CARE HOMES FOR OLDER PEOPLE - LaingBuisson Events · Capacity change from openings & closures, UK care homes 65+ Social Care Conference #LBSocialCare. LaingBuisson-30,000-10,000.

CARE HOMES FOR OLDER PEOPLE

LaingBuisson#LBSocialCareSocial Care Conference


Market size, care homes for older people and dementia, £ million UK 2019

Age specific usage rates for care in residential settings, UK 2018

65-74 75-84 85+

% OF POPULATIONWHO LIVE INRESIDENTIAL SETTINGS 0.57% 3.6% 14.7%

THESE RATES HAVE BEEN DECLINING SINCE 1993 – WHY?


0.90

1.10

1.30

1.50

1.70

1.90

2.10

2.30

2.50

2.70

2.90IN

DEX

1981

= 1

00

INDEX of population ageing* INDEX of occupied beds INDEX of deaths, persons aged 80+

Population at risk vs proximity to death as predictor of demand

BROOKINGS INSTITUTE HYPOTHESIS – DEMAND FOR CARE HOMES IS A FUNCTION OF THE NUMBER OF OLD PEOPLE AT THE END OF LIFE, NOT THE NUMBER OF OLD PEOPLE LIVING

*Expected number in care in year N divided by actual number in care in base year of 1981, where Expected number is the sum of % people in care in 1981 in each age group 65-74, 75-84 and 85+ times the population at those ages in year N


Volume of demand for care in residential settings – actual and projected, UK 65+

0

100,000

200,000

300,000

400,000

500,000

600,000

Independent Sector actuals Public Sector actualsIndependent Sector projections Public Sector projections

Additional demand of 18,000 in 5 yearsand 66,000 in 10 years


Capacity change from openings & closures, UK care homes 65+


-30,000

-10,000

10,000

30,000

50,000BE

DS

NEW REGISTRATIONS - Public Sector FROM 2000 OTHER NET CAPACITY CHANGE**NEW REGISTRATIONS - Independent Sector CLOSURES - Public Sector FROM 2000CLOSURES - Independent Sector TOTAL NET CAPACITY CHANGE

Capacity shakeout after Blair/Brown public Austerity ......................1993 Community Care Reforms expenditure boom

Council paid fees for residential care of older people and people with dementia 65+, England £ per week


0

100

200

300

400

500

600

700

800

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

£ pe

r wee

k

Year ending March 31

Council paid fees (Fredom of Information requests) £pw Council paid fees (from NHS Digital Unit Costs, exc. SSMSS) £pw

'Care Cost Benchmark' CEILING* £pw 'Care Cost Benchmark' FLOOR* £pw

Private pay premium43% higher than council pay (LaingBuisson research on behalf of the County Councils Network, 2015)

41% higher than council pay (Competition and Markets Authority, 2016 research)

Cross subsidisation is now so deeply embedded that it will be very difficult to turn back


Profitability of old people’s care homes portfolios EBITDAR as % revenue


0%

5%

10%

15%

20%

25%

30%

35%

40%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

EBIT

DAR

AS %

REV

ENU

E

Barchester (y/e Dec) Care UK (Residential Care Division) y/e SeptBupa (y/e Dec) Four Seasons Care Home Divisions (y/e Dec)HC-One (y/e Sept) Exc. HC-One Oval Caring Homes (y/e March)Avery Healthcare (y/e March)

ADULT SPECIALIST CARE



Market size, adult specialist care, £ million England 2018

Demand for adult specialist residential and nursing care, UK occupied beds 1990-2018


0

20,000

40,000

60,000

80,000

100,000

120,000

Resid

ents

Adjustment for data discontinuity* NHS residential settings Local authority staffed homes

Independent residential Independent nursing Shared Lives

DATA DISCON

TINU

ITY

No trend data on supported living

Occupancy rates (occupied divided by registered beds) UK younger adult specialist care homes

87% 85%

91% 91% 92% 90%94% 91% 91% 92% 91% 89% 89% 89% 87% 86% 88% 86% 86% 86% 85%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CQC inspection reports LaingBuisson surveys, UK


Council fees paid to independent sector homes for residential care of younger adults with learning disabilities, England


£0

£200

£400

£600

£800

£1,000

£1,200

£1,400

£ pe

r wee

k

Year ending March 31

Learning Disabilities Residential Mental Health Needs Residential Physical Disabilities Residential

High fee inflation in 2000s partly attributable to 'churn'

Future prospects for fees – no return to the high spending Blair / Brown era. Council paid fees will struggle to keep up with National Living Wage

Fees flatten with austerity from 2011/12

Learning Disabilities CAGR 2002/2011 7.7% pa



Profitability of adult specialist care homes, EBITDAR as % revenue


0%

5%

10%

15%

20%

25%

30%

35%

40%

Priory Specialist Division (y/e Dec) Voyage (y/e March) CareTech (y/e Nov)

Care Management Group (y/e Feb) Prime Life (y/e March) Regard (y/e March)

AGGREGATE

NHS FREE NURSING CARE


Revision of English NHS Free Nursing Care rate for 2019/20


£173.32

£165.56

£179.21

£3.91

£5.25

£1.40£7.76

£5.89

£155.00

£160.00

£165.00

£170.00

£175.00

£180.00

£185.00

LB calculation2018/19

DHSC agency cap DHSC 'efficiency'ask of 3.1%

DHSC inflationallowance of

0.85%

FNC for 2019/20 reverse DHSCadjustments

add 3.4% annualinflation

LB recalculation2019/20 with3.4% inflation

CARE HOMES FOR OLDER PEOPLE - LaingBuisson Events · Capacity change from openings & closures, UK care homes 65+ Social Care Conference #LBSocialCare. LaingBuisson-30,000-10,000.

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