Abstract

Objective: Population ageing brings huge challenges to health expenditures and long-term care. Most developed countries have already established comprehensive social security systems, but mid- and low-income counties are endeavouring to meet these challenges. One of the critical issues is the cost to these systems. It would be much easier to implement a long-term care system if resulted in lower or unchanged total health care expenditure. This paper uses administrative data from regional China to analyse the total health cost before and after a long-term care program.

Data: Using longitudinal administrative data from a local administration public Comprehensive Care Insurance for Disabled Elderly (CCIDE) in China’s from July 2012 to June 2017.

Methods: We present statistics using age, ADLs and gender variables and employ difference-in-difference (DID) methodology to examine the cost difference before and after the long-term care program with random trial groups. We include total medical insurance cost, out of pocket, in-patient cost and non-inpatient costs (including home care, clinics and pharmaceutical costs).

Results: The total health spending before CCIDE was 82% of local GDP per capita and dropped to 76% after the program, with inpatient cost the major contributor—dropping to 33% from 65% without CCIDE. DID results show that by controlling for age, gender and ADL scores, all cost differences before and after the long-term care program are statistically significant. For in-patient cost, both medical insurance expenditure (MIE) and out-of-pocket (OOP) expenditure have been greatly reduced; for non-inpatients cost, MIE has significantly increased and OOP slightly increased; the combined effect leads to a lower total expenditure, but a slightly increased in medical insurance and a significant decrease in OOP expenditure. Statistics also show that the biggest drop in health cost is among younger age groups and an increase among older age cohorts after the long-term care program.

Conclusion: By introducing the long-term care program, medical resources are more efficiently allocated from the hospitals to clinics and community centres, older population receive better services and more resources. The long-term care program confirms to be positively implemented with a slight increase in overall medical insurance expenditure, but a much lower OOP level than without the program.