Cognitive impairment in older people: future demand for long-term care services and the associated costs

Projections are presented of future numbers of older people with cognitive impairment (CI) in England, their demand for long-term care (LTC) services and future costs of their care. The sensitivity of the projections to factors that are likely to affect future LTC expenditure is explored. These factors include future numbers of older people, prevalence rates of CI, trends in household composition, informal care provision, care service patterns and unit costs.

A macrosimulation (or cell-based) model was developed to produce the projections, building on an earlier PSSRU model. Base case assumptions are made about trends in key factors expected to impact on future LTC expenditure, and variant assumptions about the key factors are introduced to test for sensitivity.

Expenditure on LTC services for older people with CI is projected to rise from 0.60% of Gross Domestic Product (GDP) ( pound5.4 billion) in 2002 to 0.96% of GDP ( pound16.7 billion) in 2031, under base case assumptions. Under variant assumptions, the projection for 2031 ranges from 0.83% to 1.11% of GDP. These figures do not include the opportunity costs of informal care.

Sensitivity analysis shows that projected demand for LTC is sensitive to assumptions about the future numbers of older people and future prevalence rates of CI and functional disability. Projected expenditure is also sensitive to assumptions about future rises in the real unit costs of services.