Where in Europe are elderly care beds most needed?
Looking at OECD data on the number of beds in residential long-term care facilities per 1,000 people aged 65 and over across 27 European countries, there is a very clear pattern: the richer northern and western European countries tend to have a more bed capacity relative to the size of their elderly population than the poorer Southern and Eastern European countries. But this correlation is far from perfect. There looks to be a significant opportunity for new elderly care developments in the European countries which have a much lower capacity than you would expect based on their GDP per capita.
The relationship between GDP per capita and elderly care capacity becomes even clearer when you plot the two variables on a scatterplot. The correlation is very strong: with an r-squared value of 0.49, almost half the variance in elderly care capacity is explained by GDP per capita at purchasing power parity (this is for 26 of the 27 countries above – we took out Luxembourg because its distorted GDP per capita makes it an outlier). This is not surprising, given how expensive caring for elderly people in residential facilities is.
However, whilst strong, this correlation is far from perfect. Notably, the majority of the countries which lie below the trend line lie quite significantly below it. This means there are several European countries which have much lower elderly care bed capacity than you would expect based on their GDP per capita and the size of their elderly population.
In some cases this is because elderly care capacity hasn’t kept pace with the growth in a country’s elderly population. Norway had only 40.7 elderly care beds per 1,000 over 65s in 2021, but back in 2010 the figure was 57.1. Switzerland had 61.9 in 2021, but in 2010 it had 70.1.
But some other countries which have a much lower bed capacity than you would expect based on their GDP per capita have simply always had a low capacity. Italy’s figure has grown from 17.6 in 2010 to 21.3 in 2021, but based on its GDP per capita you would expect it to have around 35. Romania’s figure has grown from 7.9 in 2010 to 10.9 in 2021, but based on its GDP per capita you would expect the figure to be around 24.
Whilst other factors such as cultural attitudes towards nursing homes and regulatory restrictions will of course explain much of the remaining variance in elderly care capacity, these factors are far from immutable, suggesting there remains a potentially significant opportunity for new elderly care developments in the countries lying significantly below the trend line.
Factors to consider when looking at elderly care markets across Europe can be found in HBI’s market reports in HBI Intelligence.
We would welcome your thoughts on this story. Email your views to Martin De Benito Gellner or call 0207 183 3779.
