The Care Homes for Older People report says care home occupancy stands at 85%, which is lower than previously thought, and calls for ways of levering “latent provision” back into use.
William Laing, report author and data director at Laing Buisson, said: “These findings call for a realignment of how we think about how future demand for care home places will be met.
“Ally this to the predictions for demand based on proximity to end of life rather than age, where we have adopted the methodology originally proposed by the Brookings Institute in the USA, and the issues the market faces are more manageable and resolvable.”
The report throws new light on care home supply and demand, reporting that net capacity rose by 900 beds in the year to March 2018, which the majority of this gain being driven by nursing homes.
Laing Buisson also highlights the contrasting fortunes of self-pay and state-pay focused providers.
William said: “Where state-pay prevails, there continues to be significant pressure on providers’ prices and margins from council and CCG commissioners, putting into question the sustainability of the model.
“Where self-pay prevails, the sector remains robust and the private pay funding model, based on liquidation of owner-occupied property value, looks likely to remain sustainable for at least the next three decades, so long as there is no collapse in property values.
“The importance of this to the market as a whole is reflected in the fees paid by ‘pure’ self-payers who account for 52% of the market by value but only 45% by volume.”
New information from CQC reports has led to a reappraisal of the impending ‘care home crisis’. Laing Buisson has collated and analysed the data from individual care home reports and these show that overall occupancy of care homes is lower than previously thought, at about 85% when measured as occupied beds as a percentage of registered beds.
William Laing, report author and Data Director at Laing Buisson said:
“If the new information is correct, and we have no reason to doubt that it is, it sheds a whole new light on the balance between demand and supply for care homes. Derived from CQC inspection reports, it shows that the aggregate numbers of residents as a percentage of registered beds are, at 85%, much lower than the widely accepted occupancy benchmark of about 90%. At the same time, there seems to be a lot more ‘latent provision’ – mothballed capacity where the care home provider has chosen not to admit residents to full capacity, for example because they don’t want to incur additional staff or other costs.
“This shifts the whole debate. Rather than looking at care home occupancy levels being close to their practical maximum, commissioners might want to look at whatever levers they have to bring the ‘latent provision’ back into use.”
It also casts a new complexion on the impact of openings and closures and, in addition, there appears to have been a reversal in recent trends in the year to March 2018. During this period, net capacity has risen by around 900 beds, with a greater part of this gain coming in registered nursing homes, allaying fears that capacity is being lost.
William Laing remarked further:
“These findings call for a realignment of how we think about how future demand for care home places will be met. Ally this to the predictions for demand based on proximity to end of life rather than age, where we have adopted the methodology originally proposed by the Brookings Institute in the USA, and the issues the market faces are more manageable and resolvable.”
Some of the reasons for lower capacity
Elderly people are being turned away from care homes with spare beds because of staff shortages, analysis suggests. Shortages are arising because managers are leaving beds, or in some cases entire floors, units or homes, empty of residents.
“The number of registered but unavailable beds is much greater than previously thought,” the research said. In some cases, it adds, managers “take a conscious decision not to admit residents to full capacity, usually for staffing reasons, either because they cannot recruit the staff or, more likely, the additional revenue from occupied beds is insufficient to justify incurring additional staffing and other costs.”
The Laing Buisson report market-defining report, Care Homes for Older People throws doubt on the assertion that care homes will struggle because they will reach their full capacity. The analysis based upon CQC information shows they are only operating at 85% capacity rather than previously thought 90%.
It is a sign of the times that some providers are choosing not to admit residents because of recruitment difficulties, or additional revenue from occupied beds is insufficient to justify incurring additional staffing and other costs.
Albert Cook BA, MA & Fellow Charted Quality Institute Managing Director Bettal Quality Consultancy