What explains regional variation in privately provided out-of-area residential placement costs for people with...

Expenditure on residential placements for people with intellectual disability (ID) in Ireland is considerable and expected to increase. Despite this, there is limited evidence on the factors driving variation in privately provided 'out-of-area' residential placement costs, including across Community Health Organisations (CHOs)/regions. This is important to help inform the delivery of services at best value.

We analyse unit cost data from 2019 for a sample of 278 high-cost publicly funded privately provided out-of-area residential placements for people with ID in Ireland. We undertake univariate analysis of the relationship between costs and a wide range of variables using t-tests and one-way analysis of variance. We employ multivariable regression analysis to examine how raw differentials in unit costs across regions can be accounted for by individual-level characteristics.

We estimate average unit costs of €264 170 per annum in our sample. The univariate analysis shows considerable variation in costs across a range of personal, disability, psychiatry/psychological, forensic issues, behaviour and supports and plans related variables. We also find wide variation in average unit costs across CHOs/regions (F = 4.58, P < 0.001), ranging from €213 380 to €331 880. The multivariable analysis shows that regional differences remain even after accounting for a wide range of individual characteristics that influence costs.

Our analysis shows that while the majority of differences in costs across regions can be explained, there is potential for cost savings in the provision of high-cost publicly funded out-of-area residential placements in Ireland. Overall this can help to develop and implement a more sustainable disability residential funding model in a context of rising demand for services. It also has potential implications for the approach to procurement of services.