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Long-Term Care Financing lessons for Low- and Middle-Income Countries

Long-Term Care Financing lessons for Low- and Middle-Income Countries


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By the World Health Organization’s Centre for Health Development

Why Long-Term Care financing matters for Low- and Middle-Income Countries

Long-term care (LTC) systems have received little to no attention in most low- and middle-income countries because population ageing is typically considered a challenge for high-income settings.

But population ageing is also a pressing priority in Low- and Middle-Income Countries (LMICs) where most older people will be living in by 2050. Given the relatively lower levels of health investments in early life, people in LMICs may experience the onset of age-related health problems before the age of 65 years, thus requiring health and LTC services at relatively earlier ages.

Without formal LTC, the costs of providing care shift to families. While LTC is traditionally considered the responsibility of the family, the number of informal caregivers has declined with decreases in fertility and family sizes, and increased opportunities for women in the formal workforce. Lack of formal LTC services increase pressure on the health system, which can result in increased health care costs while offering suboptimal care for older adults. As such, investing in formal LTC systems has become a policy priority in LMICs.

To support countries in designing and implementing LTC systems, the WHO Centre for Health Development (WHO Kobe Centre – WKC) has produced a series of research briefs on Financing LTC: Lessons for Low- and Middle-Income Countries (LMICs) which distil key research findings for policy-makers about LTC policies, systems and and institutions.

Key messages:

  • LTC in LMICs is a key policy priority as a result of the increasing numbers of older people, the onset of age-related health problems at relatively younger ages and the reduced availability of traditionally female informal caregivers.
  • People underestimate their need for LTC and are unable to save enough to cover the costs of needed services as they age.
  • Given the market failure of LTC private insurance, public intervention to meet growing demands is well-justified.
  • Countries that have invested in LTC systems recognize its value to the economy — in reducing the pressure on the acute care health system and providing needed services and financial protection.

How the briefs were developed:

The briefs were developed by summarising existing international research done on ways of financing LTC. Where gaps in evidence existed, background papers were commissioned.  The background papers include literature reviews about gender equity implications of financing LTC, public finance and budgeting for LTC in selected middle- and high-income countries, a rapid scoping review of important policy and systems initiatives for LTC financing, and a review of issues in LTC financing and implications for LMICs. The findings are presented taking into consideration their potential application in LMICs – where frequently no formal investments have been made in LTC.

This research was informed by WKC previous research quantifying unmet need for care for older persons and it also builds on ongoing work with the European Observatory for Health Systems and Policies in publishing an investment case for LTC in cooperation with academics globally and developing a simulator for LTC workforce projections. The drafts were circulated to the regional and country offices in WHO, and the briefs are currently being translated into Spanish and disseminated in selected countries.

Overview of the briefs:

Brief 1 addresses the issue of what drives the demand for LTC in LMICs. The number of people aged 65 years and older will increase in middle-income countries, where most older people will be living by 2050. At the same time, many people in LMICs will experience the onset of age-related health problems before the age of 65 years. Investments in formal LTC are needed to ensure that older people have access to needed services.

Brief 2 explores options for policy-makers on population coverage of public LTC. Governments that decide to invest in LTC for older adults face policy choices of whether service coverage is universal or selective in covering specific groups or the poor. While universal LTC is assumed to be costly, this depends on the generosity of the benefits package and decisions about its implementation.

Brief 3 covers the thorny issue of how countries finance LTC. Where no LTC system exists, individuals, families and communities cover costs, leading to inequitable access to services and negatively impacts economic growth. This brief contains specific lessons for LMIC settings in using general taxation and insurance programmes for LTC.

Brief 4 discusses the LTC services that can be covered in the benefits package, which may include medical or nursing care, personal care, and assistance and social care. Establishing a LTC benefits package is an ongoing process. It requires continuous assessment of how needs and eligibility are determined, setting thresholds for eligibility, regularly revising benefits and services based on evidence, and linking services to financing and delivery systems that promote quality.

Brief 5 presents evidence about how countries align financing and delivery in LTC. It discusses the balancing act of providing coverage across facilities and in the community for widely varying health and social services for beneficiaries. Many countries are shifting service delivery to communities, which requires investments in quality assurance systems at community level.

Brief 6 covers how countries can ensure financial protection in LTC in recognition that most people are unable to save enough to access needed care as they age. Policies may include targeting those in greatest need, including people with dementia or who have suffered strokes. Countries have also eliminated caps on needed services and capped individual payments to protect people from very high LTC spending.

Brief 7 presents evidence on promoting quality and value in LTC. The COVID-19 pandemic revealed shockingly high rates of preventable mortality among vulnerable older people in LTC settings which could often be attributed to inadequate quality and safety measures in LTC facilities. LMICs can learn from mistakes in more developed settings and invest early in LTC quality and safety to protect vulnerable older people.

Brief 8 presents global evidence financial sustainability in LTC, which requires considering the broader economy-wide impacts of LTC investments across economic, health and social sectors.


Full list of authors and affiliations:

This series was written by WKC’s Director, Dr Sarah Barber, jointly with the WHO Departments on Health Governance and Financing, and Ageing, in cooperation with global experts on LTC financing and systems. These include co-authors and reviewers from Dalhousie University (Marilyn MacDonald, Erin Langman, Julie Caruso); European Observatory for Health Systems and Policies (Jon Cylus); Harvard University (Dr Terence Cheng, Winnie Yip); Independent Health and Aged Care Pricing Authority (Kees van Gool); Japan Society for the Promotion of Science (Mariko Kanamori); Kyoto University (Sasaki Noriko, Yuichi Imanaka, Goto Etsu); London School of Economics (Joan Costa-Font); Miami University (Sara McLaughlin); National Center for Geriatrics and Gerontology (Xueying Jin; Tami Saito; Taiji Noguchi; Ayane Komatsu); Organisation for Economic Cooperation and Development (Ricarda Milstein, Luca Lorenzoni); University of Lisbon (Ricardo Jorge Alcobia Granja Rodrigues); University of Santiago (Pablo Villalobos Dintrans); University of Trieste (Ludovico Carrino); WHO Centre for Health Development (Megumi Rosenberg); WHO Communicable and Non-Communicable Diseases Department (Katrin Seeher); WHO Country Office for Indonesia (Feby Oldfisra); WHO Department of Maternal, Newborn, Child and Adolescent Health and Ageing (Jang Hyobum); WHO Regional Office for Europe (Cassandra Simmons); WHO Regional Office for South-East Asia (Tsolmongerel Tsilaajav).


Suggested citation:

WHO Centre for Health Development (2024, 13 June) Why Long-Term Care financing matters for Low- and Middle-Income Countries. GOLTC Blog, Global Observatory of Long-Term Care, Care Policy and Evaluation Centre, London School of Economics and Political Science.