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The Cost of Residential Care for the Elderly: The Effects of Dependency, Design and Social Environment*

Published online by Cambridge University Press:  14 November 2008

Robin Darton  and
Martin Knapp
Robin Darton
Affiliation:
Personal Social Services Research Unit, University of Kent at Canterbury, Cornwallis Building, Canterbury, Kent, England.
Martin Knapp
Affiliation:
Personal Social Services Research Unit, University of Kent at Canterbury, Cornwallis Building, Canterbury, Kent, England.
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Abstract

Despite the important role played by cost considerations in policy decisions regarding services for the elderly there has been relatively little reliable research on this topic. A large nationally representative survey of old people's homes conducted by the Personal Social Services Research Unit in England and Wales in 1981 provides a firm foundation for the careful examination of the cost of residential care. Focusing on residential homes in the public sector, the cost function analyses reported in this paper have a number of policy implications. The empirical results help to explain cost inflation and allow the prediction of future cost trends, they inform ‘balance of care’ discussions and inter-authority and inter-sectoral comparisons, and they provide evidence on the cost implications of scale, group-living design, day care and sheltered housing. Finally, the relationship between cost and social environment (a central component in any quality of care assessment) is examined. The results suggest that there is no significant association between the two.

Type
Research Article
Information
Ageing & Society , Volume 4 , Issue 2 , June 1984 , pp. 157 - 183
Copyright
Copyright © Cambridge University Press 1984

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References

NOTES

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2 See, for example, Kane, R. L. and Kane, R. A.Care of the aged: old problems in need of new solutions, Science, 200 (1978), 913–920CrossRefGoogle ScholarPubMed; Jarrett, J. E. The relationship of cost variation, prospective rate setting, and quality of care in nursing homes: a hedonic examination. Review of Business and Economic Research (1982), 67–77Google Scholar; Dusansky, R. On the economics of institutional care of the elderly in the US: the effects of change in government reimbursement. State University of New York at Stony Brook, 1983Google Scholar; Ruchlin, H. J., Levey, S. and Muller, C.The LTC market place: an analysis of deficiencies and potential reform by means incentive reimbursement. Medical Care, 13 (1975), 979–991.CrossRefGoogle Scholar

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21 It is also worth noting that thirteen of the 218 homes (6% of the sample) had standardised residuals with an absolute value larger than 2, and one home had a residual of 3.28.

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26 These might also be related to the prices of staffinputs, although this interpretation should be made with some caution.

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