Funding and resource flows in the care system - 2013-2015 Projects

1. Funding options for social care

Context and problem statement

The significant growth in the number of people with care needs and the long-term increases in the unit cost of social care services are putting growing pressure on the publicly-funded social care system in England. Also, due to the means-tested nature of the present social care funding arrangements, increasing proportions of people with social care needs have become excluded from state support. In this context, the analysis question is whether social care funding arrangements can be found which ensure:

Overall aims

The analysis will examine, now and over a 20 year time horizon, the impact of alternative funding mechanisms on:

This work will explore the following questions:

Q1 Individual level association between need for and receipt of care among older people in England

This study will address the issue of the association between need for care and receipt of care among older people.

Q2 Local variations in social care service use


The analysis will examine which factors (local needs, socio economic characteristics, local prices, local preferences) are linked to variations in the use, configuration and costs of social care services.

Q3 Coordination of local health and social care provision: evidence of substitition and complementarity of health and social care inputs


This analysis will contribute to addressing the policy question of how best to coordinate the health and social care systems by quantifying the degree to which the supply and demand of health and social care services is interrelated.

Q 4 Understanding and quantifying system outcomes


We aim to map patterns of targeting of health and social care resources to indicators of quality life (e.g. QALY and ASCOT) to understand the implications in terms of final outcomes of alternative service configurations.

Lead: Jose-Luis Fernandez, Julien Forder, Raphael Wittenberg


2. Financial mechanisms for intergrating funds for health and social care


Integrating care for people with complex needs, such as frail older people with multiple health problems, is a huge challenge for health and social services.  Evidence suggests that integrated services can improve access to care services, lower rates of institutionalisation, and may reduce the overall costs of care.  Although a lack of financial integration is often cited as a major barrier to the successful delivery of integrated care, the specific role played by the integration of resources across care boundaries remains opaque. 

Research questions


To systematically review the international evidence on:

Lead: Anne Mason


3. The relationship between unpaid care and formal health and social care


Informal caregivers are responsible for the large majority of care and support provided to people with long-term conditions, frail older people and the terminally ill. The health and social care systems could not cope without this ‘hidden army’ of unpaid carers. It is therefore imperative that we develop our understanding of the role of informal care in the health and social care economy and of the implications of policy changes on the supply of informal care.

Our objective is to provide robust empirical evidence of the potential impact of policy measures on informal care supply and on the interrelationship between the supply of informal care and the use of formal health and social care. We also aim to refine the evidence and methodologies used to estimate the welfare effects of policy changes, for example in terms of informal caregivers’ opportunity costs.

This work is designed to address the following policy questions:

Q1 Factors influencing informal care supply


We will attempt to quantify the range of factors determining individuals' willingness to provide informal support to people with long-term care needs.

Q2 Complementarity and substitutability between unpaid care and health and social care services


We will attempt to quantify the rate at which formal and informal inputs substitute for or complement one another.

Q3 Financial and wellbeing implications of providing care for unpaid carers


Providing care can have significant implications for the health, wellbeing and financial situation of the informal carer. We will attempt to quantify the outcomes of providing informal care, including its opportunity costs in terms of labour supply and caregivers’ wages.

Lead: Jose-Luis Fernandez, Bernard van den Berg


4. Health care expenditures, age, morbidity and proximity to death


The allocation of health care resources to administrative bodies charged with delivering patient care has historically been based on measures of a population’s needs for health care services. These have taken many forms, but are broadly based on age, gender, morbidity and measures of social deprivation. It has recently suggested that allocations should be based on age alone, believing that age is a key determinant of the need for health care and hence health care expenditure (HCE). This might be challenged on a number of accounts, for example, that wealthy less deprived individuals are more likely to live longer and accordingly attract a greater share of HCE. The impact of population ageing on HCE has been heavily contended and has led to a debate about whether it is age (or ageing populations) that drives HCEs or proximity to death (assuming the need for health care is compressed into the years prior to death). In the context of funding decisions, these two competing hypotheses have very different consequences for the appropriate allocation of health care resources. 

Project aims

This project aims to revisit the debate around the relationship between age, morbidity, time to death, life expectancy and HCE using a rich set of administrative records at the individual level on the use of health care services over time derived from Hospital Episode Statistics (HES).

Lead: Nigel Rice