The Drivers of Home and Community-Based Care Among Older Adults

As our older population grows, there is an increasing demand for home- and community-based care. People over age 65 made up 15% of the U.S. population in 2014, and that number is projected to grow to 21% by 2030. Many older adults are aging in the community and need assistance with activities of daily living such as bathing, dressing, eating, moving around the home, completing chores and errands, and light housework. This long-term, non-medical support can help older adults preserve their independence and avoid institutionalization.

Who Uses Home Care?

A model known as the Anderson behavioral model of health services explains the rate at which people utilize health care through three sets of variables: predisposing factors, enabling factors, and need factors.¹ Need factors reflect an individual’s need for health care, including their functional capacity, symptoms, and general health status. Predisposing factors such as age, gender, and social status explain people’s general propensity to use professional health services when needed. Enabling factors are those that facilitate or pose barriers to the use of health care, such as family and community wealth and access to services.

To understand the role these factors play in the demand for home care among older adults, we analyzed a nationally representative dataset (weighted to simulate more than 39 million individuals over age 65) from the 2011-2012 Medical Expenditure Panel Survey compiled by the U.S. Department of Health and Human Services.²

We analyze people’s likelihood to have used home care at least once in the past year as a function of their age, gender, race, marital status, income, health insurance coverage (Medicaid or private insurance), region of the country, self-reported physical limitations, and access to and use of informal care.^(b) Logit regression modeling is used to look at how changes within individual households over time affect their likelihood of using paid home care.^(c) Our regression analysis finds clear patterns in how predisposing, enabling, and need factors influence the use of home care.

Predisposing Factors: Age, Gender, & Race

People are significantly more likely to use long-term non-agency home care services as they get older, particularly once they are over age 85. On average, 6.8% of the sampled population age 85 and over use home care, while only 0.5% of those in the 65 to 69 age group do so. Put another way, about half of seniors using home care are 85 years or older, while only 8.8% belong in the 65-69 age group. The regression results, which control for other factors such as income and disability level, confirm the pattern of increasing likelihood of using home care as people age.

Women are more likely to rely on paid home care than men, possibly because they tend to outlive male spouses and may require care once they are living alone. 2.5% of women in the sample use home care compared to only 1.1% of men. This means that three-quarters of home care users in the sample are women and the remaining quarter are men.

In absolute terms, Whites make up the vast majority (77%) of home care users. However, Whites and Hispanics use home care at roughly the same rate (1.9% and 2.1%, respectively) while Asians use the service at twice that rate (3.9%) and African Americans at a lower rate (1.4%). Within a regression analysis that controls for factors such as age, income, and insurance coverage, we find that, all else being equal, Hispanics and Asians are more likely to use home care services than Whites and African Americans.

Enabling Factors: Income, Insurance, and Informal Care

Income is one of the strongest predictors of the likelihood someone will use home care. On average, 2.7% of individuals in the top 25% family income bracket use home care while 2.3% in the bottom 25% do. These differences become even more clear in the controlled regression analysis, which shows that those in the top income quartile are nearly five times more likely to use home care services than those in the bottom 25%. People with more resources are generally more able to afford paid home care, whether through additional private insurance or paying directly for care.

Insurance coverage also influences the use of home care. 1.7% of older adults with private insurance and 3.7% of those with Medicaid use paid home care. However, more than four times as many individuals in the sample were covered by private insurance than by Medicaid, so those with private insurance consume more home care in absolute terms: Half of home care users in the sample have private insurance and a quarter have Medicaid.

Controlling for income and other factors in the regression models, individuals on Medicaid are more likely to use paid home care than those not on Medicaid and slightly more likely to use paid home care than those with private insurance. This suggests that older adults on Medicaid, who are typically low income, may also be more likely to choose to age independently at home when it is affordable for them to access home care.

Access to informal care from family and friends (such as children living nearby or neighbors) also predicts the use of home care, but not in the direction one might expect. Informal care actually makes it more likely that individuals will seek some sort of paid home care, suggesting that informal care is a complement to, rather than a replacement for, formal care. However, once individuals pass age 85, reliance on informal care declines and paid care increasingly becomes a substitute for informal care. Overall, about 11% of individuals who use paid home care services also report receiving informal care from a child, relative, or friend living nearby.

Need Factors: Disability

Individuals who report having physical limitations are much more likely to rely on paid home care than those with no limitations. 5.6% of individuals with three or more self-reported limitations use home care, compared to 1.1% of those without. Among home care users, more than half report having three or more physical limitations.

Implications for Rhode Island

Our results show that age (particularly advanced old age), income, and availability of informal care are the top determinants of an older adult’s likelihood of using paid home care. Other relevant determinants include gender, race, availability of either Medicaid or private insurance coverage, and geographic location. These results are generally similar to existing research on health care utilization among older adults, although the literature on the use of long-term home care in particular is limited.

Holding other factors constant, reliance on paid long-term home care increases rapidly as income rises. This aligns with existing research demonstrating the role of income and cost concerns in health care utilization generally and for older adults in particular.³ For example, one study found that a permanent increase in Social Security income among low-income older adults led to a significant substitution away from nursing home care toward home care.⁴ This suggests that home care is often preferred if it is affordable.

Our findings demonstrate that informal care from friends and family members can complement paid care until age increases significantly, at which point paid care begins to substitute informal care. These results are similar to findings from recent research that informal care complements paid home care until older individuals are heavily disabled.⁵ (However, older research exists that suggests informal care reduces the use of paid home care, as well as skilled nursing care at home and nursing home entry.⁶) In general, research finds that informal care from children and other relatives has the most significant impact for older adults who do not have a spouse to help with their care.