The Irish Times view on nursing home ownership: people need more options

The biggest drawback of the trend towards bigger, privately- operated facilities is that the model does not work in rural settings

There has been a steady drift in the wake of the Covid-19 pandemic towards the provision of long term residential care by large privately-owned operators.

These for-profit businesses now account for 74 per cent of the 31,723 nursing home beds in the State, with the balance made up of voluntary and public providers. The main funder is the State, which pays for almost three quarters of beds via the “Fair Deal” or Nursing Home Support Scheme at a cost of €1.42 billion in 2019, according to a report from the Economic and Social Research Institute (ESRI).

Almost one in five small residential homes (with less than 30 beds) closed between 2020 and 2022, according to the report. The ESRI does not dwell on the reasons for the closures. But they are well known; the costs of complying with Hiqa standards, staff shortages and financing. Many of these problems crystallised for smaller homes during and after Covid. There is little reason to believe that this trend will not continue.

The market is now dominated by 15 large operators, some with 10 or more operations. They control 38 per cent of beds and all but one of them is financed by private equity. The other is run by a religious order. There are more such facilities on the way.


There is nothing inherently wrong with the provision of residential care by the private sector or indeed the reliance on private equity for financing. But it must be understood that the State and private equity have competing objectives.

The State wants high standards of care and value for money. Private equity wants to maximise profits and repay its lenders. In some cases – where the nursing home is owned by a separate, tax-efficient vehicle – the pressure for profit maximisation is intensified and exposure to risks such as interest rate hikes increased.

There is also the potential danger that the greater the market dominance of the private equity-funded providers, the greater their power and ability to push up prices and push down standards. There are also downsides to State provision. But the issue in both scenarios is one of proper regulation – and, as the single biggest purchaser, the State has significant leverage. That said, its track record when it comes to regulating complex markets is a mixed one.

Perhaps the biggest drawback of the trend towards bigger, privately- operated facilities is that the model does not work in rural settings where many of the homes that are closing are based.

The solution to this problem – and a vital support to the lives of older people in general – may lie elsewhere. The Government is committed to a statutory home support scheme which would endeavour to allow people to stay in their own homes for as long as possible. However, progress on its implementation has been slow.