The vaccine rollout is giving Canadians hope for an end to the COVID-19 pandemic. But before we contemplate a return to normal life, we must not lose sight of the virus’s devastating impact on long-term care (LTC) and the shameful state of our LTC systems. If COVID has taught us anything, it’s that LTC and the health issues that often accompany aging are not isolated problems. They are our collective eventuality, and we must collectively build a better support system.
Federal, provincial and territorial governments should work together to put in place a universal, public long-term care insurance system that would provide a continuum of care options from care at home to care in institutions, similar to what several other countries have already done. This would be financed by a mix of premium contributions, general tax revenues and individual co-payments.
Despite numerous government-commissioned reports over the last 20 years – each calling for reform and improvements to LTC – Canada’s governments have taken little or no serious action. This may be because population aging is a slow, silent process. People often don’t think about LTC until it’s too late. Older people are less visible and you can easily ignore them, or assume that you or your family won’t ever need LTC services. However, many people develop disabilities – cognitive and/or physical ones – as they age. Now that the pandemic has shown Canadians the failings of our LTC systems, we must reform them before it’s too late.
Demographic aging-prompted reforms in Germany, Japan and South Korea
Canada should learn from the experiences of other countries. Germany, Japan and South Korea made fundamental changes to their LTC systems well before COVID-19 hit. They made transformative shifts by replacing their patchwork systems of LTC provided by local and regional governments with universal, national public LTC Insurance (LTCI). In the process, they turned LTC from primarily a private family responsibility to a family, community and state collective responsibility.
These systems are financed by a combination of insurance premiums, general tax revenues and sliding-scale co-payments. They provide a range of services based on one’s level of disability. LTCI in all these countries operates on a mixed-market model, with the government setting the regulatory framework for service delivery, the price of services, the licensing and skills training of providers, and overall governance. The benefit of this model is that it capitalizes on the existing service capacity while reforming and building onto it, rather than breaking the existing system and rebuilding a new one from scratch. Germany introduced its LTCI in 1995, Japan in 2000 and Korea in 2008.
The governments in these countries were motivated to reform their LTC systems because they realized that their socio-demographic structures were transforming rapidly, and they foresaw an impending care crisis. The German government had been getting pressure from families and state governments to address LTC issues since the late 1980s. The country’s population was getting older, more women were in paid employment, and families were experiencing increasing LTC strain. As state governments were largely responsible for LTC before the LTCI, their resources were stretched, and capacity was overwhelmed by increasing demand. But it was the demographic threshold reached in 1990 – when the number of people over 65 hit 15 per cent of the population – that the government realized it was time for a radical reform. Germany had gone past the point of being an “aging society” – a society with more than seven per cent of its population over the age of 65 – and had become an “aged society,” with more than 14 per cent over age 65.
The Japanese government was also under similar public pressures to reform LTC, but it was the “1.57 shock” – the lowest fertility rate in its history – in 1989 that pushed the government into action. Japanese policy-makers were quick to realize the simple equation: (low fertility)+(increasing longevity)=(rapid population aging)=(impending LTC crisis)=(bad economics and bad politics). They also knew that their population was aging much faster than Germany, and they had little time to lose (see Figure 1). They watched and learned from Germany’s LTCI reform as they worked on their own.
South Korea’s situation was similar to Japan’s. When Korea’s total fertility rate dropped to 1.2 in 2000, the government quickly struck an LTC reform commission. Although the Japanese population was aging faster than Germany’s in the late 1990s, demographic projections showed that Korea was aging even faster than Japan. Germany introduced its LTCI when its 65-and-over population was 16 per cent; Japan when it was 17 per cent. When Korea introduced its LTCI, the figure was barely 10 per cent, but Koreans knew that their 65+ population would hit 14 per cent by 2018, and was projected to reach 20 per cent by 2026. Today, Canada’s total fertility rate (1.50) is not as low as Japan (1.42) or Korea (0.98), but with our 65+ population already at 18 per cent, we are older than those countries were when they initiated reforms.
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These countries were also motivated to reform because they wanted to avoid incurring potentially huge health-care costs as their populations aged further. Like Canada, all these countries had universal health-care systems that covered most medical and health-care services. Like Canada, there also had been only limited coverage for LTC because it fell somewhere between health and social services. Before their reforms, all three of these countries witnessed a growing tilt towards institutional care for older people and social hospitalization. This is also a trend we see in Canada.
A public long-term care insurance solution
Policy-makers in the three countries chose universal, public mandatory LTCI, coupled with a rigorous regulatory framework as a prudent policy solution. Not only does LTCI mitigate unnecessary and expensive institutionalization, but it also provides older and/or disabled people with a continuum of care in their home, community and institutions. Moreover, such a system would support healthier and active aging, and would create a new dedicated funding stream for LTC.
LTCI is also customizable. Germany, Japan and Korea each adapted the system to fit their own social, political and cultural contexts. The German government was concerned about public and state support for a national LTCI. To address these concerns, they gave families a choice of cash or service. They also gave state governments a fresh infusion of cash and infrastructural support to provide care services. In Germany, LTCI received enthusiastic support from both the public and state governments.
in Japan and Korea, governments were worried about intergenerational buy-in – why would people in their 20s and 30s support financing a large share of LTCI costs – as well as LTCI’s fit with their countries’ cultural norms about family caregiving. They therefore set the mandatory insurance premium payment to begin at age 40 to avoid placing a major financial burden on young people. In response to women’s concerns – who feared that if benefits were delivered as cash, they would continue to expect women to provide unpaid care – LTCI benefits in these countries provide only services. In both countries, more than 80 per cent of the general public supported LTCI. Families, NGOs, and women’s and seniors’ groups whole-heartedly endorsed LTCI because they saw that it would relieve the family’s – women’s – heavy caregiving burden, would allow women to continue working, and even create new employment opportunities.
Canada can customize its LTCI as well. We can set the age of premium contribution to ensure greater intergenerational equity. We can also determine a mix of cash benefits and in-kind care services to meet diverse individual, regional and cultural desires. The most important thing is that we create a universal public LTCI system, with regulations on how benefits can be accessed and used, to ensure accessibility, equity, accountability and quality of care.
The time is now
As Canadians reflect on the lessons from the COVID pandemic, we must boldly reform LTC. We have all the right conditions for a transformative change – a systemic crisis, an aged demographic, families crying out for help, a huge public recognition of LTC needs and expectations for government leadership – and we have models of reforms from other countries to learn from, adapt and innovate. We must act now.
This article is part of the Kick-starting Reform in Long-Term Care special feature.