Costs and prospects for home based Long Term Care in Northern Italy: the Galca survey

An important issue in the design of sustainable Long Term Care policies is the relative social cost of community or home based care versus institutional care. Here we undertake this cost comparison making use of the findings from the GALCA surveys on Long Term Care in Denmark, Ireland and Italy but confining attention to Italy. The survey for Italy was conducted in the municipality of Modena that may be considered broadly representative of Long Term Care conditions in the North of the country. It offers detailed descriptions of the carers and the cared for ranging from demographic and epidemiological characteristics to labour market position. The survey also allows to accurately compile all the ‘inputs’ that go into home care, from ‘unpaid’ family labour and paid labour of immigrant minders to public and private services. Based on this information, we calculate the overall, per elderly social cost of home based care and find that home based care is more cost effective than institutional care even if the opportunity cost of ‘unpaid’ family carers is valued and included in the calculation. We discuss the reasons for cost effectiveness and identify some of the risk factors that threaten the long term sustainability of current home care arrangements in Italy. JEL classification: H51, I11, J14, J22. Keywords: Government Expenditure and Health; Analysis of Health Care Market, Economics of the Elderly; Time allocation and Labour Supply JEL classification: H51, I11, J14, J22. Keywords: Government Expenditure and Health; Analysis of Health Care Market, Economics of the Elderly; Time allocation and Labour Supply Acknowledgements This paper is drawn from the final report of the project Galca Gender Analysis and Long Term Care) financed by the European Commission and led by the Fondazione Giacomo Brodolini. Our thanks go the staff, the Secretary and the President of the Fondazione for support during the project and encouragement to circulate its findings