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Executive Summary

Home and Community Care in Canada: An Economic Footprint

by Greg Hermus, Carole Stonebridge, Louis Thériault, and Fares Bounajm

Home and community care is a vital part of health systems in Canada. Over the coming years, the demand for both paid and unpaid activities required to service the needs of home care recipients is expected to grow significantly as the population ages. Governments have signaled that they recognize the need for a greater role for the home and community care sector—it is what Canadians want and critical to the efficiency and effectiveness of health systems. However, planning for the future of the sector requires that its current economic footprint be understood, particularly the less-examined contributions of community care services and unpaid caregiving.

This report addresses this need by estimating the economic footprint of home and community care in Canada, highlighting the implications of caregiving employees for businesses, and shedding light on the potential spending implications of shifting some care from institutions to homes. To complete this report, we gathered a broad set of measures to assemble the full economic footprint of the home and community care sector. The report provides the reader with an understanding of the role of public and private contributions in home health, home support, and community care; the role of voluntary contributions; and the contribution from unpaid caregiving and its associated business costs. This estimate of the economic footprint, including the community care role, is a new and important contribution as governments move forward with plans and priorities for the sector. The findings can be used as a starting point to assess the economic implications of policies aimed at optimizing the role of home and community care over the next 20 years.

The Home and Community Care Economic Footprint

Generating a pan-Canadian understanding of the home and community care sector is challenging because a large variety of terms and definitions applied across jurisdictions affect data comparability. As a result, our assembly of the footprint required a range of data sources and proxies. In general, we adopted a conservative approach when completing the analysis.

The home and community care sector relies heavily on volunteer efforts and other unpaid care.

Even with a conservative approach, our findings suggest that total spending on home and community care in 2010 ranged from $8.9 billion to $10.5 billion. This level of spending represents between 4.6 and 5.5 per cent of total health spending in Canada. Charts 1 and 2 show the breakdown of public and private spending by the components of home and community care—home health, home support, and community care.

Chart 1

While a large portion of the overall spending on home and community care services is paid by governments, we estimate between 22 and 27 per cent is paid by private sources. In 2010, we estimate private sources paid between $1.87 billion and $1.89 billion on home and community care services in Canada. (See Chart 2.)

Chart 2

The combined private and public spending on home and community care services supports an estimated 1.33 million Canadians who are home care recipients. This spending also supports between 76,000 and 99,000 full-time equivalent jobs for paid providers of home and community care services. (See Chart 3.)

Chart 3

To meet the needs of home care recipients, the home and community care sector relies heavily on volunteer efforts and other unpaid care. While the majority of unpaid caregivers do not suffer any adverse effects, there are some who find it difficult to juggle work and caregiving. Nearly 3.1 million Canadians are estimated to have provided some level of unpaid service to home care recipients during 2007. This army of unpaid caregivers provided over 1.5 billion hours of home support and community care in 2007 across Canada—more than 10 times the number of paid hours provided in home care during that same year. However, this reliance on unpaid care has consequences. The cost to Canadian businesses was estimated conservatively to be over $1.28 billion in 2007 as a result of absenteeism and turnover.

Factors driving the demand for home and community care include early discharge from hospitals, the aging of the population and increases in chronic diseases, and a growing preference to remain at home as one ages. The footprint of home and community care captured in this report speaks to the substantial resources currently required (in dollars spent and hours of service provided) to meet this demand.

The Optimal Use of Home and Community Care

The current economic footprint of home and community care is important to understand because of its essential role in overall health system efficiency, effectiveness, and sustainability. Governments and leaders of health care delivery systems seek to organize, fund, and deliver services in the most efficient and cost-effective manner. However, service delivery is not always optimal—from the patient and system perspective. Hospital or long-term care is often delivered when home and community care might be more appropriate and potentially less costly. This has been referred to as “upward substitution” in health studies. Canadian research suggests there are opportunities to address these inefficiencies through a more optimal investment in and delivery of home and community care services for the frail and elderly. If these opportunities were to be leveraged, the existing home and community ;care sector would most certainly have to expand and adapt to the demand. The impact on unpaid caregivers, and any associated business-level consequences, would also have to be considered.

Implications for the Future of Home and Community Care

The demand for home and community care is certain to grow in the coming decades. Understandably, the sector is on the radar of governments, but the future shape of the footprint is still unknown. There is still uncertainty about how much governments intend to invest in the sector, how much the public and insurers will be expected to contribute versus how much Canadians will need or be willing to spend on the private purchase of services, how much regional or local health authorities plan to shift resources from acute care to home and community care, and what the programs will look like. Although more is being learned about the extent and consequences of unpaid caregiving, it is not clear whether the sizable reliance on family and friends to provide unpaid care will be realistic or appropriate in the future. Governments, employers, insurers, and Canadians collectively should be considering a variety of scenarios for the future of home and community care.

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Greg Hermus Greg Hermus
Associate Director, Forecasting and Analysis
Carole Stonebridge
Carole Stonebridge
Senior Research Associate, Organizational Effectiveness and Learning
Louis Thériault
Louis Thériault
Director, Health Economics
Fares Bounajm Fares Bounajm
Economist, Forecasting and Analysis

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Home and Community Care in Canada report coverThis report addresses this need by estimating the economic footprint of home and community care in Canada, highlighting the implications of caregiving employees for businesses, and shedding light on the potential spending implications of shifting some care from institutions to homes.