Squaring the circle: Confronting the crisis in elderly care

No-one who reads the newspapers can be in any doubt: there’s a developing crisis in the UK’s elderly care system. The proportion of the population aged over 80 is growing fast, and the demand for care isn’t just rising, it’s changing, and radically. The world is having to adapt to a society of four generations, not three, so while the ‘younger old’ are leading more active and healthy lives, the ‘older old’ are living with more chronic conditions, and the incidence of all forms of dementia continues to increase.  And it’s this population that the elderly care system is looking after.

Budgets tighten as specialist care costs increase

As a result, ‘care’ increasingly means ‘nursing’, even though residential homes have neither the resources nor the specialist staff to provide it.  Even more crucially, they don’t have the funding. As Local Authority budgets continue to tighten, the available cash shrinks, which means there’s limited funding for anyone other than the frailest and most needy. That, in turn, means care homes have an overwhelming number of such people, in facilities often originally designed to provide far less acute forms of care, and nowhere near enough funding to look after those residents properly. Added to this, delayed discharges and funding pressures in the NHS are heaping additional stress the care home market. If these issues weren’t tough enough, the National Living Wage means the only way is up for costs, and it continues to be an uphill task to recruit carers, never mind nurses, who don’t generally see the sector as an attractive career option.

It’s a depressingly familiar story, and it’s no surprise that the number of available beds is actually falling in the UK, because operators simply cannot square the circle and make an adequate return. Many also face the challenge of working in old and poor-quality homes which need significant investment, while building new facilities is expensive, given the projected returns. And at the same time the standards demanded by the Care Quality Commission are rightly rising, as are public expectations of care, especially among those who fund themselves.

Local solutions to national challenges

Something has to give, but what? There’s little sign of any significant increase in the available funding, at least in the short term. The demographics aren’t going to reverse either. But if the macro environment can’t be influenced,  we believe there are things that can be done at the micro level. In other words, changes can be made at individual homes, within individual operators’ portfolios, or in specific geographical areas, which can make better use of limited resources, and improve the outcomes for residents, Local Authorities, operators, and investors alike.

We’ll be looking at specific examples of these ideas in future blogs in this series, but we’re going to start by setting out why we believe this ‘think local’ approach is a useful way forward.

Care home stress index

This conclusion is the result of the extensive work we’ve done over the years to support companies and organisations operating in this sector, and the insights we’ve gained about the factors that can influence the performance of a care home. We’ve applied that learning in a practical way in a new tool, which allows operators, investors, and local authorities to benchmark their homes against the overall ‘state of the nation’ in residential care. It is, in effect, a ‘stress test’, showing how different homes or geographical areas across the country are reacting to the pressures they’re under. This is important, because even if the macro issues are the same throughout the country, the way they’re playing out at local level can be very different. By inputting all the relevant criteria we can help everyone concerned make better decisions, based on facts not assumptions.

The data we include ranges from the relative affluence of the area, to the number of elderly people in the local population and how quickly this is rising, to the number of beds already provided, to the level of fees currently paid, and the demand for low-skilled workers. Operators can use the tool to map their portfolios and compare their own homes to those of their competitors; Local Authorities in particularly ‘stressed’ areas can assess whether there may be more cost-effective ways of looking after their elderly people, such as helping them stay in their own homes; and investors can analyse, for example, whether problems at a particular home are typical of the area, or the result of specific issues within that home, which should therefore be fixable. And everyone involved in elderly care – whether providing it of paying for it – will be able to identify homes that are outperforming, and learn what they’re doing that’s making the difference.

We’ll be looking at some of these outstanding performers in the next blog.

Learn more about our new tool here.

Jonathan Williams |  Director
Profile | Email |  +44 (0)20 7804 5573


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Reena Virdee  |  Manager
Profile | Email |  +44 (0)20 7213 4270


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