Can Family Caregiving Substitute for Nursing Home Care?

University of Michigan and NBER, USA.
Journal of Health Economics (Impact Factor: 2.58). 12/2005; 24(6):1174-90. DOI: 10.1016/j.jhealeco.2005.05.001
Source: PubMed


Informal care should be a substitute for nursing homes but empirical evidence often suggests the opposite. This may be because informal care receipt is positively correlated with unobserved negative health characteristics. We exploit variation in children's characteristics as instruments for informal care to provide Two-Stage Least Squares (TSLS) estimates of nursing home use among a sample of 6855 individuals from the 1993-2000 waves of the AHEAD survey. While OLS results suggest informal care is associated with greater future nursing home risk, TSLS estimates show that receipt of informal care statistically and substantially reduces the risk of nursing home entry. This finding has implications for Medicaid and private long-term care insurance markets.

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    • "24(Suppl. 1): 4–17 (2015) DOI: 10.1002/hec and Johnson, 2002; Van Houtven and Norton, 2004, 2008; Charles and Sevak, 2005; Muramatsu et al., 2007 "
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    ABSTRACT: Limited evidence exists on whether expanding home care saves money overall or how much institutional long-term care can be reduced. This paper estimates the causal effect of Medicaid-financed home care services on the costs and utilization of institutional long-term care using Medicaid claims data. A unique instrumental variable was applied to address the potential bias caused by omitted variables or reverse effect of institutional care use. We find that the use of Medicaid-financed home care services significantly reduced but only partially offset utilization and Medicaid expenditures on nursing facility services. A $1000 increase in Medicaid home care expenditures avoided 2.75 days in nursing facilities and reduced annual Medicaid nursing facility costs by $351 among people over age 65 when selection bias is addressed. Failure to address selection biases would misestimate the substitution and offset effects. Copyright © 2015 John Wiley & Sons, Ltd. Copyright © 2015 John Wiley & Sons, Ltd.
    Health Economics 03/2015; 24 Suppl 1(S1):4-17. DOI:10.1002/hec.3155 · 2.23 Impact Factor
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    • "Most of the existing studies estimate recursive simultaneous equation models that focus on the formal care process only and use instrumental variable approaches to identify the effect of informal support on formal care, thus relying on the availability of valid instruments (e.g. Lo Sasso and Johnson, 2002; Van Houtven and Norton 2004, 2008; Charles and Sevak, 2005; Bolin et al., 2008). "
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    • "Our regression results, however , pointed to a complementary relationship, as paid care probability rose with unpaid care hours. If, in line with findings from Van Houtven and Norton (2004) and Charles and Sevak (2005), our positive association was an artefact of our exogeneity assumption, we would expect our net benefits to be higher than estimated. However, it is also possible that the attributes of our sample led to this finding. "
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    ABSTRACT: The objective of this study was to estimate the annual costs and consequences of unpaid caregiving by Canadians from a government perspective. We estimated these costs both at the individual and population levels for caregivers aged 45 and older. We conducted a cost-benefit analysis where we considered the costs of unpaid caregiving to be potential losses in income tax revenues and changes in social assistance payments and the potential benefit of reduced paid care expenditures. Our costing methods were based on multivariate analyses using the 2007 General Social Survey, a cross-sectional survey of 23,404 individuals. We determined the differential probability of employment, wages, and hours worked by caregivers of varying intensity versus non-caregivers. We also used multivariate analysis to determine how receiving different intensities of unpaid care impacted both the probability of receiving paid care and the weekly hours of paid care received. At the lowest intensities of caregiving, there was a net benefit to government from caregiving, at both the individual and population levels. At the population level, the net benefit to government was estimated to be $4.4 billion for caregivers providing less than five hours of weekly care. At the highest intensity of caregiving, there was a net cost to government of $641 million. Our overall findings were robust to a number of changes applied in our sensitivity analysis. We found that the factor with the greatest impact on cost was the probability of labour force participation. As the biggest cost driver appears to be the higher likelihood of intense caregivers dropping out of the labour force, government policies that enable intense caregivers to balance caregiving with employment may help to mitigate these losses.
    Social Science [?] Medicine 01/2013; 81. DOI:10.1016/j.socscimed.2012.12.015 · 2.89 Impact Factor
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Kerwin Charles