Using a ‘wellbeing’ cost-effectiveness approach to improve resource allocation in social care

The promotion of wellbeing is the newly-stated guiding principle for the long-term care (social care) system in England. It signals a shift away from a focus on care need ‘deficits’ approach. Such a change in perspective has the potential to substantially alter how public care systems operate. The practical challenges are significant, both in the interpretation of wellbeing goals and in determining how the care system might be configured to achieve them. The main aim of this paper is to contrast a needs-led resource allocation system with one using a maximising wellbeing approach; that is, one based on: measuring the wellbeing consequences of using services and applying the principles of cost-effectiveness and opportunity cost. As a precursor, the paper also describes how a maximising wellbeing approach might be applied in the case of long-term care. We argue that in theory a maximising wellbeing approach with full information will produce greater total wellbeing improvement for the same budget than a needs-based system. In practice, the comparison will depend on: (a) whether we can actually measure wellbeing in a way that is consistent with the policy goals; (b) the availability of cost-effectiveness information; and (c) the decision rules used to implement a maximising wellbeing approach

The organisation of social care in England: markets, hierarchies and contract choices in residential care for older people

This thesis is concerned with strategic (economic) organisation, as applied to the long-term care system in England. This work adopts a transaction cost perspective. The main hypotheses are: first, that the transaction costs generated by (public sector) hierarchies in social care are lower than those generated in quasi-markets. Second, that production costs in hierarchies are greater than in markets. Third, that contingent contract use is associated with comparatively higher prices and mark-up rates, and greater net transaction costs. The motivation for this work is first to address perceived limitations of the theory in a comparative public sector application. Second, to inform the empirical and policy debate on social care reform. Following an account of the historical policy and institutional context, a multi-period, comparative theoretical model was developed, building on the contract theory literature. It underpins a systematic empirical analysis of care home services - at local authority and care home level - for older people in 1998 and 1999. Various estimation techniques addressed the skewed nature of the data and the panel design. The estimation results supported the theoretical hypotheses. Point estimates of marginal and average transaction costs were £6 and £21 per place per week respectively for hierarchies and £41 and £56 for placements under the market governance archetype, statistically significant differences. For production costs, a significant difference was found in the other direction: £89 for hierarchy and £55 for markets at the margin. Overall, the total (production + transaction) costs were not significantly different. Contingent contract use was associated with higher prices relative to average variable costs of 8% of average price compared with non-contingent contracts. The analysis pointed to low profitability rates and that providers are not solely motivated by profit (only taking 55% of potential profit). Policy implications were explored for both the markets-hierarchies and contracts analyses

Costs of regulating residential care services for children. Funded/commissioned by: Department of Health and Welsh Office

There are a number of important planned changes in the way that the regulatory function is to be conducted in Englandand Wales in the future (Department of Health, 1998). These include the setting up of independent regional authoritiesresponsible for regulating care services, the extension of regulatory requirements to services not currently covered byregulatory legislation and the setting of standards at a national level. An important issue to consider in this context is thesetting of fees to those who are being regulated. A key recommendation of the Burgner report on regulation and inspectionof social services was that the cost of regulation should be independently reviewed with a view to relating fee levels moreclosely to the actual costs of regulation (Burgner, 1996; p8). This report describes the results of an extension to a Department of Health and Wales Office funded study of health andlocal authority inspection units in England which had investigated the costs of regulating care homes for adults (Netten,Forder and Knight, 1999a). The principal aim of this study was to establish the costs of regulating residential care servicesfor children, in a way that could be used to identify cost-based fees to establishments. Residential care services forchildren were taken to include residential homes, family centres, boarding schools, foster care agencies, and adoptionagencies. Of these services Units currently have statutory responsibility for inspecting homes registered under the Children’s Act1989 and independent boarding schools. The Social Services Inspectorates of the Department of Health and Wales Officeinspect voluntary homes and voluntary adoption agencies. There are no statutory requirements to regulate the otherservices. Under the Children Act 1989 local authorities have the power to charge a “reasonable” fee for registration andinspection of private children’s homes, but voluntary homes, local authority homes and boarding schools do not pay fees. The main data collection was a survey of local authority and joint inspection units undertaken during the autumn of 1999.The data collection built on data collected in the previous survey (Netten, Forder and Knight, 1999a). For this studysupplementary data were collected about unit policies and practice with respect to services for which they had no statutoryresponsibilities, children’s services’ inspector characteristics and a sample week’s time use; and a sample of recentlyundertaken inspections and registrations. Information was also collected about enforcement actions undertaken during theprevious year. SSI inspectors involved also provided equivalent information on the amount of time spent on inspecting andregistering voluntary homes

Report on using the GPPS to assess trends in EQ-5D scores for people with long-term conditions

Background: Estimating the extent to which NHS services are contributing to improving the health-related quality of life (HRQoL) of people with long-term conditions is an important (if challenging) objective. Its importance is reflected in domain 2 of the NHS Outcomes Framework. Understanding whether this goal is being achieved requires methods which help the interpretation of the role of services on observed trends in HRQoL. Controlling for the influence of external factors, such as the severity of the underlying condition – or ‘need’ – on quality of life, is particularly crucial because NHS and care activity levels increase with need-related factors (NRFs), but otherwise NRFs are strongly associated with worse HRQoL. Failing to control for NRFs makes it therefore very difficult to interpret observed changes in quality of life, and in particular to appraise the role that NHS and care services might play in improving the well-being of people with long-term conditions. This report aims to develop a methodology which is easy to implement and which standardises for changes in NRFs when investigating changes through time in the HRQoL of people with long-term conditions