Variation in direct healthcare costs to the health system by residents living in long-term care facilities: a Registry of Senior Australians study

Jyoti Khadka; Julie Ratcliffe; Gillian Caughey; Tracy Air; Steve Wesselingh; Megan Corlis; Keith Evans; Maria Inacio

doi:10.1071/AH24081

RESEARCH ARTICLE (Open Access)

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Variation in direct healthcare costs to the health system by residents living in long-term care facilities: a Registry of Senior Australians study

Jyoti Khadka

^A ^B ^* , Julie Ratcliffe ^B , Gillian Caughey ^A ^C , Tracy Air ^A , Steve Wesselingh ^A ^D , Megan Corlis ^E , Keith Evans ^A and Maria Inacio ^A ^C

+ Author Affiliations

- Author Affiliations

^A Registry of Senior Australians, South Australian Health and Medical Research Institute (SAHMRI), Adelaide, SA, Australia.

^B Health and Social Care Economics Group, Caring Futures Institute, College of Nursing and Health Sciences, Flinders University, Adelaide, SA, Australia.

^C Allied Health and Human Performance, University of South Australia, Adelaide, SA, Australia.

^D National Health and Medical Research Council, ACT, Australia.

^E Australian Nursing and Midwifery Federation (SA Branch), Adelaide, SA, Australia.

^* Correspondence to: Jyoti.khadka@sahmri.com

Australian Health Review 48(5) 511-518 https://doi.org/10.1071/AH24081

Submitted: 13 March 2024 Accepted: 5 May 2024 Published: 4 June 2024

© 2024 The Author(s) (or their employer(s)). Published by CSIRO Publishing on behalf of AHHA. This is an open access article distributed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY-NC-ND)

Abstract

Objective

This study aimed to examine the national variation in government-subsidised healthcare costs of residents in long-term care facilities (LTCFs) and costs differences by resident and facility characteristics.

Methods

A retrospective population-based cohort study was conducted using linked national aged and healthcare data of older people (≥65 years) living in 2112 LTCFs in Australia. Individuals’ pharmaceutical, out-of-hospital, hospitalisation and emergency presentations direct costs were aggregated from the linked healthcare data. Average annual healthcare costs per resident were estimated using generalised linear models, adjusting for covariates. Cost estimates were compared by resident dementia status and facility characteristics (location, ownership type and size).

Results

Of the 75,142 residents examined, 70% (N = 52,142) were women and 53.4% (N = 40,137) were living with dementia. The average annual healthcare cost (all costs in $A) was $9233 (95% CI $9150–$9295) per resident, with hospitalisation accounting for 47.2% of the healthcare costs. Residents without dementia had higher healthcare costs ($11,097, 95% CI $10,995–$11,200) compared to those with dementia ($7561, 95% CI $7502–$7620). Residents living in for-profit LTCFs had higher adjusted average overall annual healthcare costs ($11,324, 95% CI $11,185–$11,463) compared to those living in not-for-profit ($11,017, 95% CI $10,895–$11,139) and government ($9731, 95% CI $9365–$10,099) facilities.

Conclusions

The healthcare costs incurred by residents of LTCFs varied by presence of dementia and facility ownership. The variation in costs may be associated with residents’ care needs, care models and difference in quality of care across LTCFs. As hospitalisation is the biggest driver of the healthcare costs, strategies to reduce preventable hospitalisations may reduce downstream cost burden to the health system.

Keywords: aged care, costs variation, healthcare costs, longterm care, nursing homes, observational research, older adults, residential aged care.

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