A recommendation to continue the way Cardiff Council purchases domiciliary care has been approved by Cabinet.
Since November 2014, the council has used a system which sees care at home providers submitting mini-tenders to provide individual care packages.
Figures in the report to Cabinet show that, despite costs for new care packages falling by 11 per cent, more than 85 per cent of new care packages in the last 12 months went to the bidder with the highest quality rating.
The system introduced by the council in 2014 has also strengthened and added stability to the care market in Cardiff, with the number of providers covering the city almost doubling.
Cabinet Member for Social Care and Health, Cllr Susan Elsmore, said: "How we look after older people says a lot about us as a society, so I am proud that quality of care is at the heart of the decisions we make around domiciliary care.
"Ensuring we provide quality care, helping people to remain independent in their own homes, costs the council around £23.5 million each year, so it is vital that we achieve good value for public money."
While the quality of service has improved, the average rate per hour paid by Cardiff Council pays for domiciliary care fell from £17.62 in December 2015 to £15.79 in November 2017.
Cllr Elsmore added: "Despite financial pressures in the care sector, we have seen reductions in the cost of care since implementing a range of integrated measures to improve quality.
"The system we introduced in 2014 has played a significant role in this, but it has been the leadership, teamwork and commitment of staff and managers that has made it possible."
The report approved by Cabinet recommends the creation of a new ‘Dynamic Approved Provider List' that would come into effect no later than November 4, 2018, following the end of current contractual arrangements.