The patient's critical, but all of us need it to recover
The price is not right for private nursing homes but Tadhg Daly is determined to make the State aware of the true value of caring for the elderly, writes Sarah McCabe
SHOCKING exposes, including one on the treatment of patients at the Leas Cross home in Dublin, and a perception among many that the nursing-home industry is driven by investors exploiting property-based tax breaks all means Tadhg Daly has a big job on his hands.
As chief executive of Nursing Homes Ireland, his job is to lead the recovery of a critical industry with a somewhat tarnished reputation. Today the big battle facing his members is how to claw a better return on investment from their biggest customer – the State – at a time of unprecedented budget cuts.
The pitch is to stress the value proposition that private care offers, especially by comparison with the care provided directly by the State.
Nursing Homes Ireland represents the country's 450 private nursing homes, home to about 21,000 people. There are relatively few public homes in comparison; just 120, with about 5,000 beds.
Drimaleague-born Daly has an interesting background. He was national development officer at the ISPCC for 13 years and before that was president of the Union of Students Ireland, the most high-profile student job in the country. While third-level education and child protection are both challenged sectors, Daly's description of the outlook for Ireland's nursing homes paints a picture of an even more beleaguered industry.
"The State is our monopoly purchaser," explains Daly. "It sets our price, and that price is not enough."
Most of the country's nursing-home residents are partially paid for by the Government under the Fair Deal scheme. Private homes for the most part are only financially viable if they have at least a proportion of state-supported patients on their books.
Four-fifths of people supported by the Fair Deal scheme in 2012 chose private rather than public homes; only two nursing homes in the country operate without it.
Fees paid under the scheme are negotiated with the National Treatment Purchase Fund. Factors taken into account include what has previously been paid in the area, but the costs of specialisation, like dementia-specific homes, are not considered – and an estimated 50,000 people will suffer from dementia in Ireland by 2016.
"The NTPF does not consider return-on-investment needs either," says Daly.
"A 60-bed nursing home might cost €60m to develop – no one undertakes that lightly. It's a crude methodology and it stifles diversity and competition."
Private patients don't tend to provide much extra revenue because they can't be asked to pay more for the same service.
This system means that the average price charged per patient in a private nursing home is about €895 a week – even though the same patient in a state-run nursing home costs about €1,400 a week.
"Public homes cost more despite the fact that they don't pay local authority rates or deal with working capital issues like interest on loans," says Daly. "Some of this is to do with the higher pay that public-sector employees receive."
The west Cork man who commutes to Dublin three or four days a week clearly feels a lot of responsibility towards the members of his organisation.
"I love working with Nursing Homes Ireland," he says. The organisation was formed in 2008, an amalgamation of four different groups. Daly is the former chief executive of one of its forerunners, the Irish Nursing Homes Organisation. "One voice is better than four," he says.
"Our members are good people and they make a huge difference to the quality of life of the elderly. Many are owner-operated, small businesses often run by families. Others are voluntary, non-profits run by local communities. Some are operating just on overdrafts and savings," he adds.
Their financial challenges were compounded last year when the Government cut €13m from the Fair Deal scheme, which it said would be directed instead towards services aimed at keeping older people in their own homes. "But all the statistics are pointing to increased demand for nursing-home care," says Daly.
The Economic and Social Research Institute estimates that the number of people aged between 74 and 84 will double by 2021, meaning Ireland will need an extra 888 nursing-home places every year. Life expectancy in Ireland now exceeds the EU average. "We very clearly have an ageing population," he says.
"Given that public nursing homes are obviously more expensive to run, there is no doubt that the State needs private homes if it wants keep costs down. When there are nursing-home shortages, people end up in hospitals, and a hospital bed costs around €1,000 a day."
Research from the ESRI says that 40pc of all beds in acute public hospitals were occupied by people over 65 in 2012, while the HSE says 250,000 hospital-bed days were lost last year because of delayed discharges.
"The State has to help the private sector meet these needs. In addition to constrained earnings because the State is our monopoly purchaser, nursing homes are being hit by poor access to finance and policy uncertainty."
The sector has come under intense scrutiny in recent years, after RTE's Prime Time uncovered shocking standards of care at certain homes in 2005. The worst of these was the Leas Cross home near Swords, where one patient went on to develop MRSA.
"What happened was very demoralising and not reflective of the entire sector. The vast majority (of homes) provide high standards," says Daly.
The furore resulted in an entirely new regulatory regime for the industry in 2009, governed by the newly created Health Information and Quality Authority (HIQA). It has the power to close a nursing home if it is not up to scratch. New standards include disease-prevention practices and staff-to-patient ratios.
"The new regime has overall been very positive, but some parts are troubling," says Daly.
"The administrative burden is massive. And the associated costs shouldn't be underestimated; these regulations imposed an extra €1.3bn in costs in relation to maintenance and staff-to-patient ratios. We have regulations pushing us to spend more, but at the same time the State is stifling the prices we can charge."
Staff pose by far the biggest cost for nursing homes, eating up 60pc of running costs. Caring for the elderly is an extremely labour-intensive line of work, requiring trained nurses and staff with FETAC training. Employees must also be Garda-vetted.
Daly estimates that the country's nursing homes have about a 2:1 staff-to-patient ratio when indirect employees like catering staff are taken into account.
"In some communities, the nursing home is the biggest employer," he says. He reckons the industry employs 44,000 people in total.
Daly spearheaded a month-long lobbying campaign in June, aimed at encouraging the Government to set up a forum on long-term care. The campaign wants the State to recognise the true cost of providing care to older people, and called for the creation of an appeals process for fee decisions. It says government spending for older people in Ireland is 0.67pc of GDP, one of the lowest of all the OECD countries.
It's also pushing for better policy planning. "The State's policy towards nursing homes seems to be ad hoc," says Daly. "Private operators can set up wherever they want, even though the HSE has already acknowledged that there will be a deficit in some parts of the country, like north Dublin.
"Considering how long it takes to develop a nursing home, planning needs to happen yesterday."