Categories
faith

Professional Consultancy Responds to Health and Social Care Challenges

As people in the UK live longer, demand for residential care and nursing homes is growing, as are our expectations of the standard of living they will provide.

As people in the UK live longer, demand for residential care and nursing homes is growing, as are our expectations of the standard of living they will provide.  Dean Jones  offers insights about the value a professional consultancy has for overcoming the challenge and driving value for patients.

The current state of affairs

As a result of some well-broadcasted care scandals that attracted extensive, and in some cases, damaging media attention, the government has responded with cuts that are impacting local authority (LA) fees and resulting in far tougher  Care Quality Commission (CQC)  policies.

Office for National Statistics (ONS)  Projects That by 2035 There Will Be 3.5 Million Uk Residents Aged 85 and Older, Compared to Only 1.4 Million Currently

In spite of this, the “extra-care” – or Residential Elderly Care (REC) sector – continues to overcome these challenges, attracting new investments, particularly into new-build care homes. These are specially designed, owner-occupied, self-contained housing, often with round-the-clock support and meals and sometimes with nursing assistance.

A typical pattern is for owner-founded care home operators to reach a growth limit, based on the founder’s management capacity, access to capital and appetite for risk. They cease to invest in new capacity and don’t benefit from economies of scale which can be passed on to commissioners. Public markets typically do not fulfil their function as a supplier of capital in the case of healthcare services, because they generally demand relatively modest gearing.

There’s a widely recognised need across all health and social care market segments for innovation and system change, as well as capital investment in new services. A private equity investor is well placed to leverage technical services to strategically programme and project-manage Residential Elderly Care (REC)  public real estate schemes across their entire lifecycle.

Supply and demand challenges

Today, professional healthcare businesses and registered social landlords (RSLs) are the main providers of new capacity, period. Since 2008, private and voluntary status providers, who service 92 percent of all Residential Elderly Care, have reported an upswing in demand and occupancy. Paradoxically, as adult social care budgets are decreasing and the provision of residential care by the  NHS  and local authorities has shrunk, the number of UK people who require help and support is rapidly increasing.

The Increasingly Ageing Population of the Uk Appears to Be Underpinning the Overall Rise in Rec Capacity and Occupancy

While Local Authorities (Las) are seeking to divert placements to inexpensive non-residential/domiciliary-based alternatives, the increasingly ageing population of the UK appears to be underpinning the overall rise in REC capacity and occupancy. Britons are living longer than ever. The  Office for National Statistics (ONS)  projects that by 2035 there will be 3.5 million UK residents aged 85 and older, compared to only 1.4 million currently. The cost of caring for these residents is also forecasted to increase. For example, caring for a person with dementia will increase to $1,142,677 by 2025 and $2,092,945 by 2051. In total the government estimates that 1.7 million more adults will require some type of care and support over the coming decades.

As a result, the current number of nursing and residential care homes in the UK (over 381,000) will need to almost double over the next 20 years to cope with rising numbers of people aged 85 or more.

dependent-100342

A bright future?

The demand for care will continue to rise as a result of life expectancy increasing and ageing. A robust REC independent sector arises primarily from the net increase in residential demand, and more recently, improved occupancy. These are the result of a number of competing forces:

  • Demographics, with the ageing population expected to drive the demand for health and social care.
  • Outsourcing, the long-term transfer of residents from LA homes to independent care homes.
  • Severe financial constraints, at least over the next five years, as the government – which pays for the bulk of health, social care and special education – seeks to eradicate the public expenditure deficit and restrict new builds.
  • Outdated assets, or older care homes that no longer meet needs.
  • Consolidation, a trend within segments of the independent sector.
  • Maturity, against a currently immature healthcare market.
  • Efficiency, highlighted by the “Nicholson challenge” for the NHS to make £15 to £20 billion in efficiency savings between 2011 and 2014. (It costs the NHS approximately £3,000 a week to care for elderly patients with no clinical need to be in a hospital ward. By contrast, it comes to about £1,000 per week for a residential care home provider.)
  • Demand and Occupancy. Unless the supply of new builds increases (currently by approx. 7,500 beds p.a.), it’s possible that some regions may see bed shortages, driving up LA fees.
  • New Technology. Progressive management capabilities in leveraging technology and strategic collaboration will constitute the formula for success and sustainability in the new healthcare business environment.

While a longer life is welcome news for millions of Britons, it could ironically trigger a public service meltdown as our national health system is stretched to its breaking point. Local authorities and NHS trusts retain a significant role in delivering services, with 75 percent of nursing home places funded by the public sector. There exist ever-increasing opportunities for private care providers to take some of the strain from NHS and ease bed-blocking by caring for patients, mostly elderly, in a residential setting when there is no clinical need to be in a hospital ward.

The REC Sector Could Potentially save the Nhs Billions of Pounds.

A combined approach to health and social care and some innovation is required for this savings to become a reality. In addition, Care Home Operators have a unique opportunity to grow their businesses and benefit from economies of scale, leveraging the expertise and resources of a professional consultancy. In doing so, they’ll have necessary resources and systems to bid for significant re-provision of services tendered by local authorities.

About Dean Jones

Dean is an Associate in AECOM’s Programme Leadership Practice. Dean joined AECOM from Care UK, the UK’s largest independent provider of health and social care, where he was a Programme Manager and delivered a £250m investment growth programme over 2012/15 which increased Care Uk’s number of homes circa 33%. Dean was also Programme Manager for a £60m Suffolk programme to build ten new care homes and ten day clubs, bringing much needed additional nursing and specialist dementia care to the Suffolk community.

Godinterest is proudly sponsored by Jamaica Homes, a leading real estate firm dedicated to providing exceptional property solutions across Jamaica. With a steadfast commitment to excellence and client satisfaction, Jamaica Homes offers a diverse range of properties, including residential homes, commercial spaces, and vacation rentals. For more information, visit Jamaica-homes.com.

Comments are closed.

Discover more from Godinterest

Subscribe now to keep reading and get access to the full archive.

Continue reading