Nursing home sector in need of long-term care and attention

With demand rising and the State picking up most of the tab, the business of providing long-term residential care for older people should be a rare growth opportunity in today’s economic environment.

Yet the nursing home sector is in the doldrums, with growth slacking off in spite of numerous warnings of a growing need for places as the population ages.

Private nursing home owners have throttled back investment in an uncertain environment, while the public sector stands at a crossroads, with an urgent decision due on whether to spend large sums of money on the renovation of ageing buildings.

A combination of cutbacks, the credit squeeze and policy uncertainty is contributing to the stasis.

While a number of reports have been drawn up which map out possible futures for public and private nursing homes, they haven’t been published and key decisions on future policy have been repeatedly delayed.

Frustrated private sector operators say the lack of action is threatening the sustainability of nursing homes and have called for the establishment of a forum on long-term residential care, to be led by the Department of Health.

"There have been too many reports, too much talk and not enough action," says Tadhg Daly, chief executive of Nursing Homes Ireland.

“A forum is an absolute necessity to address the growing healthcare demands of our ageing population and to plan accordingly.”

It's all a far cry from the mid-Noughties, when new ventures were opening regularly, thanks to generous capital allowances and the willingness of banks to stump up the large sums needed to fund development of nursing homes. Even the current Minister for Health, Dr James Reilly joined the rush by investing in a facility in Co Tipperary.

But as Dr Reilly – whose name ended up in Stubbs Gazette over an unpaid judgment related to this investment – and many others found out, nursing homes weren't the surefire hit they were promised to be.

Banks started calling in their loans as the economic crisis deepened. Worse, the sector became embroiled in controversy through the Leas Cross affair in 2005.

The public outrage prompted by the care failures exposed at this north Dublin home led to the creation of a new watchdog, the Health Information and Quality Authority, and the introduction of onerous – and expensive – new standards for nursing homes to implement.

Leas Cross was a “difficult time” for the sector, Daly admits. Hiqa inspectors have forced the closure of at least nine homes in recent years but Daly says this accounts for only a small minority of operators.

"One is too many when it comes to standards, we accept that, but the sector has stepped up to the plate and met the challenge of the new, robust inspection process."

Slowdown
The number of new beds coming on stream averaged almost 1,000 a year between 2003 and 2009, according to a recent report by consultants BDO. In contrast, fewer than 900 beds have been added in the past three years combined.

The State, which has always struggled with the funding of care, introduced the Fair Deal (Nursing Home Support) Scheme in 2009, under which a resident contributes 80 per cent of income and 5 per cent of assets per annum to pay for his or her care.

The State pays the balance and the older person can choose the nursing home. The resident’s asset contribution is due to be increased shortly to 7.5 per cent.

The scheme has won general acceptance, though it was suspended briefly in 2011 when the money ran out, something that Daly says “frightened the horses”.

The budget for long-term residential in 2013 is €974m. Spending is controlled through the operation of a placement system for eligible applicants but this was paused for a time this year as the HSE gave preference to older people occupying emergency beds in an effort to cut trolley numbers in acute hospitals.

The HSE has stopped publishing monthly figures on admissions to the scheme so it is difficult to gauge the pressures applying to waiting lists.

However, in the first four months of this year, almost 4,000 applications were received and 2,600 new customers were supported under the scheme, which showed a surplus of almost €11 million. Despite Opposition claims, the HSE says there are no delays in accessing the scheme.

A review of the scheme was supposed to be ready after three years of operation by October of last year but will not be published until 2014.

In line with a commitment in the Programme for Government, this is expected to favour more supports for homecare packages that allow older people to stay in their own homes.

More recently, the scheme has been dogged by rows over fee levels. Given the state of its finances, the health service is understandably anxious to drive down costs and the National Treatment Purchase Fund, which negotiates fees with nursing home, operates as a near-monopoly payer and so is in a strong position to do so.

Nursing Homes Ireland claims nursing homes are struggling to provide services with the amounts provided, and anecdotal reports of residents being asked to fork out for non-core services are common.

"We accept the State has to get value for money but this shouldn't be confused with a downward spiral," comments Daly.

Bed numbers
Nationally, there are about 28,000 long-term residential beds in 129 facilities, 80 per cent of them provided in the private sector and the rest in public nursing homes.

Some 23,700 of these beds are funded through Fair Deal, and the number of self-payers continues to dwindle – understandably when you consider that the average cost of care is almost €1,000 a week.

Recently published figures from the Central Statistics Office show the proportion of the population aged over 65 years is set to grow from 12 per cent to 17 per cent in 2026, which is the European average. By 2045, one in five of us will be in this age bracket.

Meanwhile, those aged 80 and over will rise from 2.8 per cent of the population to 8.5 per cent in 2046, according to an analysis of the figures by Dr Maev-Ann Wren, research fellow at the Economic and Social Research Institute (ESRI).

In terms of raw numbers of people requiring services, that amounts to an additional 200,000 over-65s within a decade, and an additional 45,000 people over the age of 80.

“Ireland is now definitely moving to the kind of demographic profile other EU countries have long been used to. The number of people living longer and requiring help is going to increase,” she says.

Wren predicts an additional 1,000 people will need residential care each year. Up to 2010, the sector was providing that kind of growth, thanks to additional private and public sector beds, but not any more.

Another problem is the beds are often in the wrong places; there are too few nursing home places to meet demand around Dublin and too many in some rural areas. Meanwhile, areas such as Cavan/Monaghan and Louth/Meath have too few short-stay beds.

Although the demographic challenge is stark, it isn’t all bad news. While people are living longer, they are also staying healthy and active longer, so their need for high-dependency care is delayed. Within the older population, there are two distinct groups; those needing only small amounts of care, and others, often aged over 85, with high care needs.

One of the problems of the current system, including Fair Deal, is that it tends to direct older people into expensive residential care before they want or need it. In contrast, in Northern Ireland, a system of unified care funds both nursing home care and home help.

“Sometimes security factors and isolation can lead to frail old people moving to high-cost facilities. The standards in place can also lead to an over-medicalisation of some care,” says a HSE spokesman.

The HSE is keen to develop a wider range of care options for older people, including intermediate and transitional care, and sheltered housing, as well as more home help hours and home care packages. Whether its dwindling budget allows for this remains to be seen.

And again in the home care/home help sector, there are clear choices for Government to make between private providers on the one hand and public/voluntary operators on the other.

There is an urgency to the challenge not just because of the demographics but also because of the parlous state of many older public nursing homes. One in five of these homes is housed in buildings over a century old.

The cost of maintaining these relics is already huge and it is questionable whether they will pass muster when Hiqa imposes new, higher standards from 2015.

The arrival on the scene of Hiqa forced home to replace dormitories and eight-bedded accommodation with rooms accommodating a maximum of four people.

The next stage of regulation will demand a far greater amount of two- and one-bed accommodation in nursing homes than is provided at present, and it is not clear whether these premises, many of them former workhouses, can be adapted at an acceptable cost.

A HSE viability plan on the issue has been with the Department of Health for months, but no decision has been issued. It is believed the report puts a price tag of almost €1 billion on the cost of renovating existing facilities, a sum that may explain the delay in arriving at a decision.

Decision time
There is also a belief in the sector that the Minister's personal involvement with a nursing home, even though it is being handled by a third party, has made Dr Reilly reluctant to be making decisions in which political opponents could accuse him of having a conflict of interest.

The HSE, which is shackled by the moratorium on recruitment in the public service, is examining a PPP model for new build, which would see the State constructing nursing homes and private operators running them.

Daly says his members, who claim to provide beds for 50 per cent cheaper than in the public sector, have the capacity and expertise to meet future bed needs but the choice between public or private development involves a delicate political decision given the make-up of the Government. As in other areas of the health service requiring urgent decisions, it’s a case of: Over to you, Minister.