Nursing home sector in need of long-term care and attention
The threatened sustainability of nursing homes has brought calls for a forum on long-term residential care
With demand rising and the State picking up most of the tab, the business of providing long-term residential care for older people should be a rare growth opportunity in today’s economic environment.
Yet the nursing home sector is in the doldrums, with growth slacking off in spite of numerous warnings of a growing need for places as the population ages.
Private nursing home owners have throttled back investment in an uncertain environment, while the public sector stands at a crossroads, with an urgent decision due on whether to spend large sums of money on the renovation of ageing buildings.
A combination of cutbacks, the credit squeeze and policy uncertainty is contributing to the stasis.
While a number of reports have been drawn up which map out possible futures for public and private nursing homes, they haven’t been published and key decisions on future policy have been repeatedly delayed.
Frustrated private sector operators say the lack of action is threatening the sustainability of nursing homes and have called for the establishment of a forum on long-term residential care, to be led by the Department of Health.
“A forum is an absolute necessity to address the growing healthcare demands of our ageing population and to plan accordingly.”
It’s all a far cry from the mid-Noughties, when new ventures were opening regularly, thanks to generous capital allowances and the willingness of banks to stump up the large sums needed to fund development of nursing homes. Even the current Minister for Health, Dr James Reilly joined the rush by investing in a facility in Co Tipperary.
But as Dr Reilly – whose name ended up in Stubbs Gazette over an unpaid judgment related to this investment – and many others found out, nursing homes weren’t the surefire hit they were promised to be.
Banks started calling in their loans as the economic crisis deepened. Worse, the sector became embroiled in controversy through the Leas Cross affair in 2005.
The public outrage prompted by the care failures exposed at this north Dublin home led to the creation of a new watchdog, the Health Information and Quality Authority, and the introduction of onerous – and expensive – new standards for nursing homes to implement.
Leas Cross was a “difficult time” for the sector, Daly admits. Hiqa inspectors have forced the closure of at least nine homes in recent years but Daly says this accounts for only a small minority of operators.
“One is too many when it comes to standards, we accept that, but the sector has stepped up to the plate and met the challenge of the new, robust inspection process.”
The number of new beds coming on stream averaged almost 1,000 a year between 2003 and 2009, according to a recent report by consultants BDO. In contrast, fewer than 900 beds have been added in the past three years combined.
The State, which has always struggled with the funding of care, introduced the Fair Deal (Nursing Home Support) Scheme in 2009, under which a resident contributes 80 per cent of income and 5 per cent of assets per annum to pay for his or her care.
The State pays the balance and the older person can choose the nursing home. The resident’s asset contribution is due to be increased shortly to 7.5 per cent.
The scheme has won general acceptance, though it was suspended briefly in 2011 when the money ran out, something that Daly says “frightened the horses”.