By S.Priyan, Senior Research Analyst

The number of people aged 65 or more is drastically increasing throughout the world. The average Compound Annual Growth Rate (CAGR) of this increase in the number of elderly people in Europe is about 2.1% between 2008 and 2015. The healthcare services to these elderly people are highly demanding in terms of funds and workforce. The care homes that offer long term healthcare services to the elderly, among others, could be nursing homes, residential care homes or sheltered homes. The number of these care homes in Europe is increasing year after year from 2000.

Chart 1 shows the number of elderly people (Europe), 2008 and 2009

                                                                                                   Source: Frost & Sullivan

The workflow automation software solutions that these care homes deploy to handle their administrative, financial and clinical functionalities are termed as care management systems. These systems are of various types, based on different criteria. Based on the end users, the systems can be either residential or nursing home management systems. Based on the service period of the care delivered the care management market could be segmented as Short Stay or Respite, Long Stay, Trial Visits and Day Care. Based on the functional modules, the systems are termed as clinical, financial or administrative. While most of these systems are integrated, these are offered as stand alone systems, which would benefit small care homes around Europe. The cost of theses systems vary from $500 to $3000 in 2008. This cost involves the initial license costs and initial set-up and training charges. This cost is expected to remain the same through the forecast period of the market due to the ever prevailing demand for care homes and management software systems.

The number of nursing home beds per 1000 population aged 65 and above has been slowly dropping over the last several years. It was 61.2 in 2006. However in UK, 65.0% of the NHS beds were occupied by people aged 65 and more. Germany is the biggest nation in Europe, both in terms of elderly population and GDP. It is the third fastest growing population in Europe, only after Italy and Switzerland. The French healthcare system, including the long term care system is the best among the European nations, according to the WHO. Italy has the fastest ageing population in Europe, followed by Switzerland and Germany. The number of people aged 65 and more is expected to double by 2050. Scandinavia has the highest number of beds per 1000 population, for long term care. Hence, the demand for both long term care beds and the care management system infra structure is increasing throughout Europe.

Chart 2 shows the various types of care homes and services (Europe), 2008

                                                                                                  Source: Frost & Sullivan

While the care management systems mainly serve care homes for the elderly, there are other integrated or exclusive care homes for drug dependence, sensory impairment, physical disability, learning disability, Alzheimer's disease, dementia, alcohol dependence or mental health issues. These care homes vary from the clinical perspective up to reimbursement claims eligibility and management processes.

The care management systems are beneficial in driving the overall quality of care service delivery. The systems integrated into a common database thus avoiding redundant data entry from various sources. The shortage of care home staff is better handled by care management systems. The care home payments and reimbursements are streamlined by the software systems. The expenses are better managed thus increasing administrative costs.

Chart 3 shows the advantages of management systems on Care Homes (Europe), 2008

                                                                                     Source: Frost & Sullivan

Drivers and Restraints of Care Management Systems in Europe

Several factors are driving the growth rate of the care management systems in Europe. Some of the most significant of them are rapidly ageing population, growth technological innovation such as telemedicine, shortage of care home beds in Europe etc. Similarly some of the factors that are restraining the growth rate of the care management systems in Europe are: initial and ongoing costs of the systems, complex reimbursements schemes, lesser funding than required, lower investment levels in long term healthcare in Europe and so on. The market is estimated to be more than $200.0 million in 2008 and it expected to grow at a CAGR of more than 9.0%.

The market also faces several challenges such as huge number of novice companies in the market, large number of smaller care homes that are not able to afford a management system in place and so on. However, the demand for the care management systems in Europe is on the rise. So is the penetration rate of the systems among the small, private care homes in Europe.

Some of the major market participants of care management markets in Europe include Aston solutions, Anoto Group AB, Cerrus International, Blue Parrot Software, TietoEnator, Cerner Corporation and so on. These companies offer all kinds of care management systems priced between $500 and $2,500 in 2008. Most of these companies offer complete support and maintenance services to the care homes. These services can cost between 12.0-15.0% of the initial licensing costs.

The demand for care management systems is increasing across Europe. More affordable systems and increased funding for the adoption in the care homes could drive the market faster than estimated. The European healthcare infrastructure should be well equipped to handle enormous amount of medical data from care homes, because of dramatically increasing elderly population. The systems should be seamlessly integrated for a error-proof management system. Integrated software systems at nursing and residential care homes could assist the care providers in handling the challenges of the highly demanding healthcare service in Europe.