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.
    Full-text · Article · Mar 2015 · Health Economics
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    • "Most of the caregiving literature on long-term care decisions for elderly persons finds that patient needs are the main predictors of the demand for care (Bolin et al. 2008; Bosang 2009; Charles and Sevak 2005; Armingon et al. 2005; Van Houtven and Norton 2004; Lo Sasso and Johnson 2002). This perspective ignores that altruistic values on the part of caregivers (Grant and Nolan 1993; Shultz and Martire 2004) may elicit more informal care than would be given in its absence. "

    Preview · Article · Oct 2013
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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). "

    Full-text · Dataset · Jul 2013
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