Memorandum by Philip J Burgan, Maria Mallaband
Care Group Limited (PEX 24)
SUMMARY
1. This submission is derived from the perspective
of a national chain of care homes, delivering care for the elderly
and also specialist care for autistic clients.
2. It is written with the aim of advising
the government of the current status of the care industry, where
money needs to be spent and where it can be saved—pertaining
to both social care and NHS (PCT) care.
ELDERLY CARE
3. History of the market
The 1993 Community Care Act saw payment
for elderly social care move from central government to cash limited
local government. Placements fell, occupancies fell and this impact
combined with proposed draconian changes to physical standards
resulted in 100,000 beds disappearing from the market place—nearly
20% of the market. A "knee-jerk" reaction to this saw
above inflation fee rises in the early 2000's, which stabilised
the market, but this regime tapered off by 2005 and costs started
to rise further than fees again. April 2010 saw most authorities
freezing or reducing fees. Falling asset values and reduced profits
in the current recession have seen many large and small operators
breaching banking covenants. Profitability is at an all time low
and many operators are seeking the shelter of administration/receivership.
The market is in severe distress and whilst this will harden the
demise of poor quality assets that are not future-proof, it will
also affect better quality assets that cannot generate a sufficient
return to pay for the true cost of care. This will lead to insufficient
provision in years to come as the rapid rise in elderly demographics
takes place.
4. Social service market
If one were to stay in a budget hotel, a typical
rate could be £50 per night or £350 per week for a room.
Some local authorities (LA's) are paying less than this for personal/residential
care fees, yet as well as a room the operator is expected to provide
24 hour care, meals, laundry, medication, entertainment and make
a profit. It cannot be done. Respected companies such as Laing
& Buisson and Joseph Rowntree Foundation suggest that current
fees for personal and nursing care fall short of the true cost
of providing that care by at least £100 per week. Yet at
care homes operated by LA's themselves the cost of providing that
care is £600-£800 per week. LA's are starting to close
their own homes and sub-contract these beds to the private sector,
but very slowly.
5. Domiciliary care
Most elderly people would prefer to live in
their own home with outside help (domiciliary care). The previous
government accelerated this type of care as an alternative to
residential (personal) care in a care home. This was a mistake.
There is clearly a market for those of low dependency to have
a carer pop in for a few hours a day. However, the system has
been abused, and those people who need more intensive 24 hour
care cannot have their care needs met by this method as it would
be prohibitively expensive, so inevitably they receive less hours
of care than they truly need. It is a ticking time bomb, and one
waits for the headlines of "Elderly lady gasses herself to
death/sets the house on fire/overdoses on her medication...."
etc as she struggles to cope, before something gets done about
it.
It is obviously more cost efficient to care
for a group of people in one location than in disparate locations
when their care needs demand.
6. Extracare
This is a relatively recent phenomenon
designed to allow people the privacy of their own home in a complex,
with a warden and domiciliary care provided on an "as-needed"
basis. Again ideal for those with low levels of care, but no substitute
for a residential care home for those with greater needs.
7. Private Care Market
Although pensions have taken a battering, the
general increased affluence of the population, mainly through
rising home equity over recent decades have led to an increasing
number of people able to fund their care in old age from their
own resources. This trend will continue and will take some strain
out of the public purse. However currently it is a small part
of the market—circa 15%.
8. Primary Care Trusts (PCT's)
The abolition of PCT's is a stated aim of the
coalition government. However, no mechanism has yet been announced
as to how the transition to a local GP led service will take place.
This has led to uncertainty and loss of staff moral within PCT's
as to their own futures. PCT business has been a way that the
government can save significant amounts of money for elderly care.
The author has done much business with the NHS in recent years
and been able to offer discounts of up to 40% compared with the
cost of care on a NHS hospital ward. This has come to a halt currently
and is losing the NHS a vital source of cost saving.
9. Recommended Actions
(a) Accelerate closure of LA homes;
(b) Be more selective as to who receives domiciliary
care/Extracare and be more aware of the cost/benefit ratio in
providing that care compared with care in a residential care home;
(c) Transition the move from PCT led NHS care
to GP's quickly and efficiently. Using care homes as an alternative
to hospital wards for the elderly is a potential large area of
saving;
(d) Consider using some of the money saved from
(a), (b) and (c) towards increasing social service fees over say
a three year period to represent the true costs of delivering
care. Some of this cost can also be mitigated by allowing third
party contributions ("top-ups") towards bridging this
gap. Top-ups are looked upon disapprovingly by some of the more
militant LA's at present, for no logical reason when a relative
is prepared to pay so that their loved one can receive care in
a home of their choice which may charge a higher fee than the
basic social service award.
10. Autism care/learning difficulties/challenging
behaviour
A very specialist sector growing by 10% a year.
Nearly all social services funded. Fees vary between £400-£5000
per week depending on the level of challenging behaviour displayed
by the service user.
Historically these people were categorised as
having mental health problems and housed in asylums. As diagnoses
have improved, so have treatments and specialist care home centres
have sprung up around the country.
LA's take a long time to assess these people's
needs and therefore placements become protracted due to concerns
over budget constraints, and who will pay. LA's are struggling
to strike a balance between their statutory duty to fund the care
of these service users with their ability to fund that care. Some
have started to shun a residential care home environment and place
clients in normal houses (supported living), under supervision,
to demonstrate their great independence and therefore justify
paying a lower fee. This has not always worked and led to severe
frustration on the part of service users and their parents as
they inevitably have to return to a more secure residential home
environment, for their own safety and that of the public.
The author has responded to this dilemma by
providing a "core and cluster" environment in the 5
areas in which it operates, whereby a care home is used to assess
a service users needs, work with them to improve their abilities
in their deficient areas, and then move them out into the community
into a supported living environment with care.
If the service user cannot cope in a supported
living environment, he can move back in to the care home. However,
our experience is that this rarely happens, and the resulting
lower needs of the service user in the community results in a
fee saving.
11. Recommended Actions
(a) Sub £1000 per week clients can be largely
catered for in the community on a "supported living"
model, for less fees than a care home;
(b) For service users with higher levels of challenging
behaviour, adopt a "core and cluster" model to evaluate
them, protect the downside, but give them the opportunity to lead
a more independent lifestyle and at the same time reduce the level
of care required and therefore enjoy a fee saving.
12. Conclusion
This brief document has inevitably portrayed
a broad brush approach to how savings may be made and how some
of those savings urgently need to be deployed to offset a future
crisis in the provision of elderly care. It has not focused at
all on best practice, or client choice, but the author believes
these values can still be delivered despite a more efficient use
of public funds.
September 2010
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