Review into fund’s nursing home price mechanism

A review of how the National Treatment Purchase Fund negotiates prices with private and voluntary nursing homes under the Fair Deal scheme is almost complete.

NTPF chairman John Horan told the Oireachtas Public Accounts Committee, that proposals on the “pricing mechanism” would be presented to the Departments of Health and Public Expenditure and Reform in a “matter of weeks”.

Mr Horan said a decision would be made to either move to a new pricing system, stay with the existing one, or just “tweak” it.

He said the NTPF was mandated by statute to negotiate with nursing home proprietors for the purpose of reaching an agreement as to the maximum cost for specified long-term residential care services.

“By the end of April 2018, more than 430 nursing homes had pricing contracts with the NTPF and the average price of long-term residential care paid to these nursing homes amounted to €957 per resident per week,” said Mr Horan.

“Any proposals to amend a successful system benefitting 17,500 residents and involving State expenditure of close to €900m should be very carefully scrutinised and considered.”

Earlier, the chief executive of Nursing Homes Ireland, Tadhg Daly, told the committee the NTPF was “abusing” its dominance as a monopoly purchaser and threatening the viability of private and voluntary nursing homes.

Mr Daly said that five private nursing homes closed last year due to financial concerns.

Mr Horan said its information was that four nursing homes had closed last year but that a more important issue was the number of beds — pointing out that during the same year, the number of beds increased by 313.

“The bed numbers are growing; the number of nursing homes is fairly static over the last three to four years. It has hardly changed,” he said.

The average contract term had also increased from 19 months to 30 months over the last three years, he said.

“Private nursing homes are voluntarily sitting down and individually negotiating deals with the NTPF for the prices that will be paid under the Fair Deal scheme — taxpayers’ money,” said Mr Horan.

“So I would be very reluctant to say, ‘Let’s have a new system’. I like the system the way it is because I believe it is working. That is not to say that what is working could not be improved.

“That is why we are doing this major review and doing it very carefully.”

Mr Daly said the NTPF, as a monopoly purchaser, had adopted a ‘take it or leave it’ approach within its negotiations of fees with private and voluntary providers. 

There was no independent appeals mechanism for a provider who failed to agree on a fee with the NTPF.


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