Private nursing homes say ‘extreme’ cost pressures threatening their future

Soaring energy and food costs are threatening the future of private and voluntary nursing homes, which require urgent Government support to survive, their representative body has said.

Talks between Nursing Homes Ireland (NHI), the body representing private nursing home operators, and the Department of Health have been ongoing since March over increased cost pressures experienced by private and voluntary nursing homes.

The group has expressed frustration that the Government has not yet set a support mechanism to assist care homes that are struggling to meet the higher costs based on State-funded fees negotiated with the State’s National Treatment Purchase Fund (NTPF) before the surging price inflation.

There are 460 private and voluntary nursing homes caring for about 24,000 people.

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The State subsidises long-term nursing home care for older people through the Fair Deal scheme at a cost of about €1.4 billion a year based on prices previously agreed with the NTPF.

Tadhg Daly, chief executive of NHI, said the Government has recognised in meetings that nursing homes are operating in an “extraordinary and extreme cost environment” but he expressed disappointment that the Government had not yet introduced a support scheme.

“Nursing homes operate on a 24/7 basis and are entirely exposed to the escalation in energy and food costs,” he told The Irish Times.

Care homes were “operating off fees that were set within an entirely different cost environment”, and immediate intervention was required to ensure residential care was properly supported and to address the “force majeure presented by inflation”, said Mr Daly.

“The sustainability of nursing home providers is threatened by the sustained high levels of inflation, and almost 20 smaller operators have closed their doors over the past two years.”

Nursing homes were “under threat due to the exceptional cost situation”, he said.

Mr Daly said the Minister of State with responsibility for Older People, Mary Butler, had recognised in their meetings the “unprecedented situation” nursing homes now face, but he added that there was “now a requirement for urgent intervention from Government”.

Figures provided by NHI to the department, compiled by Dublin accountants JPA Brenson Lawlor, show the average cost per nursing home bed per week had increased by more than 10 per cent year-on-year in 2021 and was projected to rise a further 22 per cent this year.

In response to queries, the department said the Minister and her officials were considering “reasonable and evidence-based policy” to support capacity within the sector.

“I am acutely aware of the specific challenges faced by the nursing home sector related to price inflation and increased energy costs,” Ms Butler said.

She said she met the NHI to discuss the price inflation pressures earlier this month and had visited nursing homes recently to discuss the issue with both public and private care facilities.

“It is imperative that nursing homes manage potential cost pressures in line with their regulatory and contractual responsibilities, maintaining their quality of care so that residents’ lived experience and comfort is not affected,” the department said.

The department said nursing homes had received “significant supports”, amounting to €141 million, during the Covid-19 pandemic through the State’s temporary assistance payment scheme, known as Taps, while direct support has been provided to many private nursing homes.

Minister for Health Stephen Donnelly referred to the significant price inflation pressures faced by private nursing home providers contracted by the HSE when briefing Cabinet on Wednesday about a €366 million cost overrun in the State’s healthcare budget in the first half of the year.