Investigation of Individualised Funding And

Investigation of Individualised Funding and

Local Area Coordination-Type processes:

A Literature Review.

Prepared for:
Disability Policy
Disability Support Services Group
Ministry of Health

Prepared by Bennett & Bijoux Limited

Contact details:

Sara Bennett

Bennett & Bijoux Ltd

P O Box 56053

Dominion Rd

AUCKLAND

Ph 021 369 039

Email:

16 November 2009

Table of Contents

Summary

Key Findings: Individualised Funding

Key Findings: LAC-Type Processes

Introduction

Method

Individualised Funding

1.Introduction

2.Background and Context

3.Description of Individualised Funding

4.The Outcomes for Disabled People of Implementing Individualised Funding Arrangements

5.The Costs and Benefits of Individualised Funding Arrangements Versus Other Alternatives

6.The Requirements for Implementing Individualised Funding Processes.

LAC-TypeProcesses

1.Introduction

2.Background and Context

3.Description of LAC-type processes

4.Key features of Local Area Coordination-type processes

5.Outcomes for disabled people from LAC-type processes

6.Costs and benefits of LAC-Type processes

7.Implications that LAC-type processes have for other parts of the New Zealand disability support system

8.Requirements for implementing LAC-type processes

Discussion

References

Appendix One:

Person-Centred Approaches

Acknowledgements

Many people have been very generous in their contributions of time and expertise to this literature review.

Bennett & Bijoux Ltd would especially like to acknowledge the assistance of Jenny Moor andJohn Wilkinsonwho both provided invaluable support, insight and good humour throughout the research process.

We would also like to thank John Wilkinson, Marsha Marshall, Amanda Bleckmann, Karen Smith, Mairi Lauchland, Eddie Bartnik and Martin Andersonfor their important contributions though both interviews and provision of otherwise unattainable information.

Finally we would like to thank Kristie Saumure at the Ministry of Health Library, and Michelle Hill at CCS Disability Action Information Services for all their help and assistance during this review.

Summary

Part of the Government Response (New Zealand Government, 2009) to the Inquiry into the Quality of Care and Services provision for People with Disabilities report of the Social Services Select Committee (Social Services Committee, 2008) is a commitment to approaches that give disabled people greater choice and control over their lives, and which supports participation in their communities.

To inform part of a report to the Ministerial Committee on Disability Issues, this literature review was commissioned by the Ministry of Healthto examine the available evidence pertaining totwo strategies: individualised funding (IF) and local area coordination (LAC).

Data gathering has included both published and unpublished material, where available, and written material has been complemented by five interviews with seven key individuals.

This literature review sets out key themes and findings to emerge from the literature relating to the following issues:

the key features of IF arrangements;
the outcomes for disabled people of implementing IF arrangements;
the costs and benefits of IF arrangements versus other alternatives; and
the requirements for implementing IF processes.
the key features of LAC-type processes;
the outcomes for disabled people that result from LAC-type processes;
the costs and benefits of LAC-type processes;
the implications of LAC-type processes have for other parts of the disability support system; and
the requirements for implementing LAC-type processes.

A summary of findings is provided below. Fully referenced discussion of these is included in the body of the report. In addition, as both IF and LAC-type processes are underpinned by the attitudes and philosophy of person centred approaches, an outline of person centred approaches in provided as Appendix One.

Key Findings: Individualised Funding

Over the past three decades, individualised funding (IF) has become an increasingly prevalent part of the disability policy landscape in a number of jurisdictions around the world, including New Zealand, Canada, the United Kingdom, the USA and Australia.

Internationally, IF schemes have been developed in response to a demand for increased independence, choice, control, self-determination and empowerment from people who use disability services (Buchanan, 2006; Lord & Hutchison, 2003; Social Care Institute for Excellence., 2009).

There are a variety of definitions of IF in the literature, and all acknowledge that IF is a resource allocation system that assigns the allocation of support dollars directly to the person, rather than a service agency. As well, IF enables the person living with disability to have control over how resources are used to provide support and to enable the attainment of goals and aspirations (Duffy & Sanderson, 2005). In essence, IF models are designed to focus on the strengths and talents of people with disabilities, rather than dwell on their deficits (Bigby & Fyffe, 2009). Stainton defines IF as:

“Funding allocated directly to an individual or in the case of a child, their parents or legal guardian, to provide the support necessary to meet disability related needs and to assist individuals to become contributing citizens”

(Stainton, 2008: 2).

Central to these definitions is the concept that IF is a payment mechanism for disability support. It is based on a philosophy of person-centred control, where disabled people are empowered and enabled to live ordinary lives and have control and choice over that life. There is general agreement that IF approaches have two fundamental characteristics:

The amount of funding is determined by direct reference to the individual and/or family’s specific needs, and aspirations;
The individual and their family determine how funds are used to meet those needs eligible for funding

(Blackman, 2007; Duffy, 2007a; Harman, 2005; Lord & Hutchison, 2003; Stainton, 2008).

Description of Individualised Funding

Developing a single description of IF is challenging as there is a great deal of variation in the different terms and technical details of the models used to describe a shift towards greater control by the person living with disability in the services they receive. The variety of terms used to describe IF indicates that the schemes vary across technological differences and details, particularly relating to the extent to which the person living with disability has control over the range of transactions associated with planning, brokering and managing their support. Schemes must be understood within the cultural context and public policy framework in which they are being administered; the values base and models of citizenship they reflect; and the people who are eligible for the various programmes. Schemes vary considerably, for example, in their goals, eligibility criteria, target groups and objectives (Social Care Institute for Excellence., 2009; Stainton, 2008). Many IF programmes have a holistic view of quality of life, and consider employment supports, community living, leisure and relationship building (Lord & Hutchison, 2003).

Individualised funding can take many forms, including:

“direct funding to the individual with a disability and/or family;
Individualised funding that may be portable, that is, moved with the individual as they move between options;
Funding provided to a service provider that is ‘tied’ to an individual;
Funding managed by a third party (e.g., a fiscal intermediary);
Discretionary funding where funding is tied to a particular purpose such as home modifications or transport; and
Funding tied to programme parameters such as family, day or accommodation support services”

(Craig & Cocks, 2008: 9).

The Key Features of Individualised Funding Arrangements

Various authors have considered the key components of IF arrangements that are shared across jurisdictions, and that are required to support a viable approach to individualised disability supports. In a recent review of IF programmes from Canada, the United Kingdom, Australia and USA, Blackman (2007) suggests there is a basic structure to IF with elements which are common to all models, and the principal components or key elements of IF include:

Funding allocated to the individual (i.e., not to groups or agencies).
Initial application and eligibility determination.
Financial assessment or means testing (i.e., to identify the individual’s charges or contribution to cost of plan).
A system for financial administration, oversight and evaluation.
Identification of the broad parameters or types of support/service areas (e.g., personal care supports, residential, employment) for the use of the funding.
Formation of a personal support network.
Identification of funding limits.
Assessment or identification of needs and available resources.
Personalized support plan.
Approval of plan and the level of financial support.
Negotiate and finalize the individualized contract.
Funding allocation methods.
Support network, including staffing mechanisms, for the utilization of the funds.
Accountability guidelines (i.e., monitoring mechanisms) for the use of public funds and the protection of the person (i.e., risk management).
Appeal or conflict resolution mechanisms.
Review, audit, and evaluation processes

(Blackman, 2007).

Acknowledging the variation of models of IF, and the variation with which they are implemented, different authors emphasise different components of IF to suit their local experiences. However, summarising the evidence, the following components are commonly described as key aspects of IF arrangements: framework of supporting principles; supportive policy frameworks; focus on enhancing choice and control; support; planning and assessment; funding mechanisms; accountability and risk management; community capacity development; and reflexive practice or willingness to ‘learn as you go.’

The development and implementation of IF models varies across jurisdictions, and is influenced by the cultural context and public policy framework that they are being administered, the values base and models of citizenship they reflect. The report includes a brief description of the key components of the major IF models in New Zealand, the United Kingdom, the United States, Canada and Australia, to demonstrate the variation in international scope and practice of IF arrangements.

The Outcomes For Disabled People Of Implementing Individualised Funding Arrangements

IF is a key mechanism that is increasingly being used to make service delivery systems more responsive to the control, choices and individual needs of people with disabilities (Blackman, 2007; JSL Management Consulting., 2007; Lord & Hutchison, 2003; Williams, 2007). Proponents of individualised funding argue that there is a strong body of evidence that it is effective in achieving better outcomes across a range of social measures for people with disabilities and their families (Glasby & Littlechild, 2002; Glendinning, et al., 2008; Stainton & Boyce, 2004). Many benefits have been attributed to IF, including increased self-determination; an increased reliance on natural supports; avoidance of having to fit individuals into pre-determined and incompatible groups; promotion of integration and full inclusion of people with disabilities with the community; and creative programmatic solutions (Blackman, 2007).

Overall, while the available evidence demonstrates positive impacts of IF arrangements for people living with disability, increasingly it is being suggested that a cautious approach needs to be taken to assessing the impact of IF across a range of levels (Spandler, 2004; Stainton, 2006). A critical analysis of the literature indicates that there are limitations to the research and evaluation that has been undertaken to date. For example, the literature demonstrates considerable variation in the scope and focus of evaluation studies of IF, and studies are often small-scale and characterised by small sample sizes. Furthermore, much of this literature emphasises the experiences of people who are most likely to be offered, or to take up, IF schemes and there is little information about other population groups. The experiences of ethnic minority service users are absent in the literature on IF internationally. Little is known about the implications for black, Asian, lesbian or gay service users, in spite of previous research demonstrating barriers to access for disability supports for these groups (Social Care Institute for Excellence., 2009).

Within the parameters described above, the literature includes a broad range of evidence describing generally positive outcomes of IF for people with disabilities, and their families and carers. The largest body of evidence focuses on identifying links to consumer satisfaction, quality of life, the growth in self-esteem by a service user or the sense of empowerment they may feel (Stainton, 2006; Williams, 2007). Various authors report that service users report higher satisfaction with IF compared to other options, they believe they are living more independently and are pleased with the greater choice and control they have (Carlson, Foster, Dale, & Brown, 2007; Dawson, 2000; Glendinning, et al., 2008; Houston, 2004; Scourfield, 2007; Stainton & Boyce, 2004).

In addition, IF initiatives enable increased control over a range ofdecisions such as choice of staff, time that support is provided, and provide greater flexibility (Dawson, 2000; Hatton & Waters, 2008; Lord & Hutchison, 2008; Stainton & Boyce, 2004).

Service users of IF schemes have reported improvements in quality of life asmeasured through a range of indicators, including improved self esteem, social, psychological wellbeing, community presence and participation, employment, education (Glasby & Littlechild, 2002; Hatton & Waters, 2008; Stainton & Boyce, 2004; Wilson, Benjamin, & Buel, 2008).

Participation in IF schemes has been associated with improved quality of support across a range of dimensions. For example, compared to others, individual budget (IB) holders reported they experienced slightly better outcomes across a range of domains which suggested improved quality of support including personal dignity, safety, meals and nutrition, social participation and involvement, occupation, accommodation cleanliness and comfort (Glendinning, et al., 2008). A key impact of IF is that it enables people with disabilities to live “an ordinary live within the home” (Blyth & Gardner, 2007:239).

In comparison to the volume of research on the experiences of individuals with disabilities who use IF arrangements, there is little research on the impact of IF initiatives on carers, inspite of carers being internationally recognised as having a key role in supporting people with disabilities to manage IF resources and as a source of ongoing support (Social Care Institute for Excellence., 2009). However, the available evidence is positive.

The Costs and Benefits of Individualised Funding Arrangements Versus Other Alternatives

The economic case for IF or other forms of self-directed support is based on the simple but powerful concept that the right level of resources should be put under the control of the right person (Duffy, 2005, 2007b). This suggestion is informed by evidence that traditional models of health and social care are structurally wasteful, as resources are directed to services instead of people. As a result, the disabled person only receives a small amount of the value of the pre-committed resources. In contrast, IF is seen to be a key tool in ensuring that limited resources are used effectively to support individual outcomes.

Summarising the evidence on cost comparisons between IF and standard forms of provision, Stainton (2006) comments that virtually all the evidence across a range of jurisdictions supports better economic outcomes (cost/benefit) for IF without significant cost differentials.

For example, a recent evaluation of the United Kingdom individual budget pilot scheme reported very little difference in the cost of support received by Individualised Budget (IB) holders, and a comparison group (Glendinning, et al., 2008). This suggests that IBs were (at least) cost-neutral compared to the cost of standard mainstream services. The evaluation included an analysis of cost effectiveness of IBs for a range of different service users:

For mental health service users, IBs appeared to be more cost-effective than standard arrangements on social care and psychological wellbeing outcome measures
For younger physically disabled people there appeared to be a small cost-effectiveness advantage for IB over standard support arrangements on social care and psychological wellbeing outcome measures
For people with learning disabilities, IBs were found to be cost-effective with regard to social care only when support plans were established. Standard care arrangements appeared to be slightly more cost-effective than IBs for psychological wellbeing outcome measures
For older people, there was no evidence of a cost-effectiveness difference between IBs and standard support arrangements for social care outcomes. Standard support arrangements were marginally more cost-effective than IBs for psychological wellbeing outcome measures

IB holders reported higher use and higher costs of healthcare services compared to the comparison group. The authors note that it is difficult to know why this is the case, however it is possible that time spend in support planning for an IB may have resulted in the identification of unmet health need, leading to increased use of health services. Based on these findings, Glendinning and colleagues (2008) suggest that IBs have the potential to be more cost-effective than other alternatives, and the advantages are clearer for people with mental health problems and younger physically disabled people than other groups.

In a separate review of the effects of individual budgets for carers, Glendinning et al (2009) report that IBs were associated with statistically significant positive effects on carers’ quality of life, and these positive outcomes were achieved without any higher public expenditure costs, suggesting IBs are also cost-effective for carers.

When IF arrangements are considered from an opportunity cost perspective, the literature describes a range of key barriers (costs) and enablers (opportunities) that influence the ability of funders and service providers to engage successfully with IF initiatives. Strategic leadership and good political support as a key factor that contributes to the extent and ease of implementation, and ultimate probability of success of IF (L. Powers, Sowers, & Singer, 2006; Williams, 2007).

IF requires a different approach to service commissioning, as individuals are empowered to use their budgets flexibly, rather than being placed in pre-purchase service provision. There is an opportunity for funders to identify and stimulate the development of new supply, and to help existing providers adapt their provision (Routledge & Porter, 2008). In order to implement IF initiatives, funders will need to transition from the provision of block grants to service providers, to a more open contractual system where people with disabilities purchase the services of their choice. Duffy describes a series of ‘transitional challenges’ in moving from the present system to a system of IF (Duffy, 2005). Any move to IF will involve unpicking the funding for existing service providers (which is not the same as unpicking the services, as many people may continue to purchase these services). Transition costs may be met by unlocking the wastage in the present system, but this will only be achieved if the future system has benefits in it for disabled people.