Study Finds Home Care Is Far Less Costly Than Residential Care

Research in the U.S. during the 1970s and 1980s suggested that home care was not a cost-effective alternative to nursing home care. But a major new Canadian study has concluded that home care services can indeed be a cost-effective alternative to residential long-term care.

The study should provide support to those who argue that states are wasting Medicaid dollars through policies that force the elderly into nursing homes when they could be cared for at home.

The National Evaluation of the Cost-Effectiveness of Home Care, funded by Health Canada, compared the costs of services to patients in long-term residential settings with the same services provided to patients in a home setting. The researchers found that the cost of home care was between 40 percent and 75 percent of the cost of facility care, depending on the level of care the patient received. The researchers discovered that the potential savings are especially high for home care clients who are in a stable health condition. For such patients, costs were about one-half or less of the overall costs for facility patients.

The study acknowledged that informal caregivers, usually family members, contribute significantly to the cost-effectiveness of home care. Although the researchers took the cost of caregivers' time into account in their estimates, the ultimate cost effectiveness of home care was influenced by what value was placed on that time'”whether, for example, professional rates of pay or the minimum wage were used.

'[H]ome care and home support services can help to achieve the seemingly contradictory goals of saving money, and improving care and the quality of life for clients,' said Dr. Neena Chappell, co-director of the program of research.

For press releases, summaries, and full reports that have come out of The National Evaluation of the Cost-Effectiveness of Home Care, go to: