Nursing Homes: Additional Bed Capacity to Cost CHF 20 Billion by 2040 Dienstag, 30. Juni 2015 - 10:00

At present, over 400,000 of the people living in Switzerland are over 80 years of age. By 2040, the figure is likely to have more than doubled – a trend that will lead to a clear increase in the number of people requiring nursing care. If we consider care for the elderly to be an industry like any other, probably no other sector is set for such dynamic and virtually guaranteed growth in demand over the long term. As the second largest segment of the healthcare industry after hospitals, it nevertheless faces many challenges. Given an increasingly elderly population, funding of the current system is likely to become even more challenging than it is today – as will training and recruiting enough qualified nursing staff. Although personnel costs account for the bulk of the overall cost of care for the elderly, the economists say considerable sums of money also need to be invested in new nursing homes and in the replacement of existing buildings.

Massive Rise in Number of Elderly People in Nursing Homes by 2040
According to the economists at Credit Suisse, the sharp growth in demand for nursing care is likely to mean that the proportion of gross domestic product spent on nursing homes and community nursing ("Spitex") will rise from the current 1.7% to more than 3% by 2040. Whether the current funding regime – in which costs are borne by government, the health insurance organizations as well as persons requiring care – can cope with this massive additional burden remains open to question. The economists therefore believe politicians need to examine alternative funding models at the earliest opportunity and to devise solutions that are politically acceptable as well as sustainable. The fact is that regardless of whether funding for the current system is assured or not, both the demand for care for the elderly and the number of nursing jobs are set to rise massively in the decades ahead. Depending on the scenario, the economists at Credit Suisse forecast that between 60% and 120% more people will be cared for in nursing homes than is the case today. However, the rate of growth varies dramatically across Switzerland's individual regions. Demand for care for the elderly is likely to grow at a particularly dynamic rate in the outermost regions surrounding the metropolitan centers of Zurich and Geneva-Lausanne. The economists expect fairly below-average growth in demand in the major cities and peripheral regions of the Jura Arc and the Alps.

Lack of Specialist Nursing Staff Likely to Become More Acute
The supply of nursing care has grown in parallel with demand in recent years. The number of employees in this highly labor-intensive industry has therefore grown at a faster rate than in most other parts of the Swiss economy. Thus the fact that there is already a shortage of specialist staff in some cases comes as little surprise. This is likely to become significantly more acute in view of continued dynamic growth in demand in the future. The Credit Suisse economists believe an additional 48,000 to 71,000 full-time nursing positions will be needed in nursing homes alone by 2040, a rise of between 1.8 and 2.2 times compared with today. But whether this demand can be met when growth in the working population is virtually stagnating is called into question in the new study "Swiss Healthcare Sector 2015 – Future of the Nursing Home Market." The vote in favor of reducing mass immigration in the referendum of February 9, 2014, must be viewed as particularly critical given this backdrop. The fact is that since 2006 more than 40% of new nursing positions have been filled by people with a foreign nursing diploma.

Structure of Nursing and Care Provision Is Changing
Switzerland's 1,500 or so nursing homes currently account for around 80% of nursing staff. The community nursing service ("Spitex") is responsible for the remaining 20%. Community nursing for the elderly will continue to increase in importance relative to nursing homes. This is not least due to the fact that at the moment nursing homes also house clients with minimal care needs; in economic terms, it would be more efficient for these clients to be cared for by Spitex. The strict segregation between community nursing and nursing homes is becoming increasingly blurred, however. A large number of alternative residential and care concepts already exist; they include serviced accommodation, which is experiencing strong growth.

French-Speaking Switzerland More Strongly Focused on Community Nursing Than German-Speaking Switzerland
Although Switzerland has near blanket nursing home coverage, with 99% of the population being no more than 15 minutes' drive from at least one nursing home, the regional density of provision varies considerably in some cases. In particular, the new study shows that extensive parts of French-speaking and northern Switzerland currently have below-average provision of nursing beds. However, this finding is put into perspective once Spitex provision is also taken into account. The French-speaking cantons in particular currently have an above-average focus on community care for the elderly.

Investment in Nursing Homes Has Tripled in the Last 10 Years
Recent years have seen a sharp increase in investment in nursing homes as well as in the number of staff. Municipal planning departments annually approved nursing home projects worth more than CHF 700 million in the 2012 - 2014 period compared with CHF 200 million or so in the years around the turn of the millennium. Although there was no increase in the number of new construction projects, the buildings approved were increasingly large. An especially large number of projects were approved in the Greater Zurich area, Basel region and Central Plateau. The Credit Suisse economists therefore believe these regions will see the biggest expansion in bed numbers over the next two to three years. 

Investment of Nearly CHF 20 billion Needed in Additional Nursing Homes by 2040
The dynamic growth in nursing home real estate is set to continue in the medium to long term given the forecast increase in demand. The economists at Credit Suisse believe an additional 53,000 nursing home beds will be needed on a Swiss-wide basis by 2040, notwithstanding the increasing importance of community nursing. That represents a total investment sum of CHF 18.4 billion, or nearly CHF 700 million annually. This figure takes little account of the replacement or refurbishment of existing buildings, or of investment in the construction of new homes for old people. The total amount of investment needed in old people's homes and care homes is therefore likely to be significantly higher still. However, the additional demand for care beds is not evenly distributed across Switzerland. Based on the forecast growth in demand and current density of provision, the Credit Suisse economists believe it is the regions between Lake Geneva and Lake Neuchâtel, east of Lake Geneva and west of the city of Zurich that need to make the biggest investment in additional beds from the current level.