Diverting Essential Nursing Home Funding Will Have Huge Cost Says Report

Greater demands on Irish nursing homes and increased pressure across the wider healthcare sector adding to delays accessing the acute sector and overcrowding in A&E

Tuesday, February 11, 2014: The Government’s current short-term approach with respect to policy and funding for the residential care needs of our ageing population will, if continued, result in a much higher social and economic cost in coming years, according to a new report on Ireland’s long-term residential care sector published today.

The new BDO report estimates that for every 1,000 people who can not access nursing home care due to the State’s strategy, the cost to the Exchequer will be €273 million annually in addition to the immeasurable impact on people and their families.

Titled “Health’s Ageing Crisis: Time For Action, A Future Strategy for Ireland’s Long-Term Residential Care Sector”, the report states that Ireland has a growing ageing population requiring long-term residential care, placing significant strain on the Irish nursing home sector and increasing pressure across the wider healthcare service. The new report commissioned by Nursing Homes Ireland (NHI) presents independent research and evidence to lead the debate on public policy in respect of current and future requirements for long term residential care.
Derry Gray, Managing Partner BDO, said Government, Department of Health, the HSE and related agencies must engage constructively with the nursing home sector to prevent a crisis and to ensure that nursing home capacity is able to meet future demand. “Recent decisions by Government to divert money from nursing home care to alternative home care packages and other community facilities will be counterproductive and ultimately result in considerable waiting times for residential care.”


“This will consequently increase pressure on acute hospitals adding further to the numbers of delayed discharges within that sector,” Gray added. “Unfortunately such issues are already evident within our acute hospital sector. From a capital and operational funding perspective, encouraging and supporting the private and voluntary nursing home sector to develop the bed capacity needed to meet the current and future requirements of our ageing population represents a more effective use of limited Exchequer resources. A clearly defined role for the nursing home sector, in the context of a new and emerging continuum of care model, should form a key element of future health care strategy.”

The BDO report also noted that, unlike other elements of older care provision, nursing homes provide high levels of specialised care and operate within what is a highly regulated and safe environment.

“Uncertainty around the financing of Long Term Care under the Fair Deal scheme and the absence of a formal cost model threatens sustainability of current provision and continues to temper investor sentiment, acting as a barrier to investing in the nursing home sector,” said Tadhg Daly, Nursing Homes Ireland (NHI) CEO. “Significant capital investment in the nursing home sector is now urgently required. The political expediency associated with cutting financial support for the Nursing Home Support Scheme (Fair Deal) runs the risk of real long-term damage to Ireland’s capacity to care for our growing ageing population. Older persons must be afforded opportunity to access nursing home care in a timely manner and failure to ensure this will have serious consequences for their health and wellbeing. Furthermore, a key weakness in terms of the provision of the entire range of older people services in Ireland is the absence of regulation of or national quality standards for assurance in other older care settings, primarily homecare,” said Daly. “Inaction is no longer a policy or solution - the findings in this report very much emphasise the time for action is now.”

“Government policy and funding must provide a sustainable basis for the delivery of high quality nursing home care and allow for on-going investment in new capacity and service development. The private and voluntary nursing home sector is a vital part of health service provision, a notable employer, contributing significantly to local economies and is the most cost efficient provider of long-term residential care for our ageing population,” added Daly.


The BDO report stipulates that bed capacity within the nursing home sector is no longer keeping pace with increasing demand for long-term residential care. Ireland has, relative to other European countries, an extremely low number of long-term beds per 1,000 of the population. But critically, economic and funding constraints have in recent years been compounding this deficit, warns the report.


The report found that demand for nursing home beds is now exceeding supply in parts of the country, with the gap rapidly widening. Analysis conducted as part of the study predicts a shortfall in the number of nursing home beds of approximately 4,000 beds in two years (2016) and 8,000 beds by 2021.

The implications are clear, according to the report, that people in need of residential care, because they can no longer be cared for at home, will be forced to remain in or seek care within an acute hospital setting. This will have an inevitable wider impact on demand for acute hospital beds and over-crowding throughout Ireland’s accident and emergency departments. The report noted that the costs of providing care in an acute hospital are a multiple of between five and eight times the cost of providing nursing home care, either publicly or privately.

The report also highlighted the vital role currently played by Ireland’s nursing home sector which provides long-term residential care for over 27,000 people including public, private and voluntary beds. The report estimates that approximately 22,000 people are directly employed by the private and voluntary nursing home sector, contributing over €170 million annually to the Exchequer through direct taxation paid.


Download the report in full here

Download the report executive summary here. 



For further information contact:
Michael McGlynn, NHI Communications & Research Officer
(01) 4292570 / 087 9082970
Glen McGahern, Q4 Public Relations
086 1940057

Notes to the editor:
The report, “Health’s Ageing Crisis: Time For Action, A Future Strategy for Ireland’s Long-Term Residential Care Sector”, by BDO Chartered Accountants was commissioned by Nursing Homes Ireland (NHI). The objective was to undertake an independent, fact-based review of the Irish nursing home sector. The report’s analysis was based on publicly available data and literature and included primary research, which took the form of extensive engagement with key stakeholders throughout the nursing home sector, older persons care and wider health sector.


Find a nursing home in your area...