Nursing home group says Government to blame for closures

The Government has played a “significant role” in the closure of 25 private nursing homes across Ireland in the past 20 months, a leading private nursing home group has alleged.

CareChoice, which operates 15 homes in the Republic, says the Department of Health is operating “discriminatory” policies at a time of rising care costs. It received an average €15 a week per resident increase this year for residents operating under the State-subsidised Fair Deal scheme, it says, while HSE-run public nursing homes got €170 a week.

“It appears that the Department of Health is willing to chronically underfund private nursing home providers, including CareChoice, while at the same time applying a totally different funding model to the public nursing home sector,” CareChoice chairman James Tolan said as the company reported a lost of €16.9 million after tax last year, up from €10.4 million in 2021.

The company warned that its shareholder could not continue to ask investors for money to fund a Fair Deal funding gap which should be funded by the State.

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“The Department of Health has been willing to fund all of the inflationary and additional regulatory costs in HSE run homes while, at the same time, it is unwilling to fund the same inflationary and regulatory costs which CareChoice has faced,” Mr Tolan said, adding that HSE-run nursing homes were receiving, on average, €35,000 more per resident per annum — or almost €700 a week — compared to the fees it receives.

Fair Deal pays nursing homes a set fee per resident with the residents contributing 80 per cent of their income and 7.5 per cent of their assets over a certain limit to the State in return.

Newly filed accounts for CareChoice show turnover at the group, owned by French investment firm InfraVia, increased by more than 11 per cent in 2022 to €76.7 million. However, the group’s sales costs climbed by more than 20 per cent to nearly €64.7 million, mostly due to a 15 per cent jump in staffing costs to €52.8 million in the year despite a slight decline in CareChoice’s headcount from 1,584 to 1,518.

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Some €9.4 million of the company’s loss for the year related to interest payable to shareholders on loans to the Irish company to fund its acquisition strategy, up from €8.9 million in 2021.

Mr Tolan said the group had had to seek €19 million in funding from its owner over the past 16 months to meet “inflationary pressures and the unwillingness to fully fund the cost of providing care”, with the group losing €6 million due to rising costs.

CareChoice threatened to pull its Beaumont Residential Care facility in Co Cork out of the Fair Deal scheme in May, leading to protests by affected families at the constituency offices of the Tánaiste Micheál Martin, Minister for Finance Michael McGrath, and Minister for Enterprise Simon Coveney.

At the time, CareChoice said the rate of State support it received under Fair Deal of €1,085 per week per resident was no longer sustainable given rising costs for staffing, food and energy. Residents’ families were told that CareChoice needed at least €1,270 per resident to offset cost-of-living rises.

The Department of Health has been approached for comment.

In May, Minister for Health Stephen Donnelly told The Irish Examiner that CareChoice had adopted “cynical” tactics to get its point across, causing unnecessary anxiety among the families of affected residents.

He said discussions with the National Treatment Purchase Fund, which negotiates with private operators on the HSE’s behalf, were ongoing and that CareChoice had not behaved in “a particularly helpful way”.