A new BDO report, ‘New Perspectives on Elderly Care’ brings to light a substantially greater ‘unhealthy life years’ figure than commonly accepted. Among the 10 countries included in BDO’s new report, the years an elderly person could spend in poor health can be as high as 12 (in the case of Germany). The finding goes contrary to the generally agreed belief that retirement is all ‘golden years’.
In ‘New Perspectives on Elderly Care’, BDO provides strategies and avenues for both public sector and private organisations to increase the number of healthy life years through better investment, notably through a new concept, value-based elderly care.
Value-based elderly care
As life expectancy continues to increase, the cost of providing elderly care has seen a relentless upward trend. BDO notes however that the countries with the healthiest ageing populations support alternatives to the traditional methods of elderly care, engaging in community-based initiatives and investing more smartly in preventing and rehabilitating after illnesses. The move from volume (fee-for-service) to value (value-based payment) and the importance of outcomes will have a profound impact on health systems. Value creation for the patient-client takes centre stage in all of this.
Another avenue is to develop more attractive and more secure roles for multi-disciplinary professionals working collaboratively in providing more efficient care. BDO notes how technology can help mitigate the scarcity of professionals to take care of ageing people. Initiatives such as centrally-hosted and integrated care records can partially overcome this scarcity through improved information sharing and better investment of human resources and logistics. Examples are telecare and telehealth, which will allow people to stay at home for longer and return home quicker after hospital dismissal. Artificial intelligence could further provide robot assistants to cope with workforce challenges.
Changes in reimbursement will bring about new business models for elderly care
Concluding, BDO emphasises that new business models and new types of investment will be needed for value-based elderly care, and that these will allow to focus efforts on prevention and rehabilitation as well as boost innovation. This goes hand in hand with substantial social investments which inevitably raise questions regarding the origin and size of the investments and the intended results, warns BDO.
Reflecting on this period of transition in health and elderly care, BDO’s Center for Healthcare Excellence & Innovation and our Global Public Sector team are looking towards the future to help governments, public and private organisations anticipate and plan for the challenges and opportunities ahead.
A South African perspective:
Rushay Singh, Audit Partner with Public Sector industry as a focus, comments that South Africa is fast becoming deemed, by the rest of the world and by many South African citizens, as a welfare state.
South Africans are currently heavily dependent on debt and this has resulted in many defaults on home loans, credit card repayments been missed and judgements been issued. In some cases, employees have resulted to extreme measures of actually resigning just so that they can tap into their retirement benefits. The results of this can become very concerning for many stakeholders;
- the retirement benefits will be used by these individuals in the short terms to clear their debt, meaning that they would have nothing to show for their retirement.
- Heavy tax penalties will be deducted for exiting from these funds prior to the age of 55.
- And now the individual will be unemployed, putting further strain on the government, more chance of riding up debt and less chance of retirement security.
The government has been considering not allowing retirement benefits to be accessed before retirement age to prevent the above situations and the further strain on the fiscus.
Singh concludes, “I personally am in favour of this as it would then not encourage this unusual behaviour as well as young people accessing retirement benefits prior to retirement.”