This introductory chapter provides an overview of the entire publication, drawing on the analyses carried out in the four subsequent chapters. It documents the state of healthy ageing and community care across OECD countries and quantifies the benefits of further investment in preventive policies and community care. The chapter flags effective preventive policies as well as policies to adapt the health system better to population ageing. The chapter concludes with policy options to improve long-term care at home and in the community.
The Economic Benefit of Promoting Healthy Ageing and Community Care
Abstract
People are ageing less healthily than they could
The trend of population ageing across the OECD is set to persist in the coming decades. As fertility rates remain below replacement levels and life expectancy continues to rise, the proportion of older adults in the population is projected to grow steadily. By 2060, there will be more than 50 older people aged 65 and over for every 100 working-age people (20‑64) in most OECD countries.
Gains in life expectancy are slowing down and not every additional year lived is a year lived in full health. Life expectancy at age 60 increased by 1.0 year between 2012 and 2023 while it increased by 1.7 years between 2001 and 2011. In 2021, the gap between life expectancy and healthy life expectancy at age 60 stood at 5.7 years, meaning that 25% of the last years of people’s lives are characterised by poor health and limitations. This gap has increased by 0.5 years over the past two decades from 5.2 years in 2000. The rate of people aged 65 to 74 with chronic conditions has increased from 44% to 50% between 2011 and 2021 across the OECD.
Part of the reasons behind this trend is that health systems are not well adapted to older people. Older people have complex health needs. But they often do not receive the care they need, and in the setting that is best for them. Many are not sufficiently adopting healthy lifestyles. For example, only one in four people aged 65 and above meets the physical activity recommendations of at least 150 minutes of moderate‑intensity physical activity per week. A lack of prevention and primary care, poor co‑ordination and integration with other providers can lead to worsening health among a certain segment of the population. Data from the OECD’s Patient-Reported Indicator Surveys (PaRIS) shows that only 47% of patients aged 65 and above perceive their primary care practice as well-prepared to co‑ordinate with long-term care providers.
At the same time, home and community care provision is not meeting current needs. Currently, 40% of 25 OECD countries have ceilings set on the hours of care, while care for instrumental activities for daily living is not covered in 20% of the surveyed countries and only 30% of OECD countries provide 24 hours of long-term care help at home. Lack of adequate and affordable home care services can promote an overreliance on informal or family caregivers. In many countries, options for community care are limited: the number of adult day-care users is below 1% of the population aged 65 or above. Shared living arrangements such as co-housing or co‑operatives are reported in about one‑third of OECD countries.
Besides the health benefits, there is a strong economic imperative to better supporting healthy ageing
Insufficient healthy ageing drives health and long-term care expenditures amid financial scarcity and workforce shortages. Spending on health is expected to grow by an average annual rate of at least 2.6% per year over the period from 2019‑2040, and long-term care expenditures are projected to nearly double by 2050. In parallel, the working age populations in OECD countries is projected to shrink by 8% in the OECD area by 2060, and by more than 30% in more than a quarter of OECD countries. This is projected to reduce GDP per capita growth in the OECD area by almost two‑thirds from 1.1% per year in the 2010s to 0.4% per year on average over the period 2024-2060. Lower GDP growth rates make it more difficult for countries to meet rising demand for health and long-term care, and reductions in the working-age population reduce the pool from which to recruit health and long-term care sector, adding to already existing scarcities of a health and long-term care workforce that is ageing. With other sectors forecasted to face shortages, attracting further workers to the health and long-term care sector will be even more challenging.
Promoting healthy ageing would help freeing up resources. Poor health among older people drives up healthcare consumption due to more frequent outpatient consultations, avoidable hospitalisations and hospital readmissions. Better prevention, such as policies to improve healthy lifestyles and early detection of diseases helps curb the burden of chronic diseases. Estimations by the OECD find that on average, a 10%-increase in spending on prevention leads to a reduction in the number of chronic diseases that would translate into reductions in healthcare spending by 0.9% within a period of five years. Similarly, OECD calculations suggest that an increase in spending on long-term care at home could lead to a decrease in the overall long-term care spending by around 0.5%.
Further evidence from a broader set of countries is needed to close evidence gaps. A review of the evidence from policies in OECD countries identified some main policies that show the greatest potential for promoting healthy ageing, discussed below. However, significant gaps in the evidence based on the impact of certain policies remain. Furthermore, the degree of policy implementation of promising policies remains sometimes limited to a handful of countries or it is sometimes in initial stages. Policy emphasis and resources seem to be placed more on providing care services and reacting to worsening care needs than on preventing or slowing disability or anticipating proactively the evolution of older people’s care needs.
Three main policy options around better prevention and health system adaptation promise to reduce the impact of ageing on health expenditures
Identify people at risk. While early intervention is desirable, prevention can still be effective in old age, and older people might benefit more from targeted interventions. Home visits can improve health outcomes, quality of life, reduce hospitalisations, and delay admissions to long-term care facilities. For example, preventive home visits in Norway were found to lead to a reduction in admissions to long-term care facilities by 7%, in hospital admissions among those aged 80 and above by the same rate, in the average number of hospital days by 11%, and in mortality of those aged 80 and above by 4%.
Offer care closer to people. Hospital stays are costly, remove people from their familiar surroundings, and can have negative side effects on patients’ health. To avoid this, countries are successfully shifting the delivery of care from hospitals to home and community settings. Hospitals-at-home shorten or entirely replace hospital stays. They result in similar or better health outcomes and evidence from several OECD countries, such as England (United Kingdom) and Israel, found that they are 10‑50% less costly than the in-patient stay.
Foster co‑ordination and integration of providers. Care pathways and integrated care programmes harmonise the delivery of care and formalise team structures. Across the OECD, 20 countries have already introduced integrated care programmes for an older population, with another three planning to do so. In England, increases in emergency admissions were up to 70% lower in integrated care programmes compared to the control group.
Adequate housing, age‑friendly environments and a continuum of care are effective at supporting people ageing in their community
Adapt houses and communities to an ageing population. The current housing stock is not always well-adapted for older people and home modifications are associated with lower likelihood of being admitted to nursing homes and lower need of help with activities of daily living. However, the evidence reviewed also showed a need to simplify the process for housing adaptation and ensuring that it is sufficiently generous to cover modifications. In several countries like the Netherlands, Sweden and Norway municipalities provide advice on housing adaptation. There are also gaps in accessibility, with urban infrastructure often not designed with an age‑friendly perspective to further promote independence for older adults. An offer of activities to enhance social participation is also effective: In Japan, municipalities have implemented salons for older people on educational programmes and social activities, which has halved the incidence in long-term care needs.
Make home care services more comprehensive. Just under 30% of people report having long-term care needs and have access to formal services due to waiting times, complex eligibility requirements, high out-of-pocket costs and countries not always providing enough hours and services for home care in line with older people need. Personal budgets as introduced in England and the Netherlands could provide flexibility to users in deciding the home care services that they need or countries could expand the service offer to better meet help with instrumental activities of daily and the number of hours available such as in Australia and Spain, respectively. Digital technologies as implemented in Nordic countries and Japan can help contain the costs of monitoring and free workers time for providing other type of care to older people while also seeking options to improve the affordability for users.
Improve access to adult day care and innovative community living options. Day care services for older adults have substantial benefits with reduced social isolation, improvement in health outcomes and a reduction in health costs and delay nursing home admission. While looking for options to expand access, improving the offer of health services in adult day care, such as in Japan, where health screening is included, could have a stronger impact on health outcomes. Beyond adult day care, some countries are promoting innovative housing models for older people in order to reduce social isolation and delay the severity of health and long-term care needs. France is considering options for co‑operative housing and intergenerational housing whereby people could benefit from the allowance for long-term care and there is also a special allowance for inclusive housing, the so-called “allowance for shared living” (aide à la vie partagée). In the United States, Green House care facilities include Medicaid and Medicare residents and offer small home‑like environment with higher quality of care, resulting in lower hospitalisation.
Population ageing is one significant demographic trend necessitating changes in social and health systems throughout the OECD. Between 1980 and 2020, the ratio of older people aged 65 or over to younger people of working age (ages 20‑64) increased from 20 to 30 for every 100, reflecting sustained low fertility rates and rising life expectancy (OECD, 2024[1]). This structural change has already contributed to an annual increase of 2.6% in per capita spending on healthcare across the OECD before the pandemic (OECD, 2024[1]). Projections indicate that the old-age‑to-working-age ratio will climb up to 45% or more for most OECD countries through 2060, with Japan and Korea exceeding 80% (OECD, 2024[1]), In light of these trends, maintaining health in old age has become increasingly important due to both individual and social implications. Successful policies that support healthy ageing can improve health outcomes, reduce health costs and can also delay the need for longer-term care for older people. OECD countries have recognised the need to adapt their health, social and long-term care systems to accommodate an ageing population. Out of 29 countries that participated in the OECD Questionnaire on Healthy Ageing and Community Care, 25 had a healthy-ageing-strategy in place.
This chapter provides an overview of the policies that countries are undertaking in terms of healthy ageing, concentrating on healthcare and long-term care for those 65 and above. The focus is to document as much as possible whether interventions are cost-effective interventions and document innovative approaches. With such an economic angle in mind, the report drew on national healthy ageing plans and strategies, as well as research on long-term care, to identify key principles for the four priorities, which can help promote healthy ageing in place (Table 1.1). The four priorities and relevant policies are discussed in detail in each of the analytical chapters. The current chapter is a summary of the key findings of these analytical chapters, focussing on a selection of promising policy options.
Sections of this chapter are organised as follows. Section 1.1 discusses trends in healthy ageing, followed by Section 1.2, which presents how healthy ageing can contribute to reducing health and long-term care spending and better cost-effectiveness by outright preventing chronic diseases, rearranging the delivery of care, and promoting ageing at home. Section 1.3 focusses on better prevention and health system adaptations to prepare for an ageing population and to shift the delivery of care from hospitals to outpatient and community care. Long-term care at home that is directed towards housing adaptations, home care services that promote longer and more independent living at home, are discussed in Section 1.4, together with long-term care in communities and day care.
1.1.1. Gains in life expectancy do not fully translate into healthy life expectancy
Over the past decades, OECD countries have recorded impressive gains in the number of years people can be expected to live, but gains in life expectancy have slowed down. Life expectancy at birth increased from 74.4 to 81.1 between 1990 and 2023 due to advances in health and living standards and this has led to large increases in the share of the population aged 65 and above. While life expectancy has increased steeply over the period from 1990 to 2011, the rate of increase has slowed down since 2011: life expectancy at age 60 increased by 1 year between 2012 and 2023,1 while it increased by 1.7 years between 2001 and 2011 (see Chapter 2). While there was a strong decline during and recovery after the COVID‑19 pandemic, the reduction in growth in life expectancy started already prior to the pandemic. The reason for the stalling is that many OECD countries are seeing slower reductions in deaths from circulatory diseases and a rise in deaths from dementia and respiratory diseases among older people (Raleigh, 2019[2]). Widening inequalities in life expectancy by socio‑economic status have also contributed in some countries to halting improvements in life expectancy.
Not every additional year of life is spent in good health. Countries have already achieved considerable gains in healthy ageing. Out of the 1.7 years in increase in life expectancy at age 60 from 2000 to 2021, the majority of 75% was an increase in disability-free “healthy life years”, although another 25% remains in years with disability (Figure 1.1). However, trends do not suggest that countries are closing the difference between healthy life expectancy and life expectancy. From 2000 to 2021, the difference between life expectancy and healthy life expectancy at age 60 has increased slightly from 5.2 years to 5.7 years, on average. Similarly, less than half of the population aged 65 and above rate their own health as good or very good (OECD, 2023[3]), all of which only highlight the potential for further gains in healthy ageing.
Share of Healthy and Disabled Life Years at Age 60
Note: Estimates are based on 38 OECD countries.
Source: WHO Global Health Observatory (2024[4]), “Healthy life expectancy (HALE) at 60 (years)”, https://www.who.int/data/gho/data/indicators/indicator-details/GHO/gho-ghe-hale-healthy-life-expectancy-at-age-60.
1.1.2. Health and lifestyle indicators show room for further progress
Older people’s limited health literacy presents a barrier to the adoption of healthy lifestyles and effective management of chronic conditions. Health literacy enables people to make healthy lifestyle choices and to manage complex chronic diseases better concurrently. However, data from the OECD’s Patient-Reported Indicator Surveys (PaRIS) shows that people aged 75 and above have lower levels of health literacy than people aged 45‑55 (OECD, 2025[5]) (Figure 1.2). Similarly, levels of digital health literacy are also lower among older people than younger people, indicating that the use of digital tools and online sources for health information is more difficult for older people (OECD, 2025[5]).
Comparison of the average of a 5‑point health literacy index across education and age groups. Difference in the 5‑point health literacy index across age groups over 75 and 45‑54
Note: *Data for Italy refer to patients enrolled in outpatient settings for specialist visits in selected regions. **United States sample only includes people aged 65 years or older. Results are age and sex-standardised across countries. Gaps between education groups are statistically significant (p<0.05) for Belgium, Canada, Czechia, Greece, Italy, Luxembourg, the Netherlands, Norway, Slovenia and Switzerland.
Source: OECD PaRIS 2024 Database, https://stat.link/qdehr0.
Many older people do not display a lifestyle that is conducive to ageing healthily. Physical activity has consistently been identified as a successful strategy to reduce cognitive decline and falls. It can reduce the number of people aged 65 and above who experience at least one fall by 15%, and the incidence of falls by 38% (Sherrington et al., 2019[6]). However, in 2019, just over one in four people aged 65 and above met the WHO recommendations on at least 150 minutes of moderate‑intensity exercise per week. Levels of physical activity varied greatly across OECD countries. In eight countries of the OECD (Czechia, Greece, Italy, Latvia, Lithuania, Greece, Portugal and Türkiye), less than one in ten people aged 65 and above met the recommendations, compared to one in two in the Netherlands, Norway, Sweden and Switzerland (Figure 1.3). Similarly, in Australia less than 11% of the population aged 65 and above performed less than 30 minutes of physical activity in at least 5 days per week (AIWH, 2024[7]).
Share of adults 65 and over meeting WHO physical activity recommendations
Source: Canada: 2018 Canadian Community Health Survey (CCCHS), European OECD countries: Eurostat (online data code: hlth_ehis_pe2e); Korea: Seo et al. (2022[8]) based on the Korean National Health and Nutrition Examination Survey; Mexico: 2019 Encuesta Nacional sobre Confianza del Consumidor, Módulo de Práctica Deportiva y Ejercicio Físico (MOPRADEF); Switzerland: 2017 BFS – Schweizerische Gesundheitsbefragung [Swiss Health Survey]; United Kingdom: May 2018-May 2019 Active Lives Survey; United States: 2020 National Health Interview Survey.
Older people have greater, more complex, and different needs than younger people. In 2021, one in two people aged 65 to 74 had at least two chronic conditions (Figure 1.4), representing an increase of almost 6 percentage points (p.p.) over the past 10 years. Rates are heterogeneous across OECD countries, ranging from 34% in Korea to 65% in Hungary in 2021. Rates have increased across most OECD countries. Only Korea and Poland show a slight decline in the rate of people with at least two chronic conditions aged 65‑74 over that time period. Some countries have recorded only small increases, such as England, the Netherlands and Finland, while increases have been the largest in Portugal. People with chronic conditions often encounter additional limitations and thus require care from different providers within the health sector, along with extra support from the social and long-term care sectors. This makes them vulnerable to health system deficiencies, such as a lack of primary care and care fragmentation (OECD, 2023[9]). Living with a chronic disease can negatively affect people’s well-being, physical and mental health and social functioning, and drive up health expenditures (OECD, 2025[5]).
Share of people aged 65‑74 with at least two chronic conditions, 2011 vs. 2021 (or nearest)
Note: First observations include 2010 for England, Korea, and the United States; 2012 for Mexico; 2013 for Israel and Luxembourg; 2015 for Greece; and 2019 for Finland, Latvia, Lithuania, and the Slovak Republic. Last observations include 2018 for England and Mexico, and 2020 for Korea and the United States. Japan has a single wave and, therefore, is not displayed in the figure.
Source: Survey of Health, Ageing and Retirement in Europe (European Union and Israel), Health and Retirement Study (United States), English Longitudinal Study of Ageing (England), Korean Longitudinal Study of Aging (Korea), Mexican Health and Aging Study (Mexico).
Insufficient management and support for older people with complex needs can further exacerbate these issues and negatively affect healthy ageing. Responses from the OECD’s Patient-Reported Indicator Surveys (PaRIS) show that only 47% of patients aged 65 and above perceive their Primary Care practice as well-prepared to co‑ordinate with long-term care providers (OECD, 2025[5]).
Functional disability has not improved across generations
Improvements in old-age disability have not been equally distributed across generations in OECD countries. Functional limitations in old age have declined over the past two decades (Figure 1.5) but this is primarily focussed on the older population. Substantial gains are observed among these middle‑old (ages 75‑84) and old-old (ages 85+), with marked declines in limitation rates for the 85+ groups across later-born cohorts. In contrast, among people aged 45 to 74, the prevalence of limitations shows little evidence of generational improvements. This suggests that, despite advances in healthcare and living conditions, young-old (ages 65‑74) and midlife functional health have not experienced the same progress seen in older age groups. Some countries have seen an increase in limitations among younger cohorts, including the United States, Canada, and the United Kingdom (Beller and Epping, 2021[10]; Zajacova and Montez, 2018[11]). In addition, across the OECD on average, there has been an increase in the share of people in the younger cohorts reporting limitations in instrumental activities of daily living over time (Chapter 2).
Share of people aged 45 or over having any functional disability by birth cohort, 1999-2021
Note: Functional disability includes activities of daily living and instrumental activities of daily living. The estimates are weighted estimates pooled across available datasets between 1999 and 2021.
Source: Survey of Health, Ageing and Retirement in Europe (European Union and Israel), Health and Retirement Study (United States), English Longitudinal Study of Ageing (England), Korean Longitudinal Study of Aging (Korea), Mexican Health and Aging Study (Mexico), Japanese Aging and Health Dynamics (Japan).
1.1.3. Current living environments are not sufficiently age‑friendly
The current housing stock is not always well-adapted for older people to stay at home as they age and public funding for housing adaptation is often insufficient. Data from the United States and Europe highlights that less than 20% of homes had the most basic features to be considered ageing-ready (Figure 1.6). As people age, moving around the house, taking the stairs and living in a place that is not adapted to people with physical limitations can lead to fear of falling and increased risk of falls and injuries (Chen et al., 2023[12]; Braubach, 2011[13]). Across the OECD, just over half of the countries provide public subsidies while two countries have funds available as part of the insurance, four countries offer tax credits, and others offer loans or grant to providers. Still, housing adaptation remains costly as the generosity of these types of support varies across countries and means-testing is common. Out-of-pocket are required in one‑third of countries to cover the cost of housing adaptations. In half of the countries for which information is available, people who need to perform housing adaptations will need to contract out the adaptation work, before receiving partial or total reimbursement of expenses.
Share of people living at home with specific features for older people or people with physical impairments
Note: Alerting devices include button alarms, detectors, a call system, or other systems to get help when needed. Ramps include street-level entrances, and bathroom and toilet modifications include grab bars or shower seats. Data for Europe and the United States is based on SHARE Wave 9 (2021-2022) and HRS 2022, respectively. The SHARE data includes 28 European countries.
Source: Survey of Health, Ageing and Retirement in Europe (European Union and Israel) and Health and Retirement Study (United States).
Housing affordability is decreasing, calling for better support to ensure affordable housing for older people. While older people are mostly homeowners, the housing market is becoming increasingly unaffordable and more recent generations of older adults might be less likely to be homeowners. Between 2020 and 2022, the housing cost overburden rate2 has been growing considerably for people aged 65 or older, moving from 7.8 in 2020 to 9.7 in 2022 on average in the European Union (EU). Evidence from Australia, the United States and European countries shows that people in older ages might also face difficulties in paying rent as the incomes of older people (aged 65 or older) tend to be lower than that of the general population (OECD, 2023[14]). Research has highlighted growing housing insecurity and rent unaffordability, together with lower quality of housing among older people.
Essential services, green spaces and social activities are not always readily accessible to older people either walking or with public transport. Being able to reach the main services and social activities that a person might need on a daily or weekly basis within walking distance makes those activities and services more accessible and improves the chances that people remain in their own homes. In cities, on average, a person can reach 16 food shops and 34 restaurants by walking 15 minutes in some of the major cities across 30 OECD and EU countries, yet only 0.2 green areas are available within the same distance and only 0.5 hospitals are reachable within that walking time. Across 27 OECD countries with available information, only 16 countries reported that public transportation is easy to access for people with mobility limitations and affordable for older people. While 83% of the urban population across the OECD’s cities can access a bus stop and 31% a metro or tram stop within a ten‑minute walk, promoting mobility and accessibility for peri‑urban and non-urban populations is much less available and people often require individual cars (OECD, 2024[15]).
1.1.4. Home and community care services remain limited
The offer of home care services in several OECD countries falls short of ensuring that people can lead an independent life at home for as long as they wish. Currently, 40% of countries have some limitations in the hours of care which can lead to unmet needs or out-of-pocket costs for individuals and incentivise the use of institutional care (Figure 1.7). While care for activities of daily living, such as eating and bathing, is included across OECD countries, not all instrumental activities of daily living, like shopping for groceries and managing one’s finances, are well-catered for. Financial support with grocery shopping and going to appointments and administration was not included in 20% and 30% of the countries respectively. In addition, only 30% of countries in the OECD provide continuous long-term care help at home, the so-called 24‑hour-care. Given people’s preferences for ageing at home for as long as possible, limitations in the number of hours and services can put a strain on older people at home, both financially and physically and precipitate the decision to move into a nursing home earlier than what would be desirable. Inadequate or unaffordable home care services can also promote an overreliance on informal or family caregivers, while demographic changes with families becoming smaller and living further away from their parents are likely to limit the availability of family caregivers.
Proportion of OECD countries with limits on hours funded for personal and household care
Note: Data for Canada refer to New Brunswick.
Source: OECD Questionnaire on Healthy Ageing and Community Care (2023[16]).
Day-care use among older adults is limited in most OECD countries for which data are available. In most countries, the number of adult day-care users is below 1% of the population aged 65 or above (Figure 1.8). There are some exceptions, with day care being a vital component in long-term care delivery in Latvia and Luxembourg where the share is above 5%, as well as in Japan and the Netherlands to some extent. Lack of awareness about adult day care, transportation challenges and costs limit the overall use of day care. Communities and professionals do not often have sufficient knowledge about of the availability of day care options nearby (STIMA, 2023[17]). Day care services for older adults are not always available within a reasonable distance and countries do not always provide appropriate funding or reimbursement for transportation (EHESSP, 2019[18]). While public funding for adult day care is available, it remains low in comparison to other long-term care services, representing only 3% of the total long-term care budget on average. In 17 OECD countries, out-of-pocket costs are required, and this can limit the number of participants. In other countries such as France and Israel, limited funding results in low availability, waiting times or in a limited number of hours.
Number of day-care users as share of the population aged 65+, 2021 or latest year
Source: OECD Questionnaire on Healthy Ageing and Community Care (2023[16]).
1.2.1. Better healthy ageing improves the sustainability of health and long-term care systems
Population ageing takes place amid declines in GDP growth and a shift in spending priorities. The shift in the demographic composition leads to a reduction in the working-age population, which can negatively affect GDP growth rates. By 2060, the working-age population will have declined by 8% in the OECD area, and by more than 30% in more than a quarter of OECD countries. The OECD old-age dependency ratio increased from 19% in 1980 to 31% in 2023 and is projected to rise further to 52% by 2060 (OECD, 2025[19]). A lower projected share of employed persons in the total population implies that GDP per capita growth in the OECD area will be reduced by almost two‑thirds, falling from 1.1% per year in the 2010s to 0.4% per year on average over the period 2024-2060 (OECD, 2025[19]). Reductions in GDP growth limit the amount to which health and long-term care spending can be increased to cover rising demand from population ageing. Migration can contribute to lessen the challenge of ageing, but migration rates would need to increase well above historical values to have a substantial impact in the labour market. The largest contribution to offsetting the effects of demographic change on growth would come from mobilising further labour market participation and employment of older people in good health.
Health and long-term care expenditures are projected to increase as populations age. Population ageing is having a profound impact on societies and on healthcare and long-term costs. Health spending from public sources across the OECD is projected to grow at an average annual rate of 2.6% for 2019‑2040 for the base scenario and projected to reach 8.6% of GDP, an increase of 1.8 p.p. from 2018 (OECD, 2024[20]). Long-term care expenditures are projected to near double by 2050 (OECD, 2024[21]).
Health conditions, which tend to increase with age, drive the increase in health expenditures. Older people tend to have higher expenditures mostly because of their morbidity status and preventable diseases, long-term care conditions and proximity to death are core drivers (Breyer and Lorenz, 2020[22]; Howdon and Rice, 2018[23]; Maynou, Street and García−Altés, 2023[24]). It is estimated that a 65 year‑old with a serious chronic illness in the United States spends USD 1 000 to 2 000 more per year in healthcare services than a similar adult without the condition (Joyce et al., 2005[25]). This is leading to higher health expenditures as people age, but a healthy old person enjoys lower spending than a young person with chronic conditions. In addition, health-system-related factors, such as increases in benefit levels and changes healthcare production, especially pharmaceutical spending and innovation, have been found to outpace the effect of ageing in driving up health expenditures (Dormont, Grignon and Huber, 2006[26]; Hagist and Kotlikoff, 2005[27]).
An increase in demand for health and long-term care services compounds with already existing workforce shortages, and an ageing health and long-term care workforce. In the European Union, over one‑third of doctors and a quarter of nurses are aged over 55 and expected to retire in the coming years while countries already have an estimated shortage of approximately 1.2 million doctors, nurses and midwives in 2022 (OECD/European Commission, 2024[28]). In addition, many countries already face existing shortages of health workers and OECD has identified the need for more training, as well as improving working conditions to retain staff (OECD, 2023[29]). Likewise, recruitment and retention of long-term care workers faces severe difficulties. Salaries of long-term care workers and job recognition are low and working conditions are difficult, dissuading people from choosing these professions and contributing to further mismatches between demand and supply (OECD, 2023[30]). This is occurring in a context where other economic sectors are experiencing shortages and can offer more attractive salaries and working conditions than the long-term care sector.
Healthy ageing and changes in the way care is provided can help reduce increases in spending and improve the effectiveness and productivity of health and long-term care systems. Three policy options stand out in effectively supporting healthy ageing and their economic impact are discussed in the next sub-sections. Firstly, more prevention, such as policies to support healthy lifestyles and participating in public health measures, the identification of people at risk, and rehabilitation and reablement help reduce the effect of morbidity, such as the number and severity of chronic diseases and limitations (Section 1.2.1). Secondly, changes in the way care is provided, such as a shift in care provision from the inpatient to the outpatient, home and community setting can ensure that people receive the same or better care that is less disruptive care and takes place in a less costly setting (Section 1.2.2). Thirdly, supporting people to age at home is generally cost-effective and meets people’s preferences to live as home for as long as possible. Housing adaptations, more affordable comprehensive home care and day care that allows people to age at home without having to fully move towards institutional care, are two promising policy options countries have at their disposal to support ageing at home and in the community (Section 1.2.3).
1.2.2. More spending on prevention and health system adaptation can reduce health expenditures
Better prevention reduces morbidity as well as health expenditures. Spending on prevention supports people in living a lifestyle and participating in public health measures that contribute to healthy ageing. Unhealthy lifestyle factors, such as excessive alcohol consumption and smoking, low levels of physical activity and unhealthy diets increase the burden of chronic diseases and negatively affect life expectancy and healthy life expectancy (OECD, 2021[31]). More prevention efforts, such as public health campaigns to reduce alcohol consumption and smoking, and policies to improve physical activity reduce chronic diseases, prolongs life expectancy and healthy life expectancy, and offers cost-effective returns (Devaux et al., 2023[32]; OECD/WHO, 2023[33]; OECD, 2024[34]). Participation in public health measures, such as screening campaigns and preventive home visits allow to reduce the burden of certain diseases, to identify people at risk to intervene as early as possible, and to target those that benefit the most from health and long-term care interventions (Bannenberg et al., 2021[35]; OECD, 2024[34]).
Investments in such preventive measures can lead to reductions in the share of older people with chronic conditions. OECD estimations show that a 10%-increase in spending on prevention was associated with a decrease in the share of people with chronic conditions, which is associated with lower overall health spending by 0.9% after a period of five years (see Box 1.1 for the methodology) (Figure 1.9).
Changes in healthcare spending due to changes in the ratio of people with two or more chronic conditions to those with one or no diseases out of five conditions
Source: Survey of Health, Ageing and Retirement in Europe (European Union and Israel), Health and Retirement Study (United States), English Longitudinal Study of Ageing (England), Korean Longitudinal Study of Aging (Korea).
Health system adaptation can shift care to settings that offer better value for money. Older people often do not receive the care they are most in need of, nor the most suitable setting, which contributes to driving up costs due to avoidable hospitalisations and exacerbations of their conditions. Avoiding hospitalisations can free financial and human resources. Hospitalisations are costly and bind healthcare resources amid workforce shortages and waiting time concerns. While a large part of the population never experiences a hospital stay in a calendar year, or is only hospitalised for a mild condition, one average hospitalisation equates the annual per capita health expenditures of more than one person. In 2022, average costs per inpatient stay for curative and rehabilitative care exceeded total health expenditures per capita by a factor of 2.23 across 27 OECD countries for which data was available.
Hospitalisations can be risky for older people. Taking people out of their familiar surroundings may disrupt care provision, require informal carers to take time off and make rearrangements to accommodate them in the hospital. For older patients, hospital stays can often be stressful and expose them to risks. They can lead to an increase in limitations of (instrumental) activities of daily living (hospital-associated disability) (Loyd et al., 2020[36]), delirium after operations, which can exacerbate cognitive decline (Kunicki et al., 2023[37]; Saczynski et al., 2012[38]), and expose them to hospital-acquired infections (Bates et al., 2023[39]; OECD, 2023[40]). As a result, the benefits of hospitalisations do not always outweigh the risks.
Congestive heart failure hospital admission in adults, 2011, 2019 and 2021 (or nearest years)
1. Latest data from 2020 (and for Costa Rica from 2022) instead of 2021.
Source: OECD Health Statistics 2023.
A share of hospitalisations can be avoided through health system rearrangements. For example, congestive heart failure is highly prevalent among older people and can lead to unnecessary hospitalisations, as can be deduced from the heterogeneity in hospital admissions due to congestive failure (Figure 1.10) (OECD, 2023[40]). Better prevention, access to primary care, a good relationship between physicians and patients and care integration can help reduce the rate of hospitalisations for these conditions among older people (Barrenho et al., 2022[41]; van Loenen et al., 2014[42]; OECD, 2023[9]).
1.2.3. Supporting ageing at home can reduce long-term care spending
Ageing at home meets people’s preferences while reducing health and long-term care expenditures. Older people across OECD countries prefer to age at home and in their community. According to evidence from the United States, 77% of adults 50 and above wish to age at home (Binette and Farago, 2021[43]). While this might be preferable in terms of quality of life and well-being, in some cases, it might also be a more cost-effective option than institutional care, depending on the system.
Long-term care at home is less expensive for people with low and moderate levels of need. People with low and moderate needs that have a limited number of (instrumental) activities of daily living and only need a few hours of care per week. They do not need the constant presence of a long-term care worker that institutional care provides, but rather some help in the morning and evening for personal hygiene, or for shopping groceries several times a week. Often, they either own the place they live in, or rent it at lower cost than the costs for boarding charged by institutional care. Long-term care provided in institutions can be cost-effective for people with severe needs that need a high number of hours of care thanks to economies of scale, where long-term care workers can provide care to several people with severe needs at the same time instead of providing intense care to a single person in their home. For people with lower levels of need, however, long-term care at home and in communities is generally more cost-effective and uses human resources more effectively, also freeing out expensive beds for those with more severe needs.
Countries can support a larger part of people to age at home. Between 2011 and 2021, the proportion of long-term care recipients who received care at home increased slightly, from 67% to 69%. Still, on average, only 29% of older people in institutional care in OECD countries have severe needs, indicating that a considerable part of people that receive long-term care support in institutions could receive long-term care at home and in communities, that reduces expenditures, helps reduce shortages of long-term care workers through a more effective use of their time, and better responds preferences of older people (see (OECD, 2024[21])).
Spending on long-term care remains geared towards institutions. In 2021, more than two‑thirds of long-term care beneficiaries received long-term care at home, but countries spent half of their total long-term care spending on long-term care in institutions (OECD, 2023[40]). An increase in spending on long-term care at home could help long-term care recipients to prolong ageing at home and to postpone the transition to a long-term care institution. Spending on long-term care at home can be directed towards housing adaptations to enable people to live at home as independently as possible and towards cash and in-kind benefits to ensure that long-term care needs are met to avoid a deterioration of a person’s health and limitations.
Based on OECD estimations, a shift from spending on long-term care in facilities towards spending long-term care at home, expressed through an increase ratio of spending on long-term care at home over long-term care overall expenditures by 1%, can lead to a decrease in the overall long-term care spending by 0.49% (Figure 1.11).
Ratio of spending on long-term care at home over overall long-term care
Note: United Kingdom refers to England.
Source: Survey of Health, Ageing and Retirement in Europe (European Union and Israel), Health and Retirement Study (United States), English Longitudinal Study of Ageing (England), Korean Longitudinal Study of Aging (Korea), The Irish Longitudinal Study on Ageing (Ireland).
OECD estimates the impact of healthy ageing policies on health and long-term care expenditures. Estimates are based on data from the Survey of Health, Ageing and Retirement in Europe (SHARE), the English Longitudinal Study of Ageing (ELSA) for England, the Health and Retirement Survey (HRS) for the United States and the Korean Longitudinal Study of Ageing (KLoSA) and on OECD data on health expenditures. The OECD has analysed the impact of two policies to support healthy ageing: (1) a policy that promotes health prevention and (2) a policy that promotes home care as an alternative to institutional care.
Model 1 was estimated to assess the impact of the first policy on health expenditures. Specifically, it examines how changes in the spending on health prevention compared with total hospital spending – affect the ratio of people with two or more chronic conditions to those with one or no diseases out of a total of five chronic diseases (high blood pressure, diabetes, heart problems, arthritis and lung diseases). The analysis draws on data from 23 OECD countries and 3 accession countries (Bulgaria, Croatia and Romania), covering the time‑period from 2006 to 2021. The estimated impact of increasing health prevention expenditures is expressed in terms of changes in overall healthcare spending associated with changes in the prevalence of chronic conditions.
In the second model (Model 2), the impact of the second policy on long-term care expenditures is assessed. This model examines how changes in spending on home care – expressed as spending on home care divided by the spending on overall expenditures in long-term care – affects the ratio of people with severe long-term care needs to those requiring fewer or no hours of care. The model parameters are estimated using data for 18 OECD countries over the time span from 2006 to 2021. The estimated impact of increasing home care expenditures is expressed in terms of changes in overall long-term care spending associated with changes in the prevalence of long-term care needs.
The impact of both policies is assessed with a five‑year time lag to account for the delay between changes in spending and measurable health outcomes. Both models control for the share of the population aged 80 and above relative to those aged 65 to 79, to account for changes in population age structure. They also include GDP per capita as a control variable to account for the overall effect of wealth on health spending and the demand for health and long-term care services. The models estimate how changes in spending affects the prevalence of chronic conditions and long-term care needs within each country. This approach avoids imposing any assumptions related to in cultural and social norms or other environmental factors, such as preferences for long-term care at home over institutions.
Better prevention can drive healthy ageing by reducing or outright preventing a deterioration in older people’s health and by recovering people’s health and functioning after health shock (pillar 1 of the OECD framework on Healthy Ageing close to people’s home). Health system adaptation focusses on ensuring that health systems meet the needs of older people and offer the right care at the right place by the right people in a people‑centred and integrated manner (pillar 2 of the framework). This section looks at policy options countries have to ensure that health systems support prevention and reablement and successfully and effectively accompany populations as they age.
1.3.1. Implementing targeted interventions to better identify people at risk of health decline can be effective if properly designed
Outright promoting healthy lifestyles remains challenging. While early intervention is desirable, there are still benefits to invest in preventive policies at an older age, but this comes with additional challenges. Older people that have spent several decades following unhealthy behaviours will find it difficult to change established patterns. While the benefits of prevention are clear, policies to sustainably improve healthy behaviours often yield mixed results at best. Policies to identify people at risk, which allows to effectively direct interventions towards them, has returned positive results and several evaluations of rehabilitation and reablement point at cost-effectiveness.
Health literacy campaigns are important to support healthy choices. Despite their well-known benefits, health behaviours and the uptake of public health measures remain challenging to realise. Firstly, people might not possess the levels of literacy that enable them to make healthy lifestyle choices and might also not be aware of offers that exist on a community level. Secondly, behaviours are sticky, and a share of people aged 65 and above have already spend several decades with unhealthy behaviours, making them resistant to change. Health concerns, such mobility restrictions, chronic pain, and fear of falling can further defer older people from being physically active. Countries are using information campaigns and counselling to improve health literacy and to inform and remind people of the benefits of healthy behaviours. France offers Nutri-Scores that improve health literacy and was found to reduce the calorie intake of purchased labelled food products by 3%, contributing to increases in life years and disability-free life‑years gained (OECD, 2022[44]).
Countries could use targeted strategies to identify people at risk of a certain condition or people that have already developed it. Australia, Finland, Norway and the Netherlands have introduced dedicated preventive home visits to older people to assess their health status and to check whether their surroundings are age friendly. Denmark had mandatory preventive home visits to older people, but since 1 July 2025 these visits have been voluntary for municipalities to provide. Home visits were found to improve health outcomes, quality of life, reduce hospitalisations, delay admissions to long-term care facilities, and were cost-effective (Kronborg et al., 2006[45]; Liimatta et al., 2019[46]; Sahlen et al., 2008[47]). For example, the introduction of preventive home visits in Norway was found to lead to a reduction in admissions to long-term care facilities by 7%, in hospital admissions among those aged 80 and above by the same rate, in the average number of hospital days by 11%, and mortality of those aged 80 and above by 4% (Bannenberg et al., 2021[35]). Countries also use sector-specific screening to identify people at risk. For example, policies to prevent falls were only effective when they targeted people at risks, but showed no effect for people that were not at risk of falling (Sherrington et al., 2019[6]). In the Netherlands, fall prevention measures have been introduced and will be covered under the basic benefits package for older people at elevated risk for falls. Changing health behaviours might also be more challenging for people from a lower socio‑economic status who are also more constrained by their income levels and living environment in terms of healthy choices. Targeted interventions such as group exercises and screening for specific conditions might be beneficial.
Rehabilitation and reablement aim at restoring a person’s independence and functions after an accident or illness by optimising their functioning and reducing disability, in the case of rehabilitation and by increasing or maintaining independence in (instrumental) activities of daily living and reducing long-term care needs in the case of reablement (Gough et al., 2025[48]). Evaluations of general and disease‑specific rehabilitation, such as cardiac rehabilitation and pulmonary rehabilitation, were largely cost-effective (Shields et al., 2018[49]; Mosher et al., 2022[50]; Candio et al., 2022[51]). Evidence is much more limited and heterogeneous for reablement, but some programmes have managed to generate positive results (Aspinal et al., 2016[52]). For example, in Australia, people that underwent a home‑based reablement programme were less likely to have an unplanned emergency admission or unplanned hospital admission, required 40% fewer hours of home‑based care and had 35% lower total home‑based costs and 20% lower total health and home‑care‑related costs than those receiving standard care in a follow-up period of two years (Lewin, Alfonso and Alan, 2013[53]; Lewin et al., 2014[54]). In Norway, reablement was also found to lead better performance of and satisfaction with daily activities while requiring 25% fewer home visits, and costs being 17% lower than standard care (Kjerstad and Tuntland, 2016[55]).
1.3.2. Bringing care closer to people’s homes reduces inpatient expenditures
Policies that shift the delivery of care from the in- to the outpatient sector by shortening or outright replacing a hospital stay are largely effective in reducing costs while being less disruptive to older people’s lives. Hospitals-at-home and intermediate care structures to shorten or replace hospital stays are now well-established, and newer policies, such as outreach teams, show promising results in keeping people in their homes rather than admitting them to hospitals.
Hospitals at home offer hospital-type care in a patient’s home or long-term care facility to outright replace or shorten inpatient stays and are dominant in at least 22 OECD countries, such as Chile, France, Spain and the United Kingdom. A generous body of evidence indicates that hospitals-at-home lead to similar or better health outcomes while being 20‑30% less costly than the in-patient stay (Singh et al., 2021[56]; Yehoshua et al., 2024[57]). For example, in England, hospital-at-home stays were (GBP 2 840) less expensive after inclusion of informal care costs (Singh et al., 2021[56]). Patients value remaining in their familiar surroundings, but this structure can place additional burden on caregivers, who need to be well-prepared and integrated in the provision of Hospital-at-Home programmes.
Doctor-led or nurse‑led outreach teams are dispatched from a hospital to offer assessments and simple interventions and can avoid emergency admissions and subsequent hospitalisations. While still a new concept, first evaluations are yielding positive results. Findings from Australia, Canada, Denmark and Finland indicate a reduction in emergency admissions and suggest that they are perceived as less disruptive than hospital admissions. Australia found a significant reduction in emergency department presentations by around 10‑20% (Kwa et al., 2021[58]; Fan et al., 2015[59]; Hutchinson et al., 2014[60]). Similarly, investigations from Finland recorded a reduction in less acute emergency admissions from long-term care facilities by about 20‑30% depending on the severity with savings of 14% per resident in a long-term care facility (Perttu et al., 2025[61]; Mäki et al., 2023[62]).
Intermediate care structures introduce a layer in between hospitals and primary care and can provide better and more cost-effective care to people that do not require a full hospitalisation, but more intense monitoring than provided in a long-term care facility. They are often used as a step-down unit to shorten hospital stays and to ensure a smooth transition from hospitals to a patient’s home. Intermediate care structures can help freeing hospital capacities and contribute to reducing delayed discharges, where people stay in a hospital for longer than medically necessary because of shortages in long-term care. Intermediate care facilities have largely been identified as successful in improving health outcomes, for example reductions in hospital readmissions, and have been found to be cost-effective, and might be worth the investment (Tyler et al., 2023[63]; Blum et al., 2020[64]). Intermediate care structures require a good co‑ordination with hospitals and outpatient providers to ensure that they contribute to a smooth care transition rather than additional fragmentation of the healthcare system.
1.3.3. Some integrated care programmes have shown promising effects on functional outcomes and cost, but setting up effective programmes remains challenging
Older people with complex needs often receive care from different healthcare providers, and from healthcare, social and long-term care sector concurrently. This requires a good co‑ordination to ensure patient-centred, seamless care within and across different sectors. Policies that aim at improving care while reducing costs through better integration and co‑ordination have long been hailed as a highly promising policy, but evidence from several decades of experimentation has shown heterogeneous effects that take several years to materialise. Integrated Care Programmes formalise the co‑ordination among workers, often changing the way providers are paid. For example, in a set of countries, such as France and Ireland, they replace traditional fee‑for-service payments by risk-adjusted capitation payments to a group of providers that shall incentivise better continuity of care.
Across the OECD, 20 countries have already introduced Integrated Care programmes for an older population, with another three planning to do so. In Canada, several provinces have gained experience with integrated care for older people. For example, Quebec launched the Program of Research to Integrate the Services for the Maintenance of Autonomy, also known as Réseau de Services Intégrés aux Personnes Âgées (PRISMA, or RSIPA) in 1999, which was later integrated in standard care. The evaluation of the programme showed a 6.3%-reduction in functional decline in people who participated in the programme, with no difference in annual cost compared to the control group (MacAdam, 2015[65]). In England, increases in emergency admissions were up to 70% lower in integrated care programmes compared to the control group (Morciano et al., 2021[66]; Keeble et al., 2019[67]). In these Pioneer and Vanguard schemes and their successor, Integrated Care Systems, improvements took three to six years to materialise (Morciano et al., 2021[66]; Lloyd et al., 2021[68]).
1.4.1. Adapting environments to older people reduce the risk of hospitalisation and institutionalisation, but such adaptations are not always sufficiently generous
As discussed in Section 1.2, there are significant health and economic benefit from having people age closer to their own home. At present, however, less than 20% of homes are adapted to the needs of older people, fewer than 30% of people with long-term care needs receive formal care and less than 1% are enrolled in day care. To maximise its potential, ageing close to people’s home requires ensuring that houses are adapted to the needs of older people and environments are more age‑friendly, and rethinking long-term care in community to ensure a more comprehensive, affordable and high-quality care (pillar 3 and 4 of the framework).
Simplifying the process for housing adaptation and ensuring that it is sufficiently generous to cover modifications would be needed to better promote ageing in place. Studies have found that home modifications that make housing more accessible are associated with lower likelihood of being admitted to nursing homes, lower need of help with activities of daily living such as bathing, lower levels of functional decline and better carer’s outcomes (Petersen and Aplin, 2021[69]). In France, to simplify access to such support older people who require housing adaptations will be able to apply to MaPrimeAdapt’ to receive financial support up to a maximum amount of EUR 22 000 (French government, 2023[70]). In several countries (Latvia, the Netherlands, Norway and Portugal), municipalities provide advice on housing adaptation. The need for the intervention must be assessed and verified by a health professional, most often an occupational therapist, and the housing adaptation application is subsequently submitted to the municipality.
Supporting independent living also requires access to services and activities located within a convenient distance or reachable through affordable, accessible public transportation. Countries need cities that are more pedestrian-friendly, with mixed activities in areas to encourage accessibility to goods and services while balancing access to green spaces within walking distance (OECD, 2020[71]). Urban infrastructure, such as traffic lights, benches, and green spaces, should also be designed with an age‑friendly perspective to further promote independence for older adults. In New Zealand, the Accessibility for New Zealanders Bill aims for the removal and prevention of accessibility barriers in public spaces and transport. Some countries have looked at flexible transport systems, which are based on demand or do not have a fixed route, or subsidised taxis as an alternative to expanding public transport: In Norway, the “Ruter age‑friendly transport (RAT)”, the “AtB 67 plus” and the “Pick me up!”, are services of shared door-to-door transport that older people can book online and access at the cost of a public transport, which is proven to contribute to improved quality of life (Nordbakke et al., 2020[72]). An offer of activities to enhance social participation is also important: In Japan, almost 87% of Japanese municipalities have implemented salons for older people on educational programmes and social activities, which has halved the incidence in long-term care needs and led to about one‑third reduction in the risk of dementia onset for participants (Saito et al., 2019[73]).
1.4.2. Home care services that are comprehensive and affordable are available in a small number of countries
Complex regulations and lack of available places limit access to home care. Current coverage, that is the share of people with self-reported long-term care needs receiving formal care services (both home and institutional), is close to 30% across the OECD. While people with low needs might not need formal services, and might rely on an informal carer, which can also have a toll in terms of employment loss of informal carers, survey responses point to up to 50% having unmet needs. Lack of awareness about benefit or service entitlement might be one reason why people do not receive formal support. At the same time, eligibility requirements are one the main reason for low access. Needs assessments are complex and lengthy and individuals with needs might not reach the minimum thresholds for entitlements. Income and wealth testing will also deter individuals from applying as they might still need to pay out-of-pocket and provide documents to justify their situation. In four countries, a family or so-called informal caregiver is also considered in the decision and generosity for accessing services. Finally, even when individuals are entitled to services, they might need to wait to receive them. Waiting lists can be lengthy and 11 countries do not have regulations to target curbing waiting times, while five others do have them for some services but they are rarely enforced.
A number of policies would have an impact on improving access to long-term care at home, such as simplifying the application procedures and providing a timely response. In Greece, community centres in municipalities can advise older people about home care and help them with the application process for home care, particularly with the paperwork required. Similarly, in the Netherlands, Care offices (Zorgkantoren) in regions help people find care that is appropriate to them. Germany has a requirement to notify the applicant about the needs assessments within a maximum time of 25 working days. In Sweden, services should be provided within three months. Spain started in 2021 a process of monitoring waiting times for being assessed and receiving services with an additional inflow of funds to reinforce human resources and simplify the needs assessment. The current body of evidence suggests that well-structured and developed long-term care benefits and services reduce use of emergency care, and hospital admissions and utilisation (Costa-Font, Jimenez-Martin and Vilaplana, 2018[74]).
Beyond availability, the depth and breadth of long-term care has room for improvement in many OECD countries. Enhancing the hours and services for home care, while seeking for innovative solutions is one principal element to address service shortcomings. Personal budgets as introduced in England and the Netherlands could provide flexibility to users in deciding the home care services that they need. Spain has changed the limit on the hours available for the highest grade of long-term care in 2023 to cater for more home care for those who have more severe needs (Ministerio de Sanidad, Servicios Sociales e Igualdad, 2023[75]). Countries like France and Australia have also recently recognised the importance of providing financial support towards certain instrumental activities of daily living, such as assistance with outings or appointments. Digital technologies as implemented in Nordic countries and Japan can help contain the costs of monitoring and free workers time for providing other type of care to older people. In addition to that, where unit costs of home care services are lower than institutional care, countries could consider expanding the hours and piloting 24‑hours care options. Such options could take the form of a cash benefit or with 24‑hour helplines so that older people could be monitored and additional help might be sent on demand. Finland’s initiative to progressively reduce institutional care and expand the possibility of 24‑hour care at home is coupled with minimum staffing requirements and benchmarking data to guarantee quality of care.
Gaps in the public provision of home care leave vulnerable people with severe needs and low income at the risk of unmet needs or high out-of-pocket costs in many OECD countries. The generosity of long-term care services varies across countries but out-of-pocket costs (the share of the total long-term care costs that is left for older people to pay, after receiving public financial support) can be high when compared to disposable incomes. More specifically, in 16 countries, out-of-pocket costs for individuals with severe needs at home represent more than half of the median income of an older person and in seven countries the costs are higher than an older person’s median income itself. Older people with low incomes also face high out-of-pocket costs in seven countries.
Countries would need to find better ways to balance the affordability of home care for users and the sustainability of finances. Previous OECD work highlighted that fully eliminating out-of-pocket costs will require increasing expenditures by 6% annually until 2050 (OECD, 2024[21]). Countries are likely to seek additional sources to fund long-term care but options to manoeuvre are tight. Similarly, countries should investigate policy options that promote efficiency and help contain the costs of long-term care. In addition to these two options, given current gaps for vulnerable people, countries could also aim for better effectiveness by targeting their existing long-term care funds towards those most in need, that is those with higher needs and lower income. Estonia has recently started a reform to reduce the out-of-pocket costs for users. Slovenia has launched a wider reform to introduce a long-term care insurance, promote a rehabilitation first approach and make the range of long-term care services more generous to users.
1.4.3. While adult day care is associated with positive health outcomes, there is a need for more widespread provision and a more systematic focus on quality
Countries could consider giving a stronger priority to day care for older adults. Adult day-care services appear to have substantial benefits on outcomes: it is associated with reduced social isolation, improved social functioning and improvement in health outcomes such as physical health and functional status (Benedetti, Sancho and Hernández, 2024[216]. Day-care attendance is also linked to a reduction in emergency attendance, hospital admissions and days in hospital, resulting in lower health costs and can also delay nursing home admission (Lunt, Dorwick and Lloyd-Williams, 2018[76]). Japan has promoted adult day care as part of the integrated community care approach and adult day care is a very popular service among the older population with needs (Naruse et al., 2023[77]). Chile started developing the national network of day-care centres for older adults at the same time as the national system for home care, rolling it out throughout the country, being a key part of its strategy to promote healthy longevity and promote autonomy of older people and reaching in 2025 almost half of the municipalities. Ireland has set recently a target to prioritise and increase the availability of day-care places.
A renewed focussed on health could improve the potential benefits of adult day care. In many countries, adult day care centres have a strong element on providing essential long-term care services and a focus on social activities. On the other hand, health screening and medical care is available in 56% of countries, and mandatory in 22%. While rehabilitation services are offered in a slightly higher share, with 65% countries providing them but less so on a mandatory basis (13%). In Japan, it is mandatory to provide a health screening service as part of adult day care. In the United States, there exists diverse types of adult day care: there are social day care programmes which have social and recreational activities but also help to maintain mental health and maintenance day care programmes. The latter type of day care provides more skilled care which includes screening for and monitoring of chronic disorders and physical exercise and has a stronger focus on maintaining or improving the person’s ability to function for as long as possible.
To ensure high-quality care for all those providers that offer adult day care services, countries could consider putting additional policy instruments in place. Quality assurance measures for adult day care are relatively light compared with institutional care and the health sector in many OECD countries. Seven countries have a system of external audit in place and public reporting is available in only three countries. Requirements and evaluation most often involve the setting of minimum standards for inputs, which are mostly structure‑oriented (e.g. workforce standards) and occasionally relate to processes or outcomes and six countries perform no regular evaluation. Mandatory quality reporting to help future residents and their relatives to make more informed choices and to foster quality competition between nursing homes can be used. In Japan, information on providers is publicly available on a website which provides information on staffing, complaints, respect of user’s human rights and other items. Unannounced inspections of long-term care providers to monitor their compliance with rules and regulations that shall guarantee high-quality care. Colombia requires for the agency in place to set up a plan with the list of facilities which will be inspected the following year.
1.4.4. Affordable high-quality community housing options are only available in between one‑quarter to two‑fifths of countries
Staying at home might not be optimal for everyone due to social isolation and other health risks but communal options beside nursing homes are either costly or scarce. Shared living arrangements such as co-housing or co‑operatives were reported in about one‑third of OECD countries. Intergenerational housing arrangements can provide older adults with more social contacts, support and sense of community, reducing loneliness and isolation (Van Gasse and Wyninckx, 2023[78]) and similar findings exist for co-housing options. Assisted living is widely available (in 24 of the 27 OECD countries), but only half of them reported that public funding at the national or local level are used to fund assisted living facilities. In 15 countries, out-of-pocket spending is required to receive services in assisted living facilities. An additional challenge for assisted living is the heterogeneity of quality measurements and monitoring: seven countries have quality standards, six have mechanisms of external or internal audit, public reporting (e.g. mandatory quality reports) is available in four countries, and quality indicators in three countries (OECD questionnaire, 2023).
Few countries systematically promote and fund innovative housing models for older people. France is considering options for co‑operative housing and intergenerational housing whereby people could benefit from the allowance for LTC and there is also a special allowance for inclusive housing, the so-called “allowance for shared living” (aide à la vie partagée). This allowance available since 2021 is meant to fund social activities for people living together in inclusive housing. In Germany, there are 530 multigenerational housing projects receiving federal funding from the programme “Multigenerational House. Together – For Each Other”. In the United States, Green House care facilities include Medicaid and Medicare residents and offer small home‑like environment with higher quality of care, resulting in lower hospitalisation. Austria has recent initiatives have aimed at making assisted living facilities more accessible and safer for older people with the use of technological tools.
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