Thursday, 28 November 2024: Over half of Irish nursing homes did not report a profit in 2023, with the sector now under immense strain, Managing Partner of BDO Brian McEnery stated today as the firm launched its 2023/2024 BDO Ireland/Nursing Homes Ireland report.
Delivered by BDO in partnership with Nursing Homes Ireland, the report shows rates under the Fair Deal programme – the HSE run scheme that provides financial support to help pay for the cost of care in nursing homes – lag behind the cost of care.
The report, which is based on 2023 financial data and is the first produced in two years, states that while there was a 1.6% increase in total registered beds, with public, private, and voluntary sectors contributing to a total of 32,239 beds, financial pressures are threatening the sustainability of many Homes, particularly smaller ones and in more rural areas.
The report also found there is a c.€640 per bed disparity between the average public rate and private rate across the country, as of November 2024. Taking the average sized (60-bed) home, this suggests a public home receives on average c. €2,000,000 in additional revenues via the Nursing Home Support Scheme above that received by private / voluntary operators.
Across all of the public, private and voluntary sector in Ireland, there was a net reduction of 17 Homes since the last BDO/Nursing Homes Ireland survey released in 2022, with 34 Home closures and 17 new Homes. This comprised a net reduction of two Homes in the public sector but a net reduction of 15 Homes (30 closures and 15 openings) in the private and voluntary sectors.
The worst hit region for closures across all sectors was the West (Galway/Mayo/Roscommon), where eight nursing homes closed compared to just one opening. This amounts to a 6% reduction in beds compared to a 12% increase in the North-East. None of the regions reported a net increase in Homes over the period. This will impact care provision and choice for residents and their families and will result in residents having no option but to live in homes far from their families, friends and local communities.
The average number of beds in the 30 Homes that closed in the private and voluntary sector was 36, compared with the 99-bed average of new Homes. This resulted in an overall capacity increase of 599 beds, from 26,561 to 27,160.
The report reveals that the country’s average Fair Deal rate as of November 2024 was €1,207 — a 14.2% increase since May 2022. Fair Deal funding accounted for 69% of nursing home income, with the remainder coming from private payers and other sources such as contract and complex care.
However, rates varied significantly across counties, with Dublin recording the highest at €1,335 and Donegal the lowest at €1,125. The disparity here across an average size nursing home of 60 beds amounts sees Dublin nursing homes receive €655,000 per annum more than their Donegal equivalent. Westmeath saw the steepest rise in Fair Deal rates since the last report, up 18.1%, while Dublin experienced the smallest increase at 8.1%.
Despite these increases, Fair Deal rates still fail to align with the actual cost of care. For example, minimum wage rates alone increased by 21% over the same review period.
The report also finds, through analysis by Building Information Ireland that construction activity in the nursing home sector has slowed significantly since the previous survey. While 2024 shows some improvement in applications and commencements compared to 2023, approvals for projects have declined by 31%. Some of this activity relates to extensions and alterations in addition to new builds, further highlighting the sector’s struggle to expand capacity. The need for growth in the number of nursing homes is reflected by the anticipated 43% increase in the number of people aged over 65 by 2036.
The survey also revealed that staff costs per registered bed accounted for 59.1% of turnover, a slight decrease from the previous survey, however noting that agency costs (not included in staff costs) have risen significantly in the same period. The average occupancy rate in 2023 was 92.3%, reflecting a recovery from the COVID-19 pandemic and an increase of 2.5 percentage points since the 2020/2021 survey which is noteworthy considering that bed capacity has also increased.
The survey also highlighted that 82% of residents were over the age of 76, with the majority falling within the 76-85 (37.4%) and 86-90 (24.3%) age brackets.
