Effects of EU's ageing population on long-term care

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Europe will have the second highest globally old-age dependency ratio among large economies, with a share population that is forecasted to shrink from 6.9% in 2015 to 4.5% in 2070. Population structure is putting continuous pressure on finances in the long-run, ageing and connecting challenges representing the main drivers of increasing long-term care (LTC) expenditure. Improving the efficiency of LTC systems is necessary in order to address the increasing need for care.

On 25 May, the European Commission has published the 2018 Ageing Report on economic and budgetary projections for the EU member states for 2016-2070. The report highlights the following implication of an ageing population:

·    working-age population will decline from 65% to 56%, becoming a substantially smaller share of the total population;

·    old-age dependency ratio is projected to increase by 21.6%, from 29.6% in 2016 to 51.2% in 2070;

·    working-age people for every person aged over 65 years will decrease from 3.3 to only 2 working-age persons.

The effects of the demographic projections show that LTC expenditure is an important and growing share of GDPs in member countries. The public spending on LTC dependents on factors like the status of the population, the model of LTC provision, human resources, rate of economic growth, progress in medical science and the development of technologies.

The reforms of LTC systems must be addressed through improving governance, targeting care at those that need it most and can least afford to pay it, ensuring availability of carers, supporting informal carers, as well as health promotion and rehabilitation.

The challenging situation of an ageing population and the effect on long-term care is highlighted also by EUROCITES' thematic analysis of the country reports for 2018. Connected to country specific recommendations for 2018-2019, the analysis shows that member states made some limited progress on reforming the long-term care systems, in terms of coordinated provisions of formal care, high-quality, accessibility and sustainability of LTC services.

A limited number of countries have introduced concrete measures like increasing the budget for provision of long-term care (Spain), increasing minimum income for elderly (France, Slovenia and Estonia), reforming to decentralise long-term care (Netherlands) or adopting strategies regarding active ageing and LTC (Bulgaria and Slovenia).

The analysis of the country reports shows that there are remaining and connected challenges regarding the ageing population like:

·    Exposure of people over 65 years old to social exclusion and at risk of poverty, due to low level of pensions;

·    Shortages of certain specialists and staff in LTC and healthcare services, especially in rural areas;

·    Low cost-effectiveness of the healthcare system;

·    Impediments to keep women in employment, as informal care is often the only option for many families and women take care for dependent and elderly relatives;

·    Low and inequal retirement age of men and women.

In order to overcome the increasing needs of an ageing population, the country-specific recommendations mostly focus on the sustainability of the healthcare and pension system (Austria, Belgium, Ireland, Luxemburg, Portugal), on the accessibility and quality of healthcare system (Finland, Latvia, Romania) and call for improving the adequacy of the social safety net for older people (Estonia). The recommendations also refer to restricting the early retirement (Croatia, Malta, Luxemburg, Slovenia), increasing the minimum income (Latvia, Romania) and increasing the employment rate of older people not yet in retirement through lifelong learning (Luxemburg, Slovenia).

The concluding remarks confirm that the designed measured for the ageing population must be compensated with improvements in health status to prevent an increased number of dependent elderly and long-term care (LTC) services. Efficiency of pension systems is a key factor in preventing the risk of poverty and social exclusion of elder people. The clear need for broadening formalised coverage of the EU population with long-term care services has to be balanced with the need to ensure the sustainability of public finances.

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Patricia Couti