OECD Analysis Finds Shifting Elder-Care to Homes Could Cut Care Costs by 5 %
SDG 3: Good Health & Well-being | SDG 10: Reduced Inequalities
Institutions: Ministry of Health & Family Welfare | Ministry of Social Justice & Empowerment
The OECD report “The Economic Benefit of Promoting Healthy Ageing and Community Care” finds that most countries are failing to harness the full economic potential of healthy ageing. While life expectancy at age 60 increased by 1.7 years between 2001–2011, the gain slowed to 1.0 year between 2012–2023. More concerningly, the gap between life expectancy and healthy life expectancy widened from 5.2 to 5.7 years, meaning older adults are living longer but not necessarily healthier lives.
The report highlights that 74 % of people aged 65 and above do not meet the recommended minimum level of weekly physical activity, driving obesity, falls, and cognitive decline. Preventive investments yield tangible returns: a 10 % increase in prevention spending can reduce the share of people with chronic conditions by 0.9 % within five years. Similarly, shifting spending toward home-based services delivers fiscal dividends — a 10 % increase in the ratio of home-care to institutional-care spending could lower overall long-term care (LTC) costs by 4.9 %.
Despite these benefits, access gaps persist. Only 20 % of older people have adapted their homes for mobility needs, and just 5 % have major modifications like ramps or stair solutions. Across OECD members, 40 % limit the number of home-care hours provided, and one-third offer no public funding for essential daily-living activities (e.g., grocery shopping, appointments). In 16 countries, out-of-pocket care costs exceed 50 % of median income, and in seven, they exceed the median income itself.
The OECD calls for stronger investment in prevention, reablement, and integrated care delivered close to home. Evidence from Australia, Denmark, Japan, New Zealand, and the United States shows that targeted home-visit and reablement programmes reduce hospital admissions and delay entry into long-term facilities. Emerging models such as nurse-led outreach teams, “hospitals at home” (now operating in 22 OECD countries), and shared-living or intergenerational housing have proven effective in improving well-being and cutting costs.
India’s rapidly ageing population — projected to exceed 19 % by 2050 — faces similar pressures of affordability, infrastructure gaps, and care-work shortages. The OECD evidence underscores the need for community-based elder care, housing adaptation, and preventive health investment to avoid the fiscal and social costs of institutional dependence. Building on Ayushman Bharat, National Programme for Health Care of the Elderly (NPHCE), and SAG Scheme, India could benefit from integrating home-care, tele-care, and reablement pathways into mainstream primary health systems.
Read the full report here: OECD – The Economic Benefit of Promoting Healthy Ageing and Community Care