Call for additional €191 million urgent support through Fair Deal for nursing home care in Budget 2024Monday July 31, 2023
34 nursing home closures to date – 1000 beds lost in three years
31st July 2023: More nursing home closures are inevitable with the loss of vital community healthcare services unless there is a strong response and substantive immediate intervention by the Government in Budget 2024, Nursing Homes Ireland (NHI) has warned.
NHI today submitted its pre-budget submission for Budget 2024 to the Minister for Finance, Michael McGrath TD, and is calling for an increase of €191 million in the Fair Deal budget to recognise the increase in costs in the delivery of nursing home care that are not being recognised by Fair Deal. With 34 nursing closures of private and voluntary nursing homes having occurred the past three years, resulting in the loss of 1,000+ beds, Budget 2024 must stem the wave of closures that have occurred within the sector. The €191 million is necessary to enable the National Treatment Purchase Fund, administrators of the Fair Deal scheme, to ensure the short-term viability of nursing homes and halt further closures.
The €191 million manifests in an additional €201 per resident, per week, to bridge the gap between costs increases since 2017 which have not been recognised within fees payable, resulting in the closure of multiple nursing homes and the sustainability of providers being under threat across the country.
Tadhg Daly, NHI CEO states: “Appallingly, the crisis in nursing home care continues. Budget 2024 now presents opportunity for Government intervention that will meaningfully address it. The reality is over the past five years, the cost of caring for a nursing home resident has risen by 36%, led by increases in all costs including for example energy, staffing and food costs. Yet Fair Deal fees have outright failed to encompass the huge increases that have arisen for these 24-7 specialised healthcare operators. With over 30 closures taking place and one-in-three operators operating at a loss in 2022, Budget 2024 represents a pivotal opportunity for Government to address this crisis in health and social care.”
“In June, the Government did not oppose an opposition motion calling for immediate, short-term action to stem nursing home closures. Support for this motion now needs to come into effect. Unless action is taken now, more nursing homes will close and more residents will lose their homes, causing great upset and trauma. More staff will lose their jobs, more communities will lose vital services and the health service will lose critical capacity for older person care. In Budget 2024 the Government cannot ignore the ever-increasing need for private and voluntary nursing home care and the extra resourcing required to meet the specialist care needs of nursing home residents.”
Without urgent action by the Government in the very short-term, a long-term crisis will become embedded within the Irish healthcare system. It will result in:
- people requiring the 24/7 clinical, health and social care provide by nursing homes being denied timely access to it, which presents severe implications for people requiring these essential services;
- people having to avail of this specialised care far removed from their local communities; and
- the loss of vital step-down services for acute hospitals, resulting in highly costly extended delays in the discharge of patients back into the community.
- Further exacerbate the crisis in our acute hospitals and A&E across the country
Nursing Home Closures
The extreme disparity between the reality of care costs and fees payable under Fair Deal has led to the closure of 34 private and voluntary nursing homes in the past three years. This is a loss of to date of over 1,000 beds from this essential sector within our health and social care services. Nursing homes that have provided decades of service in communities across Ireland are being forced to close their doors.
The Government is well aware of the scale of the crisis. A recent opposition party motion calling for immediate, short-term action to stem nursing home closures went unopposed. Further, the motion called for an urgent review of the Fair Deal pricing mechanism. This was an acknowledgment and acceptance from Government of the seriousness of the crisis in nursing home care in Ireland.
Fair Deal Reform
In its second recommendation for Budget 2024, Nursing Homes Ireland is calling for the reform Fair Deal, whereby the pricing mechanism for Fair Deal rates must be based on resource allocation that reflects individual residents’ care needs, and all the associated costs.
“While there have been numerous analyses commissioned by the Department of Health, Fair Deal’s funding model does not adopt an evidence-based approach. The existing Fair Deal pricing mechanism is based primarily on historical financial data from nursing homes and rates are typically fixed for 24 months. This means that the rates that many homes are receiving fees that are badly misaligned with their costs of providing care which are increasing rapidly.”
“We are seeing homes now agreeing one-year deals given the uncertainty. It is time to act upon the analyses and bring into effect, 14 years after it came into being, a fit for purpose pricing mechanism for Fair Deal,” said Tadhg Daly.
Response to Low Pay Commission
With regards to the Low Pay Commission suggested recommendation to increase the National Minimum Wage by 12/4%. NHI is wholly committed to raising the terms and conditions and professional standing of social care staff, where staff are valued and rewarded for the professionalism and contribution to high quality person-centered care.
However, it is critical to recognise the private and voluntary nursing home sector is ultimately funded through the Fair Deal scheme, which entails the provision of fee-based nursing homes costs, including salaries payable. An increase in the national minimum wage will have a knock-on effect in salaries payable and this State-imposed inflation must be acknowledged and specifically remunerated and provided for within the fees payable for the provision of care under Fair Deal.
The report by PwC, Challenges for Nursing Homes in the Provision of Older Persons Care, published in May 2023, provided a clear insight into the serious issues that are presenting the crisis for the sector.
It noted that Since 2017, weekly rates for the Fair Deal scheme in the private and voluntary sector – set by the National Treatment Purchase Fund (NTPF) – have risen by just 3.1% a year. Illustrating the disconnect between the reality of care costs and fees payable under the Fair Deal scheme, HSE-run nursing homes receive fees that are an average €744 per resident, per week, more than those payable on behalf of residents in private and voluntary nursing homes. This has been borne out by publication of fees payable under Fair Deal to HSE nursing homes for January 2023. The €744 per resident, per week, is massive 69% more than that payable for resident care in private and voluntary operated nursing homes. There is huge inequity.