Long term care (LTC) expenditure is expected to rise driven by an ageing population. The European Commission's projections suggest that public LTC expenditure as a proportion of GDP will more than double in most European countries by 2060. Governments are concerned about the rise in the need for LTC and the increases in public expenditure that might follow.
LTC refers to care needed by individuals with reduced physical or mental capacity who cannot perform basic activities such as bathing and dressing. It is provided by informal carers (spouse, child) and formal carers (care at home and institutions, i.e. residential and nursing homes). Elderly people are the main recipients of LTC, in particular the very old.
There are significant variations among OECD countries in the funding arrangements and the proportion of expenditure that is public, which varies from negligible amounts to up to 3.6% of GDP (in 2008). Nordic countries spend between 1.7–3.6% of GDP and LTC is mainly publicly financed from local and central income taxation. Southern and Eastern European countries are typically characterised by low levels of expenditure and tend to rely more on informal care. Countries like the Netherlands and Germany are characterised by a public insurance model where participation is mandatory and funding is based on employment-based contributions.
There is a wealth of differences in LTC policies and financing arrangements across Europe. These create a unique opportunity to learn from each other's experience. Governments need to know which policies are successful and which ones are not, and need to be aware of new emerging models. Finding detailed information about different countries' experiences is hampered by language and other barriers. Detailed and accessible information on different financing models is critically needed. Here lies one of the key contributions of the volume.
This book contains a detailed account of LTC financing arrangements in several European countries. It includes separate chapters on the Netherlands, France, England, Southwest Europe (Italy, Portugal and Spain), Austria, Germany, Central Eastern Europe, the Scandinavian countries, Switzerland and Belgium. These are written by leading national experts. If you are not familiar with different models for financing LTC, you will quickly become an expert after reading and digesting this book. If you are an expert in your own country, you will be able to compare policies and arrangements with many others. Moreover, only by acquiring detailed knowledge on different financing models can we appreciate what lies behind major differences in quantitative figures on spending and provision of formal and informal care across European countries.
Before launching yourself into each country's details, reading the introductory chapters will help you to identify some critical issues. The chapter by Colombo provides a typology of public coverage across OECD countries and allows identification of the key financing models. Private insurance is a potential option to fund LTC but this is poorly developed in many countries (often referred to as an ‘LTC insurance puzzle’). Many observers wonder why this is the case. You will find the answer in the chapter by Pestiau and Ponthiere. The role of housing wealth as a form of self-insurance, the public-private mix and its interface with informal care, and insurance markets from an industry perspective are also explored in the introductory chapters.
In summary, this is a very valuable book (which I was asked to review after I had already purchased it). It will help stimulate debate and policy development across an international audience. It will make you wonder for a long time: which one is the correct financing model?
