Seminar “The health effects of a nursing home admission”

Time:                  13:00-14:00 Hrs

Venue:               CPB-Office, Bezuidenhoutseweg 30, Den Haag, room 3, Braamzaal

Presentation:  Pieter Bakx (EUR)

Discussant:      Jonneke Bolhaar

Language:        English

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Abstract:

Ageing in place policies encourage and facilitate that elderly postpone moving to a nursing home. These policies are pivotal in keeping public spending on long-term care for the elderly in check and are usually assumed to be in line with the preferences of the elderly. Moreover, they are assumed to have no effect on the health of the target population, but the absence of health effects has so far not been documented.

We evaluate the impact of a nursing home admission for the subpopulation using Dutch administrative data from the period 2009-2013. We exploit the unique situation that in the Netherlands virtually all long-term care is publicly financed and that an individual’s eligibility for these services is determined by a randomly assigned assessor who has substantial discretionary power. Using differences between assessors in the tendency to grant admission to a nursing home as a source of exogenous variation, we show that the impact of being eligible for nursing home care on mortality is zero on average, but with considerable heterogeneity, and that the costs of an admission are completely offset by lower spending on home care and medical care, which are in part driven by a sharp decrease in the probability of a hospital admission. These findings suggest that ageing in place policies are not a way to cut public spending. Moreover, if they are primarily a way of bringing the supply of long-term care in line with preferences of the elderly for staying at home, this comes at the cost of an increase in health problems leading to hospital admissions. 

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