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The economic approach of care arrangements
Institutional care, referring to the care provided in nursing homes, has long been regarded as the main potential provider of professional care for disabled elderly (Norton, 2016). The economic literature has first been interested in the determinants of nursing home entry. It has identified recurrent predictors, in particular health status and potential informal care provision.13 A deteriorated health status (functional or cognitive) is a strong predictor of admission to a nursing home, as many elderly enter a nursing home when they are no longer able to live independently because of activity limitations (Gaugler et al., 2007; Laferr`ere et al., 2013; Arnault, 2015). Potential informal care also has a strong predictive power: the probability to enter a nursing home is higher for individuals living alone, and it decreases with the number of children (Freedman, 1996; Lo Sasso and Johnson, 2002; Van Houtven and Norton, 2004; Charles and Sevak, 2005; Gaugler et al., 2007; Laferr`ere et al., 2013; Arnault, 2015). Yet, the protective effect of the spouse has been found to vanish in the presence of cognitive impairments (Arnault, 2015).
Some papers have dealt with in the price elasticity of the demand for institutional care. Grabowski and Gruber (2007) finds that the demand for nursing homes is relatively inelastic, not reacting much to the variations in Medicaid reimbursement rules for insti-tutional care. More recently, Mommaerts (2018) has confirmed these broad results, but has also provided evidence of the heterogeneity of the sensitivity according to the marital status. Single individuals are more likely to enter a nursing home, and less likely to co-reside with relatives, when the cost of nursing homes is lower. A form of price sensitivity is however observed in the choice of a nursing home. Stroka and Schmitz (2015) point out that the probability to choose a nursing home decreases with price and distance,14 while it is not sensitive to its quality, as measured by quality report cards.
Aging in place: the importance of informal care
In OECD countries, most elderly keep on living in the community: 70% of long-term care users receive services at home (Colombo et al., 2011).15 In France, in 2016, 58% of beneficiaries of the long-term care policy, the Allocation Personnalis´ d’autonomie (APA)
14 Regarding the effect of distance, Ramos-Gorand (2013) has shown that migrations for institutio-nalization are rare in France: 15% of nursing residents have moved from their previous deparmtent of residence to enter a nursing home. Migrations are mainly explained by individual determinants (previous place of living, family status, legal protection status). program presented below, were living in the community rather than in institutions.16 The economic literature has been prolific on the relationship existing between formal care and informal care for community-dweller elderly.17 This literature has to cope with the endogeneity existing in a model studying the relationship between both types of care. Indeed, consumption decisions can be jointly determined or affected by unobserved cha-racteristics such as health status or preferences. Once this endogeneity bias is dealt with, this literature finds strong evidence of informal care resources affecting the decision to consume formal care: when elderly are provided with informal care, they have a lower probability to consume formal care (Van Houtven and Norton, 2004; Pezzin and Schone, 1999; Bolin et al., 2008a; Bonsang, 2009). This substitution effect is more relevant for unskilled formal care (domestic help) than for skilled care (nursing or personal care) and tends to vanish when the disability level increases (Bonsang, 2009). On the reverse side, the effect of formal care use on informal care consumption seems more ambiguous. Most studies have analyzed the effect of a public scheme financing formal care use on privately and publicly funded formal care use as well as informal care consumption. Many of them point out that the increase of formal care partially crowds out informal care (Ettner, 1994; Pezzin et al., 1996; Stabile et al., 2006; Viitanen, 2007; Rapp et al., 2011; Fontaine, 2012; Arnault, 2015). But still, others find no evidence of a significant relationship (Christian-son, 1988; Motel-Klingebiel et al., 2005). Beyond the volumes provided, using publicly financed home care affects the organization of informal care, with a lower number of tasks performed by caregivers (Fontaine, 2012). The relationship between formal and informal care has finally been shown to depend on countries through cultural and institutional differences (Motel-Klingebiel et al., 2005; Bolin et al., 2008a; Bakx, Meijer, Schut and Doorslaer, 2015).
Another strand of the literature on informal care has focused on the consequences of care provision on careers. Informal care provision has been found to negatively affect the labor supply of caregivers, both at the intensive and extensive margins (Ettner, 1995, 1996; Pezzin and Schone, 1999; Bolin et al., 2008b; Van Houtven et al., 2013). This effect is stronger only in countries where long-term care public support is more limited (Fontaine, 2009). Care provision also affects the physical and mental health of relatives (Savage and Bailey, 2004; Coe and Van Houtven, 2009; Do et al., 2015). These effects, however, fade out in the medium-run, after care provision has ended (Schmitz and Westphal, 2015). The magnitude of such effects has also been found to depend on the geographical area 17 Informal care usually refers to the care provided for elderly individuals living in the community. Still, families usually remain involved when an elderly enters a nursing home. This aspect of informal care has been little investigated in the economic literature. Gaugler (2005) provides a synthesis of the existing literature.
when comparing different countries in Europe (Novi et al., 2015). Finally, the social life of caregiving relatives is also affected (Miller and Montgomery, 1990), though this field has been under-investigated (Bauer and Sousa-Poza, 2015). Most studies in this literature distinguish between the effect of care provision on men and women. They study women exclusively (daughters or daughters-in-law), or they provide subgroup analyses that generally reveal larger effects for women.
Drawing near to the economics of the family, the literature has also examined the organization of care arrangements and the determinants of care decisions of the family. When they have a (non-disabled) spouse, individuals are primarily provided care by their partner; then, children are the principal source of informal care (Weber, 2011; Soullier and Weber, 2011). The literature has first highlighted the effects of parent and children characteristics on the care decisions. It shows that care decisions relate to the opportunity cost of care (i.e. job status and family situation). Moreover, care provision is unequally distributed according to the sex of the children, with women being systematically more involved into care provision. Within sibling, the decision of one child is also likely to be affected by the characteristics of other children and their own care decision. It raises the question of potential interactions existing among family members (Fontaine et al., 2009), thus relating to the economic analysis of social interactions (Manski, 1993, 2000).
Formal care use
In a context of public policies fostering home care, the determinants of formal care use have received an increasing attention in the economic literature. Need-related characteris-tics and availability of informal care have been show to be strong predictors of formal care use (see Bakx, Meijer, Schut and Doorslaer (2015) for a review). Regarding public policy parameters, the demand for formal care has been shown to be price-sensitive: existing studies have tested the effect of benefiting from subsidies on the utilization of paid home care (Coughlin et al., 1992; Ettner, 1994; Pezzin et al., 1996; Stabile et al., 2006; Rapp et al., 2011; Fontaine, 2012) .
Formal care has been found to have a beneficial effect for the elderly and their informal caregivers. Formal care has a preventive effect on the health for the elderly: it positively affects mental health (Barnay and Juin, 2016) and decreases hospitalization (Costa-Font et al., 2018) as well as emergency care use (Rapp et al., 2015). It also diminishes the indirect costs of informal care, by limiting the negative effect of informal care on perceived health (Juin, 2016). More broadly, consuming formal home care has been shown to help postponing the entry in institutions (Ettner, 1994; Pezzin et al., 1996; Guo et al., 2015).18 With the aging population and existing pressure on public spending, there is thus a growing interest in quantifying how much providing home-based formal care saves money compared to institutional care. The distribution of disability levels between the community and nursing homes is substantially different (Bozio et al., 2016), such that it hard to directly compare the price of a nursing home and the cost of living in the community.19 For severe disability levels, living in institutions might theoretically be more cost effective through economic of scales.20 Evidence on this point is limited and mixed. Wubker¨ et al. (2015) compare individuals suffering from dementia receving professional home care, and being at risk of institutionalization, with individuals recently admitted to institutional nursing care, in eight European countries. They include the monetary valuation of informal care and find that overall costs in the home formal care setting are much lower than those of institutional care. Guo et al. (2015) points out that increasing Medicaid home care expenditure reduces the use of nursing home facilities, but the gain in costs is not sufficient to fully offset home care expenditures. Beyond monetary costs and valuation of informal care, the comparison home-based formal care and institutional care could additionnally valuate the preferences of individuals for home-based care. The quality of life in institutions is indeed perceived to be poor, such that institutionalization is often regarded a non-desirable alternative solutions to aging in place. Mattimore et al. (2015) report that 30% of the 9105 patients they study “would rather die” than living permanently in a nursing home, while 26% were “very unwilling”. The principle of people’s preference for living at home is relatively common in OECD countries and it has shaped the old-age policies in France.
Construction of policies supporting home care
The French long-term policies have historically been constructed around a clear di-vision between institutionalization and aging in place. In the aftermath of the French Revolution, a draft order presented institutionalization as a second-best option, when individuals are not taken care of by their families or when their health status requires specific care (Ennuyer, 2007). The idea that institutionalization should be implemented only because of a shortcoming in family resources or extreme health disabilities remained important in the first part of the 20st century. Hospices represent the typical figure of the institution devoted to the elderly during this period: Feller (2005), quoted by Ennuyer (2007), analyses how they have been associated with a very low quality of life and a symbol of social relegation.
The report Politiques de la vieillesse (“Old-age policies”) directed by Pierre Laroque in 1962, mainly known as the “Laroque Report”, is usually regarded as a cornerstone in the construction of the French old-age policies and its strong stay-at-home orientation. This report kept on affirming that “institutionalization must remain an exception” (Haut Comit´e Consultatif de la population et de la famille (1962), quoted by Ennuyer (2007)) and it encouraged the use of home care services to promote the integration of the elderly in the society.22 Public support for home care was reaffirmed a few years later, through the reform of the assistance laws (1953, 1954),23 implementing an allowance to finance home care for deprived elderly. The means-tested property was preserved in the following forms of the home-care support policy. The Allocation compensatrice pour tierce personne (ACTP) was created in 1975 and was open to any disabled adult, whatever her age: old-age disabilities were then regarded as a sub-category in the larger field of disabilities (Capuano and Weber, 2015). A specific allowance devoted to the disabled elderly was created in 1997, the Prestation sp´ecifique d´ependance (PSD). It changed the legal approach to disabilities and created an age barrier: all disabled individuals aged 60 and more were eligible for the old-age allowance, whatever the cause of their disability and they were explicitly distinguished from the handicap policies (Capuano and Weber, 2015). This distinction according to age, which is close to be a French exception in the European landscape,24 has been widely debated (Tenand, 2016) but it has remained the basis of the French long-term care system up to now.
The 2016 reform: adapting society to the aging of the population
The law on the adaptation of society to the aging of the population, which came into effect on the 1st of January, 2016,36 has reformed the French old-age policy in several respects. It has first modified several parameters of the APA program. The national thresholds binding the care plan volumes have been reevaluated upwards. The formula determining the copayment of APA beneficiaries has also been substantially reformed. Before 2015, the copayment rate only depended on the income of the individual. With the reform, it now depends on both the income and the disability level, taking into account the value of the care plan volume. At a given income level, the copayment rate decreases with the disability level.
On the supply side, this reform has tended to gather home care structures under the regulated status. Home care structures serving APA beneficiaries have to be regulated.37 The underlying orientation of such a reform is to protect the fragile population by streng-thening the public control over home care structures (Labaz´ee, 2017). The pricing of these structures by departmental councils, however, was not presented as compulsory, due to the opposition of previously non-regulated structures and the additional workload it would generate for departmental councils (Direction g´en´erale de la coh´esion sociale, 2016). Thus, if the reform has organized the conditions of an harmonization regarding quality certifications and evaluations, it has not addressed the dichotomy existing in the pricing of structures.
The reform has also addressed issues regarding informal care and institutional care. Regarding informal care, the reform has created the legal status of the caregiving relative (proche aidant), defined as someone, non-professional, who is regularly providing care to a disabled elderly for some activities of daily living. Caregiving relatives are said to have a right to respite, which can be publicly financed. The law has finally planned the increase in the transparency regarding the price of institutional care and it had encouraged the creation of intermediate solutions, between home and institutions, through the so-called “autonomy-residences”.
Research questions and overview of chapters
This thesis aims at improving the understanding of home care arrangements for the disabled elderly in the context of France. What are the determinants of formal care consumption, at both the extensive and intensive margins? How do formal and informal care providers adjust to their provision constraints? The thesis focuses on personal care and domestic help, which can be provided either by professional caregivers or informally. I investigate several determinants of formal care use that have little been studied in the literature. I particularly focus on the effect of the price of formal care and its regulation: how do individuals adjust the volume they consume to the price they pay for professional home care? Is their demand affected by the local regulation regarding the APA program and the regulation of providers? The thesis additionally analyzes the organization of the care provision, from both informal and formal providers. Regarding informal care, I analyze the way families are organized for home care provision, with a specific focus on the interactions of the care decisions among siblings. How do families get organized to take care of an elderly parent? Is the decision of other siblings likely to affect the decision.
Table of contents :
Reading note / Note de lecture
Funding information / Financements
Summary in French / Pr´esentation de la th`ese en fran¸cais
General introduction
1 Informal care arrangements and interactions
2 The price elasticity of home care
3 Decentralized policies and formal care use
4 Importance and variations of travel costs in home care provision
General conclusion
Bibliography
