The NHS currently ‘wastes' £3.3bn keeping elderly patients in hospital when the money would be better spent on a Fast Track Discharge Fund to move them into care homes, a report has urged.
The report by think-tank ResPublica found that thousands of hospital beds would be freed up for medical cases and residential care homes could look after recuperating patients who currently "block" wards because they have no safe place to go.
Phillip Blond, director of ResPublica said: "The bed blocking crisis in the NHS is only getting worse - clogging up wards and leaving newly arrived patients on trolleys in hospital corridors."
ResPublica has found caring for all delayed transfer patients in a residential care setting would cost £835 million over five years to 2020/21, compared to £3.3 billion in an acute bed.
The report argues the remaining £2.4 billion should be invested in bed capacity, skills, training and facilities in residential care to allow the sector to step up to this more substantial role.
A Fast Track Discharge Fund would also address the crisis which is seeing care homes closing because of the low amount they currently receive for funded residents, and the impact of the National Living Wage.
There has also been a sharp decline in meeting the 4 hour target to conduct an initial assessment on 95% of patients, the report warned.
The equivalent of 3,575 hospital beds were taken up by patients who had no medical need for them in 2011/12. This will rise by 21% to 4, 282 beds by the end of this financial year (2015/16).
The report authors highlighted a human, as well as financial, cost to bed blocking with frail older people unnecessarily in a hospital bed being much better served by expert care in the community.
Dr Sarah Wollaston MP, chair of the Health Select Committee, said: This report from ResPublica provides compelling evidence that social care cannot be seen in isolation from the NHS. There is an urgent need to improve access to social care and to address the delayed transfers of care and this can no longer be side-lined by policy makers."
Justin Bowden, GMB National Officer for the care sector, said: "The crippling costs to the NHS of bed-blocking prove that there is no place for austerity in the funding of social care - to do so is morally indefensible and financially stupid.
"The future of the NHS is intertwined with the fate of social care; as government underfunding sends social care down the pan, so the NHS is dragged with it: bed-blocking rises, we spend money we don't need to spend keeping people in hospital who shouldn't be there and, to cap it all, make many of them sicker by doing so.
"Proper investment now in the residential care sector, which is willing and ready to help with the bed-blocking crisis in the NHS, is cheaper in the long run, better for those who should be discharged and frees beds for those who actually need to be in hospital."
Peter Kyle, the MP for Hove who has campaigned for better care for the elderly, said: "The situation in the residential care home sector is dire at the moment. The 2% precept and the Better Care Fund are supposed to make up the gap in public spending on the social care sector, but there is little confidence that they can - or will - do this.
"I welcome ResPublica's practical proposals as an important step in developing funding models for a more sustainable health and social care system."