Pennsylvania's domiciliary care experiment: II. Cost-benefit implications

Area of Science:

• Health Services Research
• Public Health Policy
• Gerontology and Geriatric Medicine

Background:

• The Commonwealth of Pennsylvania initiated a pilot program to shift from traditional institutional care to community-based domiciliary care.
• This program aimed to support individuals with aging, mental retardation, or mental illness who could no longer live independently.

Purpose of the Study:

• To evaluate the cost-saving potential of substituting domiciliary care for institutional care.
• To analyze the utilization of medical and social support services in community-based versus institutional settings.

Main Methods:

• A pilot program in Pennsylvania substituted domiciliary care for institutional care.
• 190 participants and a comparable non-participant group were followed for an average of 10 months.
• Participants were categorized by pretest residence (community or institutional) within subgroups (aging, mentally retarded, mentally ill).

Main Results:

• Program savings exceeded program costs for five out of six study subsamples.
• The mental retardation cohort residing in a community setting at pretest was the sole exception where savings did not outweigh costs.
• Net savings were highest for subsamples initially residing in institutional settings.
• Over 90% of program savings across all subsamples resulted from reduced institutional placements.

Conclusions:

• Community-based domiciliary care programs can achieve significant cost savings compared to traditional institutional care.
• Reduced utilization of institutional placements is the primary driver of cost savings in these programs.
• Program effectiveness varies by cohort and initial living situation, with greater savings observed for those transitioning from institutional settings.