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By Debbie le Quesne

Posts Tagged ‘care costs

The haves and have-nots: Bizarre economics of care

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The UK care home sector is losing managers and failing to replace them, that was what LaingBuisson was telling the media more than 12 months ago. And guess what, it’s not changed today.

The shrinking pool of talent for the top jobs with providers of elderly care is driving manager salaries to new heights.

In the latest data I have to hand it says new-build homes are offering in excess of £60,000 a year for managers.

That means with the additional costs of National Insurance employer contributions, pension payments and other sweeteners, the source cost for providers is rapidly approaching £100,000, and a bonus scheme can easily tip this even higher.

Of course, we wouldn’t expect to see these figures being paid amongst many of our members and it’s not because they are mean employers. It’s a simple case of economics: There’s just not enough money in the pot as the region is too poor.

It’s a fact that many of the lager corporates operate in much more affluent areas than the West Midlands and unlike many here, their main trench of income is from private payers. Most of my members survive on council-funded placements and it’s their primary source of income.

Austerity measures is seeing the industry becoming increasingly polarised – the haves and have-nots.

In May last year, according to LaingBuisson Recruitment co-founder James Rumfitt, the residential care sector as a whole was struggling to find managers of competence.

I am not surprised.

According to the healthcare consultant’s Care Home Pay Survey – second edition, the average care home manager salaries at the beginning of 2015 were up 4.2 per cent above the previous year.

This was incredible 49 per cent higher than salaries seen a decade ago. Compared to an increase of just 24 per cent in median full-time employee earnings in the UK economy as a whole, it’s an eye-watering hike.

Isn’t it odd, the general care market is in turmoil, yet the economic dynamics of a shortage of good managers, pushes up their salaries at the top end of care provision. Supply and demand are hard masters.

While there will always be those who can afford private care payments and thus fund very generous salaries for the elite operators, there will be many more people receiving care on local authority rates only. Their care providers, where pay rates remain anchored to the Living Wage, will not have the privilege of top-ups to fund such salary extravagance..

But I must say this: The care I have seen in some of our struggling homes has been exemplary. Plush surroundings, teas on the terrace, matching furnishings and expensive, oak flooring, does not necessarily equate to excellence in care.

What is it about never judging a book by its cover . . .

 

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Running blind without research into social care

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What a surprise! Austerity measures have created a problem with councils’ ability to carry out research in adult social care.

I read one of the 104 respondents’ comments to the survey which said: “People who supported research and evidence-based decisions have been made redundant.”

Another claimed: “Research in ASC [adult social care] was the first thing to be cut as it is seen as non-essential and will continue to be cut in favour of services and care packages.”

The study, commissioned by the Personal Social Services Research Unit but carried out by the Social Services Research Group, clearly seems to state the obvious as councils struggle to balance their books. We know already that local authorities are between a rock and a hard place.

Focussing on survival mechanics, however, always comes at a price. Expendable research? Probably not, though I’m well aware that duplication is a major problem in the industry and I can understand if local authorities can lock into other information streams their decision-making process on these redundancies.

Without research we have no way of knowing the how and why services are delivered and what difference they make

Without research how can we accurately set budgets and map for the future?

It needs to be done by someone. Without research we are running blind. Finally, can someone tell me please why such few numbers of me ever go into residential care?

A ‘deepening crisis’ but where is the antidote?

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Like over-prescribed antibiotics, graphic descriptions of the current care crisis fail to have the desired effect when they become a daily prescription of the news.

I fear many are becoming anaesthetised – indeed, almost indifferent – to the digest of chaos emerging from the sector.

In a joint submission to the Treasury ahead of November’s Spending Review, 20 organisations say the care sector is facing a “deepening crisis”.

Yes, it surely is!

They have called for funding to councils to be protected, as is happening with the NHS, a move that my own WMCA has also taken.

Ministers said investment in health would also benefit the care sector.

The government has pointed out that plans were being put in place to ensure greater joint working between the two sectors and that would relieve some of the pressures.

But those putting their names to the latest warning – leaders of councils, the NHS, care providers and charities – are not convinced the future is safe.

They say the market is “fragile” with councils forced to keep fees low and providers leaving the care sector; this, they add is driving up prices for those who fund themselves and leading to fewer people getting state-funded support.

Let me quote The Guardian piece: “While the government has pledged an extra £8bn a year for the NHS by 2020, social care has received no such assurances.”

Ray James, president of the Association of Directors of Adult Social Services, one of the signatories to the submission, is reported as saying: “It is vitally important that this year’s Spending Review understands the importance of our services to vulnerable people,” adding that the “near-certainty” is that without adequate and sustained finances the ability to carry out their duties will be in jeopardy.

The Care Providers Alliance, adds that the challenges are on an “unprecedented scale,” while Rob Webster, chief executive of the NHS Confederation, which represents health service managers, says: “Having a shiny NHS cog will be no good in a broken health and care machine.

“All these services are interconnected and all need greater financial certainty.”

I’d like to know who the other signatories are, but I think we get the message anyway. . . let’s hope those with real influence for change also do.

We have heard so much now of impending doom, I fear our message is in danger of becoming white noise. Prescribing the antidote when the patient is dead presents an obvious problem.

Ombusdsman’s fees report: Providers are not the villain of the piece

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The cost of care is always going to be a hot potato. For a start, many people wrongly think it should always be wholly funded by local authorities and then, of course, there’s a whole load of confusion over fees.

Enter the faithful BBC with its story that families are paying too much for care in England “all too often” . . . because of confusing or incorrect information from councils.

That’s the verdict of the Local Government Ombudsman, which noted that some people were not offered an affordable care option in their area.

It said: “The decision to place a loved one in a care home can be one of the hardest any family has to make, but all too often families are paying too much for their care because they are not getting the correct, timely information.”

Thrown into the mix are top-up fees, one of the main reasons confusion exists, according to Andrew Kaye, from the charity Independent Age.

Care England says top-up fees are helping to mask a funding crisis in social care, with some of the poorest people and their families being asked to fill holes in the budgets of local authorities. I agree, but must add that this is the only way many care businesses are able to survive in these difficult times.

The moral argument will doubtless run and run, but the fact remains until such times council fees paid equal the realistic cost of care I see little changing.

In addressing the moral high ground critics, I would ask them to consider what options there would be for non-top-up residents if homes closed because such fees were not levied.

It really would not take much to push so many of our providers into an economic tailspin.

Professor Martin Green, of Care England, argues care should be available “at a cost which the local authority should be happy to pay.”

Of course that should be the case. It’s important, however, that care providers are not seen as the villain of the piece here.

Central Government with its sweeping fiscal restraint within the care sector has forced councils and the care marketplace into a dire corner, the likes which I have never seen. Mr Cameron and his cohorts clearly know of our crisis and the fact local authorities are between a rock and hard place, They could and should bring it to an end.

Ring-fenced social care monies . . . etc, etc. . .

Global trend on care not a good one to follow

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In 1969 (too many years ago for me to remember, of course) Mick Jagger strutted onto the stage at Hyde Park wearing a white dress.

Our  parents asked: What is the world coming to? They were both shocked and challenged by what they saw as the Rolling Stones performed their concert.

Today, I’m asking the same question as I read that more than half the world’s elderly lack access to long-term care, though sadly the news doesn’t appear to warrant the same media interest as that legendary 60s’ moment.

The data has been produced by the International Labour Organisation which condemns the “deplorable” situation facing rapidly ageing populations.

A new report from the United Nations agency shows that some 300 million people over the age of 65 cannot easily access long-term care when needed.

The report comes just days after America announced an army of carers aged 75 and over was growing daily and now constitute seven per cent of those who provide unpaid care to a relative or friend, the survey found.

We face a global problem and I’m stunned to learn that the world’s most “generous” countries, found in Europe, spend only two per cent or less of their GDP on long-term care.

It’s cold comfort, I know, given the troubles in our industry, but in comparison to some nations the UK care deals are pretty good.

We have, however, an awesome responsibility to preserved what we have. Reading an article in the New York Times of how a 75-year-old shoulders the role of caring for her immobile husband without a care package makes me all the more determined to fight tooth and nail to ensure care providers get enough resources to do their job properly.

The fact care, as we have known it, is under threat and the changes being forced by market manipulation are not in the best interests of clients of providers.

We need to remain vigilant that long-term care indeed stays accessible to our elderly, sick and frail and does not become another ‘inevitable victim’ of austerity measures. The global trend, if we believe all these figures, is not a good one to follow.

Let us work together to secure the future of care

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Like countless others in the care sector I have joined the chorus in the West Midlands calling on councils to  pay a viable rate for care beds purchased from the private, charity and voluntary sectors.

The care landscape is bleak and my WMCA has warned closures are imminent and there is little regional capacity to take up those frail and needy residents who may be displaced. To this end we are desperate to work with local authorities to find mechanisms that will secure the future care of the most vulnerable and the survival of local businesses.

At an emergency meeting of the association, members heard George Osborne’s living wage directives could “be the final nail in the coffin for care as we know it.”

In an attempt to secure a funding lifeline to the industry, we are calling on MPs, councillors, local authority officers and Clinical Commissioning Groups to meet with us to discuss future ring-fenced funding for social care.

The vast majority of Black Country care businesses rely on placements paid for by councils as a primary income generator and more than 26,300 people across the region receive residential care. A similar number have care at home.

In recent weeks, five care home corporates with 1,200 properties between them have written to the Chancellor warning of impending disaster following his Budget reforms on the living wage.

The big five – Four Seasons Health Care, Bupa UK, HC-One, Care UK and Barchester – look after 75,000 frail, old people. They claim a major provider is likely to close within a year to 24 months unless the Government releases its purse strings. The response: Silence.

The national picture is indeed gloomy, but in our region it’s much, much worse and Osborne’s announcement has caused shockwaves across the region. So many are already in crisis . . . and now this.

The legislation impacts massively on all streams of care as indeed it must doe with many other businesses.

A WMCA impact analysis suggests the Osborne wages regulation will add £23 per week to the care cost of every Midlands person in a residential care setting. But we need to add to that figure a further £50, the current average weekly operational deficit on council-funded places.

If the corporates – HC-One is one of our members – are predicting at best only a two-year survival rate under current economies, what chance have my other members, who have much smaller homes and much-depleted resources?”

As for thepromised autumn Government Spending Review . . . I fear too little, too late.

Residential care occupancy levels throughout the Midlands are averaging 97 per cent and there’s not not a member in the association who is not anxious about the future wellbeing of those requiring care.

For those who think we do not want to pay the living wage, think again, please. All of my members would happily apply the living wage, but there is no financial sleeve left in their business models to do so. Care home companies are not just crying wolf. Care is a minimum wage industry and profit margins are extremely tight, especially where council referrals are the main income.

Do you know that for the last nine years fees have fallen below the viable cost of running a care home?

Over the last five years, for example, Dudley Social services has given rises totalling 8.9 per cent while the Consumer Prices Index is at 11.6 per cent, the Retail Price Index at 15 per cent and wage rises are hitting 12.3 per cent. The rises don’t track cost and we clearly need some Government benevolence to help both councils and care providers.

Recently Sandwell Council’s cabinet met to respond to a WMCA call for a fees increase of 16 per cent – residential care from £378 per week to £438.46; dementia care from £428 per week to 496.48; and residential nursing care from £490 per week to £568.00.

What do we get? A 1.5 per cent rise for residential care and a 2.5 per cent rise for nursing.

Latest figures from Industry analysts LaingBuisson reveal English councils pay £91 a week less than what is needed for fully compliant care.

In 2013 Birmingham City Council commissioned accountants and analysts KPMG LLP to establish the true cost of care through the Open Book initiative where care providers were asked to submit their accounts.

Some 380 homes were targeted and the results showed to meet escalating costs commissioners would need to pay £460 per week.

Two years on, and not including the implications of the living wage, It would take an l increase of six per cent to bring homes to the minimum figures used by the Association of Directors of Adult Social Care (ADASS) as the threshold for safe care announced this spring. An extra three per cent would allow homes to cover increases in operational costs.

Sadly, if a major employer were to make this kind of warning there would be huge interest over the potential loss to the economy. What we have here is a bunch of businesses across the region that create about 125,00 carer jobs for adult social care (figures from Skills for Care).

“That dwarfs the employment stats of say Jaguar LandRover and it’s deeply worrying that few of these jobs are secure under present funding models.

Listen, councils do have choices what to do with funds and government austerity can no longer be an excuse for not addressing the finances of care.

I would call upon our local councilors to make decisions of conscience on funding that will directly impact on the most vulnerable people in the electorate they serve.

It is a fact that a dog walker can earn more than we can pay our carers. There is something radically wrong.

Adult social care a human necessity

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Has anyone noticed that it’s gone spookily quiet on issues relating to the ‘single pot’ budget response to the NHS and social care?

Before the election there appeared to be good display of headlines and news bulletins on this initiative, but now: Silence.

Perhaps I have selective deafness, but if I have the condition is share by Zoe Williams writing in The Guardian.

She too, has picked up the vibes of change, observing that although the care sector was “beset with injustices, and the NHS was often having to fill cracks at vast and unnecessary expense, and services would have to be joined up if they were ever to work,” the tone for public consumption is different now.

Andrea Sutcliffe, the chief inspector of adult social care, has described a sector “under stress and strain” in which an ageing population with increasingly complex needs was “only half the story.” Really!

Regulators receive more than 150 allegations of abuse of the elderly every day, Williams reports. Quoting the response from a department of health spokesperson . . . “Treating somebody with dignity and compassion doesn’t cost anything.” But it does, a point Williams also makes.

The language of compassion, she writes, involves funding care and wages and conditions and so on.

As much as £4.6bn has been cut from social care budgets over the past five years, I read. I’d hoped that the current shortfall might be made good with a single NHS/social care fund, despite misgivings over its administration.

Where has news on the single fund gone? Adult social care is not a bolt-on option. It is a human necessity.

In February Greater Manchester and the NHS announced plans around the future of health and social care with a signed memorandum agreeing to bring together health and social care budgets – a combined sum of £6bn.

The scheme saw NHS England, 12 NHS Clinical Commissioning Groups, 15 NHS providers and 10 local authorities agree a framework for health and social care.

My question: After such a trailblazing start to the initiative, what is happening in the rest of UK, and of course, more specifically, the Midlands?