Substitutional effect of long-term care to hospital inpatient care?

• Published in: China economic review Vol. 62; p. 101466
• Main Authors: Lu, Bei, Mi, Hong, Yan, Gaoyun, Lim, Jonathan K.H., Feng, Guanggang
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01.08.2020
• Subjects: Ageing; Long-term care; Medical care; Medical care; I18; I130; Ageing; Long-term care
• ISSN: 1043-951X; 1873-7781
• DOI: 10.1016/j.chieco.2020.101466

In China, many of the top- and second-tier hospitals are overcrowded, this is partly due to the fact they are providing services which can provided by other medical facilities such as long-term care. The implementation of the Qingdao Long-term Care Medical Insurance (LTCMI) which began as a pilot in Qingdao in 2012 may alleviate the burden of overcrowding in these hospitals. In this pilot, the Qingdao government shifted patients who did not require hospital inpatient care from top- and second-tier hospitals to lower tier facilities, care homes and home care to i) reduce the expenditure of patients, ii) reduce the burden on the top- and second-tier hospitals and iii) improve delivery (from a time and geographic perspective) of long term care to those that need such attention. The purpose of this paper is to assess the impact of this policy from a burden and cost perspective. Our finding suggests that there is a reduction in costs to all stakeholders. The total cost to the government-subsidized medical insurance decreases by around $7918 RMB per recipient. The cost to the individual decreases by around $2324 RMB per recipient. Thus, netting a decrease of $10,242 RMB in total expenditure. Furthermore, we find that there is a 12% reduction in inpatient service after a recipient participates in the pilot. Given the reduction in costs and admissions, this does indicate some level of success with the program. This paper concludes by examining the policy implications of these results. •In 2012, Qingdao City in China launched a long-term care pilot program that provides public subsidized formal care•This paper uses administrative data to assess the impact of this policy from a cost and care use perspective•RDD show that use of long-term care reduces the probability of using hospital in-patient service by 12%•Our finding suggests that there is a reduction to costs to all stakeholders