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Are Personal Budgets a Financially Sound Reform Option for the German Long-Term Care Insurance?

Author

Listed:
  • Arntz Melanie

    () (Senior Research Fellow, Centre for European Economic Research (ZEW)Mannheim, L7, 1 68161 Mannheim,Germany, and Assistant Professor at the University of Heidelberg)

  • Thomsen Stephan L.

    () (Assistant Professor, Labor Economics, Otto-von-Guericke-University, Department of Economics and Management, PO Box 41 20, 39016 Magdeburg, Germany, and Research Associate at ZEW, Mannheim)

Abstract

In a long-run social experiment, personal budgets have been tested as an alternative home care program of the German long-term care insurance (LTCI). By granting the monetary value of in kind services in cash, personal budgets are considered to enable customized home care arrangements, thereby avoiding costly nursing home care and thus saving LTCI spending. However, personal budgets also compete with the already existing and less generous cash option of the LTCI. Any transition from the receipt of cash benefits to personal budgets thus challenges the view of personal budgets as a cost savings device, unless personal budgets sufficiently reduce the use of costly nursing home care to balance these extra costs.

Suggested Citation

  • Arntz Melanie & Thomsen Stephan L., 2010. "Are Personal Budgets a Financially Sound Reform Option for the German Long-Term Care Insurance?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(4), pages 378-402, August.
  • Handle: RePEc:jns:jbstat:v:230:y:2010:i:4:p:378-402
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    References listed on IDEAS

    as
    1. Arntz, Melanie & Thomsen, Stephan L., 2008. "Crowding out Informal Care? Evidence from a Social Experiment in Germany," ZEW Discussion Papers 08-113, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. Liliana Pezzin & Barbara Schone, 1999. "Parental marital disruption and intergenerational transfers: An analysis of lone elderly parents and their children," Demography, Springer;Population Association of America (PAA), vol. 36(3), pages 287-297, August.
    3. Heinicke, Katrin & Thomsen, Stephan L., 2010. "The social long-term care insurance in Germany: origin, situation, threats, and perspectives," ZEW Discussion Papers 10-012, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    4. Liliana E. Pezzin & Peter Kemper & James Reschovsky, 1996. "Does Publicly Provided Home Care Substitute for Family Care? Experimental Evidence with Endogenous Living Arrangements," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 650-676.
    5. Schulz, Erika & Leidl, Reiner & Konig, Hans-Helmut, 2004. "The impact of ageing on hospital care and long-term care--the example of Germany," Health Policy, Elsevier, vol. 67(1), pages 57-74, January.
    6. Stabile, Mark & Laporte, Audrey & Coyte, Peter C., 2006. "Household responses to public home care programs," Journal of Health Economics, Elsevier, vol. 25(4), pages 674-701, July.
    7. repec:mpr:mprres:3503 is not listed on IDEAS
    8. Jens Lundsgaard, 2005. "Consumer Direction and Choice in Long-Term Care for Older Persons, Including Payments for Informal Care: How Can it Help Improve Care Outcomes, Employment and Fiscal Sustainability?," OECD Health Working Papers 20, OECD Publishing.
    9. Wasem, Jurgen, 1997. "A study on decentralizing from acute care to home care settings in Germany," Health Policy, Elsevier, vol. 41(Supplemen), pages 109-129, September.
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    Cited by:

    1. Melanie Arntz & Stephan L. Thomsen, 2010. "The Social Long-term Care Insurance: A Frail Pillar of the German Social Insurance System," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 8(2), pages 29-34, 07.
    2. repec:ces:ifodic:v:8:y:2010:i:2:p:14566976 is not listed on IDEAS

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