Mellor
Nook.
Residential Care Home
For the Elderly
|
Residential Care Home For the Elderly |
|
|
THE MARKET 2.1 There are about half a million care places in residential and nursing homes in the United Kingdom. More than 70% of all residents are female and over the age of 74: about half are over 85 . With the number of people over 85 in the population at large 80, and there are conflicting views on how the future may unfold. Much depends on the health of future generations of older people and the continued availability of informal home care by relatives and friends, in some cases with assistance from local authorities and voluntary organisations. Despite common perceptions, there is at present little evidence to suggest that the proportion of older people covered by familyTable 1 - Numbers of homes in 1998
Source: Laing and Buisson Table 2 - Numbers of residents in 1998
Source: Laing and Buisson 1 About 75% of residential and 80% of nursing home residents are over the age of 75. care is actually falling. The 1995 General Household Survey (Office for National Statistics 1998) found 1.7 million individuals spending more than 20 hours a week caring for older, sick, or disabled people, compared with 1.4 million in 1985. Nevertheless, the trend towards smaller families, increased divorce rates, decreasing marriage rates, increasing dispersal of families, and increased participation of women (the traditional caring group) in the labour force could all reduce the ability of families to look after older people. In order to project the long-term cost of care, the Department of Health (in 1996) estimated that there would be a fall in informal care of around 10% by 2030. 2.2 In 1997, just over 70% of all residents were funded by the public sector in some way - Department of Social Security (DSS) Income Support, local authorities, and the National Health Service (NHS). Community Care reforms have resulted in a shift of public funding of care-home places away from Income Support towards local authorities. In addition, some 28% of residents in care homes financed themselves from their own resources - for the most part from the sale of owner-occupied property. Relatively few people are covered by insurance - at the end of 1997, there were 23,000 long-term care insurance policies in force. The continued growth in owner occupation, combined with the increasing number of people who have some form of occupational or personal pension, might suggest a reduced eligibility for local authority assistance in years to come. A larger proportion of future generations of older people will be owner occupiers. But many may well have committed part of their housing equity to supplement their income before a long-term care situation arises, or they may have taken steps to safeguard their children’s inheritance.2.3 Privately-run homes accommodate more than half of all those currently in residential care. Between late-1996 and 1997 private residential and nursing capacity remained static, while local authority provision continued to fall. There were 64,100 local authority residential home places in 1998 (including those that were dual registered) compared with 135,000 in 1988. The 1980s saw a rapid expansion of the private sector, fuelled by open-ended income support. With the transfer of DSS funding to local authority budgets, those authorities were actively encouraged to make use of the independent sector through transitional funding arrangements - and they were, indeed, required to spend at least 85% of a transitional grant in the independent sector. Nevertheless, this requirement applied only during the transitional period and it remains to be seen whether the decline in local authority provision will continue. The NHS has remained a relatively small and declining provider of care homes. The number of voluntary sector homes has been rising as local authority provision has fallen.2.4 Most providers in the care-homes market are independent small businesses, each running just one or two homes. The larger operators, such as the British United Provident Association (BUPA), are focused on the nursing-home and dual-registered home sectors. The average number of places provided has continued to rise in both nursing and residential homes - although the average number of places is significantly lower in the residential sector than in the nursing sector. Very small homes (with fewer than four residents) tend to specialise in residential care for younger, physically disabled individuals and those with multiple disabilities, rather than older people.2.5 The care-home sector represents a capital-intensive investment in property. With the trend towards larger homes, the financial barriers to entry to this market have been steadily increasing - particularly in the nursing-home market where the average size has increased by more than one-third in 10 years. In 1996, on average, nursing homes provided 37 places, dual-registered homes 45 places, and residential homes 19 places - although new nursing homes set up by major providers average nearer 65 places. Initial capital and start-up costs are thought to be in the region of £30,000 per bed.2.6 Owners of the smaller homes tend to use capital raised on the security of buildings, most notably as mortgages. Large operators tend to be subsidiaries of major healthcare companies with access to capital markets and an ability to spread risks. Offbalance- sheet capital funding, including sale-and-leaseback, has also allowed major operators to expand much more rapidly than if they had used traditional forms of finance. There are currently some £900 million-worth of assets under such contracts.2.7 The cost of running a care home is related to its size, whether it is managed by a resident owner or by a corporate body, its geographical location, and - most importantly - the type of care it provides. The inherent running costs of nursing homes are typically greater than those of residential homes, since they require specialist equipment and full-time qualified nursing staff. Staffing levels and costs are determined by the layout of the home, and the number of residents and their level of dependency. Laing and Buisson have estimated that, for a typical 50-bed nursing Rates of pay vary from region to region, with wages accounting for a lower proportion of total costs in such low-wage areas as the North East than in high-cost London.2.8 Given the present depressed state of demand for residential home places (see paragraph 2.3), it is not surprising that the average fees charged by both nursing and residential homes have followed a path intermediate between average costs and changes in support limits. Recently average fees have increased by less than the average earnings index, the retail price index or the weighted average income-support uprating. This reflects strong pressure on fee rates being exerted by local authority providers and the impact of a rising number of vacancies. | |||||||||||||||||||||||||||||||||||||||||
|
