A 15-year decline in care home demand has ended - yet many are still forced to pay for themselves.
According to market analyst Laing & Buisson’s annual report on the UK independent care home market there is an increased influence of private payers on the sector. Its analysis shows the private share of the market has risen to 41%, a trend predicted to continue in the future, with the number of independent sector residents projected to rise from 419,000 in 2009 to 424,000 in 2014 and then 459,000 (2019).
Dan Read, head of care at Partnership, pointed out there is plenty of opportunity for the private sector to target this surge in demand.
“From 2014 onwards we will see a large increase in the population of those needing care as the baby boomers come through,” he said.
“From that it is certain more people will require care, whether at their own home or in residential homes. With rising house prices and no alteration in eligibility levels, fewer people are now qualifying for state funding.”
As a result, Read thinks there is a large and growing market for private care insurance.
“The problems from brokers’ point of view are they do not know when and where people are going into care, it is difficult to find where that lead will come from. The ideal is working with Local Authorities,” he added.
The report also noted that as many as 28% of council funded residents may be receiving third-party top-ups, far more than previously estimated.
“Quite often the client may have to top-up over and above local authority rates for the care they are accessing. They might want to go into a different care home to the council funded one and so the family top-up for them,” said Read.
Laing & Buisson’s analysis of the Government green paper ‘Shaping the Future of Care Together’, says that funding of long-term care will continue on much the same basis at present, while the whole sector is still awaiting the finalisation of new regulations under the Health and Social Care Act 2008.
Again, Read believes this is a serious issue which needs to be addressed by all parties in the industry and supported by the Government. He voiced concerns that those outside local authority support were not being guided in the right direction, and also that the effect of spending cuts after the election would reduce the budgets available.
“The green paper is the bigger problem as it creates more uncertainty regarding funding for people going into care,” he said. “Anyone who is not funded by councils gets no advice from the authority whatsoever, at a very challenging time both financially and emotionally. I do not think this fits with their public sector ethos.”
The report also recognises that fee inflation in care homes has slowed down to 1.9% for nursing care and 3.2% for the 2009/10 financial year, just above the level of Laing & Buisson’s estimated care home cost inflation.
