FEARS have been expressed constructing new long stay residential facilities will no longer be attractive in Clare after a BDO survey revealed the county has the lowest Fair Deal rate in the country.
Latest figures for the Fair Deal, which provides financial support to people in long-term nursing home care, shows that support for patients in Clare is the lowest in the country at €930.20 per week.
This is €281.60 less per week per bed than Dublin, where the highest rate is paid and totals €951,808 less per annum for an average size Irish nursing home.
Report lead author, Brian McEnery, Partner and Head of Advisory at BDO Ireland said that the system for the assessment of the Fair Deal rate is fundamentally flawed and needs to shift from a county by county assessment to a “care need” one.
“Someone in a Clare nursing home with acute care needs may be getting significantly less support than someone in Dublin with far less need. This model does not serve the sector well and needs to be addressed as a priority,” he said.
The report found that increased operating costs together with heavy capital investments to meet HIQA standards, significant regional inequalities in bed supply and other regulatory requirements are among a raft of issues challenging the nursing homes sector.
On average, Fair Deal rates increased by just 13.3% since the last report was compiled in 2014 but staff costs surged by 23.5% in the same period,
According to Mr McEnery, the sector requires an estimated investment of more than €500 million in the public and private sector to address unmet challenges, if there isn’t to be a significant loss of beds.
Nursing Homes Ireland chief executive officer, Tadhg Daly warned the current low Fair Deal rates in Clare is threatening the sustainability of local providers and is making extensions and new builds economically unviable.
Mr Daly recalled the government reviewed Fair Deal in 2012 and commissioned a pricing review in 2015 that was published two years later, which is an acknowledgement this is an issue that requires urgent action.
He said a number of small nursing homes had closed and smaller operators were under constant pressure to survive.
HIQA standards requires at least 80 per cent of supply to be single en-suite rooms from next January.
The survey indicates 77% of accommodation in the private voluntary sector are single rooms.
Mr McEnery said that compliance with this requirement will be a particular challenge for public nursing homes, in particular.
The cost of developing a nursing home bed has a range of between €150,000 and €200,000 and this level of investment significantly reduces the potential for traditional ownership structures to prevail into the future.
For this very reason, large specialist operators with significant capital capabilities are growing their market share in comparison to the owner-operator and voluntary cohorts.
BDO sees this trend continuing, as well as an ongoing reduction of nursing home beds in homes with less than 40 beds.
Overall nursing homes are getting bigger, the investment required to develop them is larger and the smaller older homes are falling out of the sector.
This is why there has been a 75 per cent increase in bed supply with only an 11 per cent increase in the number of nursing homes, the report adds.
by Dan Danaher