Tuesday, November 13, 2018

'Growing Old Profitably' - focus on private payers - ditch local authority customers

I am amazed that it has taken the care industry so long to realise that sticking with local authority customers leads in one direction - and that is a place you don't want to go.

We all know the gap between the fees paid by private payers and council clients. For too long we have had the nasty practice of making those that fund their own care subsidise those referred from social services. It is another form of taxation.

This was never going to be a stable situation yet only now are we seeing how the story is going to unfold. This week's Economist had an article titled 'Growing Old Profitably'. The title should have been 'How to grow profitably on the old'

A summary of the Economist's reporting.

Much of the care industry is in terrible finance shape. It is estimated that England has lost 3,700 beds since 2012. It is not only beds that have been lost but also the profits of providing care.

There a few markets where demand is soaring as profits plummet..

Care UK's boss, Andrew Knight, is quoted saying that the only way to provide care is to take more residents who pay their own way. Nobody can argue with that assumption.

Of course this will cause the plight of care companies that rely on state funded customers to worsen.

What we are seeing is the a clear division between the care that older people will receive depending on the size of bank balance. Those companies that want to keep their selling costs low and rely on a contract from the local council will have to radically reshape how they deliver care. Failing that their financial demise is just a matter of time. A sad situation but one that has been very obvious for years. Dick Stroud

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