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The impact of co-payments for nursing home care on use, health, and welfare

Author

Listed:
  • Marianne Tenand
  • Pieter Bakx

    (Erasmus University Rotterdam)

  • Bram Wouterse

    (Erasmus University Rotterdam)

Abstract

In 2013, a reform (the vermogensinkomensbijtelling) increased co-payments for long-term care for people with financial wealth. A shown in a new empirical study, it induced older people to postpone nursing home use, but only by a few days on average. The reform reduced the financial pressure on the long-term care system, but at the cost of raising the financial risk of older adults. In 2013, a reform (the vermogensinkomensbijtelling) increased co-payments for long-term care for people with financial wealth. A shown in a new empirical study, it induced older people to postpone nursing home use, but only by a few days on average. The reform reduced the financial pressure on the long-term care system, but at the cost of raising the financial risk of older adults. With population aging, many countries seek to keep long-term care accessible while containing public spending. Co-payments play a role in balancing these goals by shifting parts of the costs to users and providing an incentive to only use necessary care. However, evidence on how co-payments affect care use, health and financial risk is limited. A 100-euro increase in the monthly price of nursing home care lowers the time spent in a nursing home by 0.8 day. The offsetting increase in home care use is small and there is no overall effect on mortality. Because some people end up staying many years in a nursing home, the limited increase in the monthly co-payment induced a substantial rise in lifetime co-payments. A cap on lifetime co-payments would limit the associated financial risk while preserving the incentive to postpone an admission. More info: EsCHER Working Paper

Suggested Citation

  • Marianne Tenand & Pieter Bakx & Bram Wouterse, 2021. "The impact of co-payments for nursing home care on use, health, and welfare," CPB Discussion Paper 430, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:discus:430
    DOI: 10.34932/GDWF-PP65
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    References listed on IDEAS

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    Cited by:

    1. Hernæs, Øystein & Kverndokk, Snorre & Markussen, Simen & Øien, Henning, 2023. "When health trumps money: Economic incentives and health equity in the public provision of nursing homes in Norway," Social Science & Medicine, Elsevier, vol. 333(C).
    2. Bar, M.; & Bakx, P.; & Wouterse, B.; & van Doorslaer, Eddy.;, 2022. "Estimating the health value added by nursing homes," Health, Econometrics and Data Group (HEDG) Working Papers 22/12, HEDG, c/o Department of Economics, University of York.
    3. Bär, Marlies & Bakx, Pieter & Wouterse, Bram & van Doorslaer, Eddy, 2022. "Estimating the health value added by nursing homes," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 1-23.
    4. Øystein Hernæs & Snorre Kverndokk & Simen Markussen & Henning Øien, 2023. "When Health Trumps Money: Economic Incentives and Health Equity in the Provision of Nursing Homes," CESifo Working Paper Series 10359, CESifo.

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    JEL classification:

    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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