Nursing home operators under severe pressure from soaring energy costs

Nursing home operators say they are experiencing extremely challenging financial pressure due to soaring electricity and gas prices, and are unable to reduce usage as an essential service.

Stephen Eustace, chief executive of Highfield Healthcare, a 300-bed nursing home in Whitehall, north Dublin, said he was looking at a €1 million increase in his energy bill over a year.

In a normal year, the home’s electricity bill would be €300,000 but that reached €850,000 for the year to July and he was looking at this rising to €1.3 million overall for the year to March.

This amounted to a 400 per cent increase and the nursing home was not in a position to reduce usage as it was a “24-7 business” that required continuous electricity and gas use for residents.

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Mr Eustace said he had already accrued a €500,000 bill for fuel in the past 12 months and was “looking down the barrel of that being doubled for the next six months”.

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“We haven’t even come into the worst of it. I saw that lady down in the coffee shop in Athlone with a €10,000 electricity bill. You haven’t seen what is being forecast. It is massive. We are looking at a further €1 million on to your bottom line on just one line item: energy,” he said.

For smaller nursing homes, the energy crisis was existential, Mr Eustace said.

“There may be economies of scale for the bigger homes. Maybe they can ride out this storm but for the smaller ones, it is survival mode,” he added.

One of those smaller homes, the 49-bed Fairfield Nursing Home in Drimoleague, west Cork, has seen its energy bill soar from €5,000 a month to €11,000, pushing the annual cost of light, heat and power from €60,000 to €130,000.

“That is huge, colossal. It was really without warning,” said Sean Collins, the nursing home’s owner and manager.

“We cannot turn off the heat. We cannot turn off the power. It is nothing we can control. It is a doubling and we are not even sure if we are going to stop there.”

Mr Collins is backing the call by the private nursing home industry groups, Nursing Homes Ireland, for an increase in prices under the Fair Deal scheme, the Government’s subsidy scheme for nursing home fees, to help nursing homes survive the soaring energy costs.

“It is a crisis as big as Covid on a financial level and that is the way it needs to be dealt with,” he said.

Smaller nursing homes were facing additional cost pressures due to infection control requirements and increased staffing costs since the Covid-19 pandemic.

Mr Collins said his staffing bill alone had increased by about €250,000 over the past three years where subsidies under the Fair Deal scheme had increased by only €100,000 over that time.

The Co Cork nursing home operator, who employs 65 people, said he was concerned about the impact of cost increases on smaller nursing homes.

“We have been in business for 21 years and we won’t be able to sustain price increases of this nature,” Mr Collins said.

“Something does need to happen immediately or there will be problems down the line. It may take 12 months but it is going to manifest itself next year. For small nursing homes, that is going to be the issue. We don’t have economies of scale.”