Financing long-term care: ex ante, ex post or both?

Area of Science:

• Health Economics
• Public Policy
• Social Gerontology

Background:

• Long-term care (LTC) financing presents significant challenges for advanced industrial economies.
• Heterogeneity exists in public financing strategies and instruments for LTC services.
• Understanding the interplay between different financing approaches is crucial for policy development.

Purpose of the Study:

• To examine the heterogeneity in public financing of long-term care (LTC).
• To classify institutional responses into ex ante (e.g., insurance) and ex post (e.g., public/family) financing.
• To determine if ex ante and ex post financing are complements or substitutes and analyze public expenditure determinants.

Main Methods:

• Distinguished and classified institutional responses to LTC financing as ex ante and ex post.
• Analyzed country-specific data to assess the relationship between ex ante and ex post financing.
• Examined cross-national data on public expenditure determinants (economic, demographic, social).

Main Results:

• Both ex ante and ex post financing mechanisms are present in all advanced industrial economies, though instruments vary.
• Ex ante and ex post financing instruments function predominantly as substitutes, not complements.
• Public LTC financing is significantly influenced by national income, population aging, and informal care availability.

Conclusions:

• Policy interventions for LTC financing should consider the substitutive relationship between different mechanisms.
• Economic, demographic, and social factors are key determinants of public expenditure on long-term care.
• Further research into optimizing the mix of financing strategies is warranted.