Redirecting resources to community based services : a concept paper

A legacy of the command economy in Central and Eastern Europe and the former Soviet Union is a social protection system that emphasizes institutional care for vulnerable individuals. It has been well established that in many cases institutionalization can be more expensive per client served and produce inferior welfare outcomes than more inclusive approaches designed to support individuals within their families and communities. But countries seeking to change the model of services face a number of financial constraints, including redirecting resources away from institutions. How can countries develop the new programs in an affordable manner? How should they change the financing flows to support the new options, without putting the burden of financing on the vulnerable themselves? The objective of this paper is to provide a framework to help countries re-orient their financing systems for social care. The paper first reviews key concepts in social care financing and then applies them to the problem of changing social care models in ECA countries.