Browsing by Subject "http://www.yso.fi/onto/yso/p9998"

As the Finnish population ages the costs of publicly funded around-the-clock elderly care facilities rises. Contracting elderly care out has been suggested as a way of reducing the costs of expensive elderly care, utilizing the private sectors competition and stronger incentives for cost reduction. However, the theory of the proper scope of government provision highlights a concern that the possible efficiency gains of outsourcing may come at a cost to non-contractable (unmeasurable or unpredictable) quality of care provision. In this thesis, I investigate the effects of outsourcing municipal elderly care provision on the mortality rates of the elderly, using municipal level data from 2001 to 2022. During this period, most Finnish municipalities had some form of private elderly care provision. However, in the 2010s, some municipalities shifted to providing almost all around-the-clock elderly care through private providers. Replicating a study from Sweden by Bergman et al. (2016), I utilize a triple difference method to study these major shifts towards private provision of elderly care, using individuals aged 60 to 69 as a population whose mortality rates are unaffected by changes in elderly care provision. I formulate a control group that is comparable to the outsourcing municipalities in terms of demographical characteristics using nearest neighbour propensity score matching. I estimate the effects on social and healthcare costs of outsourcing using a difference-in-differences design. The triple difference estimation results indicate a 6 percent increase in the mortality rates of the elderly following the shift to private provision. The difference-in-differences estimation found no observed effects on costs. These findings suggest that vital non-contractable quality dimensions of elderly care are adversely affected by municipalities seizing most of publicly provided around-the-clock elderly care.