Market intelligence
will grow at speed while the working age population is not expected to grow at all. In 2015, the 75-plus population in England was around 4.4m, this year it has reached around 5.3m and by 2029 it will be 6.3m - 43 per cent higher than 2015. The working age population grew from around 32m in 2015 to 32.8m in 2022 but is expected to stay at this figure in 2029. So, in theory, more people will need
beds. Yet there will not be any extra people around to care for them, which shows the need to encourage working age people into the sector, so working conditions and pay must improve in this respect.
Can supply keep pace with demand? The number of new investors and care home developments seems to be accelerating, and surprisingly the Covid situation did not prevent a year-on-year upward trend in care home openings from 2019 to 2021. These are predominantly large affairs with top-end facilities built primarily to care for today’s private-funded resident. Subsequent new developments may
need to appreciate that the current payment model could change – with the centrally- funded share of resident increasing at the expense of the self-funder – and built to meet where the market is going, rather than where it currently sits.
There is another factor in shaping the future of care provision and it involves people living with dementia in care homes. In 2014, the Alzheimer’s Society
published a report with age specific dementia forecasts, along with estimates as to the share of people who were living with dementia in a care home.2 In very basic terms, the propensity to dementia nearly doubles by each five-year age group from the age of 65, and the share of people living in a care home grows by around 50 per cent for those between 85 and 89, and another 50 per cent for those aged 90-plus. Using their formulae, in 2015 there
would have been around 260,000 people who were living with dementia in a care home, growing to 315,000 by this year, and a forecast 395,000 in 2029. So, in effect, what accounted for around 65 per cent of available beds in 2015, now accounts for 78 per cent. Many providers currently confirm this by suggesting three out of four people in their care have dementia. This is forecast to account for essentially all current beds by 2029, unless there are more beds available by then. However, with medical advances that
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have been achieved over the years, and what was achieved so quickly with Covid vaccinations, it must be hoped that these desperately needed developments with dementia can also be achieved, ideally to eradicate the disease, but more realistically to delay its development. If, for example, the onset and
development of dementia in individuals can be delayed by five years - compared with Alzheimer’s estimates - this would achieve a massive improvement in the quality of life for so many people and their families, and a huge reduction in the number of them requiring a care home bed. In fact, the forecast 395,000 for 2029
would reduce to 230,000 – less than those thought to have been living with dementia in a care home back in 2015! What occupancy levels would we see if that happened? How would the market react?
Conclusion While I have highlighted the fact that, in real terms, care home bed supply has reduced over the last seven years, over the next seven years the way the market develops must consider who will be paying for the care. This means private versus centrally-funded within the new government initiative. It must also be considered whether demand will continue at today’s level – especially if medical advances are achieved with dementia. If you would like to read the free CSI
report, Say Hello Wave Goodbye – Openings and Closures in Care Homes for Older People in England 2021, visit www.csi-
marketintelligence.co.uk.
Footnotes 1. Based on number of beds per 1,000 population aged 75 and over
2. Alzheimer’s Society, Dementia UK Update, 2014
https://www.alzheimers.org.uk/ sites/default/files/migrate/downloads/ dementia_uk_update.pdf
Mike Short
Mike Short is founder and director of CSI Market Intelligence. After many years in senior management consultancy across other industries, Mike has been involved in the care sector since 2009. CSI Market Intelligence have been quoted as “the best source of market data across the social care sector”. Mike has a successful track record in working with clients to identify locations for a new development, or whether or not to progress a purchase opportunity based on local market conditions, or how to improve a home’s performance through marketing. Mike lives with his wife of 40-plus years Sue, a care trainer in Worthing, West Sussex.
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www.thecarehomeenvironment.com April 2022
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