While some information is available on the nature of the tasks unpaid caregivers perform, and the amounts of time they spend on these tasks, the contribution of unpaid caregivers is often hidden. (It is recognized that some caregiving may be for short periods of time or may entail matters better described as “help” or “assistance,” such as providing transportation. However, we use caregiving to cover the full range of unpaid care provided from some basic help to personal care.) Aggregate estimates of the market costs to replace the unpaid care provided are important to governments for policy development as they provide a means to situate the contributions of unpaid caregivers within Canada’s healthcare system.
The purpose of this study was to obtain an assessment of the imputed costs of replacing the unpaid care provided by Canadians to the elderly. (Imputed costs is used to refer to costs that would be incurred if the care provided by an unpaid caregiver was, instead, provided by a paid caregiver, on a direct hour-for-hour substitution basis.) The economic value of unpaid care as understood in this study is defined as the cost to replace the services provided by unpaid caregivers at rates for paid care providers.
Methods and Data Sources
The primary source of data used for the analyses in this study was the 2002 General Social Survey (GSS) conducted by Statistics Canada (2002). The unit cost data were obtained through a custom data request made to Statistics Canada for hourly wages for different categories of workers from the Statistics Canada (2007)Labour Force Survey (LFS).
The sample for the 2002 GSS was selected from a follow-up of respondents to the Canadian Community Health Survey(Statistics Canada 2001). Statistics Canada separated the unpaid caregivers in the 2002 survey into two categories, those aged 45-64 and those aged 65+. While efforts were made to combine the two data sets into one data set for caregivers aged 45 or older, this was not feasible due to some incompatibilities in the data. Thus, in this report, we present data for the 2002 survey separately for caregivers in the 45-64 and 65+ age groups.
With regard to costing, most studies (Harrow et al. 2004; Langa et al. 2002a, 2002b; Moore et al. 2001) use hourly wages for their unit costs. This may be appropriate from the perspective of an opportunity cost, traditional economic evaluation; however, in the real world, paid care is usually provided through regulated, and insured, care provider organizations that provide care, supervision and quality assurance functions. In Canada, most formal care is provided through legally constituted care provider organizations. Thus, if governments wish to replace unpaid care with paid care, they would have to pay the market rates charged by such organizations. The alternative (where one could cost unpaid care time at the equivalent of salary rates) would be to have the unpaid caregiver effectively become a case manager who would have to hire and fire worker directly and organize and manage all paid care services. This would be quite onerous, particularly for elderly caregivers who may also have functional limitations, or for middle-aged caregivers who may have significant family and employment obligations. Thus, it is our view that market rates, or some proxy of market rates, should be used to calculate the imputed costs of unpaid care.
With regard to calculating unit costs, we developed a methodological approach to calculate market rates from hourly salaries (hourly salaries are wages received by the worker, such as $12 per hour, whereas market ratesare the rates a care provider organization would charge a care recipient). Market rates include factors such as benefits, administrative costs, capital costs and so on. It was necessary to calculate estimated market rates as there is no publicly available national data on the market rates charged by home care provider organizations. We estimated that a factor of 1.8 would be appropriate to convert hourly salaries to market rates (e.g., a home support worker who receives $12.50 per hour would have an estimated billable market rate of $22.50). Our approach was compared with market rates for a national purchaser of home care services and was found to produce similar billable hourly rates for different types of care providers.
Four estimates were calculated for this study. One estimate was based on hourly salaries by type of provider (from the LFS [Statistics Canada 2007]). The second estimate was based on the hourly salary of home support workers from the LFS. This estimate was used on the basis that most of the services to clients could be provided by a well-trained home support worker. The third estimate was based on market rates by type of provider. The fourth estimate was based on market rates for home support workers. Given that most services can be provided by a home support worker and that paid care provision is usually provided through home care agencies, at market rates, it is our view that this approach provides the most realistic imputed costs for substituting paid care for unpaid care.
The groupings of types of care provision and unit costs based on hourly salaries (from the LFS [Statistics Canada 2007]), were as follows:
- Meal preparation and cleanup, house cleaning or laundry and sewing: $12.91 per hour (rate for visiting homemaker, housekeeper and other related occupations)
- House maintenance or outdoor work: $18.18 per hour (rate for residential and commercial installers and services)
- Shopping for groceries or other necessities, providing transportation or doing banking or bill paying:$14.93 per hour (a pro-rated and blended rate for homemakers [$12.91], taxi and limousine drivers [$14.06] and financial auditors and accountants [$27.74])
- Assistance with bathing, toileting, care of toenails/fingernails, brushing teeth, shampooing and hair care or dressing (i.e., personal care services): $21.63 per hour (rate for registered nursing assistants/licensed practical nurses)
There was considerable methodological complexity in analyzing the data from the 2002 GSS and developing unit costs. The interested reader is referred to the full report prepared for Human Resources and Skills Development Canada (HRSDC) (Hollander et al. 2008) for a description of the methods used, data and methodological limitations, and other technical matters.
To view the full report, please visit the Longwoods Healthcare Quarterly.
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