HEOR Articles

Implementing Value-Based Aging in Our Long-Term Care Systems

Thomas Rapp, PhD,
LIRAES Université de Paris, Paris, France; Katherine Swartz, PhD, Harvard T.H. Chan School of Public Health, Boston, MA, USA

For the past 70 years, life expectancy in rich countries has increased by 15 years on average.1 This situation raises a crucial question: how can policies help older people make the most of these life-gained years, knowing that a share of those years may be spent with lower autonomy?

While the implementation of value-based payment programs for healthcare has become a priority in most Organisation for Economic Co-operation and Development countries, long-term care policies are not currently focusing on value-based aging. This is surprising since long-term care policies for the past 2 decades have shifted towards the goal of “healthy aging:” the idea that reducing risks of disabilities that require costly long-term care services is the best strategy to contain the growth of future long-term care spending.2 Healthy aging policies encourage providing home-based care services, which generally cost long-term care systems less than caring for a person in nursing facilities. Recognizing long-term care as involving choices between home-based and nursing home services calls for determining the value of different care options and then paying for services that have the greatest benefit at the lowest cost—the same objective of value-based payment programs for general healthcare.

In this article, we further define the notion of value-based aging and show how it could be implemented in long-term care reforms to strengthen younger and older people’s interest in long-term care systems.


The Concept of Value-Based Aging
The value-based approach to paying for healthcare combines (1) the use of patient-reported outcomes measures; (2) a valuation of care resources used; and (3) the use of new technologies in different care options. The goal is to disclose the value of each of the care options to patients and care providers. This approach has been defined and formalized in abundant literature and promoted by the Organisation for Economic Co-operation and Development and the World Health Organization.3-6 Under this approach, the value of care is measured by the incremental cost-effectiveness (cost-utility) ratio: an innovation or a service provides value to the patient if it provides more health benefits (quality of life) at a lower cost than a comparator or the standard of care. This approach favors an optimization of resources, allowing healthcare planners to focus on the services or innovations that provide the highest benefit at the lowest cost. Benefits are derived from patient-reported outcomes measures and therefore, take into account dimensions of health that are especially relevant to patients.

Long-term care systems should pay for care services that maximize older persons’ utility at the lowest cost possible.


The concept of a value-based approach policy is similar: long-term care systems should pay for care services that maximize older persons’ utility at the lowest cost possible. Two features distinguish a value-based approach to long-term care. One is the extent to which it recognizes informal (unpaid) care provided by family and/or friends that enable individuals to live at home rather than in nursing homes. The second is that it acknowledges the indirect costs borne by the informal caregiver and the benefits that the caregiver may derive from providing care. In so doing, a value-based approach provides a framework for long-term care policies to cover some services that reduce particular burdens experienced by informal caregivers.

Following the standard set of outcomes measures developed by the International Consortium for Health Outcomes Measurement, one can consider that an older person’s satisfaction depends on 6 main dimensions: (1) place of death, as an older person’s preference is to die in his/her home; (2) the person’s care experience, with well-being decreasing the more he/she receives polypharmacy or experiences falls; (3) quality of life, which varies negatively with pain, isolation, difficulties performing activities of daily living, lower mental and emotional health, and lower autonomy and control; (4) the perceived burden imposed on informal caregivers, which negatively impacts his/her well-being; (5) ability to participate in his/her healthcare decision making; and (6) clinical status, which reduces his/her well-being as he/she experiences frailty issues, spends time in hospital, and perceives his/her overall survival probability reduced.

Although different individuals weight each of these dimensions differently, they cover the most important drivers of older persons’ utility function and include both objective and subjective measures of their quality of life. Indeed, while clinical status is an important component, subjective dimensions play a key role in defining the utility of long-term care services for older persons, with subjective well-being becoming a major determinant of frail older populations’ use of long-term care. An important limitation of the International Consortium for Health Outcomes Measurement’s approach, however, is that informal caregivers’ perspective is not explicitly included; only the frail individual’s perception of the burden he/she imposes on the caregiver is included.

In contrast, a value-based approach to long-term care can acknowledge the importance of the primary informal caregiver in the long-term care decision-making processes. Decisions to accept long-term care services usually are made by the person with long-term care  needs and his/her primary informal caregiver(s) (family members, friends, or significant others). Given cost-savings for the long-term care system if a person remains at home, it is advantageous to maximize their joint utility rather than just the utility of the person with long-term care needs. While providing some care services can be difficult for a caregiver, considering only the perceived psychological or physical burden misses aspects that make the caregiver happier.

A value-based framework for long-term care policies expands consideration of services that facilitate greater use of home-based care. In particular, non-medical services that reduce sources of anxiety might appear to be low value and yet be highly valued by a family trying to enable the person with long-term care needs to live at home. For instance, replacing a bathtub with a shower or providing a simple laptop computer and tutor to explain how to use telehealth and Zoom with friends might provide great value to such a family. Accounting for informal caregivers’ utility also suggests that long-term care systems would provide greater value by covering difficult services in order to reduce informal caregiver burdens, thereby encouraging informal care for “quality tasks” that provide more satisfaction to the family caregivers. For example, helping to maintain catheters of any sort or change surgical dressings can be very stressful. If the long-term care system pays for professionals to deliver such services, informal caregivers can focus on tasks that provide greater value to the family such as those involving social interactions.

Long-term care is rapidly shifting away from thinking that people with care needs are best served when they live in nursing homes.


Note that a value-based approach for determining which long-term care services to cover involves a societal perspective, so only the costs that a long-term care system has to finance matter. Thus, although the informal caregiver’s utility is included in calculating the value of different services, the monetary value (cost) of the caregiver’s time is not taken into account because it is not reimbursed by the long-term care system. Others have estimated such costs, with the conclusion that the aggregate value of informal care exceeds the costs of formal care.7


Two Recommendations for Implementing Value-Based Aging in Long-Term Care Policies
The value-based aging approach’s advantage is that it prioritizes services that bring the highest value to people with long-term care needs and their informal caregiver, and avoids paying for low-value services. This suggests re-evaluating which services are formally paid for by long-term care systems. For example, some tasks related to use and maintenance of medical equipment provoke anxiety among caregivers; more training would be valued highly by both the caregiver and the person with needs. Similarly, a caregiver’s anxiety about helping a frail person bathe might be reduced if the long-term care system paid for a shower to replace a bathtub.   

Second, value-based aging policies can be used to foster a “positive” aging perspective. By covering services that encourage older people to remain active and live at home, a value-based approach signals that they still have a role to play in society. Many people with mild long-term care needs fear losing contacts with friends or the ability to attend religious services once they or their caregiver can no longer drive, or public transportation is not an easy option. Covering some transportation expenses as long-term care services would promote active aging. Moreover, equating positive aging with a value-based approach may encourage younger people to consider how “senior years” can be well lived. To that end, a few countries (Canada, Australia, Norway, The Netherlands) have introduced “re-ablement” policies, which provide services designed to assist frail older people’s needs rather than provide in-kind services. Instead of providing “meals-on-wheels,” for example, these initiatives use physiotherapist services to help older people learn how to cook again by themselves, if cooking is an important occupation to them. A value-based aging policy would acknowledge the value of such re-ablement policies.

In conclusion, long-term care is rapidly shifting away from thinking that people with care needs are best served when they live in nursing homes. The issue facing long-term care systems now is how to decide which services should be covered. Implementing a value-based approach would promote coverage of care options that provide the greatest benefits to frail persons and their informal caregivers at the lowest cost to the system. This might not necessarily be cost-saving in the short run, but it would ensure that resources are not wasted on low-impact services, and therefore could be an economically dominant strategy in the long run. New technologies, including mobile applications collecting self-reported questionnaires to detect needs and software platforms to improve information sharing among care providers, now provide great opportunities to implement value-based aging policies. While experimentations are needed to determine the benefits of these innovations in a value-based aging approach to long-term care, the question is, are policy planners ready to move forward?


1. Organisation for Economic Co-Operation and Development. European Investment Banking Health at a Glance 2019. Published 2019. https://www.eib.org/attachments/general/the_eib_at_a_glance_en.pdf. Accessed April 26th 2021.

2. European Commission. The 2015 Ageing Report: Underlying Assumptions and Projection. Published January 29, 2015. Accessed April 26, 2021. doi:10.2765/76255.

3. Porter ME. A strategy for health care reform–a value-based system. N Engl J Med. 2009:361(2):109-112. doi:10.1056/NEJMp0904131.

4. Porter ME. What is value in health care? N Engl J Med. 2010:363(26):2477-2481. doi:10.1056/NEJMp1011024.

5. European Union. Expert panel on effective ways of investing in health. Defining Value in “Value-Based Healthcare. Published June 26, 2019. Accessed April 26th 2021. https://ec.europa.eu/health/sites/default/files/expert_panel/docs/024_defining-value-vbhc_en.pdf

6. Wigzell O. People-Centred Healthcare: What Empowering Policies are Needed. OECD Obs.  Published December 18, 2017. Updated January 4, 2018. Accessed April 26, 2021. doi:10.1787/87f7b997-en.

7. Chari AV, Engberg J, Ray KN, Mehrotra A. The opportunity costs of informal elder-care in the United States: new estimates from the American Time Use Survey. Health Serv Res. 2015:50(3):871-882. doi:10.1111/1475-6773.12238.

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