Increasing the number of skilled nurses in care facilities could lead to a reduction in health insurance costs for residents, according to a new analysis. The report suggests that policymakers should consider not only the increased expenditures for long-term care insurance due to hiring more skilled professionals but also the potential savings in health insurance costs.
On November 3, the Korea Development Institute (KDI) released a report titled "Effects of Expanding Skilled Nursing Staff in Elderly Care Facilities and Policy Directions." The analysis found that when the proportion of skilled nursing staff in care facilities increases by 10 percentage points, health insurance costs for residents decrease by 7.7%. Additionally, the total number of outpatient visits decreased by 0.33%, and the number of hospitalizations fell by 0.49%.
This analysis examined 2,890 elderly care facilities operating from January 2016 to December 2023. KDI linked long-term care insurance claims data with health insurance statements to assess monthly changes in medical service utilization among residents. The proportion of skilled nursing staff was defined as the percentage of nurses among the total nursing workforce in the facility.
The analysis also revealed that the rise in employment costs due to minimum wage increases has reduced the proportion of skilled nursing staff by 4.25 percentage points. This shift occurred as the hiring of nurses decreased while the employment of nursing aides increased, altering the composition of the overall nursing workforce.
The reduction in medical service utilization associated with the expansion of skilled nursing staff was particularly evident for conditions closely related to nursing functions. Utilization for urinary tract infections and pressure ulcers significantly decreased, while no reduction was observed for conditions like cancer, which are less directly related to nursing expertise. This indicates that the nursing functions in care facilities can significantly impact residents' health management and medical service utilization.
KDI noted that while strengthening the medical functions of care facilities may increase long-term care insurance expenditures, it could also alleviate the financial burden on health insurance by reducing unnecessary hospitalizations and medical service utilization. The report cautioned that evaluating investments in the long-term care sector solely based on long-term care insurance finances could highlight only the costs associated with workforce expansion. It also pointed out that unmet medical needs in care facilities could lead to so-called "social admissions" to hospitals.
In light of these findings, KDI recommended that rather than separating costs between long-term care insurance and health insurance, financial investments should be assessed from an integrated perspective of healthcare and long-term care. The report suggested specifying the proportion of skilled personnel, such as nurses, in the staffing standards for care facilities and adjusting long-term care payment systems in line with changes in employment costs. This aims to create conditions that allow for the continuous hiring of skilled nursing staff.
Kwon Jeong-hyun, a researcher at KDI's Industrial and Market Policy Research Division, stated, "We have confirmed the potential that investments in the long-term care sector can alleviate the increase in health insurance expenditures. It is necessary to evaluate the cost-effectiveness of financial expenditures for long-term care insurance and health insurance from an integrated perspective."
On November 3, the Korea Development Institute (KDI) released a report titled "Effects of Expanding Skilled Nursing Staff in Elderly Care Facilities and Policy Directions." The analysis found that when the proportion of skilled nursing staff in care facilities increases by 10 percentage points, health insurance costs for residents decrease by 7.7%. Additionally, the total number of outpatient visits decreased by 0.33%, and the number of hospitalizations fell by 0.49%.
This analysis examined 2,890 elderly care facilities operating from January 2016 to December 2023. KDI linked long-term care insurance claims data with health insurance statements to assess monthly changes in medical service utilization among residents. The proportion of skilled nursing staff was defined as the percentage of nurses among the total nursing workforce in the facility.
The analysis also revealed that the rise in employment costs due to minimum wage increases has reduced the proportion of skilled nursing staff by 4.25 percentage points. This shift occurred as the hiring of nurses decreased while the employment of nursing aides increased, altering the composition of the overall nursing workforce.
The reduction in medical service utilization associated with the expansion of skilled nursing staff was particularly evident for conditions closely related to nursing functions. Utilization for urinary tract infections and pressure ulcers significantly decreased, while no reduction was observed for conditions like cancer, which are less directly related to nursing expertise. This indicates that the nursing functions in care facilities can significantly impact residents' health management and medical service utilization.
KDI noted that while strengthening the medical functions of care facilities may increase long-term care insurance expenditures, it could also alleviate the financial burden on health insurance by reducing unnecessary hospitalizations and medical service utilization. The report cautioned that evaluating investments in the long-term care sector solely based on long-term care insurance finances could highlight only the costs associated with workforce expansion. It also pointed out that unmet medical needs in care facilities could lead to so-called "social admissions" to hospitals.
In light of these findings, KDI recommended that rather than separating costs between long-term care insurance and health insurance, financial investments should be assessed from an integrated perspective of healthcare and long-term care. The report suggested specifying the proportion of skilled personnel, such as nurses, in the staffing standards for care facilities and adjusting long-term care payment systems in line with changes in employment costs. This aims to create conditions that allow for the continuous hiring of skilled nursing staff.
Kwon Jeong-hyun, a researcher at KDI's Industrial and Market Policy Research Division, stated, "We have confirmed the potential that investments in the long-term care sector can alleviate the increase in health insurance expenditures. It is necessary to evaluate the cost-effectiveness of financial expenditures for long-term care insurance and health insurance from an integrated perspective."
* This article has been translated by AI.
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