Evidence of costs associated with NHS-funded nursing care in 2021 to 2022

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Introduction

In November 2021, the Department of Health and Social Care (DHSC) released a cost collection survey to collect evidence on the cost to care homes of providing NHS-funded nursing care (FNC) in 2021 to 2022. Evidence collected was used to inform the framework for the period 2022 to 2023 FNC as well as retrospective payments to reflect additional costs associated with COVID-19 in 2021 to 2022.

This document outlines the approach to data collection and analysis and provides a cost breakdown for nursing homes to provide FNC in May and October 2021.

Methodology

Scope of the cost collection exercise

The NHS care“>FNC rate is the contribution provided by the NHS to nursing homes to support the provision of nursing care by a registered nurse.

As noted in the 2017 Supreme Court decision (R v Cardiff and Vale University Health Board), “registered nurse nursing” covers:

  1. nursing care time, defined as care that can only be provided by a registered nurse, including direct and indirect nursing time (e.g., medication management, comprehensive care planning, and nursing standards) ‘hygiene)

  2. paid breaks

  3. supervisory time

  4. Waiting time

  5. time spent providing, planning, supervising or delegating the provision of other types of care which, in all circumstances, should be provided by a registered nurse because they are incidental or closely related to or integral to the nursing care they have provide

More information on FNC is available as part of the National Framework for NHS Continuing Healthcare and NHS-funded Nursing and NHS-funded Nursing Practice Advice.

Research approach

The cost collection exercise sought cost data below:

  • gross salary of a registered nurse, including additional allowances, bonuses, incentives, introductory payments, overtime, vacation, sick and maternity pay, replacement for vacation, absence for illness and training, relocation, termination and compromise agreement payments and any underpayment or overpayment applied in the period
  • additional costs, including employers’ national insurance and pension contributions and any other relevant additional salary costs associated with registered nurses

The cost collection exercise did not seek data on costs that are not considered relevant to the definition of “nursing care by a registered nurse”, including:

  • unpaid training costs
  • nursing equipment, including personal protective equipment (PPE)
  • recruitment fees and registration fees for professional nurses

Data gathering

The department published the cost collection survey from over 2,500 nursing providers across England in November 2021. Information about the research was also shared via newsletters and sector networks. The survey was released as an Excel spreadsheet that providers could complete and return to the service between November 29, 2021 and January 17, 2022.

The survey was designed using feedback from care home providers and industry stakeholders, and asked respondents to submit the following information:

  • name and ID of the Care Quality Commission (CQC)
  • current resident funding classification
  • salary costs for May 2021 and October 2021 for employed RNs, agency RNs, managers (when RNs) and supernumerary staff (when RNs)
  • payroll hours for the above staff types for a recent period
  • estimates of the proportion of manager and supernumerary staff time spent on nursing duties
  • details of additional costs that suppliers have wished to report

Data was collected for May and October 2021 to reflect cost changes throughout the year.

Answer

The ministry received 1,002 responses and 892 were used in the final analysis after validation checks.

Responses that failed the following validation checks were deemed invalid and removed prior to analysis because:

  • all data requested for fixed dates, such as May and October 2021, must cover the defined periods.
  • the dates covered must be entered in a logical order
  • RN salary cost information must be entered
  • responses from non-nursing providers (i.e. foster homes) were not required for this exercise

The tables below show the breakdown of valid responses by carrier size and region.

Table 1: Care home responses in the sample of respondents and total number of care homes in England, broken down by operator size

Percentage of survey responses Percentage of nursing homes in England Number of survey responses Number of nursing homes in England
Large company (40 or more nursing homes) 67% 19% 594 813
Medium group (10 to 39 nursing homes) 12% 19% 108 848
Small group or independent (less than 10 nursing homes) 21% 62% 190 2,700
All categories of operators 100% 100% 892 4,361

Table 2: Responses from care homes in the sample of respondents and total number of care homes in England, broken down by region

Percentage of survey responses Percentage of nursing homes in England Number of survey responses Number of nursing homes in England
North 31% 30% 278 1,307
Midlands and East 29% 29% 261 1,280
South 29% 32% 255 1,410
Greater London 11% 8% 98 364
all the regions 100% 100% 892 4,361

Analysis

To calculate the cost for nursing homes to provide FNC in May 2021 and October 2021 (by FNC-eligible resident per week), the following equation was used:

The “total cost of registered nurses” divided by the “number of residents with nursing needs”. The result is then multiplied by the “FNC weighting factor”.

The terms of this equation were calculated as follows:

  • total RN costs: the total salary costs for the type of staff involved[footnote 1] in the reference period, normalized to one week. For registered managers and supernumerary staff (salaried or acting), this figure is adjusted to reflect the fact that not all of the time for these roles will be spent providing registered nursing care. The cost collection exercise asked respondents to estimate the proportion of time that registered managers and supernumerary staff spend on registered nurse duties
  • for registered managers, the average proportion given was 17%. The costs used in the equation have been adjusted accordingly
  • for supernumerary staff, only 4% of respondents answered this question. Data on supernumerary staff time was therefore excluded from our final calculation due to insufficient evidence. In previous research conducted by LaingBuisson in 2018 to 2019, these costs were found to be low and were considered negligible in the overall rate
  • number of residents with nursing needs: the number of residents with nursing needs during the reference week submitted by the survey respondent
  • FNC weighting factor: not all registered nurse duties are eligible to be considered. FNC assess. The per capita cost of providing nursing care must therefore be adjusted to reach the cost of providing FNC by FNC-eligible resident per week

This adjustment was made using a ‘FNC weighting factor’ of 0.85 determined by the LaingBuisson 2018 to 2019 report. Given the burdens on providers in December 2021 and January 2022 and the complexity of collecting accurate time and activity data, it was not appropriate to collect new data on the activity of nurses. Therefore, we made the assumption that if the total time required to deliver FNC may have changed from 2018 to 2019, proportion of time (to other nursing duties) remained the same

Supply cost FNC in May and October 2021 (unweighted)

The above equation was used to calculate supply costs FNC (by FNC-eligible resident per week) for each staff type in each operator type, with extreme outliers removed using Tukey’s method.

Table 3: Unweighted costs of eligible registered nurses by NHS FNC-eligible resident per week May 2021 (£)

Files validated Costs of a Salaried Registered Nurse Agency Registered Nurse Fee Registered Manager Costs Supernumerary staff costs
Large company (40 or more nursing homes) 594 £214.61 £35.56 €9.02 Not applicable
Medium group (10 to 39 nursing homes) 108 £185.11 £19.60 £3.98 Not applicable
Small group or independent (less than 10 nursing homes) 190 €144.82 £18.60 £4.66 Not applicable
All operator scales (unweighted) 892 £196.17 £30.01 £7.48 Not applicable

Table 4: Unweighted costs of qualified nurses by NHS FNC-eligible resident per week October 2021 (£)

Files validated Costs of a Salaried Registered Nurse Agency Registered Nurse Fee Registered Manager Costs Supernumerary staff costs
Large company (40 or more nursing homes) 594 £223.15 £50.61 £8.58 Not applicable
Medium group (10 to 39 nursing homes) 108 £181.36 €31.44 £4.80 Not applicable
Small group or independent (less than 10 nursing homes) 190 €149.49 21,19 € £4.58 Not applicable
All operator scales (unweighted) 892 £202.40 £42.02 £7.27 Not applicable

Results

The above gross costs have been weighted to account for variations between operator sizes and added together to give the total cost for nursing homes to provide FNC.

Table 5: Costs of eligible registered nurses by NHS FNC-eligible resident per week in May 2021, listed by bed capacity for each operator size

Total RN costs £pw Total bed capacity of nursing homes in England Bed capacity weighting factor
Large company (40 or more nursing homes) £259.18 53,292 24%
Medium group (10 to 39 nursing homes) £208.69 47,076 21%
Small group or independent (less than 10 nursing homes) £168.07 124,327 55%
All (weighted by total English bed capacity for each operator scale) €198.19 224, 695 100%

Table 6: Costs of eligible registered nurses by NHS FNC-eligible resident per week in October 2021, listed by bed capacity for each operator size

Total RN costs £pw Total bed capacity of nursing homes in England Bed capacity weighting factor
Large company (40 or more nursing homes) £282.34 53,292 24%
Medium group (10 to 39 nursing homes) £217.59 47,076 21%
Small group or independent (less than 10 nursing homes) £175.26 124,327 55%
All (weighted by total English bed capacity for each operator scale) £209.53 224,695 100%
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