What Comprises Effective Formal Elder Care at Home? Estimating Effects for Combinations of Multiple Services

Abstract

I estimate the effects for combinations of multiple services in formal elder care at home on health status. As a reasonable substitute for expensive institutional care, formal care for the elderly in their own homes is gaining popularity in developed countries. Because care at home consists of many small and complementary services, the effects for combinations of multiple services need to be analyzed. However, the high dimensionality of these combinations makes estimation difficult. This research employs a regression analysis, using combinations of care services as cross-dummy explanatory variables. To reduce the dimension of the combinations, I select the combinations that are purchased jointly by a sufficient number of the elderly using a basket analysis. I apply this method to claims data for Japanese long-term care, where the social insurance program has resulted in the emergence of markets for many care services for the elderly. The empirical results show that only 200 combinations of 14 care at home services are utilized by more than 0.03% of insurance users in Japan. Of these combinations, rehabilitation services improve the health status of the elderly considerably. However, their use is limited owing to regional disparities in the location of such services.