The optimal balance between institutional, home-based and community care for older adults requires an effective mix of organizational, funding and delivery mechanisms for target populations. This spans health and social care, and the coordination of care must respect older people’s care preferences and that of their families and friends as well as limits on the available resources to support and fund service provision. Care settings used to provide long-term care for older people and how they are defined vary greatly across Europe. This policy brief addresses the appropriate balance between three main components of long-term care: home care services; institutional care (formal and informal sectors); and care provided by family and friends (informal care). The dramatic upward trend in the cost and use of long-term care, the projected impact of ageing populations and the prevalence of age-related chronic disease and dependency ratios have catalysed proposals to redesign the funding, organization and delivery of affordable, effective and equitable health and social care for older people.