Across the UK, there are weekly news reports of residents and their families campaigning to fight care home closures. But why is it happening so often? The usual reasons cited include falling demand (which is debatable, given an ageing population), increases in utility costs, failing to meet industry standards, or the simple fact that the books don’t add up.
In fact, according to recent reports, it is estimated that one in three care homes is in danger of collapse because of dangerously high borrowing levels. This causes alarm bells to ring, and raises fears of another Southern Cross disaster, which affected 30,000 residents back in 2011.
The consequences of such closures can be distressing. Residents may be moved away from friends they’ve made in the home, as well as family members nearby. In the worst cases, there have been claims that the upheaval has led to fatal outcomes. And of course, it is just as bad for the families.
So is there a foolproof method of spotting care homes that are at financial risk? Unfortunately not. But there are simple measures you can take to minimise the tangled situation whereby your loved one is in a home on a downward spiral.
Check company finances
With the average lifetime costs of a care home placement starting at around £80,000, it is imperative to check the financial health of the company in which you and/or yours are planning to invest such large sums of money.
The financial accounts for all care homes can be obtained from Companies House. The basic information is free, and there is a minimal charge for more in-depth data. If, however, finance isn’t your strong point, be sure to delegate the task to a more capable friend or relative.
Research the rate
Although the rates may seem exorbitant, they are dictated by a highly competitive market. Still, it is so important to know whether the fee quoted is value for money. Most people don’t know where to start with this; after all, how do you know what you should be paying?
The Valuing Care Fees Calculator helps here: it’s quick and free of charge, and provides an indication of whether the rate quoted exceeds, is acceptable, or falls below the average rate for the local area.
But beware! Sometimes, if the rate seems very low for the level of care and location, it may mean the financial management of the home is inadequate.
Scrutinise staff statistics
Staff costs are one of the biggest elements of a care home’s costs, so establishing information on the number of employees, turnover levels, training and staff-to-resident ratios is important. As a guide, efficient residential care homes usually have staff-to-resident ratios of 1:8 in the day, with a slightly lower ratio at night.
But remember, too many staff lead to unnecessary additional costs, and under-staffing may mean that industry care standards are not met. Optimum staffing levels are generally an indication of an efficiently run home.
Review resident numbers
The monthly costs of running a care home will remain much the same, whether they are full or not. A home with low occupancy levels may be cause for concern as it may not be bringing in enough money to keep the business afloat.
In such cases, try to discover the reasons behind the situation. Are the fees too high? Is local competition too stiff? Does it have a reputation?
The reasons could be more innocent. It might be newly-opened, for instance. The best way to approach this is to ask the care home manager face-to-face or in writing.
Study the standards
The Care Quality Commission (CQC) publishes independent reports on more than 18,000 care homes across the UK. Every year it checks that essential standards of quality and safety are met and this information is available on CQC.
If any quality issues are identified, it is worth trying to look into these in more detail because ultimately, if the home fails to address problems within a certain time frame, it may face closure.
Vet the visuals
While some care homes may be incredibly modern and luxurious, others look tired, dated and unattractive by comparison. It’s worth asking why. Is it because the home lacks the funds to undertake general DIY? Or simply because the manager doesn’t place aesthetics high on the priority list?
The key here is to identify whether a refresh would just make the home more attractive, or whether general maintenance is being overlooked, which could imply financial troubles. And once you’re satisfied, it’s time to cut a deal…