Ever since the pandemic began, the nursing home sector seems to have been in the spotlight. The unfortunate events that resulted led to the publication of a number of reports on the sector such as the ‘COVID-19 Nursing Homes Expert Panel’ report. Last year, we also analysed a report by the Comptroller & Auditor General in mid-2020, on the operation of the Fair Deal Scheme and the resulting recommendations from it.
State review of nursing home care costs
However, the pandemic coincided with other reports that had already been commissioned including a public sector Value for Money report (the Report) undertaken between 2018 and 2021. The purpose of that report was to identify, quantify and analyse the reasons for any cost differential between private/voluntary nursing homes and public nursing homes. It was also tasked to make recommendations for improving the value for money obtained by the health sector.
The Report confirmed that funding was a key concern for the nursing home sector and noted that the cost of care in Ireland is rising. In light of Ireland’s ageing population, these findings are beyond dispute. However, the findings again re-iterate the need for all healthcare providers to have best practice credit management policies in place and to escalate unpaid debts to professional collection services providers when internal methods are not yielding results.
Recent developments effecting funding
The provision of care in nursing homes has undoubtedly been made more complex because of the pandemic, especially as infection prevention measures have brought greatly increased costs. Furthermore, new care home regulations that apply from January 2022, now require bedrooms to be of a minimum size. We have previously addressed these in some detail.
Views of Nursing Homes Ireland
Nursing Homes Ireland (NHI), the national body which represents the owners of private/voluntary nursing homes has been vocal in highlighting the increasing unsustainability of its members to provide nursing home care, in the absence of government intervention. NHI focused on both increased operational costs, referred to in the above reports, and also on the sector’s capability to retain and attract staff. The NHI has expressed its view that many smaller, rurally based nursing homes face inevitable closure as it will not be economically viable to run them.
Importance of well-drafted contracts for care
For the most part, the rights of the nursing home provider to collect fees due is provided for in the contract of care that it has with residents. In 2021, the Competition and Consumer Protection Commission (CCPC) updated its guidelines for contracts of care in nursing homes. In light of the CCPC’s decision to do so, we stressed the key issues that nursing home providers should be mindful of when putting in place or updating contracts of care so as to ensure collection of fees due.
While the views of the Irish health authorities and of NHI might strongly differ in terms of how the difficulties in the sector might be dealt with, there at least seems to be unanimous agreement that the nursing home sector in Ireland is facing major challenges in the years ahead.
These increased costs of nursing home care make it more crucial than ever that the providers have credit management policies in place, that prioritise collections from residents, or from their estate after the resident’s death, to underpin the funding of the enterprise.
If you would like to discuss incorporating demonstrated and effective credit management methods for your business, please contact a member of our Debt Recovery team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.