Most older adults prefer to age in place, which for many will require home and community care (HCC) support. Unfortunately, HCC capacity is insufficient to meet demand due in part to low wages, particularly for personal support workers (PSWs) who provide the majority of paid care. Using Ontario as a case study, this paper estimates the cost and capacity impacts of implementing wage parity between PSWs employed in HCC and institutional long-term care (ILTC). Specifically, we consider the cost of increased HCC PSW wages versus expected savings from avoiding unnecessary ILTC placement for those accommodated by HCC capacity growth. The expected increase in HCC PSW retention would create HCC capacity for approximately 160,000 people, reduce annual health system costs by approximately $7 billion, and provide an 88 per cent return on investment. Updating wage structures to reduce turnover and enable HCC capacity growth is a cost-efficient option for expanding health system capacity.

Illness increases with age. All else being equal, an older population has greater needs for health care. This logic has led to dire predictions of skyrocketing costs “apocalyptic demography”. Yet numerous studies have shown that aging effects are relatively small, and all else is not equal. Cost projections rest on specific assumptions about trends in age-specific morbidity and health care use that are far from self-evident. Sharply contrasting assumptions, for example, are made by Fries, who foresees a “of morbidity” and falling needs. Long-term trends in health care use in British Columbia show minimal effects of population aging, but major effects, up and down, from changes in age-specific use patterns. Why then is the demographic apocalypse story so persistent, despite numerous contrary studies? It serves identifiable economic interests.