Out-of-pocket payments for nursing home residents: Balancing financial protection with incentives for efficient use

Nursing homes are expensive. Confronted with population ageing, governments strive to protect older people against excessive out-of-pocket payments, while at the same time trying to limit public spending on care. This column discusses how the design of out-of-pocket payments for nursing home care can contribute to these goals, building on a study looking at a Dutch reform. A sound design should combine an incentive for efficient care use with protection against the accumulation of out-of-pocket payments over many years.