A comparative analysis of costs to government for home care and long-term residential care services, standardized for client care needs

This paper reports on the results of analyses using administrative data from British Columbia for 10 years from fiscal 1987/1988 to 1996/1997, inclusive, to examine the comparative costs to government of long-term home care and residential care services. The analyses used administrative data for hospital care, physician care, drugs, and home care and residential long-term care. Direct comparisons for cost and utilization data were possible, as the same care-level classification system is used in BC for home care and residential care clients. Given significant changes in the type and/or level of care of clients over time, a full-time equivalent client strategy was used to maximize the accuracy of comparisons. The findings suggest that, in general, home care can be a lower-cost alternative to residential care for clients with similar care needs. The difference in costs between home care and residential care services narrows considerably for those who change their type and/or level of care, and home care was found to be more costly than long-term institutional care for home care clients who died. The findings from this study indicate that with the appropriate substitution for residential care services, in a planned and targeted manner, home care services can be a lower-cost alternative to residential long-term care in integrated systems of care delivery that include both sets of services.