Market intelligence
The seven-year itch: a review of the care home market since 2015
CSI Market Intelligence founder and director Mike Short scratches a seven-year itch by reviewing the care home market since 2015 and looks ahead to what the next seven years may hold for the sector
The number seven has many spiritual and symbolic connotations. In modern times it is seen as lucky in the game of bingo, yet one supposedly gets seven years of bad luck if mirrors are broken. In entertainment, seven can be either ‘Secret’ or ‘Magnificent’, and I imagine would be the title of an Adele album if she had been able to write songs at that age.
Since the beginning of time, the number
seven symbolised the day of rest after the creation of the world. In the Pythagorean numerology, the number seven was considered to be special because it consisted of the union of the physical (number four) with the spiritual (number three). There are seven days of the week, seven seas and seven wonders of the world. Yet what relevance does the number
seven have to the care home market, I hear you ask impatiently? Well, for seven years I have written and published the CSI annual report on openings and closures of care homes for older people in England, so I thought it would be symbolic to look back on what has happened over that period.
Is seven lucky for the care home sector? Has it been a lucky period for the sector, or did someone break a mirror somewhere around the start of 2015? If a care home
opening is good news, and a closure is not so good then overall it has been pretty bad, as around two homes closed for every one that opened - around 1,800 against 950 - although around 250 closed homes have since ‘reopened’, usually with new owners. But as the new homes have been around 60 per cent larger than those that have closed the loss of beds has not been in the same ratio as care homes. Additionally, extensions have brought increased capacity to more than one thousand existing homes. This has meant that the number beds actually grew albeit by a nominal 0.5 per cent during that time period, and there are currently around 405,000 beds available. One must remember that during those
seven years up to 56,000 vulnerable people would have been displaced when their home
While there were 91 beds per 1,000 people in the 75-plus age group in 2015, we began 2022 with just 77 beds per 1,000, a decrease of 16 per cent
April 2022
www.thecarehomeenvironment.com
was closed. Certainly not lucky for them. During that seven-year period the 75- plus population, which accounts for around 90 per cent of all occupied care home beds, has grown by around 900,000. That means, while there were 91 beds per 1,000 people in that age group in 2015, we began 2022 with just 77 beds per 1,000, a decrease of 16 per cent.
LaingBuisson has a ten-year aged-
based formula for calculating the number of people requiring a care home bed in England called age-standardised demand (ASD). Using their formula in 2015 meant that 342,000 people would have required a care home bed – therefore around 85 per cent of the total bed capacity. That same formula at the beginning
of this year increases by around 57,000 to 399,000 – almost as many people are there are beds available. So, with estimated average occupancy levels currently recovering from as low as 75 per cent, there is obviously a smaller percentage of people within the older age groups in a care home.
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