Fair Deal scheme review achieves little or nothing

The inequities in State payments to Irish nursing homes have once again come to the fore, following the release last week of the report titled: A Review of Pricing System for Long-Term Residential Care Facilities. Ironically the body commissioned to undertake this review was the National Treatment and Purchase Fund (NTPF). This is the same body whose functions and responsibilities include negotiating pricing agreements with private and voluntary nursing homes for the purpose of the nursing home support scheme otherwise known as the Fair Deal. In carrying out its functions, the NTPF works closely with the Department of Health and the Health Service Executive.

The backdrop to the NTPF report was the review of the Fair Deal published in 2015, in which the department called for a pricing review of nursing homes to be undertaken by the fund. One might question why the fund was commissioned to undertake this work, given that it is not independent and for the purpose of the Fair Deal is the price-setter for private/voluntary nursing homes.

Although commencing about a year after the Fair Deal review was first published, this pricing review has taken more than four years to be published. Its terms of reference were to: 1. ensure the adequacy of residential capacity for residents requiring a high level or more complex care; 2. continue to ensure value for money with lowest possible administrative costs for clients and the State; and 3. increase the transparency of the pricing mechanisms to enable investors make informed decisions.

In undertaking the review, the fund engaged consultants Deloitte and Prospectus to write a joint report, undoubtedly at a high cost to the taxpayer. This called for a more transparent pricing mechanism to inform price-setting and reflect the complexity of residents’ needs. In the interest of transparency, they also recommended the introduction of an external and separate appeals agency, should disagreement about pricing arise between providers and NTPF.

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Private/voluntary sector

Although the Deloitte and Prospectus report is attached in the new fund pricing report, the NTPF explicitly states that it is not necessarily endorsing its findings, merely citing them. To complete its report, the NTPF has also taken soundings from its own legal advisers, who state that the introduction of the financial pricing model would lead to increased costs and concluded that the current system does not require change.

The majority of people in Irish nursing homes have high dependency needs and up to about three-quarters probably have dementia

Ironically a key recommendation arising from the NTPF pricing report is that it should, in parallel to its normal negotiations, now undertake yet another internal review of pricing. One might question how many more reviews are needed before a more equitable transparent system emerges?

A notable feature of government policy over the last decade has been the outsourcing of residential care to the private/voluntary sector with the public system accounting for an increasingly small faction of provision.

For all three sectors, government funding is arrived at through different pricing processes. Funding for the public sector is set down internally by the HSE with payment rates based on prior-period operating costs and bed-occupancy levels. Payment rates for the private/voluntary providers are negotiated through the NTPF through its contracting with nursing homes for the Fair Deal.

The criteria used by the NTPF to determine prices include costs incurred and value for money, prices previously charged, the local market price, budgetary constraints and the obligations of the State to use available resources. Residents’ dependency needs such as support needs with their daily living, complex healthcare requirements and responsive/complex behaviours like those associated with dementia are not considered. These are aspects of care that in other countries are given due consideration for government pricing subsidies.

A key tension centres around the comparatively low payments made by the NTPF to private/voluntary nursing home providers and the disproportionately high share of the nursing home budget the public sector absorbs. For example, in October 2016 close to 77 per cent of residents – about 18,000 people – lived in private nursing homes and 23 per cent in public facilities. However of the €940 million set aside for the Fair Deal budget that year, €360 million (38 per cent of the overall budget) was absorbed by the public sector.

Dementia care

When questioned, the HSE has attributed these price disparities to better pay and conditions required for staff working in the public system; a higher proportion of "maximum dependency" residents living there; and greater costs associated with older buildings. Some of these justifications have been challenged by Nursing Homes Ireland which, based on a nationwide survey, has shown that the private/voluntary sector provides the main bulk of dementia care.

A critical factor overlooked in determining a fair pricing mechanism for all nursing homes is the dependency level of residents. All private/voluntary facilities receive the same price, irrespective of their residents’ needs and prices are fixed at the time of agreement with no scope for review.

Inappropriate environments make it extremely difficult for staff to provide dignity-enhancing care and will further deskill frail, older residents

The NTPF considers the key cost drivers for nursing homes to be based on payroll, food, energy, repairs and maintenance. No consideration is given to residents’ quality of life or quality-of-care concerns. Fair Deal funding merely cover standard components of long-term care such as nursing, personal care, bed and board, aids and appliances, and laundry. Therapies are not funded under the scheme nor are vital recreational and daily activities.

The majority of people in Irish nursing homes today have high dependency needs and up to about three-quarters probably have dementia. The provision of quality care for these residents necessitates significant set-up costs and intensive continuous resourcing and revenue.

Good nursing home care is not cheap. The environment needs to be small-scale, homely and fit-for-purpose. Inappropriate environments will make it extremely difficult for staff to provide dignity-enhancing care and will further deskill frail, older residents. All staff need to be trained and pay and conditions for care staff must be set at a realistic level that supports recruitment and retention.

The Fair Deal is supposedly based on the principle that money follows “the patient” but the current price model is unfair and fails to reflect this. As more small-scale nursing homes are being forced to close down, the inequities in the public/private divide in aged-care services now need urgent attention. All sectors need more realistic funding to enable older people to enjoy a good quality of life, one they clearly deserve. Similar criteria must be applied for funding allocation and similar pay scales awarded for the enormity and nature of the human care work undertaken. With population ageing now advancing more rapidly than ever, there is an urgent need to resolve what could in the future constitute a significant crisis in our older peoples’ services. And undertaking yet another pricing review will in my view achieve little. In fact it is a total waste of taxpayers’ money.

Prof Suzanne Cahill is an adjunct professor of social work and social policy at Trinity College Dublin and honorary professor of dementia care at the Centre for Economic and Social Research in NUI Galway