Demographics
the bone and recovery times continually shortened to try to reduce ‘bed blocking’. Recent figures published by NHS England showed a 40 per cent rise in total bed days lost through delayed discharge over the past two years.
In 2016, Lord Carter who was working with Health Minister Jeremy Hunt suggested that hospitals could build their own social care facilities or arrange for patients to be nursed in private care homes; the latter a more likely scenario. In truth this is already occurring. As care homes fill the demand for bed spaces, those responsible for constructing and running homes must be cognisant of the need to future proof the properties by ensuring the environment is dementia- friendly.
Working people
Today there are four people of working age to each person aged 65 or older; this will increase to two people of working age to every one person aged over 65 in 40 years time. Gross domestic product (GDP) is earned from the output of the investment of people and capital in our nation, and while the latter may be growing as we invest in the industries of the future, the tax burden may land disproportionately on those who are of working age.
This is a group that has not had the opportunity to have a free education like their parents, but has come out of university with student debts that are at an all time high. The cost of property for a first time buyer continues to rise as the UK struggles to build enough new homes for its burgeoning population, a population swollen due to greater longevity and more nuclear families. So working people have to work long and hard to pay off their student debts and to obtain sufficient funds to be able to put down a deposit on their first home, as well as to repay ever larger mortgages, of which the interest costs are no longer allowable for tax.
No wonder the government seeks to cap the cost of the growing number of elderly people by limiting its expenditure on social care and encouraging payment for this from the net equity of the over 65s. Private pay for residential and social care will increase over the coming years.
Family values
With the sexual revolution and couples taking longer to settle down, we are seeing the age at which people are having children rise. At the same time, they may have the added responsibility of their parents and sometimes grandparents,
Kenneth MacKenzie
Kenneth is a chartered accountant with 40 years of business leadership experience, the past nine having been spent in healthcare. He is the founder of Kames Target Healthcare Fund, Target Healthcare REIT and Target Advisers. In 2005, Kenneth led the acquisition of Independent Living Services (ILS), Scotland’s largest independent domiciliary care provider (home care). Kenneth grew this business by acquisition and put in place a new senior management team before exiting via a disposal to a private equity house. Prior to his involvement with ILS, Kenneth negotiated the proposed
acquisition of a large UK independent living business in a JV with the large US care home operator, Sunrise Senior Living, as they looked to enter the UK market. Significant work was done researching the UK healthcare market and he led the due diligence on the business. Kenneth’s experience from this exercise and contacts with the CEO of a REIT in the US was a key reason why he went on to found the Kames Target Healthcare Property Unit Trust.
who are all living longer and may not live close by. This is another reason why residential care is more likely to be necessary.
With people living longer, the likelihood of receiving an inheritance stretches into the future, and at the same time may be reduced by the need for care funding as family cohesiveness dissipates. In reality, an older relative suffering significant frailty and/or dementia may no longer be easily accommodated at home. Therefore, a care home place is likely to be required, further driving demand.
The birth rate is also falling, from nearly 90 births per 1000 women aged 15-44 years in the early 1960s to about 60 births per 1000 in recent years. Today’s children will have many more opportunities, but they are also likely to need to work harder, earn more and pay more taxes to fund the endless deficits, the need for higher pensions and to increase investment in the NHS. They are of course expected to live even longer; about 39 per cent of females born in 2012 will reach 100 years of age, but there will be less of them proportionately. They will need to work until later in life before receiving a pension, and it is likely that modern medicine will bring further progression in longevity and in the treatment of multiple morbidities. However, it is also likely that ultimately this group will also require quality end of life care that celebrates a life well lived.
May 2017 •
www.thecarehomeenvironment .com Conclusion
The challenge ahead is immense, but it also brings opportunity. Only 20 per cent of care home stock has been built post 2000 and only about 17 per cent of existing homes have the facilities that residents are likely to demand, for example full en-suite wet room facilities. Research indicates that 80,000 homes with lesser facilities may be in imminent danger of closure; in fact the number of closures has outweighed that of new homes opening for the first time over the past couple of years.
LaingBuisson also suggests that the need for care beds could rise by over 40 per cent over the next decade if the demographic drivers alone are an indicator. In fact the company predicts that “the UK is on the cusp of another extended phase of expansion of care home demand, of the same magnitude as that which took place in the 1980s.’’ So, if we consider the statistics, there is likely to be an increased need of about a quarter of a million care home beds at a time when perhaps five or six thousand homes are being built each year. No wonder members of the government are scratching their heads! There are two things that are certain in life, death and taxes; the need for new care home facilities may just be a third.
Further reading l LaingBuisson: Healthcare Intelligence Research Information UK.
www.laingbuisson.com
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