Local care markets Unintended consequences of the Care Act and risk mitigation

Facilitators John Huskinson: Care Act Finance lead, Buckinghamshire County Council Anjana Jasani: Care Act Programme Manager for BCC, Ernst & Young

Objectives and structure An overview of the care market and self funders – why are they important in light of the CA? The impact of the Care Act on the care market The financial impact in Buckinghamshire What are the risks if we do nothing? How is Buckinghamshire mitigating these risks? Facilitated exercise to share experiences and learning on how LAs are addressing these issues

New incentives for Self-Funders Self funders are those who currently fund and arrange their own care From April 2015 they will have the right to request that the LA arranges care for them. However they will have more of an incentive to do so from April 2016 when eligible care counts towards their £72k cap. This will lead to a greater level of transparency around care costs, exposing any differences in prices charged to SFs and LA arranged clients This may impact on purchasing and supply behaviour which could impact significantly on overall market prices. As a result LAs may see their prices for care up to ensure the market remains sustainable.

Other impacts on the care market The methodology different local authorities use to calculate usual price may need to be reviewed to ensure it presents a defensible position if challenged and to ensure that it maintains the sustainability of the market. The system of top ups - these are likely to increase as providers attempt to differentiate the services they provide. How can local authorities better manage top ups as they are ultimately financially liable for them and if agreed, are often unlikely to be able to move residents to lower cost homes if top ups end or clients deplete assets and become at least partly funded by councils? The Act also requires the splitting out of hotel and care costs. This too has some profound consequences: If hotel costs are capped or fixed as the legislation suggest, what happens in areas where the hotel cost exceeds this? Particularly in areas where land values and labour costs are high.

Other impacts on the care market How should local authorities support providers in defining their respective hotel and care costs, to prevent gaming where providers try to maximise hotel costs to compensate for possible loss in care costs, which then results in a greater financial pressure on the service user? Providers’ behaviours and self funders’ behaviours will have significant impacts on the market and these are determined in part by their relative financial positions (i.e. health of care market suppliers and wealth of self funders). How can we predict how self funders will behave?

What will the impact be? Care costs within cap of £72,000. Contributions by residents determined by means Care costs exceed cap of £72k. Councils pay costs above £72k. In Buckinghamshire = £10.5m new burden by 2021 Lifetime care cost Residents ordered by lifetime care costs

What will the impact be of care market equalisation? Average price £900 p.w Average price £600 p.w Average prices £600 p.w Average price £759 p.w Providers exit the market

What will the impact be if prices care market prices equalise? For residents making no contribution to care, the Council will pay 100% of the higher fees. At higher care costs after market price equalisation, more residents hit cap (and sooner).

Financial impact in Buckinghamshire: £900 £600 £300 Average price of self-funder care home bed per week Average price of Council care home bed per week Difference between prices paid £15m The additional financial impact on the Council per year from 2021

What risks does this present? Significant financial pressure on LAs due to numbers of SFs asking the LA to arrange their care Increased likelihood of care providers going out of business= Increased safeguarding concerns Less available care beds then it is likely that the NHS will find it harder to place people resulting to an increase in delayed discharges from hospitals.

How are we mitigating risk in Buckinghamshire? Working as part of a consortium of 11 LAs to commission research into degree of financial risk attached to care market subsidisation and to further understand SF behaviour. We will use the outcomes of this to lobby government to ensure adequate funding Working with EY to develop a ‘blueprint’ 10 year strategy for adult social care which focuses on demand management and cost reduction

Blueprint vision

Blueprint analysis

Influencing demand by taking a whole life approach To achieve this we need to continue forming a deeper understanding of: The customer’s lifetime journey The pathway through services Whole lifetime costs Effective interventions/intervention points. The interface with other services in the Council and partners who play a key role in supporting demand management (Front Door, Children’s, Public Health Housing)

Blueprint commissioning ideas

How is your LA addressing/considering some of these issues? Record the activity/discussions underway in your LAs around some of the issues we’ve discussed today. There is value in sharing and understanding different approaches where they exist. Activity In groups, record on the flipcharts (with your LA name) whether you’ve done any work on developing: -Strategies for managing supply -Strategies for managing demand and changing journeys -How you calculate usual price incl top ups i.e. setting care accounts Feedback: Is there anything you will do differently as a result of the issues raised?

John Huskinson: Anjana Jasani: Contact Details