Nursing homes say Fair Deal shortfall will force closures

Nursing home owners are warning that smaller care homes will be forced to close despite demand for more spaces because of rising costs. The Fair Deal system of funding nursing home care in Ireland is not meeting the actual costs of that care, 96 per cent of nursing home operators say, making it impossible for many homes in certain counties to survive.

It comes as a new report by BDO for industry group Nursing Homes Ireland says 45,000 nursing home beds will be required in the State within a decade.

The Private and Voluntary Nursing Homes report, published today, The report is based on survey results for 2020, conducted last year.

Nursing home operators say there is a wide disparity in the rates paid for nursing home beds by the State through the Fair Deal scheme, which subsidises the cost of nursing home care for patients in private nursing homes. Under Fair Deal, private patients pay 80 per cent of their income and 7.5 per cent of their assets, with some exceptions, every year and the State tops that up to a set rate.

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In Donegal, the county with the lowest Fair Deal payment as at May 2022, the average weekly rate paid by the State is €955 per bed. This is €280 less per week than for residents in Co Dublin, which has the highest average weekly rate.

The reports notes that this equates to a €14,560 disparity in financial support per resident annually — or €859,040 on the basis of the 59-bed average size of nursing homes across those two counties, though Dublin homes tend to bring that average up.

The report also notes that financial support for Dublin’s public nursing home beds is 44 per cent higher than the private nursing home rate.

BDO Ireland partner and head of advisory, Brian McEnery, who compiled the report said that nursing home bed numbers have fallen slightly over the past year to 31,743. The report estimates that 45,000 beds will be required by 2031 to cope with a rising population of people over the age of 65. There has been a 17 per cent jump in the number of people in the Republic over the age of 65 per nursing home bed in just seven years.

“There was an increase in private and voluntary bed numbers from 26,221 to 26,561 [the previous year], though this was less than expected due to the slowdown of construction activity arising from Covid-19,” Mr McEnery said. However, that increase was more than offset by a 500-bed reduction in public nursing homes.

While planning applications for nursing homes were up 25 per cent nationally over 2020, the figure for Connacht and Ulster where Fair Deal rate are lower was down 40 per cent, the report says.

“Granted permissions were down 31 per cent nationally compared with 2020 and this decrease was seen in all regions, with the exception of Leinster. On commencements, Dublin recorded a spike in activity which was up 307 per cent in 2021 over 2020 figures,” according to the report.

A rising trend in the closure of homes with fewer than 40 beds, mostly located in regional areas, was largely due regulatory requirements for physical upgrades as well as rising costs, the report states.

“Smaller homes, particularly in regional areas, are struggling to meet existing regulatory demands and rising costs under the constraints of the prevailing Fair Deal scheme,” said Mr. McEnery. “This is a worrying trend, not least for the more sparsely populated area where these nursing homes are integral in the community but are not sustainable.

Tadhg Daly, chief executive of Nursing Homes Ireland said the survey highlighted that smaller nursing homes are facing the choice of increasing capacity or closure in the face of rising costs.

“Given the critical role of the nursing home sector in a well-functioning health service together with an ageing population, there is an immediate requirement to address the underfunding of nursing home care,” he said.

Fair Deal rates increased by around 2 per cent overall last year