The Use of Care Services by Elderly: is Substitution a Tool for Economizing on the Costs of Provisions?

A common characteristic of the EC countries is a general tendency towards an aging society. This demographic change is expected to have among others important consequences for the use of care services: the EC countries have all become aware of, on the one hand, the expected increase of use of care services for the elderly and the related increase of public expenditures and, on the other hand, the limited public budgets. Therefore, the aim of care services policy in the EC countries is to make the provision of these services compatible with financial limitations on public budgets. After a brief overview of the different policy responses regarding care services for the elderly in the EC countries, this paper will be focussed on the recent Dutch care services policy, i.e. the substitution policy. In short, the substitution policy aims to reduce public expenditures for care services for the elderly by a shift from expensive intramural care services to semi-mural and extramural care services, under the condition of an equal quality level of services. In addition to this shift in the public services themselves, the Dutch government tries to realize a shift f rom public to private and/or (semi-) informal service provisions (including self-help). After an analysis of the potential and the problems involved in the substitution strategy for these care services, we will focus our attention on the demand side. The purpose of this paper is to test the feasibility of the substitution strategy. For this purpose, a logit model will be developed and estimated in order to identify factors that may be significant in determining whether a selected elderly person is likely to use extramural care services. Given the results from this empirical analysis, the paper will be concluded with some reflective remarks.