Care home closure and the influence of domiciliary care supply: Evidence from England

There is a general trend of increased marketisation of long-term care (LTC) services across Europe, with the natural consequence that market forces will affect the supply of LTC. At the same time, there has been a rapid increase in the use of home-based provision for those requiring LTC support. However, there is little evidence as what the effects of growing domiciliary care provision has on the markets for institutional forms of care. This is important from a policy point of view in terms of managing local markets, access to services, the quality of services and inequality. Using data from England for all care homes and domiciliary care providers registered to provide care to older people during 2014-16 we assessed if increased domiciliary care supply was linked to increased likelihood of care home closure. Using Cox proportional hazard models of care home closure controlling for care home characteristics including quality and local area measures of needs and income, the findings provide no evidence that domiciliary care provision is a substitute for care homes. In some specifications there was even a complementary relationship between the two forms of social care: increased domiciliary care supply significantly reduced the likelihood of care home closure. Potential reasons for the complementary relationship found, including market integration, older population growth, reduced informal care provision and market signals, and the implications for European LTC policy, are discussed.