Abstract

Local authorities arranging for long-term care in the UK can require older homeowners to use home equity to pay for institutional but not community-based care. The study found that older people's economic resources affect their likelihood of entry into long-term care facilities. After adjusting for need and other enabling factors, income was not significant; however, home ownership reduced the likelihood of facility entry. Homeowners may be less likely to enter facilities due to their reluctance to use home equity to fund their care. State policy regarding financing of long-term care in the UK may be deterring older homeowners from receiving care in the most appropriate setting, by providing financial incentives to remain in the home. Background: Most long-term care (LTC) in the UK falls outside the National Health Service (NHS) funding structure. Local authorities are responsible for arranging care for the elderly who demonstrate financial need either at home or in facilities. For these individuals, home equity is included in their asset-base if they move into institutions, but not if they remain in the home. As a result, homeowners have a financial disincentive to enter institutional-based care.

Method: The hypothesis that older people's economic resources affect their likelihood of entry into LTC facilities was tested. 1,425 individuals aged 75 and up from a single medical practice in Leicestershire County were followed from 1988 to 1999. Baseline data collected included: income, home ownership, and health status. Follow-up data included up to five health assessments and information from death certificates for those who died before the study endpoint. The effect of home ownership and income on LTC facility entry was evaluated.

Findings: Increased age, living alone, functional restrictions, poor self-reported health, and cognitive impairment increased risk of LTC facility entry. After adjusting for need and other enabling factors, home ownership reduced likelihood of LTC facility entry. Income was not statistically significant.

Conclusions: Since financing obligations for individuals vary in different settings, home-owners may be avoiding entry into facility-based care for financial reasons. The authors suggested that seniors' reluctance to use home equity to fund LTC may be due to a desire to retain assets for their children's future economic security. UK state policy regarding financing of long-term care may be deterring older homeowners from receiving care in the most appropriate setting by providing financial incentives to remain in the home. In Canada, LTC financing decisions are income-based in Ontario and assets are considered in some provinces. Despite different funding structures, the findings of this study suggest that the desire to preserve home equity and/or income may be a deterrent to LTC access.

Reference: Hancock R, Arthur A, Jagger C, Matthews R: The Effect of Older People's Economic Resources on Care Home Entry Under the United Kingdom's Long-Term Care Financing System. Journal of Gerontology Series B - Psychological Sciences and Social Sciences 2002; 57(5): S285-293.