Care homes after Covid: counting the cost
At the height of the Covid-19 pandemic last year, Monica Richardson discovered that a lifetime of working, paying taxes and saving had failed to provide her with the comfort and care she needed towards the end of her life.
The disease had swept through her West Yorkshire care home, killing 14 people in just one month. Richardson, 87, had fallen ill from the virus but was recovering. So she was taken by surprise when the managers forced her to move from residential care on the ground floor to nursing care upstairs and charged an additional, non-negotiable £300 per week fee.
The increase — just a year after Richardson first moved in — took the annual price up by £15,600 to an eye-watering £67,600.
The cost was unsustainable for Richardson, a former secretary, who had sold her and her deceased husband’s £250,000 flat as well as their furniture to pay for care. In February she moved to a cheaper care home, which was, says her daughter Alison Wright, “a traumatic experience”.
Richardson is happier now. But the move took an emotional and financial toll. The cash from the house sale will run out in a couple of years and although the local authority should then take over, not all care homes keep state-funded residents.
Richardson is hopeful it won’t happen, but as self-paying residents have few rights, there is always the potential for eviction. “We have enough money to last another few years; but we think she’s going to live to be a hundred now,” says her daughter.
Richardson isn’t unusual in finding herself at the mercy of a profit-driven care home industry, forced to deplete her savings to pay rising fees to private providers.
Her problems are high on the political agenda in the wake of the pandemic, which spread like wildfire in care homes, claiming around 30,000 residents and 900 staff. It highlighted crucial deficiencies ranging from a lack of protective equipment to poor pay, with many infected employees unable to afford to take time off and so spreading the virus.
Boris Johnson, the prime minister, has pledged to reform social care “for once and for all”, addressing an issue which threatens to engulf healthcare budgets and is growing with the ageing population. But there was widespread disappointment that the recent Queen’s Speech sidestepped any progress towards reform.
As this FT Money report shows, while the government prevaricates in delivering on its promises to ease the burden, the financial pressures on residents and their families are only getting worse.
The funding crisis
More than 30 years after social care became one of the first public health services to be outsourced to the private sector, the shortfall in funding has reached crisis point, putting pressure on care home residents, and squeezing hospitals, which have vulnerable patients they cannot discharge. Thousands of elderly people are stranded in their own homes without much-needed help.
Unlike services that come through the NHS, care for the elderly is not free, forcing vulnerable people to shop for care, 90 per cent of which is provided by private companies, whether single family-owned homes or large private equity-owned chains.
Anyone with assets of more than £14,250 has to pay some of their fees and anyone with savings of more than £23,250 — including their home — has to pay the full cost of care. The rest are financed partly or fully by local authorities.
The fees have been rising by above the rate of inflation — a result, says industry lobby group Care England, of increases to the minimum wage for staff, which account for up to 80 per cent of costs, often leaving operators struggling to manage.
In England, residents can pay at least £900 a week, but it varies by region. In the Southeast, where property comes at a premium, a bed costs at least £1,053 a week, or more than £1,200 if it includes nursing, according to LaingBuisson, the healthcare consultancy. At the luxury end, a bed in Kensington can top £2,000 to £3,000 a week.
However, nearly half of care home residents have insufficient money and are funded by local authorities which pay a much lower rate — about £600 a week in England. Care homes say this doesn’t meet costs and they subsidise the state-funded residents by charging self-payers extra, even though they usually live in the same homes, with little difference in service or care.
Scotland, Wales and Northern Ireland all run schemes that are more generous for self-payers but still don’t free many families from contributing.
And everywhere the move usually comes at a time of distress — in the wake of a family death, an accident or hospital stay.
“If you were making a big purchase you’d look at it carefully, but this is rarely done with a straight head,” Jan Ives, a former NHS worker, who found care for her mother-in-law Jean who died in October last year, says. “It’s full of emotion and guilt and angst between family members and they are also watching their inheritance go down the pan and the person wants a choice about where the money goes and there is none.”
Fee structures, if disclosed at all, are often opaque and not covered by the industry regulator the Care Quality Commission, which focuses on safety, health and care quality.
200,221 Places in UK for-profit residential care homes. There are an additional 43,105 places in not-for-profit homes
Even when information about price and quality are available, little is said about future costs. Many residents now find themselves facing sharp increases driven by rising pandemic-linked costs. For example, Barchester Healthcare, one of the larger chains, in March increased prices by 5.9 per cent, which it attributed to higher costs during the pandemic.
William Laing, founder of LaingBuisson, says the lack of price visibility results from having to adjust care to individual requirements and the need to compensate for low fees on local authority-financed residents.
Some care homes have three-month probation periods, and many ask for proof in advance that you or your family will be able to pay for at least two or three years. Trips out — even to the dentist — usually cost more.
There is always the threat of eviction for non-payment, poor behaviour or just complaining. “You might be told that we can’t meet your relative’s needs any more or your family is taking up too much of our time,” says Julia Jones, cofounder of John’s Campaign, which lobbies for residents’ rights.
Self-funders have little security or protection against eviction although they must be given 28 days notice; while local authority or NHS-funded residents are protected by the state, which would have to find a replacement place.
Mike Padgham, chair of the provider organisation the Independent Care Group, says the “vast majority of care providers, many of which are small, family-owned businesses, do their best to provide the highest standard of care at a fair price whilst paying their staff fairly for the amazing work they do in a challenging and stressful environment”.
He warns that state fees need to be increased as a “matter of urgency” or care homes will close or stop accepting local authority residents — a trend that is accelerating.
178,824 Places in UK for-profit nursing care homes (2020). There are an additional 15,941 places in not-for-profit homes
The Competition and Markets Authority, the commercial watchdog, has stepped in to curb what it sees as bad practice. In one of a string of cases launched since 2017, it used consumer protection laws to force several operators to pay compensation to grieving families that had been charged for accommodation weeks after their relative had died.
Last week, Care UK, which has 121 care homes and is owned by the private equity chain Bridgepoint, appeared in court after it refused to refund residents up to £3,000 each in compulsory “administration” fees, for which the CMA said they received no service or product in return.
Care UK, which stopped the practice in 2018, says the fee covered the cost of admitting new residents and that the practice was widespread. It added that it had always acted in compliance with the CMA’s guidance and there was no guidance in place regarding these fees until 2018. “As a result, the allegations made by the CMA are not a fair and true reflection of our approach to residents and their care,” it added.
Quality concerns
If high fees are a concern, so too can be the quality of care. Although four-fifths of homes were rated good or outstanding, a substantial one-fifth of care homes in England were rated inadequate or requiring improvement by the regulator the Care Quality Commission (CQC) last year.
Bob Pike, a former company director, was so dissatisfied with the care at the £71,500-a-year Hallmark care home in Rugby that looked after his sister, Ronnie Harrison, a former midwife with dementia, that he retained another carer to visit her.
“My sister was a very sociable person and a good conversationalist and when she first went to her home we told them Ronnie needs people around. They nodded their heads — and there were some activities — but it wasn’t enough,” he says. “The ground floor was the showcase but the Alzheimer’s floor was out of sight and out of mind for everyone.”
Pike says he wouldn’t have begrudged the fees, if the care had been good, but he felt it was poor value. Harrison died at the end of 2019 but in the time she lived at the home there were five managers, and a continual turnover of staff leading to “particularly poor” care at times, Pike says.
Hallmark apologised to the Pike family for “falling short of their expectations”. The company says: “We worked closely with the family to make sure we acted on their feedback and requests, and that the care delivered to their loved one was of a high standard, irrespective of local management changes.”
The pressures on staff and the related management challenges have been heightened by the pandemic, at the same time as — charities say — care has deteriorated as a result of social distancing.
Jones of John’s Campaign says that before the pandemic family members were often essential voluntary carers for their relatives in care homes, helping them to eat or take exercise, and checking, informally, on their wellbeing. “They might say they will take your mum out for a walk every day but then they don’t have the staff,” she says.
She is concerned at the apparent deterioration in residents deprived of care over the past year and the anxiety that causes. “The family member rings up and the staff says the resident is fine and you don’t dare to argue,” she says. “There’s been a massive power shift and families are too often made to feel they are a nuisance.”
Helen Wildbore, director of the Relatives and Residents Association, which runs a helpline, is concerned that care homes have cut social events, activities and access to outdoor areas during the pandemic and that this “closed culture” is becoming the “new normal” in care homes.
Last week the charity wrote to the CQC calling for the regulator to restart routine inspections, which were suspended during the pandemic, and to monitor compliance, as well as better representing the sector’s needs, including lobbying for adequate sick pay for care workers.
The CQC said it has taken “decisive action” throughout the pandemic, making it clear to providers that blanket approaches to limiting visits are unacceptable. It carried out more than 7,000 targeted inspections, which compares with over 12,000 in 2018-19, the last full pre-pandemic year.
Confusion over reforms
There have been at least 12 consultation and policy papers as well as five independent commissions since 1998, all trying to grapple with the issue of how to provide a sustainable adult social care system, which costs the government more than £23.3bn a year in England alone.
The government is yet to reveal its hand but proposals have ranged from a cap on lifetime social care charges, to more generous means tests, or even for care homes to be nationalised.
Care England is pressing for at least a £7bn annual increase in funding to the sector in England, including higher local authority fees, government-backed indemnity insurance to protect against negligence claims and occupancy guarantees as well as a strategy to train and professionalise the workforce. It says that in some areas local authorities pay home operators less than £3.50 an hour for residential care.
But the lack of transparency over fees, executive pay, and dividends as well as some of the larger players’ complex ownership structures in multiple jurisdictions have raised concerns that wider reforms are needed to ensure the money gets through to frontline carers and residents.
Nick Hood, senior business adviser at Opus Restructuring, a long-term adviser to the industry, has calculated that the sector has £6.4bn of debt, concentrated heavily across the top 75 operators, so residents are not just paying for care but serving the interest on the homes, pushing up costs and leaking money from the system.
“It’s a scandal that an industry that is reliant on British taxpayers to fund half of its residents is allowed to avoid UK tax, load these businesses with debt and then hike fees,” he says. “Meanwhile ordinary people who have paid tax all their lives are forced to sell off their homes.”
But Professor Martin Green, chief executive of Care England, argues that “those who reject the notion of inward investment in the care sector should be prepared to see huge increases in taxpayers’ money being invested”.
Others argue for taxpayers to pick up more of the cost or even the whole. bill and for care to be reintegrated with the NHS. The opposition Labour party has in the past demanded free personal care for the elderly in England but not clarified what this would cover.
While the politicians debate and delay, more families are forced to confront tough choices. Karen Hindley, a retired primary teacher, visited 17 care homes to find one suitable for her father, a former lecturer at Cambridge university, who was diagnosed with aggressive Alzheimer’s after he kicked an ambulance driver and was not allowed home from hospital.
“The hierarchy of diseases is cruel,” said Hindley. “If you have a brain injury due to a cancerous tumour you are fully funded by the NHS. However, if your brain damage is due to Alzheimer’s disease, where the pathology is almost indistinguishable, you are means tested.”
Hindley sold the family home and has enough to pay for care, but she is angry at the injustice of it. “My poor father was a fit man, rarely needing to call upon the NHS,” she says. “But when Alzheimer’s kicks in, the NHS effectively says no.”