7.
Residential Care Capacity and Demand
7.1.
Introduction
Government policy aims to support older people to remain in their own homes and communities for as long as possible and, where this is not possible, to support access to high quality nursing home care. This requires planning ahead to ensure an adequate supply of long-term nursing home care beds to meet the needs of our ageing population.
This chapter considers future requirements for long-term nursing home care, the capacity of the current long-term residential care sector to meet those requirements and possible approaches to ensuring adequate future capacity.
7.2.
Future Need for Long-Term Nursing Home Care
The vast majority of long-term nursing home beds are utilised by people over 65 years of age, with only 5% of residents aged under 65 years.
The over 65 population is set to increase from 585,700 in 2014 to 732,000 by 2021 and to 803,000 by 2024. Based on current utilisation rates, this suggests a requirement to have over 36,000 long- stay beds in the system by 2024. By 2021, the population over the age of 80 years will have increased by 37 % since 2011. Those over 80 years of age accounted for 71% of NHSS residents at end 2014, with over 50% being over 85 years of age.Thus, even in the context of strengthened community and home-based models of care, it is clear that there will be an absolute requirement for additional long-term residential care capacity.
Within the overall long-stay population, it is anticipated that 23,965 people will be in receipt of support under the Nursing Homes Support Scheme by end 2015. This is estimated to grow to 33,070 by 2024.
Table 6 shows the percentage of the general population, and the actual numbers supported by the scheme from 2012-2014, for each age cohort. It also shows the percentage of the total NHSS population in each age cohort.
71 Table 6. Utilisation rates for NHSS scheme
2012 2012 2012 2013 2013 2013 2014 2014 2014 Age No. in NHSS total % of NHSS % of general population in age group No. in NHSS total % of NHSS % of general population in age group No. in NHSS total % of NHSS % of general population in age group < 65 years 1,306 5.92% 0.03% 1,271 5.53% 0.03% 1,110 4.96% 0.03% 65-69 years 978 4.43% 0.54% 1,006 4.37% 0.53% 931 4.16% 0.48% 70-74 years 1,759 7.97% 1.33% 1,782 7.75% 1.30% 1,597 7.14% 1.12% 75-79 years 3,321 15.05 3.21% 3,482 15.14% 3.30% 2,848 12.74% 2.65% 80-84 years 5,216 23.64% 7.34% 5,249 22.81% 7.22% 4,629 20.70% 6.19% > 85 years 9,486 42.99% 15.65% 10,217 44.41% 16.36% 11,247 50.30% 17.40% Total 22,065 100% *0.0048% 23,007 100% *0.0050% 22,362 100% *0.0048%
Source: Nursing Homes Support Scheme, HSE/CSO
*The % figures give the % of the total population in Ireland supported by the NHSS
Table 7 sets out are the medium-term projected requirements for long-term residential care beds. The end 2015 target NHSS population has been broken down by age group, and long-term residential bed utilisation for each age group in the scheme, and has been expressed as a % of the current total national population in that age group in the scheme. Future projected bed utilisation has then been projected by relating these age-related bed utilisation rates to national population projections for these age cohorts out to 2024.
Table7: Medium-term projected numbers for NHSS.
Year Total NHSS Numbers
2019 27,419
2024 33,070
Source CSO/DoH
While every effort should be made to maximise the number of older people who can be supported in their own homes, by strengthening home and community supports, and developing alternative models of care, it is not yet clear how many older people will avoid or delay the need for long-term
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residential care under this approach. However, even under the most optimistic scenario, absolute numbers needing residential care will increase over the coming years and we need to plan for that. It is clear that net additional long-term and short-term residential beds will be needed in light of the forecast increase in the number of older people.
7.3.
Current Long-Term Nursing Home Capacity
Long-term nursing home care in Ireland is provided through a mix of public and private provision, with the public sector providing about 20% of all beds and the private sector delivering the remaining 80%. At the end of 2014, the Health Information and Quality Authority (HIQA) advised that there were approximately 29,000 long-stay beds in 565 designated centres registered with the Authority. A breakdown of these is set out in table 8.
Table 8 HIQA register of providers of long-term residential care end 2014
Designated Centre No. of residents who can be accommodated
Private 21,900
Health Act, 2004 Section 38 arrangement* 780 Health Act, 2004 Section 39 assistance** 332
Health Service Executive 6,030
Total 29,050
Source: Health Information and Quality Authority.
*Health Act, 2004 arrangement refers to a voluntary agency providing services on behalf of the HSE under Section 38 of the Health, Act 2004.
**Health Act, 2004 Section 39 assistance refers to a voluntary agency grant aided by the HSE under to provide services under Section 39 of the Health Act, 2004
7.3.1 Public Nursing Home Capacity
An immediate issue facing the public system is the fact that a notable number of facilities do not meet HIQA infrastructural standards. Currently there are 5,290 long-term residential care beds available in the public system. While some progress has been made in maintaining and upgrading existing public bed stock so that it is HIQA compliant, further work is required which will entail significant capital costs. Moreover, the re-development of public facilities in line with HIQA standards is likely to involve further reductions in current public bed numbers within affected facilities. The impact of such reductions may be particularly marked for high-needs residents given
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the role of the public sector in catering to those with complex care needs. Indeed, an analysis of delayed discharge data highlights that approximately 3% of those awaiting discharge from acute hospitals encounter difficulties securing an appropriate placement due to complex care needs, particularly in areas where there is a general shortage of long-term residential care services.
In addition to the pressing need to upgrade and maintain existing public capacity, there is also a need for additional public sector capacity, if the Government wishes the public sector to maintain its current presence within the nursing home market. There may be important policy reasons for maintaining a strategic presence such as the need to ensure that the State is not wholly dependent on private operators or, as noted above, to ensure the availability of services for the most highly dependent, complex cases. If Government policy is for the public sector to continue to provide circa 20% of all nursing home capacity, this will require public nursing home beds to increase by approximately 1,200 beds by 2024, with an associated capital cost for the provision of these beds.
7.3.2 Private Nursing Home Capacity
Based on the end 2014 data from HIQA, there are currently 450 private nursing homes, i.e. private and voluntary (Section 39) operators. These facilities can provide accommodation for 22,232 residents.
Given projected demographic trends and continuing public expenditure constraints, it appears probable that there will be an expanded role for the private sector in the future nursing home market. However, Nursing Homes Ireland has indicated that, while there is an appetite to invest in delivering extra capacity including short stay/intermediate type care, there may be merit in stimulating the sector via a series of measures, including:
• guarantees of future NHSS funding, • advance price agreements,
• extensions to the length of contracts,
• tax incentives to encourage targeted development.
This issue of future private capacity was considered by Deloitte and Touche Consultants. It was their view that, given the relationship between current and projected demand and supply, and prices available, lenders and developers are likely to continue to see the nursing home sector as a viable
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investment, provided they have certainty about the bed price rate they would be paid for a number of years. However, the fact that lenders now require developers to provide upfront capital of approximately 30% of the total development costs is a limiting factor. There may not be sufficient ready capital available from existing nursing home operators to co-finance the levels of additional capacity needed over the coming years, resulting in private development only by larger operators. Lenders have expressed concern about this as it concentrates their lending risk more than they would wish.
7.4 Measures to Encourage Provision of Future Nursing Home Capacity
The provision of additional capacity must be planned to ensure adequate supply throughout the country. Trends in the provision of new residential capacity by the private sector should be carefully monitored over the coming months and years, and if required replacement ratios and levels of new capacity fall significantly behind projected population demand, all available responses should be considered.
As an important starting point for this planning work, the Department of Health is currently undertaking a project to identify and assess the various options available to Government to encourage the provision, including the upgrading and refurbishment, of long-term residential care facilities for older people, in areas where they are needed. This will consider whether it is preferable for the Government to meet future nursing home needs by means of direct build, public private partnership, tax incentives or other initiatives.
The work involves:
detailed forecasting of the demand for, and supply of, nursing home care,
extensive stakeholder consultation to identify both the market failures which may be inhibiting optimal supply of nursing home care and the potential measures for addressing those failures, and
full cost benefit analysis of a suite of policy options to encourage the provision of necessary nursing home facilities.
The work is at an advanced stage and is expected to culminate in a report to the Minister in the coming months.
In addition to the above analysis, the Ireland Strategic Investment Fund has identified the nursing home sector as one that could provide a rate of return and an outcome that is compatible with the Fund’s mandate. The Fund would offer loan finance on fully commercial terms (this is not
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preferential funding), but it could still be a valuable stimulus to increasing private investment activity.
7.5 New Public Private Collaboration
In addition to the analysis outlined in section 7.4, detailed consideration should be given to potential new models of collaboration between the public and private sectors. Such new models might provide for a private operator to finance, build, and operate a facility. However, the allocation of beds and the level of care provided would remain within the remit of the HSE. These arrangements could apply to both short-stay and long-term residential care beds.
7.6 Sheltered Housing
In line with Government policy to support older people in their own homes and communities, it is important to consider the need to build capacity in areas other than long-term residential care. To this end, the potential of sheltered housing and assisted housing models should be considered in consultation with the Department of Environment, Community and Local Government.
Current initiatives include the Sue Ryder model or the Great Northern Haven housing development in County Louth, which is an integrated, community orientated housing model that incorporates health and community supports. Such initiatives can provide an alternative to long-term residential care, delivering homes which are ‘lifetime adaptable’ and designed to meet the changing needs of residents over time.
While sheltered housing appears to offer significant benefits over the longer term, it is currently under-developed in Ireland. In developing this sector, it is important that scarce health sector funds remain effectively focused on healthcare requirements. For example, the creation of an intermediate care model which falls between care at home and long-term residential care is as likely to attract people who may otherwise remain at home, though socially isolated, as it would those in long-term residential care. Those who would shift up from home care may, in many cases, have social housing issues rather than healthcare issues.
7.7 Recommendations on Residential Care Capacity
In order to ensure that there is sufficient capacity in the residential care setting to meet the needs of the increasing numbers of older people it is recommended that:
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1) The Department of Health continues to progress the project to identify and assess the various options available to encourage the provision, including the upgrading and refurbishment, of long-term residential care facilities for older people.
2) The implications for HSE residential facilities of the relevant standards should be clarified with a view to agreeing an approach that achieves the best achievable outcome for residents. 3) Detailed consideration should be given to whether there is potential for new models of
collaboration between the public and private sectors.
4) The potential of sheltered housing and assisted housing models should be considered in consultation with the Department of Environment, Community and Local Government.
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Chapter 8: Future Financing of Services for Older People