Fair Deal scheme not fit for purpose as nursing homes continue to close

State must revamp its thinking and policy on services for older people, particularly in wake of obvious lessons from Covid

Ireland’s older population have just had the worst three years in living memory. About nine-in-10 of the more than 7,500 people to succumb fatally to the Covid19 pandemic were older people. While the majority of deaths occurred in hospital, one-third occurred among nursing home residents. Nursing homes bore the brunt of the pandemic. The Covid19 pandemic should have represented a defining moment to provide a new focus on older people’s wellbeing and on their care. But, as the recent closure of multiple nursing homes confirms, a deficit in policy and resourcing is leading to an emergency within older person and broader health and social care.

Nursing home closures are heartbreaking for residents, families, staff and owners. It should not be lost upon us, that nursing homes are indeed the residents’ homes. While the closures have grabbed the attention and caused considerable angst within affected communities, regrettably there should be no surprise that it is happening. The warning bells have been sounding for years, with the closures a manifestation of the failure by the State regarding the policy it applies to resourcing nursing home resident care.

A crisis and crossroads now presents as a result of this for care of the older person in Ireland. Ten nursing homes providing care to about 400 people have closed or announced they will be closing their doors this year to date, resulting in the loss of approximately 500 jobs. Their closures follow a trend whereby 29 homes ceased providing care between 2018 and 2021. Nursing homes have closed due to the failure by the State to ensure that fees encompass the reality of resident care costs.

Nursing home care operates within a unique funding environment. Fees are set by the State through the National Treatment Purchase Fund (NTPF) under the Fair Deal scheme. Geography and historic pricing arrangements supersede resident care needs in determining fees. A chasm exists between fees payable under the scheme’s budget for private and voluntary nursing home residents and those within Health Service Executive-run homes. The Department of Health’s Value for Money Review report, published last December, found HSE nursing homes were provided with fees that were, on average, over €600 per resident, per week, more.


Smaller homes

The Health Information and Quality Authority (Hiqa), which is responsible for regulating nursing homes, publicly declared at the start of August that a particular model of care is being lost within the sector: smaller nursing home provision. This is a warning it has been repeating for a number of years. In 2017, it highlighted concerns regarding the closure of smaller nursing homes because they were not financially sustainable. It said continued closures would reduce the choice of settings available to older people and their families. Its warnings in the intervening period have gone unheeded.

The regulator has not been out on its own. Successive independent analyses, including those commissioned by the Department of Health, have delivered stark warnings regarding Fair Deal’s failure to encompass the reality of nursing home resident care costs. Successive governments have not grasped the necessity to redefine fee setting under the Fair Deal scheme which is 13 years in operation.

In 2015, a Department of Health report said it is untenable for Hiqa to assess differentiated dependency levels and, in doing so, impose costs on nursing homes, while the State pricing regulator, the NTPF, claims it is unable to reflect this in its pricing decisions. A stark, alarming and incredible warning. Yet the fee-setting mechanism remains unchanged.

The Comptroller and Auditor General’s examination of Fair Deal, published two years ago, found no model in effect to determine how fees for resident care were being arrived at. Its criticism followed that of the Economic and Social Research Institute, the Oireachtas Public Accounts Committee, the Office of the Ombudsman, the Dementia Services Information and Development Centre, and Sage Advocacy. They all stated concerns that Fair Deal’s mechanism to determine fees is not fit for purpose. When it undertook its analysis to assess learning for nursing home care emanating from Covid, the Covid Nursing Homes Expert Panel reported in August 2020 that several organisations had informed it that Fair Deal does not recognise the levels of care and services provided for resident care.

Cost environment

The recent closures represent a snowball effect taking hold. Hiqa had been informed of 29 closures the three years before the current exceptional cost environment coming into being. The multiple losses of nursing homes from communities is a consequence of an unsuitable mechanism and procedure to determine the fees payable for people with extremely high dependency, person-centred care needs: nursing home residents.

The most drastic impact so far has been upon smaller nursing homes. But its effect is keenly felt across the private and voluntary nursing home sector. The unprecedented inflationary pressures now being experienced by the economy are a threat to the sustainability of all nursing homes.

We have been living within an exceptional cost environment for a year now. The Government has yet to introduce a measure to support nursing home providers that charge fees which were set before inflation took hold. A nursing home will not turn off its lights and switch off the heating.

For many residents, families and communities, the required intervention is already too late. Continued inaction cannot be countenanced. Failure to recognise the reality of care costs is threatening the sustainability of nursing homes with implications for the entire health service. The immediate need is for an urgent intervention to bring Fair Deal fees in line with the reality of present-day costs. Supplementary funding encompassing the very considerable increase in resident care costs is a necessary stopgap and interim response. We need immediate funding for all residents to stem the tide of closures, secure the homes of nursing home residents and inject stability into the sector.

Beyond that, the Government has to grasp the requirement to change Fair Deal and its fundamental failings with regard to its primary purpose to fund resident care. The State has to stop long-fingering the problem and start to have sustainable policies for long-term care for older people. It is entirely unreasonable to continue to operate the mechanism currently applied within Fair Deal which is manifestly not fit for purpose. This current emergency must provide impetus to bring into effect a fit-for-purpose, person-centred funding scheme to recognise the reality of nursing home resident care costs.

Tadhg Daly is chief executive of Nursing Homes Ireland, the representative group for private and voluntary nursing homes