, emergency secondary care, elective secondary care etc., contributed to past trends in healthcare expenditure and why have there been different trends for different types of care?
Integration, funding and resource flows in the care system - 2016-2017 Projects
1. The economics of integration: understanding the consequences of alternative health and social care integration arrangements
Project lead: Jose-Luis FernandezContext and problem statement
Across England, the policy emphasis on improving integration across the care system is leading local authorities and Clinical Commissioning Groups (CCGs) to put in place new “joint” arrangements for assessing care needs, designing care packages and commissioning services.
Project aims
The aim of the project is to shed light on the different local arrangements for integration, and to use this evidence to explore the link between alternative local integrated assessment, commissioning and delivery processes and key indicators of local care system performance.
2. Interdependency and coordination of health and care services: using economic methods to define target groups and care pathways
Project lead: Andrew StreetContext and problem statement
Policy makers have long promoted ‘integrated care’ for people with complex needs, hoping to save money and improve health outcomes. We seek to assess which groups of the population would most benefit from improved integration, the nature of the health and social care packages that people receive, and the degree of substitution or complementarity between elements of their care packages.
Project aims
The project has the following objectives
- To quantify the potential for cost savings in the allocation of resources by identifying which groups of the population to target
- To estimate the size of integrated health and social care budgets for people with particular co-morbidity profiles.
- To identify which clients/population are associated with utilisation of services from multiple agencies.
- To estimate the degree of substitutability and complementarity between services for those populations.
- To estimate the size of transaction costs associated with separate and joint working for different populations.
- To quantify the cost implications on budget holders and providers of changes in the care pathway.
3. Assessing the consequences of budget changes on the care system and self-funders
Project lead: Jose-Luis FernandezContext and problem statement
Given the nature of public funding of social care, it is important to understand the implications of changes in public budgets for care on the patterns of service utilisation by local authorities, and to help develop possible strategies to best achieve equity and efficiency goals in that context. This project is designed to provide guidance to funders and commissioners as to how to deploy scarce public funds for social care.
Project aims
The proposed study aims to understand how different authorities manage resources given budgets and how they react to changes in budget:
- To identify those factors explain why local authorities take different decisions in terms of the number of people with care needs that they support?
- To explore how are public budget changes affecting the number of self-payers in the system, their need characteristics and the levels of support that they receive?
- To examine the patterns of socioeconomic inequities in access to care services among older people in England, given budgets
4. Analysis of the impact of local authorities’ new responsibilities to support carers
Project lead: Julien ForderContext and problem statement
Unpaid care by family and friends is at the heart of the care system. Carers provide the majority of care and support in England, with potential impacts on their own quality of life, health and employment. Under the provisions of the Care Act 2014, local authorities assumed from April 2015 expanded responsibilities to assess the needs of carers and provide support to them in their own right. It is important to understand the impact that carer’s can have on the use of (formal) service, and how therefore improved support for carer’s might have the potential to reduce pressure on formal services.
Project aims
The aim of the project is to explore the following:
- the degree of interdependency (substitution) between formal and unpaid care, and whether the relationship between formal and unpaid care has changed over time; and
- how far has formal support for carers has changed following the reforms
5. Health care expenditures, proximity to death and changes over time
Project lead: Nigel RiceContext and problem statement
This project aims to explore and explain the rise in health care expenditures observed in England over time. We will document the ways in which expenditures have grown over time at an aggregate level for hospital services (inpatient, outpatient, A&E) and GP prescribing together with potential correlates, focusing on population growth and ageing, GDP and mortality rates.
Project aims
To further understand the drivers of health care expenditures the project has the following aims:
- To document basic trends in health care expenditure over time at an aggregate level, including expenditure per capita and as a percentage of GDP, with a particular focus on Hospital and Community Health Services (HCHS), but also including GP prescribing and Family Health Services.
- To explore changes in expenditure over time, by decomposing expenditure into components due to changing morbidity profiles (changing patterns of morbidity) and due to changes in the impact of such conditions on expenditure (how treatment costs have changed over time).
- To explore the dynamics of health care expenditures. What are the characteristics of individuals who persistently access health care over time?
- To explore these issues with a focus on expenditure in proximity to death.
6. Projecting future levels of social care clients and expenditure in England
Project lead: Raphael WittenbergContext and problem statement
The continuing rise in the number of older people and people with learning disabilities, together with uncertainty about the future supply of unpaid care, have led to concern about the sustainability of public expenditure on care.
Project aims
The aim of this work is to produce robust projections of future demand for long- term care for older people and younger adults and associated public expenditure, under a range of assumptions and scenarios about future mortality and disability rates, future policy on the living wage, future availability of unpaid care, future policy on the balance of care, and potential funding reforms.
Funding and resource flows in the care system - 2013-2015 Projects
1. Funding options for social care
Project lead: Jose-Luis Fernandez, Julien Forder, Raphael WittenbergContext and problem statement
The significant growth in the number of people with care needs and the long-term increases in the unit cost of social care services are putting growing pressure on the publicly-funded social care system in England. Also, due to the means-tested nature of the present social care funding arrangements, increasing proportions of people with social care needs have become excluded from state support. In this context, the analysis question is whether social care funding arrangements can be found which ensure:
Context and problem statement
- levels of public and private health and social care utilisation (and associated expenditures)
- care-related outcomes (e.g. need shortfalls, gains in social care related quality of life)
- distributional implications (e.g. outcomes and costs for people with different needs and wealth; intergenerational transfers)
Overall aims
The analysis will examine, now and over a 20 year time horizon, the impact of alternative funding mechanisms on:
- levels of public and private health and social care utilisation (and associated expenditures)
- care-related outcomes (e.g. need shortfalls, gains in social care related quality of life)
- distributional implications (e.g. outcomes and costs for people with different needs and wealth; intergenerational transfers)
This work will explore the following questions:
Q1 Individual level association between need for and receipt of care among older people in England
Aims
- This study will address the issue of the association between need for care and receipt of care among older people.
Q2 Local variations in social care service use
Aims
- The analysis will examine which factors (local needs, socio economic characteristics, local prices, local preferences) are linked to variations in the use, configuration and costs of social care services.
Q3 Coordination of local health and social care provision: evidence of substitition and complementarity of health and social care inputs
Aims
- This analysis will contribute to addressing the policy question of how best to coordinate the health and social care systems by quantifying the degree to which the supply and demand of health and social care services is interrelated.
Q4 Understanding and quantifying system outcomes
Aims
- We aim to map patterns of targeting of health and social care resources to indicators of quality life (e.g. QALY and ASCOT) to understand the implications in terms of final outcomes of alternative service configurations.
2. Financial mechanisms for intergrating funds for health and social care
Project lead: Anne MasonContext
Integrating care for people with complex needs, such as frail older people with multiple health problems, is a huge challenge for health and social services. Evidence suggests that integrated services can improve access to care services, lower rates of institutionalisation, and may reduce the overall costs of care. Although a lack of financial integration is often cited as a major barrier to the successful delivery of integrated care, the specific role played by the integration of resources across care boundaries remains opaque.
Research questions
- What mechanisms are available for integrating resource use across health and social care?
- What evidence is there that these are effective or cost-effective, and what are the barriers to their use?
Aims
To systematically review the international evidence on:
- The types of integrated resource mechanisms available
- The costs and effects of these mechanisms, including unintended consequences
- The barriers to implementation and the factors critical to success
3. The relationship between unpaid care and formal health and social care
Project lead: Jose-Luis Fernandez, Bernard van den BergContext
Informal caregivers are responsible for the large majority of care and support provided to people with long-term conditions, frail older people and the terminally ill. The health and social care systems could not cope without this ‘hidden army’ of unpaid carers. It is therefore imperative that we develop our understanding of the role of informal care in the health and social care economy and of the implications of policy changes on the supply of informal care.
Our objective is to provide robust empirical evidence of the potential impact of policy measures on informal care supply and on the interrelationship between the supply of informal care and the use of formal health and social care. We also aim to refine the evidence and methodologies used to estimate the welfare effects of policy changes, for example in terms of informal caregivers’ opportunity costs.
This work is designed to address the following policy questions:
Q1 Factors influencing informal care supply
Aims
- We will attempt to quantify the range of factors determining individuals' willingness to provide informal support to people with long-term care needs.
Q2 Complementarity and substitutability between unpaid care and health and social care services
Aims
- We will attempt to quantify the rate at which formal and informal inputs substitute for or complement one another.
Q3 Financial and wellbeing implications of providing care for unpaid carers
Aims
- Providing care can have significant implications for the health, wellbeing and financial situation of the informal carer. We will attempt to quantify the outcomes of providing informal care, including its opportunity costs in terms of labour supply and caregivers’ wages.
4. Health care expenditures, age, morbidity and proximity to death
Project lead: Nigel RiceContext
The allocation of health care resources to administrative bodies charged with delivering patient care has historically been based on measures of a population’s needs for health care services. These have taken many forms, but are broadly based on age, gender, morbidity and measures of social deprivation. It has recently suggested that allocations should be based on age alone, believing that age is a key determinant of the need for health care and hence health care expenditure (HCE). This might be challenged on a number of accounts, for example, that wealthy less deprived individuals are more likely to live longer and accordingly attract a greater share of HCE. The impact of population ageing on HCE has been heavily contended and has led to a debate about whether it is age (or ageing populations) that drives HCEs or proximity to death (assuming the need for health care is compressed into the years prior to death). In the context of funding decisions, these two competing hypotheses have very different consequences for the appropriate allocation of health care resources.
Project aims
This project aims to revisit the debate around the relationship between age, morbidity, time to death, life expectancy and HCE using a rich set of administrative records at the individual level on the use of health care services over time derived from Hospital Episode Statistics (HES).