Ethical stalking by Mark Williams. UpliftLive 2024
Ippc
1. CONSUMER CHOICEAND
QUALITY OF HOME CARE
FOR THE ELDERLY
Mats Bergman, Economics, Södertörn
University, Sweden
Henrik Jordahl, Research Institute of
Industrial Economics, IFN, Sweden
Sofia Lundberg, Economics, Umeå
University, Sweden
8/27/2014 1
List of care providers:
• Care for you Ltd
• Home quality
assistance Ltd
• Best care given Ltd
• Age with beauty
care Ltd
• …
2. AIM & MOTIVATION
• AIM: How does private provision and the introduction of consumer-
choice system influence quality, as perceived by the elderly?
• Provision of elderly care is the responsibility of the local
government (municipal)
• (At least) three different systems:
1) In house production (public sector provision)
2) Procurement auctions (private provision)
3) Consumer choice (private provision)
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Privatization trend. Little is
known from the literature
3. Previous studies (Empirical)
• Bedard & French, 2009, HeEc: Prison inmate mortality increases with medical-
staff contracting-out, by about 10 %
• Bayer & Pozen, 2005, JLE: Recidivism among young prisoners higher after
release from private for-profit prisons, by about 10 %
• Grabowski et al, 2008, HSR: Measurable quality in nursing homes do not fall
after conversion to for-profit status
• Chou, 2002, JHE: Among information weak elderly, higher mortality in for-profit
nursing homes
• Hsieh & Urquiola, 2006, JPuE: No effect of school voucher programs & private
schools on average educational outcomes
• Bloom et al, 2010, WP: Increasing No of hospitals from 7 to 8 reduces heart-
attack mortality by (10 %?)
• Gaynor et al, 2010, WP: Competition increases health care quality, without
increasing costs
• Propper et al, 2008, EJ: Competition increases mortality in the UK (roughly by
10 %)
• Gaynor, 2006, WP (survey): Most studies find competition increases hospital
quality when price is fixed
• Bergman, Johansson, Lundberg & Spagnolo, 2014, (CEPR ,D P): Private
provision of nursing home care for the elderly: Decrease in mortality
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4. How?
• APPLICATION: Assisted living at home (basic medical
care, food services, hygiene assistance etc.)
• DATA: National survey with responses from approximately
70 000 elderly, in which the respondents were asked to
grade overall quality of the home-assistance service (from
2008)
• METHOD: Difference-in-difference at the municipal
level
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We find evidence that consumer choice systems
increase perceived user satisfaction
5. Elderly care in Sweden
The State, the
Central
Government (1)
The County (21)
The local
government, the
municipality (290)
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1992
6. Systems, alternative ways to provide
elderly care
Elderly care
In-house Private
In-house and
Private
The care
taker
No choice
Consumer
choice
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7. In-house or private?
In-house Private –
procurement
Private – consumer
choice
Responsibility
(by law)
Municipality Municipality Municipality
Provider In-house Private or mix Private or mix
Quality
monitoring
Municipality Municipality Municipality
How Call for tender – bids -
winner
Application – screening –
listing as provider
Senior
citizens
Apply & is
assigned a
provider
Apply & make a
choice or is assigned
a provider
Apply & make a choice.
If not happy? Switch.
Dominates
until 1990
Regulated since 1994 Regulated since 2009
Act of Free Choice
System (AFS)
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8. Three systems or two?
• Procurement or Act of Free Choice System?
• Senior residents perspective?
• Most likely equivalent, they have the opportunity to choose
• Quality outcome? Could be different. WHY?
Differences in:
• Competition – entry conditions
• Contract conditions (length of contracts)
• Screening?
• Quality standards more likely to be time consistent for Act of
Free Choice System
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9. Year of shift to Consumer Choice
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0
20406080
Frequency
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Year of shift to Consumer Choice
10. Year of shift to Act of Free Choice System
8/27/2014 10
0
1020304050
Frequency
2008 2009 2010 2011 2012 2013
Year of shift to Act to Free Choice System
11. Illustration of data & research design
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2008 2013
Year
Procured
32
In-house
258
290
In-house
135
Procured
3
Consumer
Choice
(AFS)
152
3
135
Private
12. Data & method
• 290 municipalities
• 155 shift from in-house to consumer choice
• 152 shift from consumer choice by procurement to
consumer choice by the Act of Free Choice system
• A shift is not equivalent to 100 percent private provision
• Diff-in-diff on the municipal level using municipal fixed
effects
• Additional control: Cost per care-taker (annually)
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13. Cost per care taker
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0
200400600
2008 2009 2010 2011 2012 2013
Year
Cost per care taker/1000 [price level 2008] Fitted values
14. Consumer satisfaction index (CSI)
• Measured annually. From 2008
• Survey to care takers: Overall impression (used in the
regressions)
• Questions about specific services (ability to influence,
opportunities for out-door activities)
• Answers: a grade indicating how satisfied the respondent
is with overall impression and so forth
• Data 2008 – 2013
• Response rate about 70 percent, respondents #70 000 –
90 000
• Problem? Change in measurement method: 2012 and
2013
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15. The CSI measure
• Scale 0 – 100
• Prior to 2012:
• 1 – 10 scale and respondents indicated their overall impression of the care
• CISm = The average of all respondents in municipality m times 10
• From 2012:
• Six alternatives for overall impression:
• Very satisfied
• Pretty satisfied
• Neither satisfied or dissatisfied
• Pretty dissatisfied
• Very dissatisfied
• No opinion
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Share of
satisfied
respondents 0 –
100 = CSI
16. Illustration of the “problem”
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0
10
20
30
40
50
60
70
60
62
64
66
68
70
72
74
76
78
80
82
84
86
88
90
92
94
96
98
100
Frequency
Index
2012
2011
Solution?
Percentiles (5 step intervals)
1 – 20
Support in the literature
17. Example
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1012141618
2008 2009 2010 2011 2012 2013
Year 05
101520
CSIpercentilecategory(1-20)
2009 2010 2011 2012 2013
Year
Shift In-house
Municipal A Municipal B
18. Results
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Table 1. Results. Consumer satisfaction and shift to consumer choice
Dependent is
NKI-percentiles
Ordered probit Ordinary least square
VARIABLES Model 1 Model 2 Model 3 Model 1 Model 2 Model 3
Shift to consumer 0.335*** 0.760*** 0.888*** 1.925*** 3.721*** 4.263***
choice (0.051) (0.082) (0.089) (0.321) (0.450) (0.483)
Cost per care -0.002*** -0.008***
taker/1000 SEK (0.001) (0.003)
Constant 7.365*** 6.112** 6.513***
(0.192) (2.381) (2.379)
Municipal FE NO YES YES YES YES YES
Observations 1,740 1,740 1,713 1,740 1,740 1,713
chi2 42.93 662.7 676.8 . . .
LogL -5015 -4705 -4624 -5701 -5346 -5253
LogL0 -5036 -5036 -4963 -5719 -5719 -5630
Prob-value 5.68e-11 0 0 2.37e-09 0 0
F . . . 36.020 2.670 2.696
R2 . . . 0.020 0.348 0.356
R2 adjusted . . . 0.020 0.218 0.224
Standard errors in
parentheses
*** p<0.01, ** p<0.05, * p<0.1
19. Results
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Table 2. Results. Consumer satisfaction and shift to consumer choice and Act of Free
System (AFS)
Dependent is
NKI-percentiles Ordered probit Ordinary least square
VARIABLES Model 1 Model 2 Model 3 Model 1 Model 2 Model 3
Shift to -0.516*** -0.206 -0.147 -3.204*** -0.652 -0.362
consumer choice (0.134) (0.208) (0.209) (0.673) (0.939) (0.938)
Shift to AFS 0.949*** 0.979*** 1.067*** 5.735*** 4.418*** 4.750***
(0.137) (0.193) (0.195) (0.689) (0.832) (0.835)
Cost per care
taker 1000/SEK -0.002*** -0.009***
Constant (0.001) (0.003)
7.359*** 6.803*** 7.334***
Municipal FE NO YES YES YES YES YES
Observations 1,740 1,740 1,713 1,740 1,740 1,713
chi2 91.27 688.9 707.6 . . .
LogL -4991 -4692 -4609 -5677 -5335 -5240
LogL0 -5036 -5036 -4963 -5719 -5719 -5630
Prob-value 0 0 0 0 0 0
F . . . 51.86 9.968 10.13
R2 . . . 0.047 0.357 0.365
R2 adjusted . . . 0.046 0.227 0.235
Standard errors in
parentheses
*** p<0.01, ** p<0.05, * p<0.1
20. Conclusions and extensions
• A shift to consumer choice by Act of Free System has a
positive effect on consumer satisfaction
• A shift is equivalent to a 4 percentile step increase in CSI
(20 percentiles).
• The idea of consumer power as a driver of quality might
work!
• High costs are not equal to satisfied consumers …
Extensions
• Use the information on degree of competition (care takers
with private provision as share of total number of care
takers)
• Is cost endogenous?
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