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

Author

Listed:
  • Costa-Font, Joan
  • Jimenez-Martin, Sergi
  • Vilaplana, Cristina

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.

Suggested Citation

  • Costa-Font, Joan & Jimenez-Martin, Sergi & Vilaplana, Cristina, 2018. "Does long-term care subsidization reduce hospital admissions and utilization?," Journal of Health Economics, Elsevier, vol. 58(C), pages 43-66.
    • Handle: RePEc:eee:jhecon:v:58:y:2018:i:c:p:43-66
    DOI: 10.1016/j.jhealeco.2018.01.002
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    More about this item

    Keywords

    Hospital admissions; Hospital utilization; Long-term care reform; Bed-blocking; Poisson hurdle model; Spain;
    All these keywords.

    JEL classification:

    • 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
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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