LAST UPDATE | 9 Jan 2024

CLOSURES, FUNDING DIFFERENCES and majority for-profit ownership are just some of the many challenges faced by the nursing home sector, the Economic and Social Research Institute (ESRI) has identified.

The ESRI also found that the majority of the sector is now controlled by private, for-profit, large nursing home operators.

Despite controlling the majority of the market, patients in the private the sector receive 55% less funding under the State’s subsidy scheme, compared to patients in the public sector.

The findings were contained in a study named ‘Changes and challenges facing the Irish long-term residential care sector since Covid-19′. 

It found that since the Covid-19 pandemic, one in five small, private nursing homes – homes with less than 30 beds – have closed for good, the majority of those in the rural areas. A total of 700 beds have been closed in the public sector. 

While the pandemic did act as a catalyst for many of these closures, the ESRI’s data found that a nursing home having a Covid-19 outbreak was not associated with its closure.

The study said: “In most cases the point estimate was negative, and results show that having an outbreak in Wave 3 (between November 2020 and March 2021) may have actually reduced the probability of closure.

“However, this is likely due to a small number of [long-term nursing] homes having effectively closed by November 2020, when Wave 3 began.

It added: “While we do not place any causal inference on these results, they do suggest that having a covid-19 outbreak may not have been a key factor underpinning a [long-term nursing] home’s decision to cease operating.”

Last month, HIQA revealed that fifty nursing homes had closed between 2019 and 2022 – with “burnout” and “financial viability” being cited among the reasons for this.

It’s report also found that these closures were predominantly impacting local areas.

Tadhg Daly, CEO of Nursing Homes Ireland (NHI), said the report showed that the whole nursing home sector was vulnerable.

“Entire models of care are being wiped out and the entire sector is under threat by a failure of the State to recognise the disparities in funding and by failing to provide for rampant inflation in costs,” he sad.

He said that nursing homes representative group have welcomed the report.

He also stressed that the issue cannot be ignored by the Department of Health, adding that the report’s findings validate NHI’s calls for better measures to protect sustainability of the sector.

“This crisis cannot continue without serious consequences for the State and for care of the older person,” he said.

‘Problematic’ funding system

Despite controlling the majority of the market, patients in this portion of the sector receive 55% less funds under the state’s Fair Deal scheme compared to patients in the public sector.

Daly defended the recent increase in investment into the Irish nursing homes sector by suggesting that since the sector is independently regulated by HIQA, all standards and quality of care are the same, irrespective of owners.

The institute’s data reflects that 74% of all beds nationwide are within the private sector. Remarkably, it found that 14 operators control 40% of all beds in Irish nursing homes.

Commenting this morning, People Before Profit TD Mick Barry has said the data should “act as a warning” to government on the dangers of a for-profit care model.

Barry said that nursing homes should be run “in the best interests of those who need them – not in the best interest of a smaller and smaller number of big companies”.

Barry added: “The privatisation of the sector overseen by Fianna Fáil and Fine Gael needs to be put sharply into reverse. Those who advocate for a publicly owned not for profit nursing home sector will be strongly boosted by the release of this new report.”

The Fair Deal scheme pays the balance of the the total cost of nursing home care – residents contribute 80% of their income and 7.5% of their assets towards the cost of care, while the government covers the remaining expenses.

The ESRI has found however that inflation has now outpaced the scheme.

This was raised last year, by private, long-term nursing home Beaumont Residential Care in co Cork, after the management pulled out of the funding scheme in May.

This led to the families protesting outside the Dáil in June, pleading with the government Ministers in Cork to intervene with negotiations between the nursing home – one of 14 operated by CareChoice in turn owned by French investment fund InfraVia Capital Partners – and the HSE.

The families of residents in Beaumont Residential Care in co Cork protested to pressure government to intervene in negotiations in June 2023. The Journal / Muiris O'Cearbhaill The Journal / Muiris O'Cearbhaill / Muiris O'Cearbhaill

Minister of State for older people Mary Butler had previously told campaigners that there was no possibility that the state could assist them in their call for increased National Treatment Purchase Fund (NTPF) rates for Fair Deal residents in private nursing homes.

However, the ERSI highlights that the NTPF is also not in the position to negotiate the price of the Fair Deal plan a resident will be on.

The institute found that although a care needs assessment is carried out by a health professional for Fair Deal applicants, the current funding system does not consider the level of dependency of residents.

The assessment only determines whether an individual is eligible (or not) for the scheme.

Today’s report said: “This lack of resident-centred funding may result in inadequate funding for residents with high levels of dependency.”

It added: “This separation between residents’ care needs and financing provided to [long-term nursing] homes is a problematic feature of the current funding system.”

The ESRI said there was “little evidence” found that the Temporary Assistance Payment Scheme (TAPS) for Nursing Homes – a fund set up for private and public homes to purchase essential supplies during the Covid-19 pandemic – assisted in any way with preventing the spread of the virus.

Despite this, the private sector alone was provided with €132 million through the scheme with cleaning, infection control and staffing costs making up the majority of TAPS expenditures.

Daly said that while there has been significant consolidation and investment into the sector, “this has all but ceased given the dramatic increase in operating costs and failure to address the funding crisis”.

Reliance on the private sector

Author of the report Dr Brendan Walsh said the pandemic saw large changes in supply, ownership, and financing in the long-term residential nursing home sector.

The sector now “faces a number of challenges as it emerges from the pandemic”, according to Walsh.

“We now have a [long-term nursing home] system increasingly reliant on a small number of profit-driven operators,” he said.

Sinn Féin TD and party spokesperson for health David Cullinane has said the current government has “dragged its feet” when it comes to the provision of beds in the public sector.

Cullinane claimed that the government has no joint-up plan for care for older people.

He said: “This is being taken advantage of by a private market which is becoming dominated by a small number of providers, which are replacing traditional not-for-profit, public, and local private providers at a rapid pace.”

Walsh said: “Policies that harmonise financial incentives for nursing home providers with the primary objective of fulfilling residents’ health and social care demands within a more integrated care environment are required.”

NHI CEO Tadhg Daly echoed these calls, adding that establishing a sustainable long-term care system for older people “remains the priority of the NHI”.