Residential aged care and dementia: A health economic perspective

Author: Tiffany Easton

Easton, Tiffany, 2018 Residential aged care and dementia: A health economic perspective, Flinders University, College of Medicine and Public Health

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Federal government expenditures on residential aged care currently exceed $10 billion per year, and health economics provides an important but underutilized framework for prioritising expenditures. The measurement of quality of life is a key requirement both for health economic analysis and for quality assessment. Importantly, more than half of Australians currently residing in residential aged care facilities have a diagnosis of dementia, and thus the inclusion of people with dementia is paramount in any robust evaluation of residential aged care services. This thesis provides a detailed assessment of the costs of care and quality of life in a residential aged care setting, and highlights the key issues and implications for economic evaluation methodology and practice in this sector.

The four studies contained in this thesis are based on a subset of data from INSPIRED, a large-scale cross-sectional, observational study to investigate services provided in the residential care environment for dementia; Studies one through three used available case analysis, while study four used multiple imputation to account for missing data. Data were collected from 17 aged care facilities for 541 residents across 4 states over the 14-month period from January 2015 to February 2016.

The first study assessed the quality of life of residents and undertook an empirical comparison of the world’s most widely-used generic measure of health-related quality of life (EQ-5D-5L) with a condition-specific quality of life measure for dementia (DEMQOL-U) in the full cohort of 541 individuals, which included a high proportion (64 per cent) of people living with a diagnosis of dementia. Self and proxy (family member, friend or carer) assessments of quality of life were also compared and identified generally poor agreement in the utility scores generated by the alternative instruments.

The second study examined the daily operating costs of 17 residential aged care facilities. This study indicated labour costs to be the largest single contributor to total daily operating costs. The assessed level of care need of the residents was identified as a key cost driver.

The third study comprised a comprehensive assessment of health system costs associated with the provision of residential aged care for five South Australian residential aged care facilities (N=180 residents) and investigated the relationships between health care and residential aged care costs according to the size of the facility and geographic location. Findings suggested lower operating costs and lower Medicare costs on average for regional facilities compared with metropolitan facilities but higher pharmaceutical costs.

The final study synthesized costs and outcomes at the individual level to explore the factors which contributed to resident quality of life. Using the same sample of 180 South Australian residents from five South Australian residential aged care facilities, residential aged care and health care utilisation data were combined with individual level factors using generalized linear models (GLM). Findings demonstrated a number of factors which were associated with quality of life in residential aged care including the individual’s level of physical functioning and their access to and utilisation of medical services. A greater understanding of this vulnerable population may inform a more tailored approach to residential aged care delivery in the future.

Keywords: Residential aged care, dementia, quality of life, cost of care

Subject: Economics thesis, Ageing Studies thesis

Thesis type: Doctor of Philosophy
Completed: 2018
School: College of Medicine and Public Health
Supervisor: Julie Ratcliffe