Shaping the Future of Irish Nursing Homes

It is expected that the Irish nursing home sector will face further change in 2025, driven by rising costs, market consolidation, and strengthened regulations. Despite these changes, reforms and economic tailwinds offer renewed optimism for the sector. Our Healthcare Sector team examines the key considerations for nursing home operators and providers to be cognisant of in the coming year.

While the seeds of change were sewn in the Irish nursing home sector in 2024, it is hoped that 2025 will see the most significant changes for the last number of years. In this article, we will reflect on the market shifts that came to define the sector in 2024. These trends have shaped key policy developments that now form the foundation of legislative reforms in the sector. However, these reforms also bring new responsibilities and obligations for providers.

Financial pressures

In recent years, the escalating cost of care for nursing homes was the dominant theme in the sector and several facilities closed. It has been reported that operational costs surged 36% since 2017. In addition, providers are now facing further financial pressure with the increase in the national minimum wage to €13.50 from 1 January 2025. Providers also need to contend with the new statutory sick pay entitlements. While Fair Deal rate increases offer some relief, many nursing homes continue to struggle with increased costs.

Enhanced and expanded regulation

As we discussed previously, the Government legislated actively throughout 2024. The Health Information and Quality Authority (HIQA) was expanded considerably with the introduction of the Health (Miscellaneous Provisions) (No. 2) Act 2024. Among other changes, this Act extended greater power to HIQA to inspect, gather and investigate information related to suspected breaches of the Health Act 2007 by providers. It also empowers HIQA to issue compliance notices to providers, directing them to cease breaches of the Health Act 2007 or face liability for a criminal offence. Towards the end of 2024, the Health Act 2007 (Care and Welfare of Residents in Designated Centres for Older People) Regulations 2013 were amended with the addition of further regulations. Among other things, these regulations copper-fastened fundamental rights of residents on issues such as visitation and the facilitation of communication with family members.

Looking to 2025, we can expect further shape to be put on the Department of Health’s Design Guide for Long-Term Residential Care Settings for Older People. As we discussed previously, the Design Guide is at draft stage pending further updates to reflect changes from the public consultation held last year. The Design Guide will provide HIQA with the ability to assess the development plans of new residential care settings or adaptations to existing ones. HIQA is permitted to insist on recommendations for interior design, bedroom layout, communal areas, infection control and staff areas.

Cost of compliance

The financial blow for providers of compliance with the reforms is partially cushioned by the development of some initiatives in the sector. For example, the Resident Safety Improvement Scheme allowed providers to apply for a state grant in 2024 of up to €25,000 for permitted works contributing to resident safety. Skills development across staffing was identified by the Department of Health with the provision of new funding for a post-graduate course specific to nursing home care. Additionally, the Minister for Health announced in the 2025 Budget €1.223 billion to support the Fair Deal Scheme, an increase of 5.3% as compared to 2024. A further €10 million was provided to support compliance with certain Regulations.

Industry groups such as Nursing Homes Ireland (NHI) engaged heavily with the Irish Government to address the deficiencies in the Fair Deal Scheme. The “It’s Not Fair – Save our Nursing Homes” campaign further increased the pressure on the Government to assess whether the scheme, introduced in 2009, is still fit for purpose. While it is reported that there has been a 6.6% increase in the national average Fair Deal rate in 2024, up 1.1% on 2023, there is a still a lot of work to do to address the deficiencies in the scheme. The pricing model has not kept pace with rising operational costs. We await further developments in this regard.

Comment

2024 was no doubt a challenging year for the nursing home sector in Ireland due to several notable trends. Systemic issues, such as deficiencies in the Fair Deal Scheme, continue to hamper the sector. However, challenges like operating costs, local authority rates, and staff shortages are less entrenched and can be addressed through effective collaboration between the Government and the sector. The Government demonstrated an appetite last year to push through regulatory and legislative change and it is hoped that this trend will continue in 2025. Reform and financial support, combined with an improving economic outlook driven by falling interest rates and inflation, are fuelling renewed confidence in the sector’s rebound in 2025. While consolidation stabilised in 2024, optimism is building for the year ahead, as growth is expected to be driven by increased investment, further consolidation, and the entry of new providers.

For more information and expert advice on navigating expanded compliance obligation in this sector, contact a member of our Healthcare Sector team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.