Research Political Sciences

Providers of Long Term Care for the Elderly Must Evolve

, by Ezio Renda
The latest report on this sector by the Cergas research center and Essity has been released

The aging trend of the population impacts the Long Term Care (LTC) sector and will continue to generate, with an ever faster evolution, an increase in demand for services, which it is necessary to know how to address with targeted actions. According to the Istituto Superiore di Sanità, by 2030 a growing disease burden is expected for older Italian citizens. The forecast predicts a growth in the number of people over 65 who are not self-sufficient, which according to the latest ISTAT data from 2021 was 3,959,395, or 28.4 percent of the total over-65 population. This is one of the findings of the 6th Long Term Care Cergas SDA Bocconi - Essity Observatory Report, which this year aimed to investigate how sustainable the sector is in the medium to long term, looking at the economic, personnel and service model dimensions.

With respect to the sustainability of services, the 6th Long Term Care Cergas SDA Bocconi - Essity Observatory Report returns a snapshot of a sector in which service models are not evolving, although the existing offer today presents a more diversified portfolio than in the past. Despite the fact that the current social context expresses the need for comprehensive caregiving, in the managers' perspective the need least attended to by the LTC sector is psychological support for the elderly and the family (with a score of 3.4 on a scale of 1 to 5). In contrast, the ability of services to deliver excellent complex and basic care is confirmed (4.9 and 4.4 out of 5). For managers, nursing homes and integrated home care are confirmed as strategic services, scoring 4.86 and 4 out of 5, respectively. In contrast, telehealth, telemedicine (2.76 out of 5) and support services for family caregivers (2.4 out of 5) are not recognized as determinant and strategic. This suggests that while the use of technology is now widespread in some areas of the elderly care sector, such as the management of users' records (score of 4.41 out of 5), it still struggles to be a key tool in the delivery of therapies (2.86 out of 5) or to design care protocols with artificial intelligence (1.62 out of 5).

The Report shows that 93 percent of respondents believe that the factor that most undermines the economic sustainability of the LTC sector is the current valuation of public rates, while for 76 percent of respondents it would be the willingness of families to pay, and finally according to 73 percent the determining factor would be the high fragility of users accessing accredited facilities. This, despite the fact that at the beginning of 2023 the economic situation of the surveyed institutions was improving, with +20.7 percent in the value of production compared to 2019 and an improvement in the gross operating margin.

Staffing shortages continue to be a central issue for managers, with bigger shortages among those who manage only the social and health care supply chain (where 18 percent of doctors and nurses and 11 percent of care staff are missing) than among those who also manage health care services (e.g., acute, long-term care, rehabilitation). The Report points out some of the most recurring problems in the LTC sector: dissatisfied staff, high turnover (33 percent for health care staff and 25 percent for care staff), and difficulty in finding replacement, partly due to applications that do not fit the needs of the managers.

The international picture, with the evidence gathered by the 6th Report of the Long Term Care Observatory Cergas SDA Bocconi - Essity on the case studies of the LTC sectors of France, Germany and Sweden, reveals the European scope of the challenges for the sector. This cross-country comparison allowed for an in-depth examination of how the different national contexts have approached the complexity of the sector's challenges, providing, despite the diversity of models, a perspective that could enrich the debate in the Italian context with insights into the strengths and weaknesses emerging from different policy choices. The case of Sweden, which has chosen to invest in "aging in place", i.e., home-based services, contrasts with the French LTC system, which instead focuses on the residential model. To counter the loss of attractiveness of the sector, the example of Germany stands out, which has expressed a very precise policy in this regard by acting on the labor policies of care workers.

Based on the evidence gathered, the Italian picture is extremely complex. While service providers have revised and continue to revise their processes since 2021 with a high impact on the levels of sustainability and efficiency of production processes, the efforts do not seem to be sufficient. Today, the LTC sector and the managers operating in it are failing to plan for future-oriented solutions because the context and regulations dictate that efforts must be made to seek short-term solutions. The 6th OLTC Report urgently highlights the need to rethink the system and the portfolio of services in a structural and lasting way so that they are truly consistent with current user demand and capable of solving today's most critical issues. Together, investment in technology, which does not seem to be attracting great attention, would provide a strategic opportunity to reformulate the sector's responses while also making it more attractive to human resources.

Giovanni Fosti, Elisabetta Notarnicola and Eleonora Perobelli, professors and researchers at CERGAS, SDA Bocconi School of Management, say that "Data shows the elderly care sector can no longer be considered as secondary. In order to be able to respond to the care needs of the elderly, an alliance is needed between policy makers and providers at the educational and economic levels, a systemic action that assesses the set of resources in the field, regardless of who holds them, aiming at better directing the use of these resources. Finally, a prerequisite for the sustainability of the sector is a range of services closer to the needs of dependent persons and their families. The possibilities in this direction are still largely unexplored, just as the potential offered by technologies, insofar as they can represent in the possibility of connection and bonding, both in the family perimeter and in the perimeter of relationships with providers."

Massimo Minaudo, CEO Essity Italia, adds, "As with all personal services sectors, Long Term Care relies heavily on trust, skills and quality of work in order to continue to provide answers to people's needs. The Cergas SDA Bocconi - Essity Long Term Care Observatory Report allows us to analyze the health of the care sector, providing valuable insights into its long-term sustainability. The need for a network of fundamental services such as those of psychological support for the elderly and for the family is certainly the most telling result, showing that the Long Term Care sector needs targeted coordination in order to respond more and more effectively to the evolving needs of dependent individuals."