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Overview
of the National Evaluation of the Cost-Effectiveness of Home Care
Introduction
Health reforms and the ongoing fiscal restraint of the 1990s led planners
and policy makers to focus on home and community based services as alternatives
to institutional care. Home care has come to be seen as a vehicle for
achieving both policy goals by providing services "closer to home," and
efficiency goals by lowering costs. National, provincial, and territorial
governments, and regional health boards, recognize the importance of the
role home care plays in our health care system.
The National Evaluation of the Cost-Effectiveness of Home Care was a
major program of research which provided critical new information to policy
makers about the cost-effectiveness of home care in Canada. It had a budget
of $1.5 million and was comprised of 15 interrelated substudies, six on
the cost-effectiveness of home care compared to care in long term care
facilities and nine on the cost-effectiveness of home care as an alternative
to care in acute care hospitals. Each substudy examines a particular issue
or question that arises out of comparing home care to institutional care
and, as such, is like an individual piece of a larger puzzle. The results
of the 15 studies, when fitted together, provide a picture of the cost-effectiveness
of home care in Canada.
Definition of Home Care
The term home care is generally used to refer to services provided in
the home or in the community to individuals with functional disabilities
and to their families. These services can range from home support, such
as a few hours a week of simple housekeeping, to full nursing and medical
care, such as administering intravenous medications which were previously
done only in hospitals. Home care is also provided on a short-term basis
to assist people who are discharged from acute care hospitals. In addition,
home care can provide palliative care, respite care and other related
services to those in need.
Costs of Home Care
Health Canada estimates that public home care expenditures were $2.1
billion, or 4% of public expenditures on health care, in the 1997/98 fiscal
year. While the growth in the institutional sector was generally been
restrained in the 1990s, expenditures on home care grew at almost 11%
per year from the 1990/91 fiscal year to the 1997/98 fiscal year.[1]
The amount of spending on home care by private individuals needing care,
and their families, is not known at this time but may be substantial.
Current Evidence for Cost-Effectiveness
The move to home care has in large part been a response to the fiscal
pressures of the 1990s. In the late 1990's, there was relatively little
information on the cost-effectiveness of home care in Canada. There was
a prevalent assumption that home care was not only cheaper but offered
just as good, if not better care to the client. That assumption was, however,
proven by scientific study. Thus, one could characterize the move to home
care as occurring due to faith in home care's efficacy and due to the
necessity of restraint.
The international literature on the cost-effectiveness of home care
is mixed. Some researchers have reported that home care is cost-effective
compared to acute care and others have reported that it is not. There
is also considerable literature in the United States which argues that
home care is not a cost-effective alternative to care in long term care
facilities.[2] However, some Canadian
writers have argued that home care may be a cost-effective alternative
to residential care in a Canadian model of service delivery.[3]
Functions of Home Care
In Canada, home care is often divided into the following three functions
or models:
- The maintenance and preventive model, which serves people with health
and/or functional deficits in the home setting, both maintaining their
ability to live independently, and in many cases preventing health and
functional breakdowns,and eventual institutionalization;
- The long term care substitution model, where home care meets the needs
of people who would otherwise require institutionalization; and
- The acute care substitution model, where home care meets the needs
of people who would otherwise have to remain in, or enter, acute care
facilities.[4]
Goals and Objectives
While other researchers funded by the Health Transition Fund studied
the maintenance and preventive model, the National Evaluation of the Cost-Effectiveness
of Home Care addressed key issues in relation to the cost-effectiveness
of the long term care substitution model of home care and the acute care
substitution model of home care. The program's 15 interrelated substudies
looked at the comparative costs of institutional and community based services
in regard to the formal health care system and in relation to the costs
borne by the client and his or her family (i.e., the costs of informal
support). Administrative and policy blockages to cost-effective service
delivery were also studied.
The proposed program of research has two major objectives:
- To directly evaluate the extent to which home care is a cost-effective
substitute for care in long term care facilities, and under which conditions
it is, or is not, a cost effective alternative; and
- To directly evaluate the extent to which home care is a cost-effective
substitute for acute care, and under which conditions it is, or is not,
a cost-effective alternative.
The Overall Approach
The cost-effectiveness of home care is a complex topic. The project
designers believed that one large study would be insufficient to provide
the information needed by policy makers. Thus, a series of interrelated
studies were conducted along parallel tracks. The substudies were designed
to fit together like pieces of a puzzle to produce a picture of the cost-effectiveness
of home care in Canada.
Another aspect of the research approach was to build on unique circumstances
or "natural experiments" across the country. There are differences in
the organization of home care and the data that are available across jurisdictions.
Some jurisdictions have unique data and/or a unique way of providing services
which provide opportunities to study particular questions that cannot
be studied in other jurisdictions. For example, British Columbia has over
10 years of unique data in which residential and home care clients have
been classified using the same care level classification system. This
allows for "apples to apples" comparisons of costs across residential
care and home care as, within each level of care, clients have very similar
care needs, irrespective of the site of care.
It is important to note that any evaluation of "cost-effectiveness"
should not place an inordinate focus on the costs of services. One must
not only ask "which is cheaper," but also which type of service provides
the best outcomes for the amount of money spent.
The National Evaluation of the Cost-Effectiveness of Home Care was designed
to be a program of applied, policy-relevant research. It was believed
that the approach adopted would provide significant efficiencies in terms
of costs and timeliness compared to the more traditional approach of conducting
a series of discrete, separate studies done in a linear sequence. This
project has raised further questions and, thus, should be seen as the
beginning, rather than the end, of Canadian research in this area.
[1] Health Canada, Policy and Consultation Branch.
(1998). Public Home Care Expenditures in Canada 1975-76 to 1997-98 (Fact
Sheets, March). Ottawa: Minister of Public Works and Government Services.
[2] Weissert, W.G. (1985). Seven reasons why it is
so difficult to make community-based long-term care cost-effective. Health
Services Research, 20(4), 423-433.
[3] Hollander, M.J. (1994). The costs, and cost-effectiveness,
of continuing care services in Canada. Ottawa: Queen's-University of Ottawa
Economic Projects--Working Paper No. 94-10.
[4] Federal/Provincial/Territorial Subcommittee on
Long Term Care. (1990). Report on Home Care. Ottawa: Health and Welfare
Canada, p. v.
Summary of the Whole Study
This project was a large, multifaceted research program consisting of
15 substudies that examined various aspects of the cost-effectiveness
of home care compared with that of institutional care. The 15 substudies
were conducted by teams across Canada; six studies examined home care
as a substitute for long-term care, and nine examined home care as a substitute
for hospital or acute care services. Like the pieces of a puzzle, each
of the findings from the individual substudies, when combined with the
other findings, will give a more complete picture of the cost-effectiveness
of home care in all of its aspects.
Summaries of Substudies
Substudy 1: Final Report of the Study on the Comparative Cost
Analysis of Home Care and Residential Care Services
This study set out to determine the relative costs to government of home/community-based
services compared with those of residential long-term care services, by
level of care, in the British Columbia setting. Using a unique linked
database at the University of British Columbia, the study followed four
cohorts of new admissions to the British Columbia continuing care system
between 1987 and 1997 and tracked subjects' use of home care, residential
care, physicians, hospitals, and pharmaceuticals from one year before
the first assessment and for three years after the assessment. The costs
were compared overall and by the five care levels used in British Columbia.
The study found that home care is generally cheaper, at all levels of
care, than is care in residential facilities. The costs, however, are
in the transitions. Home care is much cheaper for governments if the clients
are stable in their type and level of care than for those who change their
type or level of care. The costs for stable clients are about one half
of the costs of clients who are in transition. The study found that 30
to 60 per cent of the costs for home care clients are for hospital care
and that traditional services, such as home nursing, account for only
about one third to one half of overall home care costs.
Substudy 2: Care Trajectories: The Natural History of Clients
Moving Through the Continuing Care System
Substudy two tracked the movement of clients through the British Columbia
continuing care system over a 10-year period to document patterns of movement
and to determine if care patterns might be predictable. Predictable care
patterns have implications for clinicians who could then prepare in advance
for possible changes in care status. However, the study found that, contrary
to assumptions there would be four to six common patterns of movement,
there was in fact a wide variety of care trajectories, none with a large
percentage of clients. The most common pattern was for clients to enter
the system at a given level and type of care and die without any changes
in the level and type of care. A total of 6,384 clients was used for the
study which accessed a linkable longitudinal database at the University
of B.C.
Substudy 3: Cost Implications of Informal Supports
The third study used a unique Edmonton database of some 5,000 home care
clients to examine the relationship between the amount of formal home
care services clients receive and the amount of informal (family) support
the clients have. In essence, the study asked whether those clients needing
home care who had no family support received more formal service from
the system than did those with family support at home. The first scenario
is one in which formal care substitutes for informal care, and the second
scenario is one in which formal care complements home care. If the sectors
complement each other, an increased provision of formal home care will
result in the need for more informal support. If, instead, one substitutes
for the other, changing demographics (e.g., more working women, one-parent
families, increasing aging population) will necessitate more resources
being applied to formal care to offset future decreases in the availability
of informal care. Using complex statistical analysis, the report found
that formal and informal care are complementary, not substitutive.
Substudy 4: Pilot Study of the Costs and Outcomes of Home Care
and Residential Long Term Care Services
Substudy 4 was a small pilot study for a second, larger study (substudy
5) focusing on the costs and outcomes of care in the community and in
long-term care facilities. In particular, it delineates the economic,
social, and psychological burden borne by family members and informal
caregivers when patients are in home care rather than in institutional
settings. The purpose of the pilot study was to test instrumentation and
determine the feasibility of data collection strategies for substudy 5.
Three study sites were used: Winnipeg, rural Prince Edward Island, and
London, Ontario. Information was collected both on clients and on informal
caregivers through interviews and questionnaires. The pilot study enabled
the research group to better refine its measurement tools, determine sufficient
sample sizes, and resolve other issues that could affect the outcome of
substudy 5.
Substudy 5: A Study of the Costs and Outcomes of Home Care and
Residential Long Term Care Services
This study examined whether it costs less to provide care in the community
than in a long-term care facility and whether the outcomes of care are
worse, the same, or better for community clients compared to facility
clients. The study also measured the informal costs of care by identifying
the psychological, social, and financial burdens shouldered by family,
friends, and volunteers looking after clients. Information was collected
through interviews with both clients and informal caregivers in Winnipeg
and Victoria and through diaries. The study found that, regardless of
whether only formal care costs or both formal and informal care costs
were considered, community care was significantly less costly than residential
care. Home care costs were about 40% to 50% of residential care costs
in terms of the cost to government. However, informal costs were considerable:
clients and informal caregivers contributed about half of the care costs
of community clients and about one third of the care costs of facility
clients. The researchers not that different jurisdictions may have different
policies regarding the delivery of health care services, impacting relative
care costs. A total of 580 clients were involved in the study.
Substudy 6: Decision-Making: Home Care or Long-Term Care Facility
This qualitative study interviewed case managers in British Columbia,
Alberta, Saskatchewan, Ontario and Prince Edward Island to delineate the
decision-making process regarding the question of whether clients were
cared for at home or placed in residential care and thus to determine
ways of bringing about an effective substitution of home care for facility
care. Eighty-nine case managers in both rural and urban settings completed
questionnaires and participated in focus groups. Through this data collection,
almost a dozen "factors" were identified that allowed patients to be cared
for at home, including the availability of informal supports, adequate
funding and staffing for formal home care services, community support,
meal programs, supportive housing, adequate family finances, respite programs,
day programs, transportation, and home maintenance. Likewise, a number
of factors influenced the decision to place the client in facility care,
including the need for transitional, convalescent, or respite care; heavy
24-hour care needs; an unsafe home environment; the presence of incontinence
or an inability to transfer; client dissatisfaction with home care services;
and the belief that facility care is cheaper.
Substudy 7: Overview of Home Care Clients
This studyprovides a descriptive overview of the characteristics of home
care clients in two jurisdictions, British Columbia and Saskatchewan.
It also provides some basic data on resource utilization for British Columbia
This study was prepared because there is no national database on home
care in Canada. It was believed that some provincial data would be a useful
contribution to information about home care. Home care data from British
Columbia (33,053 clients) and Saskatchewan (12,623 clients) for the fiscal
years 1997/98 and 1998/99 were examined, as was information on gender,
age, length of stay, and marital status. A separate analysis on clients
discharged from hospital into home care in British Columbia examined the
role of home care in replacing hospital care. Key findings were: overall
there were approximately 1.3 females for every male in care across both
jurisdictions. The relative proportion of females to males was higher
for long-term clients than for short stay clients. The highest proportion
of clients in both provinces was in the 75-to-84 age group. The analysis
of service utilization in British Columbia found that both men and women
who were in short-term care (up to 90 days) averaged some 27 days per
care episode. Clients in care for 91 to 365 days averaged 259 days for
men and 279 days for women. As periods of care lengthened, the proportion
of home support services to professional services grew. Men and women
in the short-term group received more professional services than home
support services; those in longer-term care received up to nine times
as much home support than professional services. - Clients discharged
from hospital had slightly shorter durations of home care services, but
used more professional hours. The most common diagnoses were neoplasms
(19.7%) and circulatory diseases (16.7 %). The findings are significant
because: the relative proportion of short- and long-term care clients
in various jurisdictions will impact the volume and type of resources
required. The growing emphasis in some jurisdictions on home care as hospital
substitution may result in human resource and budget issues as cheaper
home support services are replaced with more costly professional services.
Substudy 8: Eligibility for Community, Hospital, and Institutional
Services in Canada: A Preliminary Study of Case Managers in Seven Provinces
This study asked 60 case managers from seven provinces to rate 16 different
vignettes and indicate the level and type of care they would recommend
in regard to home care, residential care, and hospital care. Generally,
it was found that significant differences existed across jurisdictions
in regard to eligibility and access to services. Staff assigned to the
clients also differed; for example, the expected involvement of registered
nurses ranged from 93.8 per cent to 54.4 per cent across jurisdictions.
Placement results also differed when case managers were blinded and then
not blinded to information regarding informal support. The study makes
policy suggestions, including one to standardize the understanding of
"who is eligible for what" based on comprehensive assessment data, so
that client needs are responded to in an effective and equitable manner.
Substudy 9: Costs of Acute Care and Home Care Services
This study looked at the cost-effectiveness of home care compared with
that of acute care to determine if additional opportunities existed for
cost savings or increased system efficiencies. The study used Alberta
data for hospitals and home care to generate data on care episodes for
people in hospital, those with inter-hospital transfers, and episodes
that included both hospital care and home care services. Data were analyzed
on the basis of case mix groups (CMG), which categorize hospitalizations
into groups of individuals that use approximately equal amounts of resources.
The results showed that admissions with inter-hospital transfers were
1.75 times more costly than those without transfers. The report concludes
that, as a result, costing should be done by episode of care (a set of
contiguous inpatient and home care contacts) and that current hospital
costs calculated by CMG or resource intensity weight (an index number
that measures the relative cost of a CMG) may be under-estimates. The
report found that most combinations of hospital care and home care were
more expensive than hospital care alone, but that care needs (number of
diagnoses) were also higher for persons who received home care. The author
notes that case severity is an important indicator of home care assignment
and that home care episodes are more costly because they have a higher
degree of severity.
Substudy 10: Economic Evaluation of a Geriatric Day Hospital:
Cost-Benefit Analysis Based on Functional Autonomy Changes
This study investigated whether the benefits related to a geriatric hospital
day program exceed the costs, using a cost-benefit analysis based on changes
in functional autonomy (a means of measuring the ability to perform daily
tasks). The latter was measured at admission and discharge to the geriatrics
unit at Sherbrooke University. The study found that for each dollar invested
in care, $2.14 of benefits were derived in terms of improvement in functional
status. The report observes that a measurement of dollar benefits alone
does not incorporate other important aspects for clients such as improvement
in cognitive function, socialization, and well-being. As a result, the
findings of a 118 per cent cost-benefit may in fact be the lower limit
of the possible benefit of such hospitals. The authors also suggest health
policy-makers will need to grapple with the issue of optimal length of
stay for patients - too long or too short a stay may increase the costs
and not the benefits.
Substudy 11: An Economic Evaluation of Hospital-Based and Home-Based
Intravenous Antibiotic Therapy for Individuals with Cellulitis
This study examined the costs and outcomes of antibiotic intravenous (IV)
therapy for individuals with cellulitis, focusing on a comparison between
hospital versus home care locations. (Antibiotic IV therapy is the most
commonly prescribed IV therapy in Canada, and cellulitis is a major reason
for such prescriptions.) The initial goal of a randomized control trial
proved to be unattainable. The study was modified to an observational
cohort study design, which the author notes is more prone to bias. As
well, in several instances a lack of adequate home care services meant
that many people were treated through repeat visits to emergency departments
rather than strictly at home. However, the study's main findings showed
that home care and emergency care cost about half of the care in hospital,
afford patients a better quality of life, and result in fewer complications
and higher rates of resolution of the cellulitis.
Substudy 12: Cost-Effectiveness of Home versus Hospital Support
of Breastfeeding in Neonates
This study examined the costs associated with breastfeeding term and pre-term
infants in both home and hospital contexts. It also sought to examine
the efficacy, safety, level of maternal satisfaction, and resources involved
in managing breastfeeding. It showed no differences in indirect family
costs, hospital delivery costs, or total system costs. In terms of outcomes,
the group with home care had significantly higher rates of babies being
exclusively breastfed. The qualitative data regarding maternal satisfaction
appear to support early discharge from hospital accompanied by home visiting
by the community nurses. The authors of the report suggest policy-makers
consider home support for breastfeeding a viable option in terms of costs
and clinical outcomes for mothers of term infants and suggest that mothers
be offered a choice of either standard care or early discharge with home
visits by a lactation consultant or nurse with breastfeeding expertise.
Substudy 13: The Geriatric Outcome Evaluation Study
This study explored service use within a geriatric services program; specifically,
it explored how a geriatric day hospital fits into a broad spectrum of
services in Victoria, B.C.. Clients were studied in five geriatric care
settings: an outpatient clinic, a day hospital, post-acute inpatient rehabilitation,
residential rehabilitation, and inpatient psychogeriatric rehabilitation.
The researchers wished to determine if patient needs could best be served
by such specialized services, supporting the continuum of care concept,
or if in fact inpatient and other services could be substituted. They
found that each service did appear to address a particular need or constellation
of needs, based on their study of mental and physical health, daily functioning
and bodily pain. This finding supports the notion of an integrated hospital-based
system of outpatient and inpatient services for geriatric clients. The
study encountered several challenges, including time limitations and a
restructuring of outpatient programs during the research period, leading
to a substantial reduction in sample size. As a result, researchers could
not complete a cost-effectiveness analysis.
Substudy 14: Evaluation of the Cost-Effectiveness of the Quick
Response Program of Saskatoon District Health
This study evaluated the cost-effectiveness and efficiency of Saskatoon
District Health's Quick Response Program (QRP), which identifies vulnerable
elderly patients in the emergency department and arranges appropriate
community services to avoid unnecessary hospital admissions. Chart reviews
were conducted for all people over the age of 60 who visited emergency
departments during an 11-week period in 1999. The study identified only
two patients out of 3,074 who were not seen by the QRP and whose hospital
admission could have been avoided with appropriate care in the community
- a finding that shows the QRP is working very efficiently. An unexpected
finding was that 46 patients visited the emergency department repeatedly
(up to 19 times.) The study confirmed that the costs of providing community-based
services initiated by QRP are lower than the costs of providing hospital
care; but unless hospital beds are closed, QRP is an add-on cost.
Substudy 15: An Analysis of Blockage to the Effective Transfer
of Clients from Acute Care to Home Care
This study examined the discharge process from hospitals to home care
services to identify barriers and inefficiencies that impede the transfer
to home care. It used a series of interviews and focus groups with hospital
and home care providers in seven jurisdictions, as well as an expert panel
to detail key problems to effective transfers. Six main types of systems
barriers were found: barriers to working together, family/patient barriers,
geographic barriers, system management and control barriers, system change
barriers, and resource barriers. The report identifies three overarching
principles of best-practices to bridge the gap: establishing formal systems
that include common information systems and the flexible use of resources;
building relationships and informal networks between hospitals and home
care with boundary-spanning positions and the development of working relationships;
and building system capacity with adequate budgets, resources, and programs
to underpin the system.
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