Home care

Home care includes both home health care services (e.g., nursing, rehabilitation, and social work) and home support services (e.g., bathing, housekeeping, and meal preparation) delivered to people living in their homes (McGrail et al 2008). Home care provides multiple functions, substituting, preventing or delaying the need for acute care or other institutional care (CIHI 2010b).

Total public spending on home care was estimated at $3.4 billion (2007 dollars) in 2003-04, while private spending on home care was estimated at $963.1 million in 2002-03 (McGrail et al 2008). These numbers likely underestimate the value of home care being delivered to Canadian as it does not include informal care (i.e., care delivered by unpaid care givers, such as family or friends). A recent report from the Canadian Institutes for Health Information estimated the economic cost of informal care at $25 billion (Kelly & Orr 2009).

Funding home care: Canada

In Canada, home care is funded both publicly and privately and delivered by for-profit and non-profit providers (CIHI 2010b). Publicly-funded clients receive care in one of two ways: 1) either through a contracted agency paid for by the government; or 2) through a home care agency paid for by the client who receives a monthly stipend from the government to “shop” for home care that best meets their needs (sometimes referred to as “self-managed care”).

Innovation in funding home care varies across provinces. Alberta and British Columbia, for example, are beginning to use assessment tools as the basis for remuneration.

In Alberta, the Resident Assessment Instrument for Home Care (RAI-HC©) is used to determine the type of care that best fits the clients’ needs (i.e., home care, supportive living or long-term care) (Alberta Health Services 2011). This will likely form the basis for plan to implement Activity-based Funding (ABF) for home care in the future (Community Care Information Management 2011).

In British Columbia, the Vancouver Coastal Health region has experimented with a form of pay-for-performance in home care – the Accountability, Responsiveness and Quality for Clients Model of Home Support (ARQ Model). ARQ groups clients in higher-density housing or communities and includes incentives for meeting performance objectives. The subsequent evaluation of this model found evidence of higher efficiency (i.e., more clients in clustered housing), greater system competency (i.e., better match between clients’ needs and care giver abilities), and higher levels of patient satisfaction than the conventional home care model (Choi & Davitt 2009).

Funding home care: International examples

United States

In the United States, Medicare funds home care through ABF. The goals of this system are to reduce the number of visits and avoid potentially high-cost individuals. Funding is based on a 60-day episode of care aimed at restorative care and therapy. Funding levels are adjusted for patient-level clinical characteristics collected within the Outcome and Assessment Information Set assessment tool (OASIS).

The introduction of ABF resulted in financial distress for many home health providers (Choi & Davitt 2009), a decline in the volume of home care visits (CIHI 2007; Liu et al 2003; Tarricone & Tsouros 2008), and mixed results in terms of quality of care (Liu et al 2003; Tarricone & Tsouros 2008).


In Europe there is wide variation in terms of private and public funding and delivery of home care but there is a trend towards limiting public funding mechanisms to meet with increasing demand. Two common mechanisms include withdrawing public funds from home support services like housekeeping and providing clients with cash-limited payments or vouchers to use with the service of their own choosing, including informal caregivers. Shifting a share of the financial burden onto individuals and families, co-payments have been utilized in different ways (i.e., charging flat rates or means-testing) (Mossialos et al 2002). Assessing needs of home care clients varies from fragmented, medical-only assessments to single-point assessment systems by interdisciplinary teams helping guide clients through the system (Mossialos et al 2002). Health care systems in Europe have been moving towards prospective funding based on expected future expenditure, using fixed budgets (Hollander et al 2007).