Shaping Our Futures

A conference on Independent Living
sponsored by the European Network on Independent Living (ENIL)

På svenska / In Swedish

What Price Independence?

Gerry Zarb and John Evans, UK

This paper was due to be introduced by Gerry Zarb, Senior Research Fellow at the Policy Studies Institute in the UK. He was unable to attend due to illness and the paper was presented by John Evans of the Hampshire Centre for Independent Living, UK and Chair of the European Network on Independent Living.

John Evans gave the following introduction to the paper:

We were hoping that Gerry could be here to present his paper, but his spirit is here in his work. Some of us have been engaged in a lot of the work that Gerry has been doing on our behalf and I would like to point out that the British Council of Disabled People commissioned the Policy Studies Institute at the time when we were campaigning for legislation for direct payments, and the work that Gerry did then, published as Cashing in on Independence, was probably one of the key factors which influenced the then Secretary of State for Health, Virginia Bottomley, and other influential groups like the Association of Directors of Social Services that helped us to secure the change in the law to allow direct payments.

I that the fact that it influences national policy making is indicative of the strength of Gerry’s work. He has worked along with us ever since then, and I’m sure he will continue to do so.

Research is an area which is very debatable in the disability movement. We’ve always felt they there are lots and lots of people wanting to do research on our behalf around Independent living issues, but they are not always coming from the right place. The important thing we must remember is that we must be in control of that research, we must instigate it, and we must direct it. As long as we do that, it is usually research which bears the results of showing the importance of what Independent living is all about.

We are the experts. We started the movement. We have to maintain control of the movement and not allow researchers to take it over.

Main paper:

Introduction

This paper is intended to contribute to two linked contemporary debates concerning the further development of independent living options for older and disabled people, and the funding of long-term care. The paper attempts to set out some of the key issues which need to be incorporated into the agendas for these debates. It also outlines the main factors which would need to be taken into account in any fully developed analysis of the social and economic costs and benefits of independent living.

What we know about the costs and benefits of Independent living

First, I have looked at the evidence from existing research on the costs and benefits of independent living - particularly the various forms of direct or indirect payments schemes which are (in the UK at least) increasingly available to certain groups of disabled people.

What the research evidence tells us is that direct payments have consistently been shown to be a cost effective mechanism for enabling disabled people to access high quality support which maximises choice and control at equivalent or, often, lower cost than other forms of community based support. The most detailed study carried out in the UK, for example, showed that support packages based on direct payments were on average 30 to 40 per cent cheaper than equivalent directly provided services. This study also indicated very clearly that people receiving direct or indirect payments had higher overall levels of satisfaction with their support arrangements than service users. This was particularly noticeable in relation to reliability and flexibility and the degree of confidence people had in their support arrangements being able to meet their needs.

Other smaller scale studies have shown similar results. The evidence from this research demonstrates that user controlled money goes further, so investing in Independent living is a more cost-effective use of public finance.

Current debates about the future development of Independent living options

Given that the arguments about both cost and quality have largely been settled it is perhaps surprising that direct payments and similar independent living options are still far from universally available. We need to consider why this is the case and to identify some of the key points of contention which are yet to be fully resolved. I suggest that there are four key issues which need to be placed at the centre of debates about the future development of Independent living for older and disabled people.

First, that the fundamental contradictions between ‘care’ as conceived in health and social care systems and ‘Independent living’ have not yet even been fully acknowledged, let alone resolved. The implementation of direct payments in the UK is an illustration of this, where a concept with choice and flexibility at its core is being squeezed into a system of rationing resources and pre-determining what constitutes "need".

Second, that contemporary debates around the future funding of long-term care are fundamentally flawed. While it is of course both legitimate and prudent to be considering how future support options should be financed, the basic problem with the existing approach to this question is that the whole debate is premised on the assumption that residential care will continue to be presented as the option of ‘first choice’ for the majority of older and disabled people requiring higher levels of support. A contrasting approach would be to explore ways in which alternative community based, non-institutionalised, support systems could be developed.

The disability movement has developed alternative models on a small scale; until these are developed more widely, most older people will never have the opportunity to access alternatives to institutional care and, hence, will continue to ‘choose’ this option until their perceptions are altered by the range of alternatives on offer.

Third, the development and expansion of Independent living options for a larger number of older and disabled people is also being held back by the absence of any conception (outside of the Independent living movement itself) that independence could, or should be, established as a basic and universal human or civil right. Despite the considerable expansion in availability of direct payments which is currently taking place, access to Independent living is still essentially granted on a discretionary, rather than mandatory basis. This is true even in systems (eg. Germany) where - on the face of things - everyone is entitled to access Independent living options. This is because, typically, there are still considerable restrictions on both the level of resources people can receive, and on the ways in which they are allowed to use these resources to organise their support.

Most importantly, practically all of the existing support systems place some kind of ceiling - either in terms of cost or eligibility criteria, or often both of these - on the level of resources at which Independent living is deemed to be viable. This means of course that people for whom Independent living is considered to be unviable are faced with a stark choice between struggling to maintain their independence in the community, or entering institutional care. Effectively, this amounts to putting a price on peoples’ lives. No amount of rhetoric, however well intentioned, about ‘enabling’, ‘empowerment’ and so on will disguise this while some older and disabled people continue to be institutionalised against their will.

Reconceptualising investment in Independent living

Discussion of universal access to Independent living options points in turn to the need for debates about funding these to be re-conceptualised. The fact that access to Independent living is often denied once a certain level of resources have been reached reflects the widespread concern about funding for public services. A key objective for future debate would be to shift the existing focus on costs towards seeing expenditure on Independent living options as a form of social and economic investment. Another related issue which needs to be factored in to the debate concerns the balance between expenditure and investment at the individual and macro levels. In particular, that the costs and benefits of investment in Independent living need to be analysed at an aggregate (ie. macro) level in order to demonstrate the overall impact of such investment in terms of both social justice and economic efficiency.

Existing approaches to this question are seriously limited by the narrow focus on individual investment decisions (eg. as typified by the process of assessment for community care). This not only precludes any meaningful discussion of overall costs and benefits but it also tends to systematically exclude individuals and groups at the extremes of the cost scale for whom such investment is deemed not to be cost-effective.

A shift in focus away from individual investment decisions towards consideration of macro-level social and economic costs and benefits also implies a need to analyse the impact of investment in Independent living as a process which occurs over time. This is because the cost and benefits of individual investments made at any particular point in time will obviously have longer term effects and the ‘pay off’ - if there is one - may only be demonstrated over time. Similarly, at a macro level, the long-term impact of investment in Independent living needs to be analysed in terms of the potential for bringing about changes in patterns of demand for particular forms of support and, hence, on the overall effect on public finances. I will return to this point later.

This long-term approach to investment is equally important at an individual level as it opens up the possibilities for considering how particular investments may be cost-effective over time, even if they appear expensive at the outset. Similarly, this approach would allow us to take account of the social and/or economic contribution which such investment enables people to make and, where necessary, to ‘offset’ costs at one stage (eg. in older age) against the benefits at an earlier stage (eg. when people are working). However, there is of course a danger lurking within this approach as it could be distorted to ‘justify’ the exclusion of certain groups and individuals (eg. those who are never economically active). This could - to a certain extent - be countered by analysis of investment in Independent living at an aggregate level. Any pattern of social investment will always include ‘outliers’, individual cases with relatively high costs. However, these cases are only relevant when investment decisions are made on an exclusively individual basis. When the nature of investment in Independent living is reconceptualised at a macro level, the key outcome is the overall impact in terms of social and economic costs and benefits: in other words, the fact that particular people have higher costs at some stage does not matter as long as it can be demonstrated that the overall impact of investment in Independent living is in a positive di* Social insurance and funding of long-term care

The issue of investment in Independent living is also linked - albeit indirectly - to the question of funding for long-term care. It has a particular bearing on the current debates about social insurance being used as a vehicle for funding of long-term social support by requiring people to make financial provisions during earlier stages of the life course which would then be used to pay for entitlements to support in later life. A number of concerns have been raised about the principle of using social insurance in this way and the relationship between investment in Independent living and the principles of social insurance remains an uneasy one. In one sense there does appear to be a common underlying objective in terms of promoting greater self-reliance, autonomy and choice. But whereas investing in Independent living is about the exercise of collective rights and responsibilities, a state support system is driven primarily by economic imperatives, in particular the perceived need to limit public spending.

What do we need to know about the costs and benefits of Independent living?

Restructuring the debates on future development of Independent living options and funding for long-term care would need to be supported by appropriate evidence to demonstrate the social and economic benefits of investment in Independent living. There are some the key pieces of evidence which would need to be collected and I will suggest some possible approaches to developing appropriate forms of analysis.

As discussed earlier, shifting the focus of debates about funding for Independent living away from individual costs towards the concept of social investment would require that analysis of the costs and benefits of alternative models needs to be carried out at the macro level. Equally important is the need to try to develop forms of analysis which examine the net effect of costs and benefits over time. Given that it would obviously be impractical - and, quite possibly, unethical - to carry out large-scale social experiments in real time, we need to utilise models for simulating the cost-effectiveness of investing in Independent living over the longer term. As mentioned earlier, there is also a need to consider the net costs and benefits at different stages of the life course (for example, by looking at how cost savings at earlier stages might be offset against increased expenditure in older age).

Conventional approaches to analysing cost-effectiveness in health and social services are typically based on two main factors:

• utilisation and demand (actual and/or projected);

  and,

• unit costs (staff, capital costs plus overheads).

Although there is considerable variation in how these factors are applied to different services, the basic approach is usually the same. The cost- effectiveness of one type of service compared to another is assumed to be a function of the relative demand plus the actual costs: although some economists might also want to analyse predicted variations in relative costs which might follow from changes in demand (changes in demographic trends, for example).

Basically, this would involve estimating future cashflows and translating these back to current prices in order to inform potential investment decisions. So, for example, cashflow models for people purchasing their own personal assistance using direct payments could be built up for a given time span and compared to the costs of providing the same level of assistance provided through service based options. This kind of model would need to take account of both direct unit costs, indirect costs (such as administrative overheads), cost savings, and revenue transfers (such as savings on social security benefits, earnings from employment, and the generation of tax revenues for people who are enabled to become more economically active). The model could also be used for further sensitivity analysis to look at the effects of building-in certain assumptions: for example, assumptions about the future level of demand for direct payments.

It is also essential that any discussion of cost-effectiveness takes account of the benefits associated with alternative funding mechanisms. This requires setting appropriate measures for the quality of outputs associated with the various options. Such measures can then be related to the costs (direct and indirect) involved. In the context of investment in Independent living, the principal "benefits" which we would need to measure are those relating to:

• how well particular personal assistance options satisfy people’s needs (which could be measured by factors such as reliability, degree of choice and control and so on);

  and,

• the wider benefits which follow from the degree of efficiency with which these needs are met (for example, by enabling people to take up employment or participate in social or cultural activities; the impact on family members, and so on).

However, it is important to recognise that "need" is a normative concept and will involve an element of subjectivity in measurement. Some analysts have suggested that, in order to carry out a meaningful cost benefit analysis, needs should be conceptualised in terms of final objectives, rather than the means by which those objectives are achieved.

So, when we talk about a need for a home help or a personal assistant, for example, we are really only talking about the means. The final objective would be the benefit to the individual in terms of improving quality of life; giving them security and control; addressing their requirements for physical assistance and so on. It is always possible, therefore, that these needs could be met by a number of alternative means. The focus for analysis should be the effectiveness of alternative forms of investment in meeting these needs.

In welfare economics needs are often expressed in terms of "shortfalls", or unmet needs. But, these are - by definition - subjective and individual. There is also the problem that, people may either be unaware that a need is not being satisfied (for example, because they do not know that particular support options are available); or, they may not have the motivation to make them known - particularly if they have very low expectations.

In view of this, there are three alternative approaches which have generally been adopted:

i) taking expressed unmet needs which are backed up by objective demand (as indicated by ability and willingness to pay for example);

ii) adopting measures of minimum standards or "absolute need";

iii) using set criteria defined, for example, by assessment procedures (in other words, professionally defined needs).

The second and third of these alternatives are increasingly seen as arbitrary and inflexible and are not, in any case, consistent with the principles of Independent living. The concept of expressed demand is more promising however as this opens up the possibility of developing measures which are meaningful to older and disabled people themselves. Factors like choice, reliability, and flexibility can all - potentially at least - be assessed in an objective way. The challenge for analysing the effectiveness of investment in Independent living therefore will be to develop appropriate measures for such factors which can be universally applied to people with a range of different needs and support arrangements.

The cost efficiency of any particular support options is usually related to the most efficient means of meeting needs in a given set of circumstances. A cost-efficient support option can be defined as one which maximises the output (or benefit) achieved from given resources, or one which minimises the resources required to achieve a specified level of output. In the context of Independent living options, the main focus would be on the first of these - assessing the extent to which different options maximise the benefits to users.

Basic elements of cost benefit analysis

There are three basic elements which need to be included in any cost-benefit analysis of investment in Independent living. These are:

i) resource inputs - including things like staff costs, consumables, capital costs, and a measure of time used by both support agencies and users;

ii) the actual costs - both direct and indirect costs and intangible costs such as the effort involved in organising a personal assistance package);

iii) non-resource inputs - including social environments (which refers to the extent to which independence is promoted in other ways such as through removing transport and access barriers), interpersonal relationship between users and workers, disabled peoples’ own personal resources, and collective expertise (the knowledge and experience provided by Centres for Independent Living for example).

In addition to the basic resource inputs and costs - such as direct unit costs, overheads, wages, and time spent on organising individual support arrangements - there are also a range of indirect costs which need to be factored in. These include things like:

• occasional costs for purchasing supplementary or back-up support;

• holiday and sick pay for support workers;

• other miscellaneous or occasional costs (for example, meals, travel time, telephone calls, recruitment);

• ‘dead time’ - such as time spent waiting for support workers to arrive;

• reduced earnings (either for disabled people themselves or other family members);

• the subsidy provided from sources of informal support.

Other factors for analysis

Other factors which need to be built in to our model for analysis relate to the potential social and economic benefits of investment in Independent living. These would include things like savings on social security benefits; earnings from employment; generation of tax and consumption revenues associated with increased participation in social and economic activities; the potential reduction in demand for health and social services; and the scope for reduction in dependency on informal support.

These are, of course, all outputs at the macro level. In addition we also need to factor in the outputs relating to the benefits to the end user which might be produced by a range of different support options. Not all of these can be measured directly so, in some cases, proxy indicators need to be developed. These would not necessarily be assigned a monetary value however. Some of the principal benefits to consider include: the reliability, flexibility and security provided by different support arrangements; the amount of productive time freed by people being able to access suitable support; the degree of choice people have over how and when support is provided, and by whom; the level and scope of support provided; the time and energy involved in organising individual support arrangements; and, longer-term viability of support arrangements.

Wider social and economic costs and benefits

Finally, the discussion of macro level outputs benefits leads us back to the issue of the wider social and economic costs and benefits of investment in Independent living. There are three issues in particular which are likely to be the most important in terms of economic arguments about the value of such investment, although they are also likely to be the most contentious in the context of the welfare reforms which are currently being considered around the world. These are the relationship between earnings and benefits; the implications for demand for health and social services; and, the potential scope for reducing dependency on informal support. First, as discussed earlier, one of the most fundamental distortions in current debates about funding for Independent living and long-term care is that there is a very narrow focus on the costs to public finances. There is almost no consideration at all of the potential cost benefits or savings which may be produced by a more positive approach to investment in Independent living. In particular, that little consideration is given to the net effect of increased tax revenues and lower expenditure on social security which might be associated with increased social and economic participation. These are likely to be very important - particularly for younger age groups.

However, it is also important to emphasise that the level of disabled peoples’ participation in economic activity is determined by a much wider range of factors than the straightforward ratio of earnings to benefits. Perhaps even more important are the range of barriers to employment associated with both wider labour market conditions and the organisation of work itself.

Unfortunately, the considerable range of barriers to economic activity faced by older people will mitigate against these benefits. For example, recent research on what happens to people after a spell on incapacity benefits in the UK shows that there is only a very slow rate of return to economic activity for most people in older age groups and, once past the age of around 50, the prospects of ever finding employment are virtually zero. It is important therefore that we do not replace one narrow focus with another as this would create a very real danger that this could be used to justify the exclusion of older people from the benefits of Independent living.

Over the longer-term there may also be financial benefits in the form of potential savings associated with a reduction in demand for health and social services. For example, research on ageing and disability suggests that people who have been living independently for longer periods in their youth and middle age may be less inclined to seek assistance from directly provided social services when they are older.

Other savings may come from a reduction in demand for acute and/or long- term health care on the basis that full independence may well be associated with higher levels of quality of life and the associated benefits in terms general well-being. Where living independently also contributes to increased economic activity then obviously people will also be in a better position to build up their own financial resources for older age. This is in fact becoming increasingly important given that the proportion of pensioners’ incomes coming from savings and occupational pensions has been rising markedly over the last two decades.

The other side of the coin however is that there is a growing divide between cash and asset rich pensioners and those who have not been able to build up their financial resources because of their limited participation in economic activity. Again, this suggests that there are potential benefits in investment in Independent living earlier in the life course as, if people are not able to build up sufficient resources they will inevitably remain dependent on a higher level of state support when they are older. Given the well documented association between economic activity, financial resources and health, such investment may in turn contribute to a reduced demand for acute and/or long-term health care. However, at this stage, these are little more than hypotheses which need to be tested.

Another of the potential benefits of investment in Independent living could be a reduction in overall levels of dependency, including dependency on informal support from families or ‘carers’ - who would themselves be enabled to increase their levels of participation in other areas of social and economic life. However it is important to keep in mind that this would, in turn, mean a reduction in the existing informal cost subsidy from carers. So, this would also need to be factored in to any analysis of the costs and benefits of investment in Independent living.

The importance of this factor can be demonstrated by reference to the scale of subsidy provided through informal support systems. A recent study in Ireland, for example, indicated that family members spend an average of 47 hours a week in providing informal support, rising to 86 hours a week for people in the oldest age groups. These findings are very similar to those from UK research on comparisons between the costs and benefits of payments schemes and services. This indicated an average of 40 hours informal support per week for people with packages based on direct or indirect payments, and 55 hours per week for people using directly provided services. While this source of support - by definition - has no monetary value attached, this does not mean that is free because there are of course indirect costs attached.

Concluding comments

Most of this discussion has focused on the economic arguments about the value of investment in Independent living. Obviously, this is partly because it is what the conference organisers requested as the topic for this paper. However, it does also raise some broader questions about what should be seen as the fundamental justification for investing in Independent living. To a large extent, the arguments presented in this paper reflect the agenda set by utilitarian economics which defines a properly functioning economic and social system as one which gives priority to efficiency over equity.

There are of course alternative standards which could be used to assess the value we place on different forms of investment - particularly values based on social justice and basic civil rights. While many of us may well feel that these are more appropriate values in the context of enabling independence, we have to realise that the parameters for the debate are constrained by the principles of utilitarian economics which are central to the organisation of contemporary public support systems.

This in turn suggests that moral arguments based on the principles of rights and equity alone will not be likely to cut much ice unless additional economic arguments can be mobilised. This paper has hopefully provided some ideas on how such arguments could be effectively constructed.

© G Zarb 1998

References

Zarb, G. and Nadash, P. Cashing In on Independence: Comparing the Costs and Benefits of Cash and Services, Derby: BCODP/PSI, 1994

‘I am in Control’: Research into users’ views of the Wiltshire Independent Living Fund, Devizes: Wiltshire Community Care User Involvement Network/Wiltshire and Swindon Users’ Network

Morris, J. Independent Lives? Community Care and Disabled People, Basingstoke: Macmillans, 1993

Unell, J. Kings Fund Major Grant Programme Community Care Projects, London: Kings Fund, 1994 (includes short report on the Haringey On-Call Support service).

Morris, J. The Shape of Things to Come? User-led Social Services, London: Social Services Policy Forum/National Institute for Social Work, 1994

Note: Further background information on the Haringey On-Call Support service can be obtained from Gerry Zarb at the Policy Studies Institute.

Arthur, S and Zarb, G. Measuring Disablement in Society Working Paper 4 - Barriers to Employment for Disabled People, PSI, 1995

Barnes, C. Disabled people in Britain and discrimination: a case for anti- discrimination legislation, Hurst & Co, 1991

Berthoud, R, Lakey, J and McKay, S. The economic problems of disabled people, PSI, 1993

Zarb, G. and Oliver, M. Ageing with a Disability: What do they expect after all these years?, London: University of Greenwich, 1993

McKay, S. Pensioners’ Assets: A review of the evidence, London: PSI, 1992

Blackwell, J, O’Shea, E, Moane, G, and Murray, P. Care Provision and Cost Measurement: Dependent Elderly People at Home and in Geriatric Hospitals, Dublin: Economic and Social Research Institute, 1992

Zarb, G. and Nadash, P. Cashing In on Independence: Comparing the Costs and Benefits of Cash and Services, Derby: BCODP/PSI, 1994

Questions and observations

One person noted the differences between the situation of younger disabled people who able to achieve Independent living, albeit with a struggle, and older people who invariably have no option but to go into residential care.

Dr Michael Oliver picked up this point, saying that even amongst those who are sympathetic on this issue , "the basic assumption remains that the appropriate place for older people is in a home". He noted his growing concern about his own situation as he gets older, and that many organisations for disabled people are failing to address the issue.

Rachel Hurst followed on from this by observing that issues around Independent living are not being addressed in general social policy debates. She noted particularly that there is discussion of disability in the current moves to address social exclusion in the UK, even after having made direct representations to the Prime Minister. She recounted being put on a waiting list to go to a European social policy conference, saying, "disabled people should be up there talking about the solutions that we have come up with, because our solutions and the way we are approaching everything are examples of good, hard social policy of the type that they want and need. But they will not recognise them because they come out of the socially excluded mouths of disabled people."

She concluded that breaking down these barriers is, "one of the most important hurdles that we have to overcome."

Jon Snow followed this by saying that this is becoming a wider political issue as there is a growing care industry. "Old people farming is growth industrial from which people are making very large sums of money," so there are people with a financial interest in seeing older people put into residential homes. He went onto consider the difficulties of educating society at large about the benefits of Independent living, noting that direct action can be very "enlightening" but not without drawbacks, and that the way forward on this is uncertain.

Nick Danagher made some comments about the importance of employment. Jon Snow agreed, saying that some of the most important progress is made from disabled people taking their place in at work. He pointed his experience in the British media where disabled people are almost wholly excluded.

Jane Campbell moved on to consider how some organisations "for" disabled people, which are not controlled by disabled people, are trying to take over ideas around Independent living. She pointed to the example of the Leonard Cheshire Foundation in the UK, which had published achieved a high public profile by publishing research about discrimination against disabled people and a major advertising campaign, while at the same time she sees the Found as keeping disabled people dependent and not consulting the Independent living movement.

She questioned whether these types of organisation are really committed to Independent living, "or are they just learning our language." In terms of reaching a wider audience, she argued that we need to be cautious of organisations like this taking over our ground.

Rachel Hurst also noted that such organisations also often employ a token few disabled people who are used to justify it as involving disabled people.

Jon Snow noted that this is a "double edged sword," as we do want to see disabled people doing the jobs that they want to do, particularly if that job relates to educating the wider world on issues around disability.

This led onto a short debate about whether charities which are not controlled by disabled people can provide true Independent living. It was suggested that the key difference between what the Independent living movement defines as "Independent living", and what organisations "for" disabled people would describe as "independent living," is that it is rights based.

The way forward was said to be picking up the case made in Gerry Zarb’s paper and to push the arguments about the economic and social benefits of true Independent living as defined by the movement.

A representative of the UK’s Royal Commission on the Future of Long-Term Care noted his appreciation of the debate and gave delegates information on how to make submissions to the Commission, and that it is considering issues relating to younger people as well as older people . He went to say that the Commission is considering fundamental issues about long-term care, such as that about whether it has to be instutionally based, and that it is considering all possible options for the future.

Jon Snow concluded the morning session by thanking the speakers and participants in the subsequent debate.