Urging action over care homes funding “crisis”

Medical group Bupa has called for urgent action to address the “chronic underfunding” of the UK care homes system.

As part of this warning they pointed to the possibility of the NHS blocking beds unless the fees paid to care home operators was increased.

It is a significant move for Bupa to call for “fairer fees” for care home operators. This follows the recent high profile failure of care home operator Southern Cross Group.

Around 70% of the residents in Bupa care homes are currently funded by local authorities.

Across England as a whole, local authorities now pay for over half of the 390,000 care home residents.

Care home operators are coming under increasing financial pressure due to the gap between price inflation and inflation of the fees paid by local authorities.

Bupa reported that the average increase in fees paid by local authorities was 0.3% in 2011/12. This compares to price inflation which is currently at 4.2% as measured by the Consumer Prices Index.

Price inflation within care homes is often much higher than increases to consumer or retail prices. The typical costs associated with running care homes tend to increase faster than the average inflation figure.

Bupa forecasts a possible care home shortfall of 100,000 beds within ten years unless more is done to increase investment in the sector.

Despite the recent Dilnot proposals, we feel it is unlikely that local authorities will be able to find the level of additional funding Bupa suggests is necessary given the current state of the economy and public finances.

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