GrumbleSmiles

One of the fundamental themes of my submission to the Dilnot Commission  (see Commission on Funding of Care & Support dated 6 February 2011), is that in the years ahead, most older people will have to pay for their care by using their house as an asset. This is not a welcome prospect because as a society we have come to expect that health care is free.  Alongside that idea, the inflation of house values over the last 30 years has led the elderly and their relatives to believe they will leave a significant legacy when they die.

I believe these two related myths are holding back the elderly from securing a better future for themselves. In this new area of austerity, is a bubble that needs to burst but no political leader wants to be the first to break the bad news. In the financial press recently were some guesstimates that illustrate the scale of the issue:-

 People over 65 own £763 billion of un-mortgaged property;

 In 10 years this will have risen to £1 trillion;

 800,000 people will reach 65 next year;

 On average they will live for 23 more years.

So what are the barriers to this happening? Insecurity is the key issue.  In later life few people want to step into the unknown, and yet lifespan and health are two unanswerable questions. The fear of not knowing how much you will need to look after yourself is what leads many people to hoard what they do have. This is reinforced by the justifiable view people have, that long term care is not only very expensive but often very poor quality.

For the Government to unblock this situation they need to remove the barriers that they can influence:-

 Make equity release a more reasonably priced option so that people can more easily access the hidden savings they have in their homes;

 Stimulate the retirement housing market to encourage people to move and downsize their homes;

 Offer long term care insurance to give people more certainty over future health care costs;

 Dramatically improve the quality of health care for older people by restructuring NHS provision.

These moves will hopefully be captured in the recommendation of Andrew Dilnot’s report. A trillion pounds would go a long way to reviving our ailing economy and would enable older people to secure for themselves a brighter vision of later life.

Submission by John Graham OBE – 26 January 2011

My proposals are two-fold, and are based on both improving the quality of care for older people and also releasing the billions of pounds required to meet the dramatic growth in the frail elderly population in the years ahead.

Transforming the NHS Care of the Elderly

The proposal in terms of the NHS is consistent with the recent move to GP commissioning.  It also seeks to refocus the NHS on the area it does best – acute care.  The NHS, in becoming more specialised, has moved itself away from dealing with the complex but relatively low level interventions of geriatric care.  Equally, the current nursing profession, with its move toward a more technical degree based approach, is less well suited to provide the “tender loving care” more often required by the elderly.  The consequent problems with care of the elderly in NHS hospitals are regularly reported on e.g. Age UK’s report on nutrition; Patient’s Association report on rising complaint levels; the recent reports on poor surgical outcomes for older people, rising levels of infections on wards and the inadequacy of pain control. 

Your report illustrates the significant imbalance in funding in favour of NHS care over social care.  My proposition is to shift away from treating older people in hospital except for short term acute clinical intervention.   My experience suggests that most medical needs can be met in nursing and residential care settings or even in people’s own homes in the community.  This is wholly consistent with the Coalition Government’s move to GP commissioning.

There would need to be skill set changes to support this move.  Many nurses have been lured away from vocational training in pursuit of better salaries and degrees.  Whilst this move in the direction of increased technology and clinical specialism may be appropriate across the whole spectrum of the NHS, it is not so relevant when nurses need to take the lead in providing dignity and holistic care to elderly people who have multiple low level conditions.  They need to treat the person, not the illness and to do this I would suggest the development of a new arm of the nursing profession operating in nursing homes and the community.   Second level nurses for the elderly are already separately accredited in Holland and elsewhere and would go a long way to improving medical care in residential homes.

Put together, I believe these two proposals would significantly improve value for money, given that the overall unit cost of nursing and residential care is significantly lower than the basic cost of nursing in the NHS.  By redirecting millions of pounds from the NHS, it will allow many more people to be provided for in nursing homes and the community, controlled by the more localised social care sector.   Rather than transferring funds out of the NHS, I would specifically provide “top up grants” to nursing / residential homes from the NHS budget for those people who have complex health needs.    I would, at the same time, remove the anomaly of free “continuing care” funding by the NHS.

Unlocking Housing Assets

My second change would be to make a series of amended taxation measures designed to make it easier for elderly people to use the assets tied up in their homes (the so called “death tax” is one option, but I believe all political parties grossly understated the cost of their proposals).  My key proposal would be to promote the use of reverse mortgages (used in Australia) as a way of enabling older people to release equity in their own homes.  I would do this by offering mortgage interest relief on the condition that the released resources were used exclusively to secure health and social care support through a registered agency.  This should avoid the pitfall of more open ended and less regulated equity release schemes.  It would provide a major avenue enabling older people to remain in their own homes and still fund the domiciliary care they need in later life to maintain their independence.  Tax free eligibility levels could be tied to Local Authority domiciliary care costs.

As a second level of cover, I would extend tax free eligibility to long term care insurance which could be used to fund people as a “stop loss” if they were eventually unable to remain in their own homes for life. 

By essentially getting asset rich residents to fund their own care with this tax free benefit, it will leave public funds to stay focused on those people with critical and substantial health care needs who have no significant financial resources or assets.  This should significantly relieve pressure on Social Services and reduce the demands on the NHS.

Improved Regulation

Both of my proposals would need a change in regulation, although I believe this could be done through existing channels.  Firstly, the CQC role should be defined more clearly to support quality outcomes rather than focusing on compliance with input procedures. Secondly, the FSA would need to exercise control over the issue and purpose of tax free reverse mortgages, and also of any extension to health care insurance.  Again I believe this is only an enhancement of their current role. 

Conclusion

I appreciate that none of these proposals are straightforward and they have significant ramifications, but I think that there needs to be a significant transformation of the elderly care system in terms of both quality and cost.  Nonetheless I believe these propositions are sufficiently close to the current direction of travel of all party policy to be accepted.  I believe they address old peoples’ concerns about the inadequacy of care in the NHS and ease their ability to fund planned care elsewhere with their own resources.

This represents a profound change which will claw back the unearned assets people have accumulated in their housing.  To an extent it is what is already happening by default for an increasing number of families, and without supportive measures it provokes a great deal of resentment.  I believe the provision of a tax incentive will make the measures more readily accepted by elderly residents and their relatives.  It holds out the prospect of a new vision of care and support in later life for those who need it most, whilst enabling the majority of elderly people to continue to live independently with some additional support.