Does long-term care subsidization reduce hospital admissions and utilization?

Joan Costa-Font, Sergi Jimenez-Martin and Cristina Vilaplana

Journal of Health Economics, 2018, vol. 58, issue C, 43-66

Abstract: We use quasi-experimental evidence on the expansion of the public subsidization of long-term care to examine the causal effect of a change in caregiving affordability on the delivery of hospital care. More specifically, we examine a reform that both introduced a new caregiving allowance and expanded the availability of publicly funded home care services, on both hospital admissions (both on the internal and external margin) and length of stay. We find robust evidence of a reduction in both hospital admissions and utilization among both those receiving a caregiving allowance and, albeit less intensely, among beneficiaries of publicly funded home care, which amounts to 11% of total healthcare costs. These effects were stronger when regions had an operative regional health and social care coordination plan in place. Consistently, a subsequent reduction in the subsidy, five years after its implementation, is found to significantly attenuate such effects. We investigate a number of potential mechanisms, and show a number of falsification and robustness checks.

Keywords: Hospital admissions; Hospital utilization; Long-term care reform; Bed-blocking; Poisson hurdle model; Spain (search for similar items in EconPapers)
JEL-codes: H53 I18 J14 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:58:y:2018:i:c:p:43-66

DOI: 10.1016/j.jhealeco.2018.01.002

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