More long-term care for better health care and vice versa : investigating the mortality effects of interactions between these public sectors

Public health care (HC) and long-term care (LTC) sectors co-exist across several countries in the Organisation for Economic Co-operation and Development. Economic interactions between these two sectors have been found to occur even in the absence of formal integrated care arrangements. We investigate whether and how interactions between the HC and LTC sectors impact mortality. We analyse data on English local authorities in 2014/15 and employ a sequence of cross-sectional econometric specifications based on instrumental variables to identify the effect that LTC expenditure has on mortality through its interactions with HC services, and vice versa. Our findings suggest that any effect of LTC expenditure on mortality is likely to run through the HC sector by allowing the latter to reallocate resources from less to more effective services. An increase in LTC expenditure per user by 10% can indirectly save, on average, about 3 lives per million individuals. In addition, on top of the known HC direct mortality effects, we find that investing an extra £42m in the HC sector – equivalent to a 10% increase in HC expenditure per capita for the average local authority – can decrease the use of LTC services producing around £7.8m of savings. These can generate mortality effects if invested in services having an impact on mortality.