Sunday 25 June 2017

Investors flock to care home sector despite fees chaos

Rising number of over-65s 'will dramatically increase demand'

Based on current population trends, it is estimated that many of us will need to spend our final years in a nursing home Stock image (PA)
Based on current population trends, it is estimated that many of us will need to spend our final years in a nursing home Stock image (PA)

Maeve Sheehan and Mark O'Regan

Motoring millionaires, publicans, and husband and wife teams are among a range of investors involved in Ireland's multimillion euro elderly care home sector.

Catering for our rapidly ageing population is attracting major investors - both domestic and foreign.

Among those surveying possible investment opportunities in the sector is American millionaire Dan Pena, who chairs a company - Seneca Healthcare - that has former health minister Mary Coughlan as a director.

A board member of watchdog the Health Information and Quality Authority (Hiqa), Anne Carrigy, also joined Seneca Healthcare last year but quit her unpaid post at the firm last Tuesday.

A Hiqa spokesman said Ms Carrigy's decision to resign "was linked to her role as a board member of Hiqa".

Hiqa is responsible for regulating nursing homes but a spokesman said Ms Carrigy had declared her appointment in the annual declaration of interests that board members are required to fill out.

Seneca Healthcare is one of several investment firms hoping to break into Ireland's lucrative nursing home market by investing in new and existing nursing homes.

And while the input of private sector money continues to grow, a Sunday Independent investigation has shown the cost to the State for looking after our older people is at an all-time high.

Our investigation revealed that the top 10 private nursing homes shared €53m in fees paid under the State's Fair Deal scheme in 2016. The cost to the taxpayer for a resident in an HSE-funded nursing home, meanwhile, can be as high as €212,264 a year, or more than €4,000 a week.

Based on current population trends, it is estimated that many of us will need to spend our final years in a nursing home.

However, the number of over-65s is steadily rising, which suggests this cohort of the population will dramatically drive up the demand for both public and private home care over the next few years.

The unrelenting pressure on State finances will inevitably attract more private investors anxious to fill a growing gap in a lucrative market.

Currently there are not enough nursing home beds to cater for the huge numbers of elderly people who will need long-stay residential care.

However, Nursing Homes Ireland, which represents the private and voluntary sector, has highlighted a range of financial and other challenges facing private investors.

It said there was little evidence of new nursing homes being built, while sales of existing outlets were limited.

Strict Hiqa regulations that can involve significant expenditure must also be met.

Nursing Homes Ireland also complained of the disparity between what the HSE pays public and private nursing homes per patient per week under the Fair Deal scheme.

A Government-commissioned report said the pricing model "lacked rationale, consistency and fairness" and deterred investment. But this has not stopped top professional advisers in Dublin telling clients that nursing homes are a lucrative investment.

Sunday Independent

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