It’s better to look after elderly people before they get injured: a preventive approach to health would prioritise social care investment.
Joan Costa-Font is a Professor of Health Economics and Head of the Department of Health Policy at the London School of Economics and Political Science (LSE). He leads the Ageing and Health Incentives Lab (AHIL) and co-leads both the Perceptions of Inequality programme at the International Inequalities Institute and Ageing@LSE.
Sergi Jiménez-Martín is a Professor of Economics at Universitat Pompeu Fabra and an Affiliated Professor of the Barcelona School of Economics. He is the Director of the Barcelona Microeconometrics Summer School (BMiSS, Barcelona GSE).
Cristina Vilaplana Prieto is a Professor at the University of Murcia. Her work has been published in Health Economics, the Journal of Health Economics, the Journal of Economic Behavior & Organization, Health Policy and the European Journal of Health Economics, among others.
Cross-posted from LSE EUROPP
Health care and social care are usually funded, evaluated and argued about as if they belong to separate worlds. Health programmes have to prove their worth. In England, the National Institute for Health and Care Excellence (NICE) applies a cost-effectiveness threshold of roughly £20,000–30,000 per Quality-Adjusted Life Year (QALY) gained.
Social care faces no such test. We therefore know surprisingly little about what governments get, in health terms, for the money they spend helping older people with washing, dressing, cooking or getting about. This is particularly important in the UK given Andy Burnham has announced plans to create a new National Care Service.
Spain’s System for Autonomy and Care for Dependent People
Spain offers a rare opportunity to see the value of investing in social care. Before 2007, publicly funded long-term care in Spain was scarce and means-tested. It was essentially reserved for people with very high levels of need. The unspoken expectation was that families, above all women, would cope.
This changed in 2007 when a new system – the System for Autonomy and Care for Dependent People (SAAD) – established access based on assessed need, regardless of a person’s age.
After an assessment, each person receives an individual care plan. This may include publicly funded home help, day centres, telecare or residential care. It may also include a cash subsidy for families who provide care at home. The Spanish government agency IMSERSO publishes benefit schedules and monthly statistics about how the system is being implemented.
The rollout was gradual. In 2007 only people with the highest level of dependency were covered. Those with severe needs were added from around 2011 and moderate needs from 2015. Access also varied across Spain as regions assess people and deliver services.
Austerity then intervened. In 2012, at the height of the Eurozone crisis, caregiving subsidies in Spain were cut by 15%, co-payments rose and hours of home help fell. This staggered, uneven expansion, followed by a retrenchment, resulted in significant variation in who received care and when.
Measuring the benefits of social care
Using the Spanish sample of the Survey of Health, Ageing and Retirement in Europe (SHARE), we compared people in Spain who received SAAD social care benefits with similar people who did not, before and after the SAAD system was introduced.
We matched them on age, sex, marital status, education, income and chronic conditions, controlling for region and year effects. Our four outcomes are life satisfaction (0–10), loneliness (a 3–9 scale), depressive symptoms and survival between survey waves. Figure 1 reveals the trends in the relevant outcomes.
Figure 1: The effect of access to long term care services and support on health and wellbeing in Spain
Note: The figure displays event study coefficients of the four outcomes of interest for individuals receiving care subsidies and home care support. Period 0: implementation of SAAD. Period -1 pre-SAAD (year 2004). Periods 1 to 6 correspond to the situation after SAAD was introduced. Source: Own work using SHARE.
Access to care improves both well-being and survival. Among recipients of caregiving subsidies, life satisfaction rises by 0.24 points on the 0–10 scale. Among home help recipients it rises by 0.50, twice as much. Loneliness falls by about 0.6 points for subsidies and 0.5 for home help. The probability of surviving to the next survey wave rises by 3 percentage points for subsidies and 2.6 for home help. We also find fewer depressive symptoms.
However, the two types of support work slightly differently. Home help has the larger effect on life satisfaction, which is consistent with regular professional assistance and company. Subsidies have larger effects on survival and on loneliness and depression, perhaps because they allow families to arrange flexible care.
The benefits are not evenly spread. They are larger for women, for people living alone and in rural areas, as well as for the oldest people. Among people aged 80 and over, subsidies are associated with a 5.6 percentage point increase in survival.
What lies behind these gains? We cannot prove a single channel, but the pattern is consistent with the practical effects of care. Recipients report better diets, have stronger grip strength relative to non-recipients, feel more in control of their lives and have fewer hip and other fractures. Regular help with daily tasks may plausibly prevent malnutrition, falls and the isolation that goes with unmet needs.
The 2012–2017 austerity years are also informative. The cuts offset a substantial part of SAAD’s benefits, with loneliness and depression rising and life satisfaction and survival falling relative to the counterfactual. Retrenching care is not free: the costs show up in health and well-being.
Investing in social care is good value for money
Our second question is whether the gains created by social care in Spain justify the cost. This is the question health systems routinely ask of drugs and treatments, but rarely of social care.
To answer it, we combined our estimates on the benefits of social care in Spain with data on what each type of benefit costs public funders and related the cost to the quality-adjusted life years gained. This is a back-of-the-envelope calculation, not a full economic evaluation, but it gives an order of magnitude reported in Figure 2.
Figure 2: Cost of social care per Quality-Adjusted Life Year (euros/year) in Spain
Note: Purple bars represent the cost per Quality-Adjusted Life Year for men receiving caregiving subsidies; green bars for women receiving caregiving subsidies; red bars for men receiving home care support; and yellow bars for women receiving home care support. Vertical lines indicate 95% confidence intervals. The cost per Quality-Adjusted Life Year is calculated based on life expectancy by sex and age cohort. Source: Own calculations using SHARE data.
We estimate that caregiving subsidies cost around €6,200 per Quality-Adjusted Life Year (QALY) gained and home help around €9,200. Cost-effectiveness thresholds across Europe typically range from €20,000 to €50,000 per QALY, and NICE’s range is higher than our estimates.
Even for the least cost-effective groups we identify, such as women aged 55–59 receiving home help, the estimate is about €17,500 per QALY. That is still below the usual thresholds for health care. In other words, on these estimates, the average euro spent on long-term care buys health gains at a price that compares favourably with the health programmes that systems already fund.
What the UK can learn from social care in Spain
These findings matter beyond Spain. In the UK, as in Spain, the social care system relies heavily on unpaid family carers, and NHS and social care budgets are set and judged separately. Health programmes must clear a cost-effectiveness bar, while social care is largely exempt.
Yet the NHS is under constant pressure to ration its services, and NICE’s threshold is itself a statement that some spending on health care is not worth its cost. Estimates of the NHS’s marginal cost per Quality-Adjusted Life Year are lower than the NICE threshold, at around £13,000.
Our estimates for the average recipient of long-term care in Spain are of the same order or lower, although currencies and price years differ and subgroups vary. This suggests that in the UK social care could be financed by replacing NHS programmes that fall short on cost-effectiveness with social care programmes that deliver more health per pound.
Moving money from the NHS to social care is hard, and our results do not tell us which NHS programmes should go. What they do indicate is that health returns from home help and carer support are real and they can be at least as large per pound as the returns to many things the NHS buys. A social care service that is evaluated on the same terms as health care and funded in part by reallocating from less cost-effective health programmes would be a better use of limited resources.
For policymakers, the implication is that long-term care should be routinely assessed with the same health-economic tools as medical interventions, including measures of loneliness, depression and life satisfaction. And where budgets are tight, the right question is not whether to fund health or social care, but which spending, wherever it sits, buys the most health.
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