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2018 Conference Presentation

Policy developments EU

10 September 2018

Vulnerability and long-term care in Europe: an economics perspective

Ludovico Carrino, King's College London, United Kingdom

Cristina Elisa Orso, Ca' Foscari University of Venice, Italy
Giacomo Pasini, Ca' Foscari University of Venice, Italy


Background: This analysis provides a novel approach to investigating the effects of longevity on the welfare of Europeans, focusing on the need for and the provision of insurance in the form of long-term care (LTC). A significant degree of health inequality is emerging among different socioeconomic groups, and the economic relevance of formal LTC has been growing, with rates of care-dependent older people estimated to increase in the forthcoming decades.

Objective: We aim at documenting the efficacy and inclusivenenss of European LTC systems by estimating comparable measures of potential LTC coverage based on official eligibility rules. We aim to exploit micro-data from European surveys such as ELSA (English Longitudinal Study on Ageing) and SHARE (Survey of Health, Ageing and Retirement in Europe), to control for the different epidemiologic characteristics across European countries.

Methods: Assessment- and eligibility rules define the target population in ‘need-of-care’, and represent a compulsory gateway to receive home-care benefits, either in-kind or in-cash. We first critically compare the legislations in Western European LTC systems (namely, Austria, Belgium, Czech Republic, England, France, Germany, Italy and Spain), both between and within countries, on defining the target population in need-of-LTC. Although the majority of programmes cover functional (mostly Activities of Daily Living, ADL, and Instrumental Activities of Daily Living, iADL) and cognitive limitations, the assessment-process appears in most countries as a patchwork of different rules and practices. These differences can give rise to differential measurement criteria: health outcomes may attract different weights within an assessment-scale, with some limitations having more importance than others in determining eligibility. Using micro-data from SHARE and ELSA, we estimate the potential coverage of each specific LTC programme, disentangling the between-countries differences in a population and regulation effect. More precisely, by applying each legislation on the standard population of SHARE and ELSA, we generate a set of comparable “directly-adjusted” eligibility rates (i.e., the share of the standard-population potentially covered by each programme). Furthermore, we perform a pair-wise comparison of programmes’ inclusiveness through a counterfactual analysis (indirect-adjustment) which simulates the adoption of a region’s legislation on another region’s population.

Results and conclusions: We highlight how each definition of need-of-care identifies a very specific “eligible population”: even when two programmes end up with identical coverage rates, the individuals who are regarded as eligible in each programme may exhibit very different characteristics. This discrepancy is driven by the inclusion/exclusion of specific outcomes in the assessment-of-need and by the different weighting of the outcomes in determining eligibility. The adjusted rates of coverage highlight the existing heterogeneity in eligibility rates due to the definition of need-of-care. A further analysis of our results shows that eligibility rules which directly account for iADL (alongside ADL) have higher coverage rates. Similarly, higher inclusiveness is generated by assessment strategies which evaluate the vulnerability status through the accumulation of functional deficits or through the presence of cognitive limitations. Conversely, programmes focused on ADL-only (or perhaps a subset of them), or requiring the joint presence of functional, behavioural and cognitive problems in order to trigger a potential demand for care.

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