Tim Street of private equity firm Patron Capital tells us that “care homes are essentially becoming light-weight community hospitals.” Putting it this way helps to mentally clarify just what it is that’s happening to the sector.

Across Western Europe, there are several different factors pushing in the same direction on the care home market. First, expanded lifespans are leading to an increase in the number of dementia sufferers in the population. Due to medical advances, however, most of the elderly population is still mobile and able to live independently or semi-independently (in assisted living). Up to a point, developments in domiciliary care have made supporting independent living cheaper than putting someone in a care home. Finally, social care is an increasing strain on European budgets, one which governments – both local and national – are not shy about tackling.

This means that governments are tightening eligibility criteria for those who are seeking public reimbursement for residency in a care home. People that typically would have gone into a care home in the past are now being pushed towards domiciliary care and kept in that situation for as long as possible. Only the sickest are being put into care homes, and due to the compression of morbidity and the advanced age of the patients, they are typically hit by extremely debilitating conditions.

As a result, care homes have been forced to move away from their traditional role of providing a community-centred retreat for the elderly to providing something much more medically intensive with far shorter lengths of stay. The average resident of a care home’s residency period has plunged to as low as 300 days in parts of Germany.

Street’s description of a community hospital is important because it emphasises that patients may go in and out. Nursing homes are not just providing borderline-hospice care to the dying. In Bupa’s care homes, for instance, more than half the time patients leave to go home or to another health facility – not to the grave.

These same trends are everywhere. Tim Street was describing the phenomenon in the UK; Deutsche Capital Management attests to the situation in Germany; Grupo SAR has had to develop large medical teams in its care homes as it adapts to the the sector’s new role.