Friday 18 January 2019

Boyle nursing lofty growth ambitions

Carechoice boss Noel Boyle has a driving ambition to bring consolidation to a fragmented sector

Carechoice chief executive Noel Boyle. Photo: Mark Condren
Carechoice chief executive Noel Boyle. Photo: Mark Condren

Fearghal O'Connor

When Noel Boyle took the job of leading Irish nursing home group Carechoice, he had a simple mandate from its new French owners: growth.

"We will treble the size of our business by 2023 and will end up with 13 homes approximately and approximately 1,600 beds," he says.

Already, the blocks for the ground floor of the group's new home in Swords, Co Dublin - the first part of a €100m investment - are beginning to appear above the builder's hoarding. Full planning permission has also been secured for two more homes around Dublin.

In recent years, much of the media coverage of the wider sector has rightly revolved around the mistreatment of residents in a number of homes - something that over the last decade has led to much greater regulation. But what has been less publicised is the fact Ireland is facing into a major shortage of nursing homes for the simple reason that, with improved living standards, people are on average living longer.

Ireland's population is still relatively younger than the European average but, says Boyle, the population over 65 has risen by 19pc since 2011 and is forecast to double over the next 20 years.

"So, effectively Ireland is at the beginning of a rapid growth in its aged population, particularly in the 75-plus age core which represents the predominant age group in the nursing home sector and that leads then to the issue of demand and supply," says Boyle. "It is generally accepted that in 2023 there will be approximately half a million people in Ireland over the age of 75 and that is double the current number.

"So if the current rate of incremental supply continues, there is expected to be a nursing home bed deficit of approximately 10,000 beds by 2036. So these demographics result in a need to increase the capacity of nursing home beds in Ireland by more than 50pc over the next 20 years."

Boyle estimates around 13pc of people over 75 will at some stage require long-term residential care. The nursing home market in Ireland is currently worth around €950m. There are around 31,000 long-term residential beds in Ireland, with 75pc of these supplied through the private sector rather than voluntary sector or by the HSE.

Carechoice is now one of the top three players in the market and Boyle is hopeful that the company can help to drive a badly needed transformation right across Ireland's still-fragmented nursing home sector.

"We'll become the biggest player here before the €100m is fully spent. But we think that the market is still very fragmented, with the top 10 players accounting for less than 20pc overall."

But in an industry on which some of the most vulnerable people in society depend for all of their needs, the numbers are just the start of his job. Approximately 45pc of Carechoice residents are highly dependent, with issues that include various levels of dementia.

"In parallel with the huge opportunity for growth there are also big changes in terms of quality of care," says Boyle. "The expectations of nursing home residents and their families will also continue to increase - particularly in terms of dignity, independence, quality of life, connectivity with family and with the wider community."

Delivering that within a rapidly growing organisation is his key challenge.

"As we build scale we need to develop a level of corporatisation as we adapt the Carechoice organisation and its processes to keep pace with that level of growth. So, for example, that means continuously investing in the quality of care, in new care models, in initiatives to bring new management on board and investing in connectivity and clinical technology related to the quality of care that really enhances the lives of our residents."

Simple things can make a big difference to the happiness and wellbeing of residents, says Boyle. Many seemingly simple but important decisions need to be made when a new nursing home is being developed.

"You're thinking about the layout of the room, the colour scheme, the calmness of the colour scheme, the flooring, the style of bed, the size of the ensuite. All of those are very important to create this sense of home from home. So, for example, should the door to a bedroom look like the front door to someone's house? In some of our homes that is the case."

Carechoice has its roots in a group of five nursing homes in Cork and Waterford.

It was acquired in 2017 by €1bn French investment fund InfraVia Capital Partners for a reported €70m. The fund had already more than dipped its toe into the Irish market in 2016 with the purchase of Coillte's telecommunications mast company Cignal. In 2018 it followed the purchase of Carechoice with a deal to buy the Mater Private Hospital Group.

"When they acquired Carechoice in 2017, it consisted of six long-term residential homes and after only 18 months we have expanded our portfolio by acquiring three new homes."

That has seen Carechoice go from six homes, with just over 500 beds, to nine homes with 800 beds. But those homes - a 117-bed facility in Trim, Co Meath, an 89-bed facility in north Dublin and the 124-bed Marlay nursing home in Rathfarnham - are just for starters.

The new investment programme will see three new homes built, six of the existing homes extended and likely further acquisitions.

Earlier this year, the French fund decided that Boyle - a low-key but experienced executive - was the person to lead the ambitious growth programme. Prior to joining Carechoice, he was chief executive of Campus Oil, a very different type of an operation.

"It is a very innovative and proactive business that developed a market-leading position in online home heating oil sales to over 40,000 customers. Prior to that I was the managing director of a well-known leading US multinational involved in security and logistics which saw me travel to many facilities in the US, Argentina, Brazil and throughout Europe."

Boyle has not found it difficult to move between seemingly very different sectors.

"The competencies are fairly transportable," he says. "I like working in businesses that require turnaround or in businesses that require accelerated growth in fast moving, growing markets and certainly that's what I see in the nursing home sector."

Change is certainly a feature in the heretofore very fragmented market. Boyle says there is already a clear trend towards the emergence of national, private long-term residential groups that have significant capital and management resources to help reshape the market. This, he says, can only be a positive thing for the overall health sector and can help to relieve some pressure.

"We find that 75pc of our admissions come from acute and long-stay hospital settings. The cost implications of a supply constraint on nursing homes is significant for the overall health system, with unmet demand leading to delayed discharges from high-cost care settings placing significant pressure on public finances."

Pricing in the nursing home sector is almost entirely reliant on the Government's often maligned nursing-home-support scheme known as Fair Deal, which represents about 8pc of the total public health spend, and which sees patients charged a certain percentage of the full cost based on their assets. With 95pc of his patients coming through this scheme, Boyle says the HSE scheme is a viable option for elderly people who require high quality care and unfortunately can't continue to live in their own home setting because of the complexity of their needs.

"I think the Fair Deal system was brought in at a time when there was structure required in the pricing of nursing homes and the affordability of nursing homes to its residents. So I think like all systems it could be improved, but it has brought a structure to the sector which wasn't there prior to that," he says.

"I do think further iterations and improvements are required. It served a purpose and it brought structure to the pricing in the sector and it brought a certain amount of affordability to the sector for residents that required that level of high-quality care. But like all processes and new initiatives it could do with further iterations."

The cost implications of the supply constraints on nursing homes are significant, says Boyle.

If demand is unmet, then that will lead to delayed discharges from acute settings that are a much higher cost than residential settings. This, says Boyle, has a knock-on effect elsewhere in the health service, for example in already overburdened A&E departments. And yet, despite the changing demographics, the financial support available and the benefits it would provide across the wider healthcare sector, expansion of the nursing home sector still faces constraints.

"One of the significant issues facing the industry now is rising construction costs. To build a nursing home today carries an average cost of €160,000 per bed. That's up 18pc since 2015. So that's certainly becoming a barrier to build more capacity to meet the growing demand, for sure. From Carechoice's point of view, we've developed excellent partnerships with our construction partners and also with our professional development partners and this is critical. We have to have that to continue with our ambitious growth plans."

Expansion brings other problems too, not least finding the right people to work in the new and expanded homes. Boyle expects to recruit 600 people in 2019 to keep pace with this growth, adding to the 935 staff that Carechoice already has and to allow for relatively high staff turnover in an industry that requires a special type of dedication from staff.

But despite the challenges, Boyle remains enthusiastic and excited about the sector in which he has now become a key player. He is also very ambitious about where the €100m investment programme can lead: "We are trying to revolutionise and reshape the sector. Our aim is for Carechoice to become a national leader that other groups in the country will use to benchmark themselves."

 

CURRICULUM VITAE

Name: Noel Boyle

Age: 51

Position: Chief executive, Carechoice

Lives: Churchtown, Co Dublin

Education: Summerhill College, Co Sligo UCD, Bcomm, MBA

Previous experience: Chief executive, Campus Oil

Family: Married to Lorraine. Father to three daughters - Emma, Lily, Ruby

Pastimes: Sligo GAA, Connacht and Leinster rugby, walking, reading, running

Favourite holiday: Annual family holiday to Nerja, Spain

 

BUSINESS LESSONS

What lesson have you learned over your career?

Regardless of how experienced you are, always be willing to seek and heed advice. Sometimes being CEO can be a lonely place. If you have problems, it’s good to be able to seek advice from somebody.

 

What advice would you give to a young, aspiring business person?

As much as possible, always hire people who will push and challenge you.

 

What are your aspirations for the year ahead?

We have a super team in Carechoice — it is a very enjoyable and very fulfilling place to work. If we can help to reshape the sector and revolutionise it, that would be great. We’re well on the way. Other people will react and follow and that’s how a fragmented sector evolves. That’s how it works.

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