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Does long-term care insurance reduce hospital utilization and medical expenditures? Evidence from China

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  • Feng, Jin
  • Wang, Zhen
  • Yu, Yangyang

Abstract

This study examines the effect of long-term care insurance (LTCI) on hospital utilization and expenditures among the elderly in China. We exploit the introduction of public LTCI in Shanghai, China, and implement a difference-in-difference technique to disentangle the effects of LTCI. We find that the introduction of LTCI significantly reduces the length of stay, inpatient expenditures, and health insurance expenditures in tertiary hospitals by 41.0%, 17.7%, and 11.4%, respectively. We find a greater effect on people over 80 years old. Outpatient visits in tertiary hospitals decrease by 8.1% per month after LTCI. The possible mechanisms are the substitution of long term care for hospitalization and health improvement. Our cost-effectiveness analysis indicates that every extra 1 yuan spent in LTCI will generate a decrease of 8.6 yuan in health insurance expenditures.

Suggested Citation

  • Feng, Jin & Wang, Zhen & Yu, Yangyang, 2020. "Does long-term care insurance reduce hospital utilization and medical expenditures? Evidence from China," Social Science & Medicine, Elsevier, vol. 258(C).
    • Handle: RePEc:eee:socmed:v:258:y:2020:i:c:s0277953620303002
    DOI: 10.1016/j.socscimed.2020.113081
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    3. Rong Peng & Xueqin Deng & Yinghua Xia & Bei Wu, 2022. "Assessing the Sustainability of Long-Term Care Insurance Systems Based on a Policy–Population–Economy Complex System: The Case Study of China," IJERPH, MDPI, vol. 19(11), pages 1-17, May.
    4. Lopreite, Milena & Zhu, Zhen, 2020. "The effects of ageing population on health expenditure and economic growth in China: A Bayesian-VAR approach," Social Science & Medicine, Elsevier, vol. 265(C).
    5. Joan Costa-Font & Cristina Vilaplana-Prieto, 2023. "‘Investing’ in care for old age? An examination of long-term care expenditure dynamics and its spillovers," Empirical Economics, Springer, vol. 64(1), pages 1-30, January.
    6. Kang, Lili & Zhao, Guangchuan, 2022. "Financial support for unmet need for personal assistance with daily activities: Implications from China's long-term care insurance pilots," Finance Research Letters, Elsevier, vol. 45(C).
    7. Luo, Yanan & Yuan, Kexin & Li, Yuxiao & Liu, Yating & Pan, Yao, 2024. "The “spillover effect” of long-term care insurance in China on spouses’ health and well-being," Social Science & Medicine, Elsevier, vol. 340(C).
    8. Miao Guo & Yang Li & Minghao Wu & Terence C. Cheng, 2024. "Services and Cash: How Long-term Care Insurance Benefit Design Affects Household Behavior in China," Papers 2024-13, Centre for Health Economics, Monash University.
    9. Serrano-Alarcón, Manuel & Hernández-Pizarro, Helena & López-Casasnovas, Guillem & Nicodemo, Catia, 2022. "Effects of long-term care benefits on healthcare utilization in Catalonia," Journal of Health Economics, Elsevier, vol. 84(C).
    10. Ai, Jingyi & Feng, Jin & Zhang, Xiaohan, 2024. "Long-term care insurance coverage and labor force participation of older people: Evidence from China," China Economic Review, Elsevier, vol. 86(C).
    11. Manuel Serrano-Alarcón & Helena Hernández-Pizarro & Guillem López i Casasnovas & Catia Nicodemo, 2021. "The effect of Long-Term Care (LTC) benefits on healthcare use," Working Papers 2021-12, FEDEA.
    12. Huang, Liqing & Zhu, Bangzhu & Wang, Ping & Chevallier, Julien, 2022. "Energy out-of-poverty and inclusive growth: Evidence from the China health and nutrition survey," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 344-352.
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    14. Winatha, Arvin, 2020. "Implementasi Layanan Kesehatan bagi Lansia," OSF Preprints vdxqh, Center for Open Science.

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