What are family caregivers worth? As the credit card commercial says, they are priceless. But they also have a financial value. And calculating that value is important as we consider ways to help them. For example, before Congress creates new government supports for family members who help aging parents or other relatives with disabilities, it will want to know if that assistance could reduce other government spending.
There are lots of ways to figure what caregiving is worth. For example, you could calculate what it would cost if all those family caregivers were paid market rates for the personal care they provide. AARP figures the economic value of family care could be as much as $470 billion annually. Or you could try to calculate the lifetime financial sacrifice of a daughter who abandons her career to help a relative. By one estimate, the lifetime cost to a 50-something woman who quits her job to care for an aging parent can be as much $300,000 in lost wages and retirement benefits.
Here is another way to measure the value of family caregiving: By providing badly needed support for relatives living at home, can the care provided by family members cut health care costs by, say, reducing emergency room visits and hospitalizations? If they could, they’d not only improve the well-being of those they are helping, but they may also save government a significant amount of health care dollars.
In a new paper for the prestigious National Bureau of Economic Research, four academic researchers tried to answer this question. Their conclusions are limited to the effects of one modest government program, but they hint at potentially important benefits to family caregiving.
The authors, Norma Coe of the University of Washington, Jing Guo of the American Institutes for Research , Tamara Konetska of the University of Chicago, and Courtney Harold Van Houtven of the Duke University Medical Center, looked at the results of the Cash and Counseling Demonstration program, a 15-state Medicaid program that that made it possible for people with disabilities (including older adults) to stay at home by directing their own care. Instead of getting traditional Medicaid long-term care services, participants got a monthly cash allowance, which they could use to meet their care needs. Some used the money to pay family members to serve as caregivers.
The demonstration created an ideal experiment for researchers, since half of enrollees got traditional Medicaid benefits and half got cash. The researchers looked at about 5,000 adults nine months after enrolling in the program.
After adjusting their results for important variables such as health status and access to assistance before participating in the program, the researchers looked to see whether family involvement in care affected hospital care and health status.
The results were striking. Those who got the cash allowance to help support family caregivers were a third less likely to use the emergency room and only half as likely to be admitted to the hospital when compared to those getting standard Medicaid benefits. Those who were admitted stayed 13 days less, and overall Medicaid spending fell by $1,300 over nine months.
As the authors noted, saving health care dollars is not necessarily the same as better health outcomes, so they looked to see if those with more family involvement had better health. And they did. They were much less likely to get urinary tract infections, pneumonia, or bedsores, and far less likely to suffer shortness of breath.
The study had important limitations. It looked at a small number of participants in one demonstration program. And because the researchers could review only Medicaid data, they had no information about how family caregiving affected Medicare costs, a key question for participants over 65. Still, this study suggests that family caregiving can substantially reduce hospital costs and improve the health status of people with disabilities. In effect, family care replaced hospital care. And that seems to be a good thing.