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A
REPORT ON THE COSTING OF THE OLDER PERSONS BILL
Tuesday 05 APRIL 2005
INTRODUCTION
The process of developing legislation for Older Persons was initiated in 1999, and it culminated with the development of a draft Bill in 2002
The Bill has incorporated both the recommendations of the Ministerial Committee and the three priorities of the Madrid International Plan of Action-on-Ageing
A new legislation had to be developed as the legislation was no longer addressing the needs of Older Persons
A significant percentage of the Budget was focusing on residential care
BACKGROUND
Objectives of the Older Persons Bill
Maintain and promote the status, safety and security of Older Persons
Maintain and protect the Right of Older Persons as recipients of services.
Regulate the registration of facilities for Older Persons, and Combat the abuse of Older Persons
The costing had to consider
Fiscal risks Administrative costs and cost drivers, and Institutional Arrangements
DEFINITION OF KEY CONCEPTS
Older person is a female person aged 60 or over and a male person who is 65 years old and above
Community-based care refers to domestic and personal care that a consume can access nearest to home, which responds to need, encourages local involvement and supports family and community values and responsibilities
Vulnerable Older Person is a person over the age of 60 who is in receipt of a social security grant by qualifying through a
means test and is eligible for other state social services. These are Older Persons in the community that are at risk of not having their needs met due to inadequate or inaccessible resources, and as a result are susceptible to deprivation or relative deprivation
DEFINITION OF KEY CONCEPTS CONTINUE
Home based care is the provision of health and personal care services rendered by formal and informal caregivers in the home in order to promote, restore and maintain a person’s maximum level of comfort function and health including care towards a dignified death (World Health Organisation)
Capital Programme is a programme for government and community infrastructure development in service delivery to Older Persons
Administration Programme is the internal programme for government at national and provincial level, responsible for, amongst other co-ordination, policy and legislative development, monitoring and evaluation, funding and the maintaining of relevant registers
PROJECT OBJECTIVES
Understand the contents of the Bill in terms of an implementation plan Analyse each component of the Bill in order to cost the OPB Assess the fiscal and budgetary implications Determine the cost implication at a National, Provincial and Local levels across the various sectors Determine the cost implications of priorities as determined by the DSD for the Two-year MTEF cycle period Analyse the various components of the Bill, and thereafter cost
the components Facilitate consultative processes jointly with National department
and Treasury
CHALLENGES
Short timelines
Draft/wording of the Bill
Unavailability of adequate and valid information on Older Persons
Non-standardisation of services resulting in disparity in current costing
LEGAL ASSESSMENT
Legal assessment of the Bill was done with a view to:
Identify and determine cost drivers
Identify the rights and obligations (both compulsory and discretionary obligations) of the various parties recorded in the Bill
Identify the risks of litigation related to the implementation or enforcement of certain provisions of the Bill
Table 4: Distribution of Total Vulnerable Older Persons (60+) by Province
Distribution of Total Vulnerable Older Persons (60+) by Province
1996Actual
2001Actual
2005guestimate
2006guestimate
2007guestimate
2008guestimate
2009guestimate
Province
Eastern Cape 462,157 514,194 560,510 573,132 586,039 599,235 612,730
Free State 155,218 172,053 186,982 191,038 195,182 199,416 203,742
Gauteng 397,411 473,681 546,408 567,381 589,159 611,773 635,255KwaZuluNatal 482,833 567,572 647,262 669,981 693,498 717,841 743,038
Limpopo 305,669 355,237 401,321 414,337 427,775 441,649 455,972
Mpumalanga 142,223 170,497 197,612 205,469 213,638 222,133 230,964
North West 194,866 234,438 272,524 283,593 295,110 307,096 319,569NorthernCape 54,604 58,979 62,759 63,765 64,787 65,825 66,880WesternCape 262,659 307,061 348,587 360,372 372,556 385,152 398,173
South Africa 2,457,641 2,853,712 3,223,965 3,329,068 3,437,744 3,550,119 3,666,323
PROGRAMMES
Costing was done for the following programmes
Residential Care Programme Integrated Community Care and Outreach Programme Home-based Care Programme Poverty Relief and Economic Development Programme Capital Programme Administration Programme for National and Provincial
Table 5: Composite Table for 75% of Total Costs for All Programmes for the Different Levels of Carebased on estimated VOPs (3,329,068) for 2006/07
Basic Care Intermediary Tertiary CareProgrammes
TargetNo.
Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost
Residential Care 66,581 R 1,788.25 R 1,500,199,762.95 R 2,474.00 R 2,075,489,564.40 R 2,528.00R2,120,791,276.80
Integrated Community Care +Outreach 665,814 R 264.67 R 2,220,384,491.39 R 304.67 R 2,555,954,747.39 R 318.00
R2,667,783,535.20
Home-based Care 99,872 R 391.67 R 492,872,514.62 R 617.50 R 777,054,096.00 R 617.50 R 777,054,096.00Poverty Relief + EconomicEmpowerment (100%) 11,625 R 1,475.00 R 216,050,625.00 R 216,050,625.00 R 216,050,625.00
Capital (100%) - - R 24,150,000.00 - R 24,150,000.00 - R 24,150,000.00Administrative: National +Provincial (100%) - - R 30,249,225.16 - R 30,249,225.16 - R 30,249,225.16
TOTAL COSTS R 4,483,906,619.12 R 5,678,948,257.95 R
5,836,078,758.16
Have factored in a 5% inflation increase on 2005/06figures.
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TABLE 3 DISTRIBUTION OF TOTAL OLDER PERSONS(60+) BY PROVINCE
Distribution of Total Older Persons (60+) by Province
1996
Actual 2001
Actual Growth
2005 guestimate
2006 guestimate
2007 guestimate
2008 guestimate
2009 guestim
ate Province Eastern Cape
531,276
591,095 11.26%
644,338
658,848
673,685
688,856
704,368
Free State
178,432
197,785 10.85%
214,947
219,609
224,373
229,240
234,213
Gauteng 456,847
544,524 19.19%
628,127
652,237
677,272
703,268
730,262
KwaZulu Natal
555,044
652,457 17.55%
744,065
770,182
797,216
825,199
854,165
Limpopo 351,384
408,365 16.22%
461,342
476,304
491,752
507,701
524,167
Mpumalanga
163,494
195,996 19.88%
227,167
236,199
245,590
255,354
265,507
North West
224,010
269,500 20.31%
313,282
326,006
339,246
353,025
367,362
Northern Cape
62,771
67,800 8.01%
72,146
73,302
74,476
75,669
76,882
Western Cape
301,942
352,984 16.90%
400,720
414,268
428,274
442,754
457,723
South Africa
2,825,200 3,280,506 16.12% 3,706,133 3,826,955 3,951,885 4,081,066
4,214,648
Table 6: Composite Table for 100% of Total Costs for All Programmes for the Different Levels of Care based on estimated VOPs (3,329,068) for 2006/07
Basic Care Intermediary Tertiary Care Programmes
Target No.
Unit Cost Total Cost Unit Cost Total Cost Unit Cost Total Cost
Residential Care 66,581 R 2,384.00 R 1,999,986,710.40 R 3,299.00 R 2,767,599,059.40 R 3,377.00 R 2,833,034,866.20 Integrated Community Care + Outreach 665,814 R 352.89 R 2,960,484,691.00 R 406.22 R 3,407,883,734.81 R 424.00 R 3,557,044,713.60
Home-based Care 99,872 R 522.22 R 657,154,963.58 R 823.33 R 1,036,067,933.38 R 823.33 R 1,036,067,933.38 Poverty Relief + Economic Empowerment (100%) 11,625 R 1,475.00 R 216,050,625.00 R 216,050,625.00 R 216,050,625.00
Capital (100%) - - R 24,150,000.00 - R 24,150,000.00 - R 24,150,000.00 Administrative: National + Provincial (100%) - - R 30,249,225.16 - R 30,249,225.16 - R 30,249,225.16
TOTAL COSTS R 5,888,076,215.14 R 7,482,000,577.74 R 7,696,597,363.34
Have factored in a 5% inflation increase on 2005/06 figures.
PROJECT: APPROACH
Comprehensive analysis of the Older Persons Bill and proposed amendments
Comparative analysis between the Older Persons Bill, its proposed amendments and the Aged Persons Act, and
Cost Driver analysis to effect implementation and maintenance of Older Persons Bill
PROJECT: METHODOLOGY
METHODOLOGY
Legal Matrix – compulsory and discretionary obligations
Costing Model
Social Services Delivery Model
NORMS
The norms upon which the costing was done is based upon policies and service delivery models of the Department of Social Development
The baseline data of Older Persons used is based on the number of older persons who are currently in receipt of the Old Age
Grant, as these have been means tested for vulnerability
Target groups - 2% of the total vulnerable older persons is a target for accommodation in a residential care facility (old age
homes)
NORMS CONTINUE
3% of the total vulnerable Older Persons for home-based care. For those Older Persons who require frail care services whilst
remaining in the community
20% for integrated community care and outreach programmes. This is to ensure that the Older Persons remain independent at the highest possible level of functioning in the community
COSTING MODEL
The Model used to cost the various aspects of the Bill was based on a range of variables, namely:
Demand variables – indicating the volume of a particular service that is required, for example the number of vulnerable Older
Persons to be serviced as per the Core Programmes identified
Process and input variables – that give information on the different types of inputs (cost drivers) required to deliver the services, for example the number or health care professionals/social workers needed to manage a day-care facility, and
Costing variables – namely the costs of the different inputs required to provide the service
LEVELS OF CARE
The programmes have been costed according to the following levels:
Basic care – the minimum level at which the service can be provided
Intermediate care – minimum level plus additional services such as:
- ancillary health services occupational (therapy and physio- therapy)- recreational activities and others
Tertiary care – more advanced and luxurious care such as that which is provided in retirements or private homes (Please refer to attachments)
FINDINGS AND ANALYSIS
Current allocation for 2005/06 = R462m
For 2006/07 = R514m
Projected estimates as set out in table 7, exceeds the Department’s budgetary allocation
Consideration must be given to the fact that costing models give the actual cost of basic services required for Older Persons
Provision regarding monitoring processes will increase the number of social service personnel, required to execute the Bill
Innovations introduced by the Bill e.g. register of older persons will increase administrative functions
FINDINGS AND ANALYSIS CONTINUE
The new processes to manage and operate a facility expands the administration function of the facilities and the Department
The right to reasonable access to basic service, places a burden to the government to make services available
Notification of Older Persons’ Abuse and the notification for thereof demand an increase of professionals to notify, investigate, report and take action
KEY OBSERVATIONS
The demand for services outway the available services
Provision for frail care is critical
Service points are more required in rural areas as revealed in poverty gaps
The implementation of the Madrid Plan of Action on Acting demand a different scope of services
The development of community based care and support services is critical
Province
Old Age Homes Service Centres NPOs* Poverty Relief programmeNo.
Old Age
Homes
SubsidyNo.
Residents
Subsidy / Person
No. Service Centres
Subsidy / Person / Month
Total Subsidy
SubsidyProvincial ProjectsR’000
Eastern Cape
54R
45,772,000 3,643
R 1,047 75.18
5,530,000
1,064,282
5,000
Free State
38R
12,906,000 717
R 1,500 78
8,259,000
160,187
2,500
Gauteng 99R
62,358,809 9,403
R 1,157 120 78.00
5,288,879
4,933,378
750
KwaZulu Natal
54R
48,468,240
2,362 R 1,710 73
80.00
2,472,000
2,436,198
5,000
Limpopo 8R
9,060,592 893
R 2,470 50 78.25
3,408,101
181,215
5,000
Mpumalanga
19R
9,387,479 1,228
R 1,215 50
165.00
3,947,107
1,010,800
2,500
North West
26R
23,852,400 1,529
R 1,300 42 70.43
2,738,318
87,429
2,500
Northern Cape
27R
5,836,800 1,216
R 400 19
120.00 1,455,708
1,333,712
750
Western cape
136R
81,500,000 10,854
R 1,215 168 93.90
11,532,000
1,099,000
1,000
National 1,700,000
Total 461299,142,32
0 31,845 654 446,311,11
3
R
12,306,201
R 25,000
TOTAL Expenditure: R382 779 634
* The second last column of Table 2 represents social work services rendered by NGOs
Table 2: Current Expenditure and Coverage per Province for Old Age Homes, Service Centres and NGOs
CONCLUSION
Government has to invest in community based services and target programmes that reach the poor of the poorest
Resources should be driven by the needs, with the intention of keeping Older Persons independent within their community,
functioning at the maximum potential level
T H E E N D