Labor supply effects of long‐term care reform in Germany

Many informal caregivers are of working age, facing the double burden of providing care and working. Negative labor supply effects can severely reduce the comparative cost advantage of informal over formal care arrangements. When designing long‐term care (LTC) policies, it is crucial to understand the effects not only on health outcomes but also on labor supply behavior of informal caregivers. We evaluate labor supply reactions to the introduction of the German long‐term care insurance in 1995 using a difference‐in‐differences approach. The long‐term care insurance changes the caregivers' trade‐off between labor supply and care provision. The aim of the reform was to strengthen informal care arrangements. We find a strong negative labor supply effect for men but not for women. We argue that the LTC benefits increased incentives for older men to leave the labor market. The results reveal a trade‐off for policy makers that is important for future reforms—in particular for countries that mainly base their LTC system on informal care.     

Social security income and the utilization of home care: Evidence from the social security notch

This paper exploits Social Security law changes to identify the effect of Social Security income on the use of formal and informal home care by the elderly. Results from an instrumental variables estimation strategy show that as retirement income increases, elderly individuals increase their use of formal home care and become less likely to rely on informal home care provided to them by their children. This negative effect on informal home care is most likely driven by male children withdrawing from their caregiving roles. The empirical results also suggest that higher Social Security benefits would encourage the use of formal home care by those who would not have otherwise used any type of home care and would also encourage the use of both types of home care services among elderly individuals.     

Actions to influence the care network of home‐dwelling elderly people: A qualitative study

Positive impact of care networks of home‐dwelling elderly people may be based on several network mechanisms: navigation to resources, negotiation between participants and contagion of behaviours. Little is known about actions of participants—elderly people, informal caregivers or formal care providers—to activate such mechanisms and generate support. Aim of this study was to identify actions in relation to these network mechanisms. A cross‐sectional qualitative study of 48 interviews with home‐dwelling elderly people, informal caregivers and formal care providers in the eastern parts of the Netherlands was conducted between March and September 2016. A framework analysis on network mechanisms categorised actions. Actions were reviewed by network party and compared between networks to explore relations between actions and networks. Results showed that participants navigated through existing relations to seek support. Actions on negotiation were aimed at ameliorating existing relations. Few examples and no actions on contagion of behaviours were found. Actions seemed driven by incidents and existing relations. Elderly people rarely initiated actions, informal caregivers felt hampered by their position in the network. Consistent patterns of relations between actions and network characteristics did not emerge. We concluded that the full potential of network‐based support of elderly people is probably underused. Particularly promising seem: navigating the neighbourhood for new informal care, using opposite opinions as a catalyst for change and bringing quality of life and dilemma's into dialogue in the network.     

Mixed care networks of community‐dwelling older adults with physical health impairments in the Netherlands

As part of long‐term care reforms, home‐care organisations in the Netherlands are required to strengthen the linkage between formal and informal caregivers of home‐dwelling older adults. Information on the variety in mixed care networks may help home‐care organisations to develop network type‐dependent strategies to connect with informal caregivers. This study first explores how structural (size, composition) and functional features (contact and task overlap between formal and informal caregivers) contribute to different types of mixed care networks. Second, it examines to what degree these network types are associated with the care recipients' characteristics. Through home‐care organisations in Amsterdam, the Netherlands, we selected 74 frail home‐dwelling clients who were receiving care in 2011–2012 from both informal and formal caregivers. The care networks of these older adults were identified by listing all persons providing help with five different types of tasks. This resulted in care networks comprising an average of 9.7 caregivers, of whom 67% were formal caregivers. On average, there was contact between caregivers within 34% of the formal–informal dyads, and both caregivers carried out at least one similar type of task in 29% of these dyads. A principal component analysis of size, composition, contact and task overlap showed two distinct network dimensions from which four network types were constructed: a small mixed care network, a small formal network, a large mixed network and a large formal network. Bivariate analyses showed that the care recipients’ activities of daily living level, memory problems, social network, perceived control of care and level of mastery differed significantly between these four types. The results imply that different network types require different actions from formal home‐care organisations, such as mobilising the social network in small formal networks, decreasing task differentiation in large formal networks and assigning co‐ordination tasks to specific dyads in large mixed care networks.     

Demand of long‐term care and benefit eligibility across European countries

In this paper, we study how elderly individuals adjust their informal long‐term care utilization to changes in the provision of formal care. Despite this is crucial to design effective policies of formal elderly care, empirical evidence is scant due to the lack of credible identification strategies to account for the endogeneity of formal care. We propose a novel instrument, an index that captures individuals' eligibility status for the long‐term care programs implemented in the region of residence. Our estimates, which are robust to a number of different specifications, suggest that higher formal care provision would lead to an increase in informal care utilization as well. In the context of current theoretical economic model of care use, this result points to the existence of a substantial unmet demand of care among older people in Europe.     

Formal and informal care for community‐dwelling frail elderly people over time: A comparison of integrated and usual care in the Netherlands

While integration has become a central tenet of community‐based care for frail elderly people, little is known about its impact on formal and informal care and their dynamics over time. The aim of this study was therefore to examine how an integrated care intervention for community‐dwelling frail elderly people affects the amount and type of formal and informal care over 12 months as compared to usual care. A quasi‐experimental design with a control group was used. Data regarding formal and informal care were collected from frail elderly patients (n = 207) and informal caregivers (n = 74) with pre/post‐questionnaires. Within‐ and between‐group comparisons and multiple linear regression analyses were performed. The results showed marginal changes over time in the amount of formal and informal care in both integrated care and usual care. However, different associations between changes in formal and informal care were found in integrated and usual care. Most notably, informal caregivers provided more instrumental assistance over time if formal caregivers provided less personal care (and vice versa) in integrated care but not in usual care. These results suggest that integrated care does not necessarily change the contribution of formal or informal care, but changes the interaction between formal (personal care) and informal (instrumental) activities. Implications and recommendations for research and practice are discussed. Trial registration: Current Controlled Trials ISRNT05748494.     

Are frail elderly people in Europe high-need subjects? First evidence from the SPRINTT data

Physical frailty and sarcopenia (PF&S) has received growing attention in empirical models of health care use. However, few articles focused on objective measures of PF&S to assess the extent of care consumption among the frail population at risk of dependency. Using baseline data from the SPRINTT study, a sample of 1518 elderly people aged 70+ recruited in eleven European countries, we analyse the association between various PF&S measures and health care / long term care (LTC) use. Multiple health care and LTC outcomes are modelled using linear probability models adjusted for a range of individual characteristics and country fixed effects. We find that PF&S is associated with a significant increase in emergency admissions and hospitalizations, especially among low-income elders. All PF&S measures are significantly associated with increased use of formal and informal LTC. There is a moderating effect of income on LTC use: poor frail elders are more likely to use any of the formal LTC services than rich frail elders. Our results are robust to various statistical specifications. They suggest that the inclusion of PF&S in the eligibility criteria of public LTC allowances could contribute to decrease the economic gradient in care use among the elderly community-dwelling European population.     

Going Formal or Informal,Who Cares? The Influence of Public Long‐Term Care Insurance

International differences in long‐term care (LTC) use are well documented, but not well understood. Using comparable data from two countries with universal public LTC insurance, the Netherlands and Germany, we examine how institutional differences relate to differences in the choice for informal and formal LTC. Although the overall LTC utilization rate is similar in both countries, use of formal care is more prevalent in the Netherlands and informal care use in Germany. Decomposition of the between‐country differences in formal and informal LTC use reveals that these differences are not chiefly the result of differences in population characteristics but mainly derive from differences in the effects of these characteristics that are associated with between‐country institutional differences. These findings demonstrate that system features such as eligibility rules and coverage generosity and, indirectly, social preferences can influence the choice between formal and informal care. Less comprehensive coverage also has equity implications: for the poor, access to formal LTC is more difficult in Germany than in the Netherlands. Copyright © 2014 John Wiley & Sons, Ltd.     

The use of formal and informal home care by the disabled elderly.

Using data from the Channeling experiment, this article analyzes the factors associated with the amount of formal and informal home care received by the disabled elderly. The amounts of formal and informal home care used increase with disability, as well as with other measures of need for care. The use of formal care increases, and the use of informal care decreases, with income. The availability of immediate family increases reliance on informal care and reduces reliance on formal care. The findings have implications for the design of proposed programs to expand publicly financed home care for the disabled elderly.     

Long‐term Care Insurance and Carers' Labor Supply – A Structural Model

In Germany, individuals in need of long‐term care receive support through benefits of the long‐term care insurance. A central goal of the insurance is to support informal care provided by family members. Care recipients can choose between benefits in kind (formal home care services) and benefits in cash. From a budgetary perspective, family care is often considered a cost‐saving alternative to formal home care and to stationary nursing care. However, the opportunity costs resulting from reduced labor supply of the carer are often overlooked. We focus on the labor supply decision of family carers and the incentives set by the long‐term care insurance. We estimate a structural model of labor supply and the choice of benefits of family carers. We find that benefits in kind have small positive effects on labor supply. Labor supply elasticities of cash benefits are larger and negative. If both types of benefits increase, negative labor supply effects are offset to a large extent. However, the average effect is significantly negative. Copyright © 2015 John Wiley & Sons, Ltd.     

The redefinition of the familialist home care model in France: the complex formalization of care through cash payment

This article investigates the impact of policy measures on the organisation of home-based care for older people in France, by examining the balance between formal and informal care and the redefinition of the initial familialist model. It focuses on the specific cash for care scheme (the Allocation personnalisée d'autonomie - Personalised allowance for autonomy) which is at the core of the French home-based care policy. The author argues that in a redefined context of 'welfare mix', the French public strategy for supporting home-based care in France is articulated around two major objectives, which can appear contradictory. It aims to formalise a professional care sector, with respect to the employment policy while allowing the development of new forms of informal care, which cannot be considered to be formal employment. The data collection is two-fold. Firstly, a detailed analysis was made of different policy documents and public reports, together with a systematic review of existing studies. Secondly, statistical analysis on home-based care resources were collected, which was not easy, as home-care services for older people in France are part of a larger sector of activity, 'personal services' (services à la personne). The article exposes three main findings. First, it highlights the complexity of the formalisation process related to the introduction of the French care allowance and demonstrates that formalisation, which facilitates the recognition of care as work, does not necessarily mean professionalisation. Second, it outlines the diversity of the resources available: heterogeneous professional care, semi-formal forms of care work with the possibility to employ a relative and informal family care. Finally, the analysis outlines the importance of the regulation of cash payments on the reshaping of formal and informal care and comments on its impact on the redefinition of informal caring activities.     

Equal long‐term care for equal needs with universal and comprehensive coverage? An assessment using Dutch administrative data

The Netherlands is one of the few countries that offer generous universal public coverage of long‐term care (LTC). Does this ensure that the Dutch elderly with similar care needs receive similar LTC, irrespective of their income? In contrast with previous studies of inequity in care use that relied on a statistically derived variable of needs, our paper exploits a readily available, administrative measure of LTC needs stemming from the eligibility assessment organized by the Dutch LTC assessment agency. Using exhaustive administrative register data on 616,934 individuals aged 60 and older eligible for public LTC, we find a substantial pro‐poor concentration of LTC use that is only partially explained by poorer individuals' greater needs. Among those eligible for institutional care, higher‐income individuals are more likely to use—less costly—home care. This pattern may be explained by differences in preferences, but also by their higher copayments for nursing homes and by greater feasibility of home‐based LTC arrangements for richer elderly. At face value, our findings suggest that the Dutch LTC insurance “overshoots” its target to ensure that LTC is accessible to poorer elderly. Yet, the implications depend on the origins of the difference and one's normative stance.     

Future costs for long-term care: cost projections for long-term care for older people in the United Kingdom

The purpose of this paper is to analyse the future sustainability of the UK system for provision of long-term care (LTC) due to changes in demography and health status among the older people. It considers how demand for LTC will evolve and to what extent there will be sufficient supply to meet demand. For formal care, this requires an estimate of how much the public purses, and hence taxpayers, will be burdened with LTC costs. For informal care, it involves estimating whether there will be enough carers if current patterns of provision were to continue. The results show that demand for long-term care will start to take off 10 years from now, and reach a peak somewhere after 2040. The research finds that the most significant increase will be in demand for informal care, where the number of recipients are projected to increase from 2.2 million today to 3.0 million in 2050. Relative increases will be similar in all care settings, amounting to between 30 and 50% compared with the levels today; however, the most noticeable increase will be in demand for formal home care, which is projected to be 60% above current levels by 2040. Total expenditure on formal long-term care will increase from 11 billion pounds per year today to approximately 15 billion pounds per year by 2040 (in 2001 prices). Expressed in taxation terms the effective contribution rate will increase from around 1.0% of total wages today to 1.3% in 2050. Availability of informal carers is potentially a big problem, but the extent of the problem is very sensitive to the assumptions made concerning health improvements and care-giving patterns.     

“We don't do it for the money” … The scale and reasons of poverty‐pay among frontline long‐term care workers in England

Demographic trends escalate the demands for formal long‐term care (LTC) in the majority of the developed world. The LTC workforce is characterised by its very low wages, the actual scale of which is less well known. This article investigates the scale of poverty‐pay in the feminised LTC sector and attempts to understand the perceived reasons behind persisting low wages in the sector. The analysis makes use of large national workforce pay data and a longitudinal survey of care workers, as well as interviews with key stakeholders in the sector. The analysis suggests that there are at least between 10 and 13% of care workers who are effectively being paid under the National Minimum Wage in England. Thematic qualitative analysis of 300 interviews with employers, care workers and service users highlight three key explanatory factors of low pay: the intrinsic nature of LTC work, the value of caring for older people, and marketisation and outsourcing of services.     

Investigating the relationship between formal and informal care: An application using panel data for people living together

There is limited evidence on the relationship between formal and informal care using panel data in a U.K. setting and focused specifically on people living together (co‐residents). Using all 18 waves of the British Household Panel Survey (1991–2009), we analyse the effect of informal care given by co‐residents on the use of formal home care and health care services more generally. To account for endogeneity, we estimate models using random effects instrumental variable regression using the number of daughters as a source of exogenous variation. We find that a 10% increase in the monthly provision of informal care hours decreases the probability of using home help (formal home care) by 1.02 percentage points (p < .05), equivalent to a 15.62% relative reduction. This effect was larger for home help provided by the state (β = ?.117) compared with non‐state home help (β = ?.044). These results provide evidence that significant increases in the supply of informal care would reduce the demand for home‐help provision.     

Monetising the provision of informal long‐term care by elderly people: estimates for European out‐of‐home caregivers based on the well‐being valuation method

Providing informal care can be both a burden and a source of satisfaction. To understand the welfare effect on caregivers, we need an estimate of the ‘shadow value’ of informal care, an imputed value for the non‐market activity. We use data from the 2006–2007 Survey of Health Ageing and Retirement in Europe which offers the needed details on 29,471 individuals in Austria, Belgium, the Czech Republic, Denmark, France, Germany, Italy, the Netherlands, Poland, Spain, Sweden and Switzerland. Of these, 9768 are unpaid non‐co‐resident caregivers. To estimate net costs, we follow the subjective well‐being valuation method, modelling respondents' life satisfaction as a product of informal care provision, income and personal characteristics, then expressing the relation between satisfaction and care as a monetary amount. We estimate a positive net effect of providing mode rate amounts of informal care, equivalent to €93 for an hour of care/week provided by a caregiver at the median income. The net effect appears to turn negative for greater high care burdens (over 30 hours/week). Interestingly, the effects of differences in care situation are at least an order of magnitude larger. We find that carers providing personal care are significantly more satisfied than those primarily giving help with housework, a difference equivalent to €811 a year at the median income. The article makes two unique contributions to knowledge. The first is its quantifying a net benefit to moderately time‐intensive out‐of‐home caregivers. The second is its clear demonstration of the importance of heterogeneity of care burden on different subgroups. Care‐giving context and specific activities matter greatly, pointing to the need for further work on targeting interventions at those caregivers most in need of them.     

Long‐term care use among old people in their last 2 years of life: variations across Finland

Variations across Finland in the use of six different long‐term care (LTC) services among old people in their last 2 years of life, and the effects of characteristics of municipalities on the variations were studied. We studied variations in the use of residential home, sheltered housing, regular home care and inpatient care in health centre wards by using national registers. We studied how the use of LTC was associated with characteristics of the individuals and in particular characteristics of the municipalities in which they lived. Analyses were conducted with multilevel binary logistic regression. Data included all individuals (34,753) who died in the year 2008 at the age of 70 or over. Of those, 58.3% used some kind of LTC during their last 2 years of life. We found considerable variations between municipalities in the use of different kinds of LTC. A portion of the variation was explained by municipality characteristics. The size and location of the municipality had the strongest association with the use of different kinds of LTC. The economic status of the municipality and morbidity at the population level were poorly associated with LTC use, whereas old‐age dependency showed no association. When individual‐level characteristics were added to the models, these associations did not alter. Results indicated that the delivery system characteristics had an important effect on the use of LTC services. The considerable variation in LTC services also poses questions with respect to equity in access and to quality of LTC across the country.     

Practice variation in long‐term care access and use: The role of the ability to pay

Practice variation in publicly financed long‐term care (LTC) may be inefficient and inequitable, similarly to practice variation in the health care sector. Although most OECD countries spend an increasing share of their gross domestic product on LTC, it has received comparatively little attention to date compared with the health care sector. This paper contributes to the literature by assessing and comparing regional practice variation in both access to and use of institutional LTC and investigating its relation with income and out‐of‐pocket payment. For this, we have access to unique individual‐level data covering the entire Dutch population. Even though we found practice variation in the use of LTC once access was granted, the variation between regions was still relatively small compared with international standards. In addition, we showed how a co‐payment measure could be used to reduce practice variation across care office regions and income classes making the LTC system not only more efficient but also more equitable.     

Use of quality information in decision‐making about health and social care services – a systematic review

User choice and personalisation have been at the centre of health and social care policies in many countries. Exercising choice can be especially challenging for people with long‐term conditions (LTC) or disabilities. Information about the quality, cost and availability of services is central to user choice. This study used systematic review methods to synthesise evidence in three main areas: (i) how people with LTC or disabilities and their family carers find and access information about the quality of services; (ii) how quality information is used in decision‐making; and (iii) what type of quality information is most useful. Quality information was defined broadly and could include formal quality reports (e.g. inspection reports, report cards, etc.), information about the characteristics of a service or provider (e.g. number and qualifications of staff, facilities, etc.) and informal reports about quality (e.g. personal experience, etc.). Literature searches were carried out using electronic databases in January 2012. Thirteen papers reporting findings from empirical studies published between 2001 and 2012 were included in the review. The majority of papers (n = 9) had a qualitative design. The analysis highlighted the use of multiple sources of information in decision‐making about services and in particular the importance of informal sources and extended social networks in accessing information. There is limited awareness and use of ‘official’ and online information sources. Service users or family carers place greater emphasis on general information and structural indicators. Clinical or quality‐of‐life outcomes are often difficult to interpret and apply. Trust emerged a key issue in relation to quality information. Experiential and subjective information is highly valued and trusted. Various barriers to the effective use of quality information in making choices about services are identified. Implications for policy and future research are discussed.