One of the legacies of the command economy in Central and Eastern Europe and the former Soviet Union is the development of a social protection system for vulnerable individuals focused on institutional care. It has been well established that the approach of removing a child or an adult from the family and the community is more expensive per client served than more inclusive approaches which are designed to support individuals within their own families and communities, main streaming them as much as possible. Institutional approaches also produce worse outcomes than community-based approaches for most individuals.
Countries seeking to change the model of social protection services have faced a number of constraints. Financing new programs requires first and foremost redirecting resources away from institutions. If countries want to develop the supply of new programs, how can they do so in an affordable manner? How should they change the financing flows to support a menu of new options, better tailored to the needs of individuals and without putting the burden of financing on the vulnerable people?
The objective of this paper is to provide a framework to help countries re-orient their financing systems for social care, so that they can implement a change program for the social care system. The ultimate objective is that countries use more family-based and inclusive care programs, and use institutional care as a last resort, thus supporting families to care for their vulnerable members rather than place them in residential care programs. Family-based and inclusive care programs are generally more effective in meeting social needs and, at least on a unit cost basis, less expensive.
Changing the financing system – although necessary -- is not sufficient to achieve the goal of less institutionalization. Other components of a change program would include reforms to ensure quality of provision such as standards and accreditation, training, information to clients, monitoring, etc., and those which improve the gatekeeping and needs assessment process, including rigorous outcome and impact evaluation. The effectiveness of the financing framework in doing its job is determined in part by the effectiveness of these other policy reforms. This paper: (a) reviews key concepts in social care financing; and (b) applies them to the problem of changing social care models in ECA countries.
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