Chapter 3.6 addresses how payment mechanisms can foster value for money and quality in long term care. Payment and resource allocation mechanisms for long-term care (LTC) are distinct from those for health care for a number of reasons. Key learning includes that

• LTC is particularly prone to poor quality or inadequate care, under-provision, overmedicalization and to delivery in sub-optimal settings.

• The challenges for LTC reflect its differences from conventional health care markets, including that:

• – In health care the focus is on curing disease whereas, once an individual needs LTC, that need for care is permanent and the emphasis shifts to maintaining quality of life

• – LTC is often provided by low-paid or informal (often unpaid) caregivers rather than professionals.

• – LTC markets are generally fragmented, with a multitude of funding sources and purchasers involved.

• – Collecting data on LTC quality is difficult and makes value-based payments particularly challenging.

• Well-designed economic incentives can influence the type, setting, volume and quality of care offered, particularly when

• – Payments are adjusted to reflect cost variations between patients

• – Payment types are combined and include mechanisms to reward quality and cost containment.

• Informal caregivers may be compensated either with cash or non-monetary benefits. Although these do not normally cover the full costs of providing care, they acknowledge carers’ contributions and to some extent address issues such as working hours lost.

Chapter 2.5 sets out how long term care is provided and how it is paid for. Long-term care (LTC) refers to a broad package of personal, social and medical services provided over extended periods of time which may be delivered by care professionals or by informal care givers. Key learning includes that

• Population ageing, particularly in advanced economies, creates growing demands for LTC.

• There are inequities in the need for and access to LTC. Older people, women, those with lower incomes and lower levels of education are all more likely to need care, but less likely to have access to it.

• Funding arrangements for LTC are problematic in many countries

• – Voluntary insurance and out of pocket payments commonly fill public coverage gaps but create inequities.

• – Asset-tests for eligibility for publicly funded care are essentially regressive wealth taxes due to the unequal distribution of LTC needs.

• – Encouraging for-profit provision theoretically fosters competition, availability and responsiveness but the pressures to generate profits can jeopardize quality and safety.

• Countries face urgent pressures on LTC and could usefully consider

• – Increasing public expenditure and broadening the funding mix for LTC

• – Better, fairer pooling of resources across generations

• – Revenue sources independent of payroll contributions since labour markets as a revenue base will shrink at the same time that demand for ageing-related LTC increases

• – Better data and indicators to assess access, quality, and value for money

• – Patient-centred and coordinated approaches to LTC.