Monday, March 28, 2011

The care home crunch

The Sunday press and today’s radio news has a lot about the sinking of Southern Cross into administration/rescue/death by a thousand cuts…

The company is now at the point of ‘asking’ its landlords to accept a 20% cut in the rent. I suspect that what is actually happening is stretching the word ‘ask’ to its limits.

The article reckons that Southern Cross is now operating at 85% occupancy levels. That might seem good to those of you in the hotel business but believe me it is a disaster for care homes.

What the company is doing is getting its suppliers (the owners of the homes) to fund both its historic financial failings and the low fees being paid by local authorities.

The Sunday Times had another article about the way that care homes are attempting to get around the un-economic fees paid by local authorities.

It is now common practice to have a differential fee structure for those who pay privately and those being funded by the state. Remember, that the people who are paying privately most likely have been forced to sell their property to pay these fees.

The chief executive of Barchester Healthcare, one of the country’s biggest providers of residential care homes, said privately funded residents were routinely charged between £100 and £200 a week extra for the same standard of care, compared to council-funded residents. “It’s disgraceful,” he said.

Now this situation cannot go on. One of three things will happen.

Option 1. Local authorities will be forced to increase the fees they pay. Most, most unlikely to happen.

Option 2. Local authorities will force even more older people to stay in their homes under the guise of “ageing in place” when they really should be in a care home. This is already happening and will happen more and more.

Option 3. Care homes will fragment into those that only take private payers and those that are funded by the state. I tell you what; I know which of the two I would sooner be in. You know, it wouldn’t surprise me that this government doesn’t start to force homes to take their “fair share” of state funded payers, rather like it is doing with universities that are now forced to accept students from the state system with low grades.

This is another example of the ultra-fragmentation that is occurring in the UK between the small group of people who are able to fund their post 50-years and those who are not.

Either way, there are going to be lots of business opportunities. The provision ultra-cheap care homes will undoubtedly be a big business. Maybe we really will see the offshoring of old people to low wage areas that I have been musing about for years.

As much as it pains me to say it, this government doesn’t seem to have a clue when it comes to dealing with the problems of the ageing population. Dick Stroud

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