Comparing health outcomes and costs of home and community-based services (HCBS) versus institutional care (IC) for long-term care insurance beneficiaries in South Korea: Can the less severe benefit more?

It is often considered that home and community-based services (HCBS) are better than institutional care services (IC) in terms of person’s preferences and costs in long-term care (LTC) settings. However, this may not always be the case depending on the baseline health status of the person. Using nationally representative data from South Korea, we examined whether the effects of HCBS versus IC on health outcomes and costs differ according to the individual's baseline health status.

Entropy balancing weights were applied to achieve a good balance of baseline covariates. These covariates included variables derived from a comprehensive needs assessment, as well as historical health status and healthcare utilization trends obtained from claims-based administrative data, thereby supporting the parallel trend assumption between the treated and control groups.

Our results indicated that, in general, HCBS were associated with better health outcomes and lower formal care costs compared to IC (5.7 %p less death, 0.55 point less decline of activities of daily living, and USD 6242 less formal care costs during a 1-year follow-up). However, these differences diminished among individuals with severe functional limitations at the baseline.

To the best of our knowledge, this is the first study to investigate the heterogenous effects of choosing HCBS over IC on older adult’s health outcomes and costs due to baseline health status, using a nationally representative data from South Korea where universal access to LTC services is available.