merrion street

I would like to thank the Ceann Comhairle for allowing me the opportunity to address the House on the Nursing Homes Support Scheme. I am very aware of the anxiety and worry that has been caused to older people and their families because of the uncertainty in relation to this Scheme.

As the House is aware, while the Fair Deal Scheme has been accepting applications over the last few weeks, the approval system has been waiting for clarity on the financial situation. I am pleased to announce that the Fair Deal system will immediately begin to process approvals from Monday. The HSE will start by giving approval to those applications processed to final stage over the last few weeks in the chronological order received. 

As of mid-May there were 22,277 people in receipt of State support through the Nursing Homes Support Scheme, versus 21,421 at the end of 2010. My Department has estimated that the total number of people covered by the Scheme by year end should be almost 24,000, i.e., a net increase of 1,700 compared to mid-May. This increase will be financed out of a range of savings which have been identified.   

Before going into further details, I would like to give a little background on the Scheme.

The Nursing Homes Support Scheme is a system of financial support for individuals in public, voluntary and approved private nursing homes. The Scheme is available to anyone assessed as needing long-term nursing home care, including dementia-specific nursing home care. 

The legislation underpinning the scheme enshrines the principles of a resource cap, patient choice and funding following the patient. In 2010 the total Long Term Residential Care budget was €979 million. The budget for Long-term Residential Care in 2011 is €1.011 billion. This budget covers residents who are availing of the Fair Deal scheme, as well as residents covered by various transitional arrangements. 

The House will know that in May of this year I became aware of a potentially serious shortfall in the 2011 budget for the Nursing Homes Support Scheme.  There appeared to be a number of issues:

First, it is clear that the last Government grossly under-provided for the scheme from a budgetary perspective;

Second, it seemed that a series of factors, including greater than expected demand, were creating significant financial difficulties for the Scheme.

Third, preliminary indications also suggested that ancillary services, such as physiotherapy, Ocupational and Speech and Language Therapy, and Drugs, which were not intended to be included under the umbrella of the Fair Deal, were in fact being funded by the Fair Deal subhead or pot of money. While it is absolutely clear that these services were being provided to residents in nursing homes, this practice had nonetheless also contributed to the emerging deficit in the Fair Deal Scheme.

In response to this new information, I asked for a full examination of the funding situation by my officials and the HSE.  I received the Report on this examination last Friday.

Before I go into some of the details of the Report I would like to make it clear that the Report’s conclusions and forecast are not as definitive as I would have wished. A lack of reliable historical data, combined with a multiplicity of different accounting systems, has made it very difficult to drill down into the Scheme in the way I would want. Nevertheless, the Examination did provide enough data for the Report to reach a number of conclusions.

The Report makes it clear that a number of factors are putting pressure on the overall Fair Deal budget for 2011.  Among others these include:

• An increase in nursing home costs; and
• An unexpected and so far unexplained increase in the average length of stay for nursing home patients. It was 2.5 years in 2009 and has now risen to 4 years, resulting in higher net demand for nursing home places;

As a result of these and other factors, the Report indicated that the Nursing Home Support Scheme was likely to face a deficit of €36 million this year, even if there were no net additions to the Scheme for the rest of the year.

It is also clear that payments from the Fair Deal subhead have been used to cover ancillary services such as therapies, drugs and medical services. It was initially estimated that the total cost of these ancillary services was around €100 million. However, further examination by the HSE has indicated that only €48 million of ancillary costs were billed to the Fair Deal subhead or pot.

In order to seek to deliver the 1,700 net increase in residents under the Scheme for the rest of this year, other savings and income will be used to support the Scheme.  Expected savings of up to €30m will be made in non-service related spending.  Long stay in-patient charges, which have not changed since 2008, and should be increased annually, will also be increased so as to realise additional income of some €12m in a full year.  Despite the current economic climate private nursing homes received price increases over the last 9 months.  The annual cost of these increases is of the order of €20m. These increases are not sustainable in the current financial situation.  I have instructed the National Treatment Purchase Fund (NTPF) to renegotiate the price increases for private nursing home beds, which were negotiated by the private nursing homes last year, with a view to producing further savings.  

I must emphasise that these savings have been identified as part of a wider review of the health system’s financial position. As Deputies will be aware, there have been significant over-runs in the overall health budget so far this year. I hope to announce shortly details of the proposed actions that will be taken to address this wider financial deficit and to support the HSE in its responsibility to operate within this year’s financial provision.

I have already indicated that the examination to date has not been as definitive or as comprehensive as I, and I am sure this House, would wish.

In the short term, I have asked the HSE to put in place additional and more rigorous governance and reporting measures. My own Officials will monitor closely developments over the remainder of the year.  I will also consider whether external auditors should be used to help bring greater clarity to the situation in the future.  

I am also anxious to identify the reason behind the unforeseen increase in applications, the increase in the average length of stay in nursing homes, and some of the unexpected monthly variations in approvals under the Scheme.  I am requesting the HSE to undertake a clinical audit on the appropriateness of care and admission. 

Over the longer term I am determined that there should be a full review of the Fair Deal scheme, as outlined in the Programme for Government. This review will look at the ongoing sustainability of the Scheme, the relative costs of public versus private provision and the balance of funding between residential and community care.

It is my view that we must assist as many older people as possible to stay in their home and communities for as long as possible. Over 95% of Older People do stay at home and remain there. This is only right and proper. No matter how kind and effective an institution is, people almost always prefer the familiarity and independence of their home.  

However, it is also vital that the small minority who do end up in long term residential care are able to live in a surrounding that is as comfortable and free from worry as possible. I am acutely aware of the need to plan for an ageing population. This is more than a financial challenge. It is a challenge to us as a society, to treat our older people with the care and dignity that they so richly deserve. Our goal must be nothing less than to deliver a comprehensive, person-centred service that promotes health, well-being and quality of life.