Public–private collaboration for the creation of new residential care places: is there any other solution?

A consensual plan should make it possible to clearly set out the more than 100,000 residential care beds that will be needed in Spain by 2030, as well as the over 350,000 beds that are expected to be required by 2050, assuming that the prevalence of high dependency remains consistent and considering, as a working ratio, that 15% of people aged over 80 will need this type of social and healthcare resource, as is currently the case. Otherwise, we know that older people repeatedly end up in hospital emergency departments, occupy internal medicine beds for twice as long as people aged between 30 and 34, and ultimately receive care that is both ineffective and inefficient, driving up costs that are ten times higher in hospitals than in residential care facilities.

What alternatives do we have?

There is no doubt that technological advances and improvements in home‑based care, both social and healthcare, are part of the solution, helping people to remain longer in the place where they feel most comfortable: their own homes. That said, even if a fully integrated social and healthcare care continuum — still non‑existent — with shared electronic medical records were available, high dependency continues to require specialised and continuous daily support. Highly disabling conditions such as Alzheimer’s disease still show a high prevalence of more than 17% among people aged 80 and over (and an average of 5% among those over 65), consistently across Europe. In these cases, we will continue to need appropriate infrastructure to care for and support the most vulnerable members of our society.

Is it feasible to respond to this challenge?

The answer is complex and multifaceted, but if the question is whether our society is capable of mobilising the necessary resources to address it, I am convinced that it is — provided certain conditions are met. What are they? First and foremost, recognising that public–private collaboration is not an abstract aspiration, but a concrete and existing reality that needs to be clearly defined and structured. Currently, 74% of the 389,000 existing care beds are privately owned and managed. Of these, 42% operate under public funding agreements. Similarly, 61% of publicly owned beds (which account for 26% of the total) are managed by private companies.

Elements of public–private collaboration

Collaboration already exists, but it can be significantly improved by establishing a clear and long‑term stable framework, incorporating the following elements:

• A transparent collaboration framework that clearly separates planning of capacity (how many resources are needed and where) from provision (who pays for the bed, depending on the social protection system and households’ economic capacity).
• A clear definition of the care continuum and the characteristics of each resource, from a social and healthcare perspective, supported by infrastructure that enables economies of scale (120–150 beds in the case of care homes) and removes unnecessary requirements — such as minimum parking ratios — that artificially increase construction costs.
• Placing the user truly at the centre, allowing flexibility in space configuration or in the design of living units in order to adapt to the resident profile of each area.
• Clearly defined, common, sufficient, but also viable staffing ratios.
• Stable public funding agreements, updated annually in line with CPI and HR costs when collective bargaining agreements change.
• Legal frameworks that allow the allocation of designated land, improving access to care resources where they are most needed and reducing per‑bed costs; enabling mortgage financing of buildings and separating asset ownership from service management through different legal entities.
• A strategy to ensure the availability of qualified professionals, including agile recognition of qualifications.
• Public tenders for management that assess quality of care proposals, not solely lowest price.
• A transparent public inspection system, with reports published openly, as is the case in countries such as Ireland, where the same criteria apply to private, public and non‑profit providers.
• Integrated social and healthcare management, including the incorporation of medical care modules within residential facilities. Spain is the only European country that does not include this type of collaboration in social care centres, making continuity of care and integrated case management more difficult.

Should Public Administration bear the full responsibility for the response?

Public management is not cost‑free. In a context of public debt at 108% of GDP and an annual deficit of 3.8%, Spanish 10‑year government bond yields stand at around 3.3%, while public employment represents more than 13% of the employed workforce. Spain urgently needs a common, effective plan that places public–private collaboration at its core.

In the private sector, long‑term financial structures offer returns of around 4%, through instruments such as listed real estate investment companies (SOCIMIs), which are required to distribute all profits and are taxed at 19%. Construction and development costs for new specialised facilities are, on average, 38–40% lower than those of public tenders. As a result, the average cost of creating a new care bed in the private sector stands at around €85,000, compared with €115,000 for publicly promoted projects. This is without even comparing operating prices for privately managed funded beds — between €65 and €95 per day — with reported costs of over €250 per day for equivalent services in the public sector, figures which often do not even include building depreciation, accounting for around 15% of the price per bed in the private sector.

A joint response in the interest of the common good

In short, Spain urgently needs a shared, effective plan in which public–private collaboration plays a fundamental role. The private sector has the capacity to contribute meaningfully, but a clear framework is essential in order to deliver a coordinated response in the interest of the common good. The time available to act is shrinking rapidly.