Almost everyone will grow old one day. And pretty much everything in our current pension model is being challenged by the demographic shift towards an aging population. Not only do we have more control over whether and when we want to have children, but thanks to medical advances, we are living longer than before. This is leading to an unprecedented demographic shift, with a much larger older population relying on the contributions of a smaller working population. This not only calls into question the financing of Germany's social security system, but also a large part of the economy, which depends on the working population. The problem is exacerbated by the fact that, although we are living longer, we are not necessarily living healthier lives. Diseases such as dementia are on the rise, and growing social inequality is contributing to poorer health among people on lower incomes.
Technological innovations are primarily discussed as a solution to these societal challenges. At the same time, this is an opportunity to ask fundamental questions and discuss solutions: What might a society and economy geared toward care, especially elderly care, look like?
Global care chains in elderly care
Elderly care in Germany, as in most parts of Western Europe, is largely dependent on female, migrant workers. Central European caregivers commute between Germany and their home countries for their jobs. Working conditions are sometimes very precarious. Government-sponsored programs such as the GIZ's Triple Win program (German Society for International Cooperation) recruits nurses from countries such as Tunisia and the Philippines. This not only alleviates the shortage of nurses in Germany, but also indirectly contributes to strengthening the economies of the sending countries. Nurses often send a portion of their wages home. Furthermore, the program alleviates a perceived oversupply of nurses in the labor markets of the sending countries.
However, the "Triple Win" program relies on the inequality between these countries and Germany; otherwise, there would be no reason for the caregivers to come to Germany. There is a conflict of interest between Germany's healthcare needs and the development of these countries. Already fewer and fewer nurses are choosing to work in Germanybecause they feel that they are not paid enough there, as the job requires not only qualifications but also the acquisition of a foreign language.
Elderly care in Germany can thus be compared to a kind of supply chain. Public debates primarily focus on the shortage of skilled workers. Less discussed is why nursing is an unattractive profession. If nursing professions remain unattractive, supply will become increasingly scarce while demand increases. This results in rising costs and increasingly less affordable care, regardless of pension levels. Furthermore, more work is being shifted to the private sector, where unpaid care work is once again primarily undertaken by women and men of color.
Care according to needs rather than profit
Planning care for older people is complicated because it's less predictable. Children often have similar developmental stages, but people age at completely different rates. An 80-year-old person may be perfectly fit, while a 60-year-old may already need a lot of support. These differences mean that elderly care requires a high degree of personalization.
Now let's assume a patient does not want to maintain their usual care routine. Should the caregiver ignore the wishes or adjust the routine? And if the routine is adjusted, how is it documented and does it fit into the predefined categories of the billing system? For reasons of price efficiency and transparency, care interventions are determined according to certain norms. Deviations from these norms are difficult to accommodate because the caregivers' scope for individual decision-making is limited. This is particularly the case with dementia, where the emotional burden can be volatile and as debilitating as the physical limitations themselves. Furthermore, as a deviation from neurological and intellectual norms, dementia poses a particular challenge for technological developments, which induce certain normative assumptions in their design.
Given the different needs in elderly care, the provision of these services by the Capabilities Approach be improved. In contrast to a system in which access to care is based on contributions, the Capabilities Approach recognizes that people have different needs to achieve a minimum level of well-being and allocates resources based on these needs.
What comes after the contribution model?
Undoubtedly, the move away from a contribution model raises questions about how to finance such a system. The Capabilities Approach can be costly because it addresses the needs of each individual and therefore requires even more caregivers. However, increasing salaries and improving working conditions could attract more caregivers and lead to targeted financial improvements for some of the financially weaker segments of the population, namely FLINTAs*. These traditionally perform a large portion of unpaid care work, resulting in lower pension contributions and thus less access to benefits in old age.
A lot of money is currently being spent on elderly care in Germany, and the German government provides subsidies depending on the level of care required. Investors see the need for care as a business opportunity. There are a growing number of private nursing home chains. Nursing homes are considered by some real estate and private equity firms to be one of the most promising investment opportunities, as the market is almost guaranteed to grow with an aging population. To increase profits, labor costs are often reduced by reducing the number of contracted caregivers, leading to crushingly poor working conditions. Although collective bargaining has increased the wages of caregivers, this has not alleviated the pressure of staff shortages. Furthermore, companies pass on a large portion of this increase to the care recipients or their families in order to maintain or increase profits. This limits access to care based on income and has an additional negative impact during economic downturns.
In contrast, public investment in publicly owned care structures can employ more caregivers and avoid passing costs on to individuals. This ensures that everyone, regardless of income, has access to high-quality care and reduces external costs, such as the emotional burden on family members, which are currently inadequately addressed. More better-paid workers mean a more resilient population, less dependent on government benefits like citizen's allowances, and more able to both spend money and invest in the local economy. The workforce is also better able to care for themselves, which, following the principles of preventive medicine, can reduce overall care needs and costs in the future. Without the pressure to divert revenues toward the profits of private investors, there is even a possibility that such publicly owned structures could create self-sustaining communities in the long term. More importantly, it will help people live lives of prosperity and dignity.
Photo: Anna Shvets via Pexels
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