Long-Term Care Around the Globe

Historically, long-term care for the elderly has been viewed as predominantly an individual and family, rather than a governmental responsibility. The role of government (and/or the church) was residual, insofar as communities felt obliged to offer charitable assistance to destitute elders who did not have a family to take care of them. Until 2001, some European countries (e.g., Germany) continued to require financial contributions from adult children if elderly parents were admitted to institutional care. The United States and the United Kingdom continue to maintain the primacy of personal financial responsibility for long-term care by requiring elderly disabled persons to spend-down their own income and assets paying for care in nursing homes, and by means-testing access to home-delivered social support (as distinct from home-delivered nursing care, which is covered under medical insurance).

Within the family, eldercare has traditionally been defined as "woman's work," along with childrearing and homemaking. Although more affluent households traditionally had domestic servants to help with these tasks, most home care was provided by female family members. The difficulty of assigning a monetary value to such nonmarket labor, especially in the context of shared living arrangements and pooling of household income and assets, had the unfortunate consequence of creating something of a societal blind spot with respect to recognizing the extent to which society has relied upon such informal eldercare. Nor can understanding the economic and political consequences if the availability and adequacy of this resource could no longer be taken quite so much for granted.

Even as economists have become more willing to try to estimate the monetary value of informal eldercare, they have debated how to do so. Should informal be valued at the average hourly wage rate of home care workers (which, in the United States is only slightly above the statutorily mandated minimum wage)? Or—given that a large number of working age women are now employed outside the home—should the value of informal elder care be measured in terms of the "opportunity cost" (i.e., the pay and benefits a particular woman forfeits when she leaves employment or reduces her hours of paid work to provide informal eldercare)? In Europe and Japan, public policy around long-term care is increasingly being evaluated in terms of the potential effect on women's labor force participation. Thus, policies favoring care at home rather than in residential facilities are subject to criticism for reinforcing traditional expectations that women will stay at home to provide informal eldercare.

In pre-industrial societies, the availability, ability, and willingness of family to provide whatever eldercare might be needed is largely taken for granted. Pre-industrial societies include ones that existed in the historical past of the United States, Western European and Japan as well as contemporary societies in developing countries. In these kinds of societies, people often live their entire lives close to where they were born; families tend to be large; whether they live in extended family households or in nuclear families, they live near other family members. Very few elders, disabled or nondisabled, live alone in pre-industrial societies. Among Western countries, the percentage of elderly living alone can serve as a proxy indicator of a country's level of economic development and how long ago the country made the transition from developing to developed. Thus, in Denmark and Sweden 42 and 41 percent, respectively, of older persons live alone as compared to 17 to 19 percent in Spain, Greece, and Portugal.

Cultural values favoring shared living arrangements were powerful enough to sustain the behavioral norm in Japan until well into a highly advanced stage of economic development. Nevertheless, the prevalence of extended family living arrangements in Japan has been declining and the rate of decline has accelerated in recent years. A shift toward nuclear family living arrangements is also occurring in Korea and other Asian countries undergoing rapid economic development.

The process of economic development everywhere is associated with decreased fertility rates and greater longevity. These demographic changes have significant consequences for elder care. The U.S. Census Bureau suggests that the ratio of people aged eighty and older per one hundred people aged fifty to sixty-four is a useful measure of the potential pressure on middle-aged persons to provide care to a parent generation which has reached the age when need for long-term care becomes increasingly likely. In South America, Eastern Asia, and Western Europe, this parent support ratio doubled between 1950 and 2000. The most pronounced changes occurred in the industrialized countries, twelve of which had parent support ratios of twenty or higher as of 2000 (although two less highly developed countries, Israel and Uruguay, also had similarly high ratios). The parent support ratio is expected to rise in most countries of the world between 2015 and 2030. However, Western Africa experienced little change in the parent support ratio over the past fifty years and the aggregate level is expected to remain low in 2030 despite rapid growth in absolute numbers of elders eighty and older.

Childlessness also becomes more common with economic development. Urbanization and other patterns of mobility or migration (such as immigration from less to more developed countries) may have much the same effect as childlessness if the geographic separation between adult children and elderly parents precludes reliance on informal eldercare.

Unlike most other developed countries, the United States underwent a privatization of residential eldercare beginning in the 1930s. This occurred as an outgrowth of reform efforts to close down county-run homes for the aged, many of which were rather Dickensian. Laws were enacted that shifted the financial burden of providing for the poor elderly away from local governments onto the states and the federal government and prohibited payments from going to public institutions. What American reformers intended was to encourage the placement of disabled elders in foster family settings, but what they actually did was to stimulate the growth of proprietary nursing homes. In most other countries, however, local government authorities and churches continued to build and operate most homes for the aged. Private, for-profit nursing homes did not appear until much later in the United Kingdom, and in most European countries they never developed.

Starting in the 1950s in the United States and somewhat later in other countries, residential eldercare facilities found themselves experiencing a different sort of demand than they were used to. Instead of catering almost exclusively to poor older adults without family caregivers, many of whom were only mildly or moderately disabled, residential facilities began to admit residents who were older (on average), had multiple chronic illnesses, and were more functionally dependent. Moreover, many of these elders and their families also had some (though not always enough) capacity to pay for care. In addition, many elders now sought admission to residential care not because they lacked grown children or other relatives to provide care, but because their families felt unable to give them the level of care required. This was largely because advances in medical science enabled more people to live to age eighty and beyond, when the risk of disabling illness (e.g., Alzheimer's) increases significantly, and because better medical care enabled more elders with chronic illnesses to stay alive longer, even as their functional status continued to deteriorate. During this same period, however, improvements in social welfare protections—especially Social Security, private pensions, and the availability of public assistance payments for the elderly—as well as rising standards of living for all members of society (i.e., better housing stock, transportation services, the rapid spread of electric lighting, running water, indoor plumbing, and telephone service) made it possible for growing numbers of low-income elderly persons to live alone outside of institutions, even with a certain amount of functional disability.

Because of these countervailing trends, it is surprisingly difficult to determine whether, or to what extent institutionalization rates of elderly persons actually increased. One U.S. government study (ASPE, 1981) examined census data from 1890 to 1980 and concluded that the ageadjusted percentage of elderly persons residing in institutions and group quarters had remained remarkably constant throughout most of the century. The only age group in which the use of residential eldercare clearly had increased was among those ages eighty and older, a phenomenon attributed to longer life expectancies among less-healthy elders resulting from improvements in medical care. In the United States, it appears that the percentage of elderly persons residing in institutions and group quarters during the twentieth century has probably never been much under 4 percent or much above 6 percent. Questions of definition (what kinds of facilities should be included in the count) and measurement error make more precise estimates impossible.

What is more certain is that the character of long-term institutional care began to change dramatically around 1950 when the percentage of medically oriented care facilities (nursing homes) rose and the percentage of social welfare facilities (homes for the aged) fell. The medicalization of residential eldercare was swift and dramatic in the United States, perhaps because privatization made facilities more responsive to market forces. Although medicalization was well underway before the passage of Medicare and Medicaid in 1965, the eligibility of nursing homes for this new medical insurance coverage accelerated the trend. In many European countries and in Japan, however, as medical insurance coverage became available, it typically excluded eldercare facilities, which were mostly local public institutions, because these were viewed as part of the social services system. As a result, these welfare facilities were often very slow to adapt to change. Indeed, some barely modernized at all (in France, this eventually emerged as a serious problem that the national government addressed systematically in the early 1980s). Meanwhile, elders with chronic disabling medical conditions were increasingly hospitalized for long stays, which were covered by national health insurance. Over time, national health plan administrators came to see the use of high-cost hospitals to provide institutional long-term care as an unacceptable financial burden, as well as an inefficient use of resources.