Some small, rural nursing homes facing closure, BDO survey reveals

29 April 2021

Following the launch of the BDO Private & Voluntary Nursing Home Survey results 2019/20, Cathy Halloran, Mid West Correspondent with RTÉ reported on the findings and spoke to Brian McEnery, Partner & Head of Advisory at BDO, on RTÉ News about the results.

 

The Irish nursing home sector is facing major challenges in the years ahead, with many of the smaller, rural-based homes facing inevitable closure as it will not be economically viable to run them, according to the results of a new survey.

The private and voluntary nursing homes survey was compiled by BDO Ireland on behalf of Nursing Homes Ireland.

Out of the 463 nursing homes in Ireland, 126 nursing homes responded to the survey about their funding, costs, staff and the profile of occupants.

One of the significant issues to emerge is regional disparity in the levels of the nursing home support or Fair Deal scheme in each county, which is paid per resident per week assessed by the National Treatment Purchase Fund (NTPF) on behalf of the Health Service Executive.

The average Fair Deal rate paid in Dublin is €1,200 per resident per week, compared to €904 for a resident in a home in Donegal. This represents over €15,000 a year - a significant figure when it comes to long-term investment in the sector.

The northwest has the highest population of over 65s per nursing home bed - 43.9% compared to Dublin, Kildare and Wicklow, which has the lowest at 24.2.%, so investment in increasing the nursing home stock in areas where demand is high is going to be very difficult.

The report concludes that in a number of locations around Ireland it is not economically viable to develop new nursing homes on the Fair Deal scheme, and a number of smaller units have closed as the financial model underpinning such settings are not sustainable for the future.

In addition, HIQA regulations now require any new nursing homes to have at least 80% of their rooms single ensuite occupancy, which will have a significant impact on supply and capital expenditure. The experience of Covid-19 has driven an even greater need for infection control in single occupancy rooms.

Brian McEnery, author of the report, said the cost of developing a nursing home bed ranges between €150,000 and €200,000 and this reduces the potential for traditional ownership structures to prevail in the future.

For this reason large specialist operators with significant capital capabilities are growing their market share in comparison to the owner operator and voluntary cohorts that sustained the sector in the past, and BDO sees this trend continuing, he said.

Speaking about the regional disparities in the distribution of the Fair Deal rates, CEO of Nursing Homes Ireland Tadhg Daly said the NTPF does not have in place a model to provide evidential proof of how it sets its fees, and more transparency is needed to address the "discriminatory practice that exists in the funding of nursing homes under Fair Deal".

"Covid-19 has focused attention on the nursing home sector and presents an impetus to address this funding issue.

"A health and social emergency of gross magnitude will present if reform of the funding of nursing home care is not addressed as a priority," he said.


Content Adapted from RTÉ online: "Some small, rural nursing homes facing closure, survey reveals", available at https://www.rte.ie/news/regional/2021/0428/1212538-nursing-homes/

Click here to download the full report or watch a short video outlining the key findings.

BDO Private & Voluntary Nursing Home Survey results 2019/20