Even those who have no relatives or acquaintances to care for realise that care costs are exploding. The exploding costs and the growing deficit in long-term care insurance, as well as in health insurance and statutory pensions, are a permanent feature of the news and daily newspapers. The causes of the rising costs are manifold:

• Longer life expectancy
• Shortage of carers intensifies competition between providers
• Falling population means fewer contributors to social security schemes

The cost factors in detail

Thanks to medical advances, people are living longer today than 50 years ago, but often no longer independently. The number of people in need of care has risen from 2.02 million in December 1999 to 5.69 million in December 2023.

Conversely, the rising number of people in need of care is accompanied by an increasing shortage of care places and nursing staff. In 2024, 112 care homes, 274 care services and 111 day care centres were closed (source: pflegemarkt.com). The staff shortage has made the payment of ‘bounties’ for qualified nursing staff a standard recruitment method in the industry. In Munich, for example, a ‘bounty’ of 8,000 euros is paid – 4,000 euros for the recruiter and 4,000 euros for the carer (source: tz.de). This money can only be recouped through higher accommodation costs. However, it is also clear that the homes that charge higher rates also have more solid staffing levels and can therefore guarantee better care.

The third factor contributing to the rising share of care costs for relatives is the declining proportion of the population in Germany that is subject to social insurance contributions. You don’t need a calculator to realise that an increasing number of recipients and a simultaneous decline in contributors is placing an extreme burden on the care insurance funds. The rising accommodation costs can no longer be absorbed and must be passed on to the care recipients or their relatives.

Significant regional differences in care home costs

Another point that also has an impact on the costs of inpatient care is regional. Of course, there are cheaper and more cost-intensive homes everywhere, which also depends on the operator. We have therefore chosen the same operator, Caritas, and two locations, Frankfurt am Main and Frankfurt an der Oder, for a regional comparison. While the monthly personal contribution, as of January 2025, is €4,189 in Frankfurt am Main, it is ‘only’ €3,050 in Frankfurt an der Oder (source: Caritas). The reasons for this may be the lower property costs, administrative costs and the continuing pay gap between East and West.

‘Stay discount’ not a real basis for calculation

However, the fact that the personal contribution is significantly reduced with the length of stay in a care home is a great euphemism. The average length of stay in a nursing home has decreased in recent years, despite medical advances, and is currently still 25 months. Over 30 per cent of care home residents die within the first twelve months of their stay.