The cost implications of the changing population and characteristics of care homes.

BACKGROUND Recent increases in care home closures suggest that homes may not be able to balance pressures to reduce costs against pressures to increase standards. Commissioning requires an understanding of the factors affecting costs and how they change over time. METHODS A survey of care homes for older people was conducted in 21 local authorities in England in 1996. A complete response was obtained for 618 homes (75%) and 11,900 residents. Findings were compared with surveys conducted in 1986 and 1988. RESULTS Dependency was significantly related to prices, primarily due to the differential payments to nursing and residential homes. Home characteristics were also related to price, the proportion of single rooms having the largest impact. However, prices were most sensitive to local wage rates, particularly in residential homes. Compared with previous surveys levels of dependency had increased, particularly in voluntary residential homes and nursing homes. Independent homes were more likely to be purpose built, and a higher proportion of beds were in single rooms, although only 30% of private residential, dual registered and nursing homes achieved the proposed level of 80% of beds in single rooms. Staffing ratios appeared to have increased, but price rises were modest, particularly for nursing homes. CONCLUSIONS Standards of provision have improved over time, although prices appear to have been kept below those expected from increases in costs. Continuing pressures on costs and prices are likely to lead to further closures and a restriction of choice for older people.