Almost 700 beds closed in care homes as ESRI warn of 'dominance'

happy old lady in nursing care home

The cost of providing care in nursing homes may increase in the coming years due to the “dominance of private supply” in the system, the ESRI has warned.

A new report on the challenges facing the long-term residential care sector said that 14 medium/large operators now dominate the supply of beds in the Irish system.

“From an economic perspective, a small number of providers of State-funded health or social care resulted in these operators transitioning from being passive price acceptors to strong negotiators, potentially driving up prices,” the ESRI said.

“Evidence from other countries suggests that more stringent oversight as well as increased reporting on private equity ownership of LTRC homes may be warranted.” 

'Important lessons'

The ESRI said that the international experience with large providers “offers important lessons” for Ireland, as such arrangements “often create an environment where profit motives can supersede quality”.

It found that almost three-quarters (74%) of new beds in the sector are provided in private long-term residential care homes and 14 large private operators now provide 40% of all beds nationally.

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Furthermore, almost 700 beds were closed in public long-term residential care homes between February 2020 and December 2022 as almost one in five smaller homes of under 30 residents, mostly in rural areas, closed during the pandemic.

Nursing Homes Ireland CEO Tadgh Daly said that more nursing home closures are inevitable unless there are strong policy and resourcing interventions from Government.

This crisis cannot continue without serious consequences for the State and for care of the older person,” he said.

“NHI has made repeated warnings on the sustainability of the sector which have been ignored by the Department of Health. 

"Entire models of care are being wiped out and the entire sector is under threat by a failure of the State to recognise the disparities in funding and by failing to provide for rampant inflation in costs.” 

Mr Daly, however, said ownership was “irrelevant” to care, as the sector is regulated independently by Hiqa.

Concerns over for-profit providers

In response to the report, Age Action senior public affairs and policy specialist Nat O’Connor said that feedback given by older people frequently shows they wish to remain in their own homes rather than go to nursing homes.

“Older people have overwhelmingly told us they wish to see greater investment in home care, and some have expressed their concern about for-profit nursing homes,” he said.

'The risk of regional inequalities highlighted by the report is a major concern,' said Age Action's Nat O'Connor. Picture: Leah Farrell / Photocall Ireland

The ESRI has also warned that the move to private equity operators in the Irish system may require changes on how the sector is funded.

“In a system which is majority publicly funded but privately provided, there will always exist a structure that satisfies cost minimisation and care quality from the State with profit maximisation from the provider,” it said.

Fair Deal disparities

The report also said there were large disparities in Fair Deal between private and public nursing homes, and that the development of new long-term residential care homes has been “clustered” in counties where the Fair Deal prices are the highest.

While five of the seven counties with the highest Fair Deal price will see new private care homes commenced either this year or last year, none of the 13 counties with the lowest Fair Deal prices will see any, the ESRI added.

Mr O’Connor, from Age Action, said that most older people dislike the scheme and would like to see a “fairer funding model” introduced.

“The risk of regional inequalities highlighted by the report is a major concern,” he said. 

“The State must ensure there is equitable access to residential care across Ireland. People should not be forced to travel long distances from their families or communities to access residential care.”