IF you have not thought much about your possible long-term health care and associated financial needs, now is a good time to start. Did you know that one in five long-term care (LTC) users is younger than 65 years, while around half are aged over 80 years, with women counting for over 60% in total?
According to a recent Organisation for Economic Co-operation and Development (OECD) report Help Wanted? Providing and Paying for Long-Term Care’, there are clear signs that our chances as individuals of needing long-term care are increasing. With people living to a greater age and more women working, traditional family-delivered care is not keeping up.
It is not surprising that the needs of frail and disabled seniors are growing. In many countries, LTC policies are being developed in a piece-meal manner, in response to immediate political or financial problems, rather than being constructed in a sustainable, transparent manner. Yet, the future of LTC, is unquestionably more demand, more spending, more health workers, and above all, higher expectations that the final few years of life must have as much meaning, purpose and personal well-being as possible.
In nearly all OECD countries, between half and three quarters of all formal LTC is provided in home-care settings with a substantial share suffering from dementia-related problems.
According to the report, family caregivers are the backbone of any LTC system. Across the OECD, more than one in 10 adults aged over 50 years provides help (usually unpaid) with personal care to people with functional limitations. Close to two-thirds of these providers are women. Support for family caregivers is often minimal, provided as recognition that they perform a socially useful and difficult task.
Financial Planning for Long-Term Care
In Malaysia, the life expectancy is expected to rise from 72.6 years in 2010 to 74.2 in 2020 for men. For women specifically, the figure is expected to rise from 77.5 years to 79.1 years during the same period. “The figure is expected to rise in line with the improved health standards of the population” according to a comment in a local newspaper.
These statistics, together with women’s role in the family, point to a need for a different approach to financial planning for LTC. Women will need more LTC savings because of their longer life expectancy. If a woman sacrifices her income earning opportunity to become a caregiver for the family, she needs to be compensated for loss of income unless her LTC will be taken care of by her family or the government. Unless family support is strong, the government should have special provisions for LTC funds for women.
There are cases where men become caregivers for family members and they make necessary financial sacrifices too. Regardless, everyone needs to conduct a thoughtful and in-depth LTC financial self-evaluation: and consider including your family members in your thoughts.
Upon launching Phase 3 of the World Health Organisation’s Good Governance for Medicines Programme, Health director-general Datuk Dr. Hasan Rahman stated the programme will “enable the public to buy good quality drugs at a good price”. Malaysia was one of the first countries to adopt this programme.
The Ministry of Women, Family and Community Development has announced that they have set up Rumah Seri Kenangan to provide care and protection to the aged who are poor. There are now 22 day-care centres for senior citizens through a strategic initiative with certain non-governmental organisations which has now benefited 16,331 senior citizens nationwide.
How about middle to higher-income earners who want to live a comfortable life with affordable LTC, if need be? Do we have such amenities in an age-friendly community living environment? A friend of mine commented, “Money, money, money is the crucial point here. In most places it would cost at least RM2,000 per month, plus drugs cost to maintain a decent living. An acceptable living would cost RM3,000 plus drugs and a comfortable living RM4,000 plus drugs. Luxury living, of the type we associate with advanced countries, would cost RM10,000 or more. Clearly, this is not viable for most people, knowing that some patients live 20 or more years in retirement.”
LTC requires significant financial commitment from individuals, families and the government. It will take more than government initiatives to support and encourage us to implement workable solutions. It requires a significant paradigm shift and mindset change within the populace, business community and policy makers to look beyond the current situation when making decisions.
Though making profit is important for business sustainability, we need to adopt strong humanitarian principles if we are to succeed in providing LTC within the constraints of our socio-economic transition, culture and social support system.
Dr Phua Kai Hong, Lee Kuan Yee School of Public Policy, Singapore, in one of his presentations proposed the “many helping hands” approach to community care. A collaborative approach of public, private and people partnerships, joint responsibilities of the individual and family, community and the government, and a shift to more cost-sharing is required. On the financial side of things, Phua envisions the solution as a diversified mix of methods including prepayment, savings, pension, insurance, annuities and targeted subsidies.
Progressing towards a higher-income society
Because of the uncertainty of if or when a person might need LTC services, pooling of the financial risk associated with a sudden LTC need is important. We must design an efficient financing solution instead of relying on out-of-pocket payments. Otherwise, the cost of LTC services and support will be unaffordable for most people, even if we achieve higher-income society status.
The OCED report suggested that countries need to have a “toolkit of policies” to strike a balance between access to LTC and financial sustainability, selecting from several healthcare financial system options as needed. It seems LTC insurance has a potential role to play but unless made compulsory, it will likely remain a niche market.
A vision and the right mindset
Malaysia’s family units are in transition. Traditional care delivery is under stress. The sustainability of LTC provision will likely become an issue for us in the future. We won’t be able to find ideal solutions overnight. Unless we quickly see some concerted effort from the important stakeholders and government ministries, it will remain a multi-million ringgit problem. However, I believe there is light at the end of the tunnel. It begins with a vision and the right mindset.
From both the financial services and healthcare perspectives, we must take a sizeable first step in the right direction along our Economic Transformation Programme pathway. This is to ensure that we implement the right collaborative strategies and cohesive policies to make things work for our senior citizens. It is also for our younger generation and those of us in our middle years! – Comment by CAROL YIP
Source: The Star