Impact of regional inequalities in long-term care on health spending: evidence from dementia patients in France

Background

Unmet need for long-term care (LTC) could be associated with higher health care utilization and medical spending. In France funding of LTC is decentralised and there are significant disparities in accessibility of LTC. We analyse the impact of geographical variations in LTC funding and supply on healthcare expenditure focusing on dementia patients.

Methods

Healthcare spending of individuals is calculated from a national linked claims database. We run multilevel models exploiting the variations in spending across two geographical levels (residential areas nested in local authorities (LA)) to estimate the impact of local LTC supply and funding on health spending of patients with dementia. We estimated the generosity of LTC funding at LA with a stochastic frontier model and developed a taxonomy of LTC supply.

Results

Dementia patients living in LAs with most generous LTC funding have significantly lower acute (-11 %) and post-acute (-35 %) hospital spending while they have higher (+17 %) primary care spending. Moreover, people in areas with the highest LTC supply spend 3 % less on hospital care per year and per person compared to those in underserved areas.

Conclusions

Our results suggest that better accessibility of LTC with better funding and LTC supply can reduce hospital spending and improve overall health system efficiency.