Informal Caregiving

VI. Key Issues: Financing and Delivery >> Health Care Delivery System >> Informal Caregiving (last updated 12.3.15)

Total Number of Informal Caregivers

Economic Cost of Informal Caregiving

The total cost of informal caregiving is a combination of the economic value of informal caregiver’s time plus out-of-pocket expenses. Various estimates suggest the former is roughly $500 billion, while the latter are approximately $5,500 per caregiver. Even assuming a lower-bound figure of 40 million caregivers implies $220 billion in out-of-pocket costs–roughly a 40% add-on to the value of informal caregiving alone.

Economic Value of Informal Caregiving

Estimates are listed in reverse chronological order.

  • AARP Report (July 2015). Valuing the Invaluable: 2015 Update.  Based on  a meta-analysis of 11 surveys of caregivers between 2009 and 2014, the economic value of the 37 billion hours of work done by 40 million caregivers was estimated to be worth about $470 billion in 2013.
    • Based on the 11 sources examined, the adjusted number of annual caregiving hours for 2013 derived from each source ranged from a low of 16 billion to a high of 45.1 billion (Table A2).
    • The economic value of 1 hour of care was estimated at the state level as the average of the state minimum wage, median home health aide wage, and median private pay cost of hiring a home health aide. The national average value per hour of $12.51 is the average value for all care hours across all states. In the states, the average value per hour ranges from $10.53 in Louisiana to $15.05 in Alaska (Appendix B).
  •  Chari, Amalavoyal V., John Engberg, Kristin Ray, Ateev Mehrotra. The Opportunity Costs of Informal Elder-Care in the United States: New Estimates from the American Time Use Survey.HSR, Health Services Research, v. 50, no. 3, June 2015, p. 871-882.
    • OBJECTIVES: To provide nationally representative estimates of the opportunity costs of informal elder-care in the United States.
    • DATA SOURCES: Data from the 2011 and 2012 American Time Use Survey.
    • STUDY DESIGN: Wage is used as the measure of an individual’s value of time (opportunity cost), with wages being imputed for nonworking individuals using a selection-corrected regression methodology.
    • PRINCIPAL FINDINGS: The total opportunity costs of informal elder-care amount to $522 billion annually, while the costs of replacing this care by unskilled and skilled paid care are $221 billion and $642 billion, respectively.
    • CONCLUSIONS: Informal caregiving remains a significant phenomenon in the United States with a high opportunity cost, although it remains more economical (in the aggregate) than skilled paid care.
  • Deloitte (2015). The Hidden Costs of U.S. Health Care: Consumer Discretionary Health Care Spending. This study estimates informal caregiving costs at $492.4 billion in 2010 inclusive of care for special-needs children and adults 18 and older. The report includes breakdowns by age of recipients, household size and household income. Aggregate hours of care were monetized at $11.94 hourly based on the mean hourly wage of employees whose occupation is “Nursing, psychiatric, and home health aides” obtained from the National Compensation Survey (Appendix B).
  • Family Caregiver Alliance (2009). Fact Sheet: Selected Caregiver Statistics. Informal caregiving was valued at $450 billion in 2009.
  • Arno, Peter S.C. Levine, and M. M. Memmott (1999). The economic value of informal caregiving. Health Affairs, March/April 1999; 18(2): 182-188. [Abstract] This study explores the current market value of the care provided by unpaid family members and friends to ill and disabled adults. Using large, national data sets we estimate that the national economic value of informal caregiving was $196 billion in 1997. This figure dwarfs national spending for formal home health care ($32 billion) and nursing home care ($83 billion). Estimates for five states also are presented. This study broadens the issue of informal caregiving from the micro level, where individual caregivers attempt to cope with the stresses and responsibilities of caregiving, to the macro level of the health care system, which must find more effective ways to support family caregivers.
  • Caregiving for Alzheimer’s Patients. According to the data from Stanford University and the Alzheimer’s Association, more than 15 million people provide unpaid care for family members or friends with Alzheimer’s disease or other forms of dementia. The strain of the task has been shown in many studies to increase the risk of a variety of illnesses, and even death (New York Times, 2.18.14).

Out-of-Pocket Caregiver Expenses


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