Impact of Informal Care Provision on Elderly Care Expenditure
Abstract
The continuing growth of the elderly population and the sustainability gap in public finances are putting local authorities under pressure to exercise greater efficiency in the allocation of their care resources. If local authorities decide to restrict access to services, family and relatives will have to assume ever greater responsibility for care provision. It is predicted that the need for informal care will increase in the future.
Informal care is a significant part of long-term care, but it is not known what impact informal care has on care expenditure. Since most people caring for a family member at home receive no benefits for informal care, it is challenging to determine the economic significance of this care in Finland.
This study discusses different ways of measuring in monetary terms the help and informal care provided by family and relatives. We present empirical results on the extent of savings resulting from informal care provision and offer our assessment of the budget effects of an increased coverage of the informal care allowance.
The data were collected in connection with a geriatric rehabilitation program undertaken by the Social Insurance Institution (Kela). The sample comprises 732 retired persons who meet the Kela eligibility criteria for Care allowance for pensioners and who live in 41 municipalities of different sizes in different parts of Finland. The costs of their care were followed one year. We measured independent functional capacity using the FIM scale and health-related quality of life using the 15D questionnaire.
Informal care provided by family and relatives substitutes for services that are the responsibility of local authorities and reduces formal long-term care expenditure. When the expenses incurred from the informal care of an older person are compared with the expenses incurred from the delivery of municipal services to a person whose functional ability and health are similar, we obtain the monetary value of services substituted by informal care.
The official target set for informal care coverage (5-6% of the population aged 75 or over) increased the number of allowance recipients by 4,300. An analysis of budget effects showed that the care input for these people brought average net savings of 63 million euros a year. In sensitivity analysis the range of net savings was 40–75 million euros a year. It has been estimated that some 60,000 informal carers are engaged in this physically demanding and restrictive job. An extension of informal care support to cover the whole group would increase the number of allowance recipients by 23,000. The informal care provided by these people would bring net annual savings of 338 million euros.
Our analysis of budget effects is an economic evaluation framework designed to incorporate all operational costs and savings for purposes of informed decision-making. The results show that in view of the costs savings achieved in service expenditure, it would be justifiable and economically viable to pay out allowances to larger numbers of people caring for a family member. In Finland a smaller proportion of informal carers receive support than in other countries on average, and the amount of the allowance is also lower than average.
Based on these results it seems that even as it stands, informal care has considerable economic significance in the provision of care services for older people. Informal care provision is very common in Finland, but most of the care providers are not eligible to receive informal care allowance. Informal care significantly reduces local authorities’ care expenditure. It would be economically justifiable to extend eligibility at least to those informal carers who are currently engaged in this physically demanding and restrictive job withoutany support. The Finnish service system has a built-in
informal care resource whose monetary value remains hidden when calculating the expenses of long-term care, for instance.
Authors
Sari Kehusmaa, Ilona Autti-Rämö, Pekka Rissanen
Additional Information
- Peer-Reviewed: yes.
- Open Access: yes.
- Cite as: Kehusmaa, S., Autti-Rämö, I., & Rissanen, P. (2013). Omaishoidon vaikutus ikääntyneiden hoidon menoihin. Yhteiskuntapolitiikka, 78(2), 138-151. https://urn.fi/URN:NBN:fi-fe201304183189
