A review has been launched to map out a blueprint of how the elderly should be cared for over the next 20 years.
Nearly 500,000 people are looked after in care homes
Sir Derek Wanless has been commissioned by the King's Fund, a health think tank, to look at how the demand and supply of over 65 care will change.
The review follows Sir Derek's two reports for the government on public health and healthcare spending.
This study may reopen the debate about free personal care for the elderly - provided in Scotland but not England.
Some 486,000 people are looked after in independent and local authority-run care homes, down 9,600 in the last 12 months.
Care home places peaked in 1996 but have dropped by 89,000 since then as more and more people are looked after in their homes.
Sir Derek confirmed his review would address how the social care should be paid for when it is published in spring 2006.
And he added: "There is a great need for a review of the challenges and demands facing social care, and the resources that will be needed to deliver social care fit for the 21st century.
"Demand and expectations for social care services will increase and this growth may well outstrip growth in spending.
"Therefore, thinking about social care policy needs to be integrated with thinking about health care policy."
His 2002 report said health spending would need to double over the next 20 years to provide a good quality service and last year he called for more effort in preventing illness, rather than just treating it, pointing out it was the responsibility of government, schools and individuals to improve public health.
King's Fund chief executive Niall Dickson added: "It remains one of the big unanswered policy questions.
"We believe this review should have a major impact on the way care and support for older people is delivered in this country."
Meanwhile, Health Secretary John Reid has published a paper, Limits of the Market, Constraints of the State, arguing patient choice is not a right-wing value.
In the report, he has written that in the past choice has only been available to the wealthy few, but the government's agenda is all about extending that to all patients.
Health Minister Stephen Ladyman said he welcomed all "contributions to the current debate over the future of social care".
"Meeting the care and support needs of a wide and varied population is complex.
"We have to find better ways to deliver care and to give people more choice and control over the care they receive.
"The government is currently carrying out a review of efficiency in social care services and the King's Fund study will complement this work."