Longevity, Dependence and Long-Term Care Costs: The Case of Spain

Monteverde, Malena
Working paper no. 2006-02


Objectives: We combine data on unit costs of services with mortality and morbidity information of the Spanish population aged 65 and over to estimate individual expected costs for long-term care services (CLTC).

Methods: Using data from National Disability, Deficiency and Health Condition Survey (INE, 1999) and mortality statistics from Spain (INE, 2002), we estimate duration in dependence status by using Sullivan’s method. Generational trends of prevalence of disability were analyzed by linearly adjusting across cohort groups.

Results: We find that CLTC for women is about 70% higher than for men aged 65 and over. We also show that a care system based exclusively on in-home care generates costs that are twice as high as those borne in a system that combines in-home care with care in daily centers and residential homes. Sensitivity analyses suggest that even under a regime of uniform decline in disability rates on the order of 1.2% annually, no reductions in individual expected costs are obtained.

Discussion: Our calculations of costs rely on approximations of the expected duration of dependence by levels of severity. Despite the fact that these estimates are subject to some uncertainty, our results are robust. Even discounting for a margin of error, these estimates unequivocally suggest that in Spain, as in other Western European countries, we should expect large increases in the magnitude of costs of long-term care and that rearrangement of social resources is urgently required.