IDEAS home Printed from https://ideas.repec.org/a/cup/hecopl/v8y2013i01p47-73_00.html
   My bibliography  Save this article

The role of care home fees in the public costs and distributional effects of potential reforms to care home funding for older people in England

Author

Listed:
  • Hancock, Ruth
  • Malley, Juliette
  • Wittenberg, Raphael
  • Morciano, Marcello
  • Pickard, Linda
  • King, Derek
  • Comas-Herrera, Adelina

Abstract

In England, Local Authorities (LAs) contribute to the care home fees of two-thirds of care home residents aged 65+ who pass a means test. LAs typically pay fees below those faced by residents excluded from state support. Most proposals for reform of the means test would increase the proportion of residents entitled to state support. If care homes receive the LA fee for more residents, they might increase fees for any remaining self-funders. Alternatively, the LA fee might have to rise. We use two linked simulation models to examine how alternative assumptions on post-reform fees affect projected public costs and financial gains to residents of three potential reforms to the means test. Raising the LA fee rate to maintain income per resident would increase the projected public cost of the reforms by between 22% and 72% in the base year. It would reduce the average gain to care home residents by between 8% and 12%. Raising post-reform fees for remaining self-funders or requiring pre-reform self-funders to meet the difference between the LA and self-funder fees, reduces the gains to residents by 28–37%. For one reform, residents in the highest income quintile would face losses if the self-funder fee rises.

Suggested Citation

  • Hancock, Ruth & Malley, Juliette & Wittenberg, Raphael & Morciano, Marcello & Pickard, Linda & King, Derek & Comas-Herrera, Adelina, 2013. "The role of care home fees in the public costs and distributional effects of potential reforms to care home funding for older people in England," Health Economics, Policy and Law, Cambridge University Press, vol. 8(1), pages 47-73, January.
  • Handle: RePEc:cup:hecopl:v:8:y:2013:i:01:p:47-73_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1744133112000035/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hancock, Ruth & Comas-Herrera, Adelina & King, Derek & Pickard, Linda & Malley, Juliette & Juarez-Garcia, Ariadna & Wittenberg, Raphael, 2006. "Winners and losers: assessing the distributional effects of long-term care funding regimes," ISER Working Paper Series 2006-43, Institute for Social and Economic Research.
    2. Ettner, Susan L., 1993. "Do elderly Medicaid patients experience reduced access to nursing home care?," Journal of Health Economics, Elsevier, vol. 12(3), pages 259-280, October.
    3. Les Mayhew & Martin Karlsson & Ben Rickayzen, 2010. "The Role of Private Finance in Paying for Long Term Care," Economic Journal, Royal Economic Society, vol. 120(548), pages 478-504, November.
    4. Hancock, Ruth & Hviid, Morten, 2010. "Buyer power and price discrimination: the case of the UK care homes market," ISER Working Paper Series 2010-39, Institute for Social and Economic Research.
    5. Ruth Hancock & Adelina Comas-Herrera & Raphael Wittenberg & Linda Pickard, 2003. "Who Will Pay for Long-Term Care in the UK? Projections Linking Macro- and Micro-Simulation Models," Fiscal Studies, Institute for Fiscal Studies, vol. 24(4), pages 387-426, December.
    6. Cohen, Joel W. & Spector, William D., 1996. "The effect of Medicaid reimbursement on quality of care in nursing homes," Journal of Health Economics, Elsevier, vol. 15(1), pages 23-48, February.
    7. Jennifer L. Troyer, 2002. "Cross-Subsidization in Nursing Homes: Explaining Rate Differentials Among Payer Types," Southern Economic Journal, John Wiley & Sons, vol. 68(4), pages 750-773, April.
    8. Adelina Comas-Herrera & Rebecca Butterfield & José-Luis Fernández & Joshua M. Wiener, 2012. "Barriers to Opportunities for Private Long-term Care Insurance in England: What Can We Learn from Other Countries?," Chapters, in: Alistair McGuire & Joan Costa-Font (ed.), The LSE Companion to Health Policy, chapter 15, Edward Elgar Publishing.
    9. repec:mpr:mprres:6018 is not listed on IDEAS
    10. Stephen Machin & Joan Wilson, 2004. "Minimum wages in a low-wage labour market: Care homes in the UK," Economic Journal, Royal Economic Society, vol. 114(494), pages 102-109, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tennyson, Sharon & Yang, Hae Kyung, 2014. "The role of life experience in long-term care insurance decisions," Journal of Economic Psychology, Elsevier, vol. 42(C), pages 175-188.
    2. Martin Eling & Omid Ghavibazoo, 2019. "Research on long-term care insurance: status quo and directions for future research," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 44(2), pages 303-356, April.
    3. Eric Christensen & Richard Arnould, 2005. "The Impact of Asymmetric Information and Ownership on Nursing Home Access," International Journal of Health Economics and Management, Springer, vol. 5(3), pages 273-297, September.
    4. Dwayne Banks & Elliott Parker & Jeanne Wendel, 2001. "Strategic interaction among hospitals and nursing facilities: the efficiency effects of payment systems and vertical integration," Health Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 119-134, March.
    5. Jennifer L. Troyer, 2002. "Cross‐Subsidization in Nursing Homes: Explaining Rate Differentials Among Payer Types," Southern Economic Journal, John Wiley & Sons, vol. 68(4), pages 750-773, April.
    6. Andrew T. Ching & Fumiko Hayashi & Hui Wang, 2015. "Quantifying The Impacts Of Limited Supply: The Case Of Nursing Homes," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(4), pages 1291-1322, November.
    7. R. Konetzka & Edward Norton & Sally Stearns, 2006. "Medicare payment changes and nursing home quality: effects on long-stay residents," International Journal of Health Economics and Management, Springer, vol. 6(3), pages 173-189, September.
    8. Nishimura, Y.; Oikawa, M.;, 2017. "Effects of Informal Elderly Care on Labor Supply: Exploitation of Government Intervention on the Supply Side of Elderly Care Market," Health, Econometrics and Data Group (HEDG) Working Papers 17/02, HEDG, c/o Department of Economics, University of York.
    9. John R. Bowblis & Andrew Ghattas, 2017. "The Impact of Minimum Quality Standard Regulations on Nursing Home Staffing, Quality, and Exit Decisions," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 50(1), pages 43-68, February.
    10. Ruth Hancock & Marcello Morciano & Stephen Pudney & Francesca Zantomio, 2015. "Do household surveys give a coherent view of disability benefit targeting?: a multisurvey latent variable analysis for the older population in Great Britain," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 178(4), pages 815-836, October.
    11. Paul Frijters & Robert Gregory, 2006. "From Golden Age to Golden Age: Australia's ‘Great Leap Forward’?," The Economic Record, The Economic Society of Australia, vol. 82(257), pages 207-224, June.
    12. Giulia Giupponi & Stephen Machin, 2018. "Changing the structure of minimum wages: firm adjustment and wage spillovers," CEP Discussion Papers dp1533, Centre for Economic Performance, LSE.
    13. Ronald Bachmann & Hanna Frings, 2017. "Monopsonistic competition, low-wage labour markets, and minimum wages – An empirical analysis," Applied Economics, Taylor & Francis Journals, vol. 49(51), pages 5268-5286, November.
    14. Jellal, Mohamed, 2012. "Maroc salaire minimum emploi et pauvreté [Morocco minimum wage employment and poverty]," MPRA Paper 38491, University Library of Munich, Germany.
    15. Kate Rybczynski & Anindya Sen, 2018. "Employment Effects Of The Minimum Wage: Panel Data Evidence From Canadian Provinces," Contemporary Economic Policy, Western Economic Association International, vol. 36(1), pages 116-135, January.
    16. Les Mayhew, 2017. "Means Testing Adult Social Care in England," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 42(3), pages 500-529, July.
    17. Dale Belman & Paul Wolfson & Kritkorn Nawakitphaitoon, 2015. "Who Is Affected by the Minimum Wage?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(4), pages 582-621, October.
    18. Möller, Joachim & König, Marion, 2008. "Mindestlohneffekte des Entsendegesetzes? : eine Mikrodatenanalyse für die deutsche Bauwirtschaft (Minimum wage effects of the worker posting law? : a micro data analysis for the German construction se," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(2/3), pages 327-346.
    19. Florin Vadean & Stephen Allan, 2021. "The Effects of Minimum Wage Policy on the Long‐Term Care Sector in England," British Journal of Industrial Relations, London School of Economics, vol. 59(2), pages 307-334, June.
    20. Gudibande, Rohan Ravindra & Jacob, Arun, 2020. "Minimum wages for domestic workers: impact evaluation of the Indian experience," World Development, Elsevier, vol. 130(C).

    More about this item

    JEL classification:

    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:hecopl:v:8:y:2013:i:01:p:47-73_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/hep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.