Economies of scale in home care

Home care (HC) demonstration projects have assessed the results of an existing decentralized system rather than evaluate the consequences of changing the system. This paper examines the potential for improving HC cost performance through economies of scale and how these economies can be introduced into HC operations with expansion and consolidation of the market. Theoretical, empirical and policy issues discussed include: (a) specification of the elements of structural redesign of HC service programs focusing on the creation of joint services; (b) a critique of the current method of estimating the size of the market for long term care; (c) empirical measures of uneven HC market size and density with implications for the opportunity to apply economies of scale; (d) the major institutional obstacles to creating the requisite coordination for joint HC services and policy recommendations to overcome these obstacles; (e) housing settings for joint services; (f) HC practices embodying economies of scale in Sweden. Joint services are especially applicable in older northern cities with a high density and a large number of elderly persons. This delivery mode provides a cost savings logic for expanding and consolidating home care services.