More small retirement homes threatened with closure

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More and more nursing homes – especially smaller establishments in some parts of the country – are at risk of closure due to higher costs, a report compiled by consultants BDO for Nursing Homes Ireland has concluded.

The report highlights the challenge faced by suppliers in some counties where payments under the Fair Deal program are lower.

The Fair Deal Scheme is a government financial support program where the individual contributes to the cost of their long-term care, according to their means, with the state paying the balance.

However, fees paid to nursing homes vary from county to county, with homes in Donegal receiving the lowest rate nationally.

The report notes that the average weekly rate of €955 in Donegal is €280 per week lower than that of residents of Dublin, which has the highest average weekly rate of €1,235.

Around 96% of respondents in a survey of 124 care home owners for the report said they did not believe the Fair Deal rate covered the costs of running the home.

The report notes a slight drop in the total number of nursing home beds from 31,909 in 2020 to 31,743 in May which is mainly explained by a decrease in the number of public beds which fell from 5,688 to 5,182.

The number of private and voluntary beds increased from 26,221 to 26,561.

The report concludes that the overall net increase in the number of beds in this category is largely due to the closure of smaller homes and the opening of new larger homes or the expansion of existing facilities.

The reduction in the number of homes with less than 40 beds, which are located mostly in regional areas, was largely due to regulatory requirements for physical upgrades as well as rising costs, the report said.

“This is a worrying trend, especially for the less populated area where these nursing homes are an integral part of the community but are not sustainable,” said Brian McEnery, Partner and Head of Consulting at BDO and author. of the report.

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“Generally these areas have low fair deal rates, and that, combined with rising costs, undeniably puts the survival of these small houses at risk, with others inevitably having to close,” he added.

Tadhg Daly, chief executive of Nursing Homes Ireland, said the report highlighted how the Fair Deal scheme did not accurately reflect the reality of nursing home costs.

“In today’s unprecedented cost environment, Fair Deal failures are getting worse. The closure of small nursing homes is a manifestation of the pressure on all nursing homes, with fees payable ignoring the reality of regulatory and resident care costs,” he said.

Minister of State for the Elderly Mary Butler told Morning Ireland last week she was aware of eight nursing homes which had closed in the past three months and four more which were in the process of to cancel their provision of care for the elderly. people.

Tadhg Daly told the show that nursing homes were not closing to become shelters for refugees fleeing war in Ukraine.

“Retirement homes are closing because they are forced to close,” he said.

Brian McEnery told Morning Ireland that in addition to the most recent closures, there have been at least nine closures across the sector in 2020.

He said there was definitely a consolidation trend.

Some of the more traditional owners, who had reached retirement age, were increasingly opting out of the industry.

The gap is filled to some extent by larger and more specialized market players.

“Some coming to market are multi-jurisdictional with operations in many countries across Europe. What is concerning is that rural and non-urban locations are seeing a reduction in supply in their communities” , he explained.

He said this situation was likely to further impact the hospital system.

“We need to make sure there’s a healthy environment for operators to deliver quality care and, in fact, a healthy environment to allow reinvestment in the sector. It’s becoming city-provided care. It’s going to be a problem for the elderly,” he said. concluded.

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