TSE and La Poste economists
As the first baby boomers reach old age, infrastructure solutions are urgently needed in many countries to cope with a huge increase in elderly populations.
Economists from La Poste Groupe (Claire Borsenberger and Denis Joram) and the TSE Infrastructure & Network Center (Helmuth Cremer, Jean-Marie Lozachmeur and Estelle Malavolti) have investigated the use of large-scale screening tests to target those at risk of loss of autonomy. Their findings suggest that postal networks offer a ready-made opportunity to deliver cost-effective preventive care.
What is the scale of the challenge in France?
The number of elderly people suffering loss of autonomy in France will increase by around 20,000 per year until 2030, then sharply accelerate to nearly 40,000 per year between 2030 and 2040. In 2015, there were 1,265,000 old-age dependents. By 2050, their numbers will have nearly doubled.
Public spending on long-term care was 2% of French GDP in 2020, close to the EU average of 1.8%. However, these expenses are significantly lower than in the Netherlands (3.2%) or Sweden (3%), countries often cited as examples for management of loss of autonomy. While in France expected life expectancy at 65 years is the highest in Europe, the healthy-life expectancy as a proportion of life expectancy is lower than the EU average.
How do families help to provide long-term care?
In addition to formal care, dependent individuals receive informal care from members of their family. In Europe, informal care ranges from 22% of total care hours in Belgium, Denmark, the Netherlands and Sweden, to 81% in Italy and Spain, and approximately 43% in Austria, France and Germany. In the US, it is estimated at 54%.
For too long, we have adopted the fairytale view of children or spouses helping dependent relatives with joy and dedication. We now increasingly realize that family solidarity is often based on forced altruism (social norm) or strategic considerations (reciprocal altruism). Either way, informal care is costly for the caregivers. It often implies a reduction in labor supply, and it may involve substantial emotional and psychological costs.
Why does your paper focus on preventive care?
The huge costs of dependence to society, patients and caregivers are well documented and issues including insurance design and the provision of long-term care have been studied and debated. But the role of prevention has been mostly neglected. Existing preventive care is minimal, and its delivery is poorly coordinated, without precise knowledge of the needs of the population or the relevance and quality of preventive actions.
Prevention does not appear to involve a prohibitive cost. Subsidizing preventive care also mitigates moral hazard by reducing the probability of becoming ill and needing curative care. In contrast, subsidizing curative care fosters moral hazard by encouraging overconsumption of medical services and products.
Why is this an opportunity for national postal operators?
A coherent public health policy needs to rely on infrastructure that can ensure its deployment, management, and evaluation, and therefore the best possible use of public funds. One of the challenges for prevention policy is its deployment at large scale. Relying on a pre-existing infrastructure covering the whole territory could be a quick and efficient solution.
The World Health Organization (WHO) recommends deployment of a systematic approach called ICOPE (Integrated Care for Older People). The first stage of this public health program consists in testing and screening individuals for their risk of loss of autonomy. These simple tests can be performed by persons who are not health professionals, such as specially trained postal employees. Postal operators can play a significant role at this screening stage given their ability to reach each citizen at home through their large human network and thanks to the bonds of trust forged over decades with the population.
What can you reveal about the economic foundations of this strategy?
We studied a simple model in which a certain proportion of the relevant age group is screened for their dependency risk. This involves a cost but makes it possible to target prevention according to the individual’s risk. Prevention reduces both the probability and cost of dependence by reducing its severity or delaying its onset.
We determine the optimal levels of expenditures on screening and prevention, subject to a budget constraint. Our analysis shows that when the marginal cost of a test is constant (or does not increase too strongly) the optimal policy requires either no testing or universal testing. When the benefits of prevention outweigh the cost of testing, a universal testing program is optimal.
The optimal prevention policy applied to a specific risk group is determined by trading off the marginal benefits and costs of prevention. Not surprisingly, prevention levels are larger for high-risk individuals. We also show that without a targeted prevention policy, individuals will choose levels of prevention that are too low. In other words, the policy will lead to an increase in social welfare.
Where do we go from here?
The ICOPE program is now at an experimental stage in France. In November 2020, five specifically trained mail carriers from La Poste Groupe successfully conducted 1,130 screening tests in the Occitanie region. The results were encouraging, leading La Poste Groupe to extend its action at the request of the regional health authorities.
Providing a precise description of the costs and benefits of testing and preventive care, our analysis offers a framework for empirical assessment of the policy. Currently, the available data are not sufficient, but the ICOPE experiments will provide additional evidence, particularly on the impact of prevention on the incidence of dependence. Fine-tuning a coherent prevention policy will require further empirical and theoretical studies.
‘Testing for fragility: a valuable public policy and an opportunity for postal operators’ and other articles by these researchers are available to read on the TSE website.
Article published in TSE Reflect, September 2023