Does long-term care insurance affect the length of stay in hospitals for the elderly in Korea?: a difference-in-difference method

BACKGROUND This study examines the effects of long-term care insurance (LTCI) on the length of stay (LoS) of senior citizens under the national health insurance of Korea. METHODS The subjects include 3,903,448 people aged 65 and over as of July 1, 2008 when the LTCI was introduced in Korea. This study uses their panel data which traced the records of medical services and LTCI services for the same people from 2007 to 2010, and applies a difference-in-difference approach on LTCI users from levels 1, 2, and 3 who are the treatment group and non-LTCI users who are the control group. RESULTS We found that the LoS of LTCI users is 1.27 days greater than that of non-LTCI users, but the LoS of level 1 and level 2 beneficiaries decreases by 8.35 and 2.84 days, respectively, whereas the LTCI does not reduce the LoS of level 3 beneficiaries. CONCLUSIONS The reason why there is an effect on the LoS of level 1 and 2 beneficiaries is that these groups could choose to utilize institutional care services provided by the LTCI, and out-of-pocket costs of institutions are lower than that of hospitals. However, the reason why there is no effect on the LoS of level 3 beneficiaries is that they are not permitted to use the institutional care services in the Korean LTCI policy. Therefore, we recommend a modification in the LTCI system that facilitates the use of long-term care institutional services by level 3 beneficiaries without conflicting Korea's LTCI principle to promote home-based care services instead of the institutional care services.