INTRODUCTION

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Many people use the services of home care providers in England. Nationally, the market for home care is worth over £3bn a year, and there are more than 10,000 agencies registered to provide home care services in England, employing over half a million people. However, little research exists on the market for home care in England and in particular what factors promote local provision. This is important to know to help inform policymakers to make appropriate decisions to ensure local populations have a sufficient choice of home care providers. This report analysed provision of home care in England, examining it at a national, regional and local authority (LA) level. Further, using statistical analysis, the report looked to find the factors that affect home care supply in small area markets and that influence the likelihood of closure of a home care provider.

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HOME CARE SUPPLY IN ENGLAND

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Using data for all of the agencies registered to provide home care in England for 2014-2018, we found that there had been a strong rise in the number of providers, from 7,852 to 9,079. Despite this large level of growth, there was still a lot of turnover of firms: nationally, around one in six agencies closed each year for 2014 to 2016, although this fell to almost one in ten for 2017. The level of openings and closures of home care providers in this period tended to be higher than the same rates for all businesses in England.

Regionally, the differences in growth of home care supply were stark: East of England, East Midlands, West Midlands and London had very strong growth, whilst other regions had limited (South West), no (North West) or even a fall in the number of agencies (North East). 

The average LA had 60 providers of home care in 2018, an increase of eight providers from 2014. Growth of home care provision was stronger in LAs with higher supply to begin with. Thirty-five LAs, mainly in the North West and North East, had a fall in the number of home care providers whereas other LAs had a high growth in number of agencies. A lot of LAs had years where a high number of agencies closed or new agencies opened. These findings could be as a result of market shaping by LAs. Market shaping is a responsibility in law that LAs are required to manage and improve the availability of adult social care in their area. These findings do not necessarily suggest that the level of care provided had fallen (or increased). Instead, they provide an indication that there was less (or more) choice for people who require home care services in these LAs over time. 

 

FACTORS WHICH AFFECT HOME CARE SUPPLY AND LIKELIHOOD OF PROVIDER CLOSURE
 

Using economic theory, we developed the following points to investigate using data on English home care markets: 1) that the higher the demand for home care in a market the more the number of providers; 2) that the higher the costs faced by providers the fewer there will be in a market; 3) that the higher the quality of a provider the lower their likelihood of closure; and 4) that the greater the level of competition faced by a provider the greater their likelihood of closure.

We looked at home care supply for nearly 7,000 small area markets. These had only one provider of home care located within them on average, but a greater number were available within a certain time range of the market. For example, there were 32 providers within 10 minutes of the average small market in England. This suggests that most people will have a wide range of choice in home care agencies when choosing who will support their care needs. Only a very limited number of small area markets had little choice in home care provider.

For the market supply analysis, we found that demand (e.g. population, measures of income and need) and supply factors (e.g. rurality) in the smaller area or LA had an important influence on supply. This confirmed points 1 and 2. We further found that a greater number of alternative providers that were located nearby reduced the number of providers in a small market, confirming point 4. The analysis provided an indication that the average provider would offer services to people living up to 30 minutes from their location.

Results from the closure analysis confirmed points 3 and 4: home care providers with higher quality are less likely to close and those facing higher levels of competition are more likely to close. In terms of competition, the results suggested that if a new home care agency located next to an existing provider then the likelihood of the existing provider closing would increase by a quarter. This effect would reduce if the new agency were to locate further away. The analysis also found that higher needs levels of the population and greater nearby care home bed supply reduced the likelihood of closure.
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CONCLUSION

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Many people in England use home care services and the market is large. These findings show that access to choice in home care varies across the country, with some areas where there is a lack of choice of provider. These areas are more likely where there is a lower demand for home care. Policy to target areas of lower demand/supply may be required. Further research is also needed to assess how choice varies for individuals. 

The results also suggest that the CQC quality rating system works successfully as closure occurs for those home care providers that have poorer quality. This ensures that consumers get the highest quality care and do not have to face care which is below what would be considered acceptable.
Higher competition from alternative agencies increased the likelihood of closure of a provider. However, for those receiving home care services, continuity of care is an important part of a high quality provision. Overall, markets need to be carefully managed by LAs if they are to a) provide choice to the consumer b) create a market with continuous improvement and c) be able to provide continuity of care without home care providers leaving the market.

 

SHARING OF THIS WORK
 

In addition to this summary, a full report of this research is available here. Interim findings were presented at the HSCWRU Home Care Forum on 5th May 2021 (slides available here) and have been presented to the Department of Health and Social Care. Further presentations, a blog and journal articles will follow.