COVID-19 Could Push Care Home Providers ‘Out of Business’ En Masse, Warns Industry Representative

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by Mohamed Elmaazi

A great many care and nursing homes in England were already in a “perilous state” well before the outbreak of the novel coronavirus due to a decade of government-imposed austerity resulting in around £8 billion of cuts from social care budges, explains a care home provider based in Yorkshire.

Mike Padgham, chair of the Independent Care Homes Group (ICG), explains why many care and nursing homes in England and Wales were already on shaky ground, financially speaking, even before the outbreak of the coronavirus disease 2019 (COVID-19). Padgham runs four separate care homes as well as provides voluntary support and representation to other providers via the ICG.

Sputnik: You have been warning of care and nursing homes “closing in the wake” of the COVID-19 pandemic. Why do you think that’s a real possibility?

Michael Padgham: We have been warning for many years that due to chronic Government under-funding, the social care sector was in a perilous state, even before coronavirus came knocking. Some £8 billion has been cut from social care budgets since 2010, leaving many providers in real difficulties, with some homes already closing and homecare providers handing back contracts.

Coronavirus has brutally exposed and exacerbated the sorry state of the social care sector and we have been calling for greater financial help for front line care providers, to help them survive.

Due to COVID-19, homes are facing falling occupancy rates and rapidly rising costs – for example, on personal protective equipment (PPE), staffing costs and sickness cover.

For some, I fear, this could be the crisis that finally tips them over the edge and out of business. We are already seeing some closures.

Sputnik: What are the consequences – for providers, residents and society at large – if care and nursing homes start to close?

Michael Padgham: The loss of any care provider – large or small – is dreadful. It is always awful for residents, their relatives and the staff involved.

On an individual level, the loss of a provider means emotional upset for residents and their relatives, as alternative accommodation has to be found and this can be very traumatic. When a provider closes there will also be the consequent loss of jobs too.

Looking at the wider picture, society cannot afford to lose providers, as it is vital that we maintain care beds to keep up with ever-increasing demand.

Care and nursing homes look after some of society’s oldest and most vulnerable and their number is rising all the time, with experts predicting that demand could outstrip supply not too far in the future.

Social care currently looks after 400,000 people in care and nursing homes – that is three times the number in NHS hospital beds. Social care looks after a further 640,000 people in their own homes.

Sputnik: According to the latest data from the Office of National Statistics, the number of COVID-19-related deaths in care and nursing homes is steadily declining. In the past you have taken issue with officially stated figures as they relate to the novel coronavirus. Does your experience back up the most recent data?

Michael Padgham: At the outset, we were very sceptical of the daily death figures being released and feared that numbers for those dying in care settings would be higher than was being estimated.

In recent weeks, the Office for National Statistics has started releasing weekly coronavirus death figures, which specify how many occurred in care and nursing homes, which has provided a much more accurate picture.

We sincerely hope that the figures going down indicates that we are beyond the worst. Our own experience seems to bear this out.

However, we have to remain vigilant and the easing of lockdown restrictions and greater freedom of movement could cause a second spike, which would have consequences for care settings, where the most vulnerable and prone to serious illness from coronavirus, are being cared for.

Sputnik: If indeed the number of COVID-19 related deaths in care homes is declining, why then are so many on the verge of collapse?

Michael Padgham: It is hard to estimate how many are on the verge of collapse. However, we know that some were facing financial hardship before the occurrence of coronavirus and tackling the virus – without sufficient financial support – may well be pushing them and others towards the edge of survival.

Care and nursing homes need strong occupancy rates to survive and experts are warning that new admissions are going to continue to fall. Opus Restructuring, which advises social care operators, said the ‘occupancy drop could easily reach as high as ten per cent’, whilst care industry analysts LaingBuisson, predicted a ‘hit of five per cent plus’.

In the meantime, extra costs of PPE and staffing will continue to rise and, though we hope not, such a perfect storm could be the final straw for some.

Sputnik: What needs to be done in the short term to prevent care homes from going under-funded?

Michael Padgham: We have repeatedly said, from the outset of the pandemic, that we need to get more financial help to front line care providers to enable them to survive. We have lobbied the Prime Minister, Boris Johnson, the Chancellor, Rishi Sunak and the Secretary of State, Matt Hancock on all of these issues.

Local authorities have been given £3.2 billion by the government to support all of their extra work during the pandemic, and there is a £600m infection-control fund for care and nursing homes.

However, estimates suggest that care providers will face additional costs of £6.6 billion between April and September.

We have asked the Government to put in targeted support to help care providers and to make care providers zero rated for VAT (ideally permanently) to save them some money. We have also asked the Government to indemnify providers against claims over residents who die from COVID-19 whilst in their care.

Sputnik: Is it really the government’s role to backstop private care facilities? What about the “moral hazard” of rewarding businesses for ostensibly failed practices or models?

Michael Padgham: Many of the care providers who are facing hardship due to coronavirus are not doing so because they are poor businesses. Many will be small providers, perhaps with just one or two homes, who run on quite narrow margins and need to maintain strong occupancy rates and keep control of costs to survive.

They have faced the double whammy of falling admissions and spiralling costs which, however strong your business model, can be hard to survive.

Remember, to be registered with the Care Quality Commission and therefore legally able to deliver care, you either have to show that you are a viable business, or a viable charity that turns a surplus.

Providers have not been asking for handouts, but just some financial support, sadly lacking in the past, to help them survive an unprecedented period.

Sputnik: You have said that going forward there needs to be a “root and branch overhaul” in terms of how social care is planned and funded. What exactly do you mean by this?

Michael Padgham: We have to have greater financial support to the sector now, followed by root and branch reform of social care, matched by enough funding to bring it to parity with NHS healthcare, alongside which providers have been battling to defeat COVID-19.

The ICG’s suggestions for the future include:

  • NHS health care and social care to be merged and managed either locally or nationally
  • Extra funding for social care, funded by taxation or National Insurance
  • A guarantee that people receiving publicly-funded care can receive it in their own home or close to where they live
  • A commissioner for older people and those with Learning Disabilities in England
  • Dementia to be treated like other high profile, high priority illnesses, like cancer and heart disease
  • A fixed percentage of GDP to be spent on social care

Above all, we need to decide how we are going to deliver social care in this country, whether it continues to be delivered by the private and not-for-profit sector or is run by the state. I believe that the private sector and not-for-profit solution is the best way to deliver expert, compassionate and cost-effective care but the public needs to better understand how it operates.

I also believe that the public would be prepared to pay a little more through taxation or National Insurance to ensure they had proper care available when they need it.

Sputnik

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