Long-term care services are provided to help people manage the consequences of impairment, but their impact goes beyond the meeting of basic needs. Accordingly, the main aim was to explore the marginal effectiveness of care when measured in terms of people's overall care-related quality of life (CRQoL) and assess changes in marginal effect for increasing intensity. The associated aim was to refine and apply an observational method to estimate marginal effectiveness. A "production function" approach was used with survey data, including Adult Social Care Outcomes Toolkit-measured CRQoL, whereby we statistically modelled the expected relationship between service utilisation rates and CRQoL. This method seeks to limit endogeneity issues by controlling on observables and using instrumental variable. Using a survey of publicly funded long-term care service users in England, we found that community-based long-term care significantly improved people's CRQoL but with diminishing marginal effects and effects differentiated by baseline impairment levels. There are implications for how the care system should respond to changes in global public budgets. For example, where there is unmet need, a system aimed to maximise (unadjusted) CRQoL would put more emphasis on access (more recipients) than intensity of support compared to a system operating on a needs basis.
Keywords: instrumental variables estimation; long-term care; production functions; quality of life.
© 2017 The Authors. Health Economics published by John Wiley & Sons Ltd.