Forget whether the care home is comfortable: is it going to survive?
The first things families consider when they start looking into potential residential homes for elderly relatives is whether the homes are comfortable. As important, are they overseen by warm, cheerful, trustworthy staff?
The financial state of the business is unlikely to be top of the agenda.
Even if it were a concern, it would be hard – given the complex corporate structures used by many care home operators – for anyone other than an experienced financial analyst to get a sharp picture of the operator’s security.
But it needs to be a consideration. The care crisis, as it’s most often reported, usually involves poor standards of care. What is less likely to make the main news pages is the chronic financial difficulties care homes face and their rapid rate of closure. It is inevitable that more homes will have to raise fees, more will close and more will go bust.
For residents and their families the consequences of these things reach far and wide: there is the potential problem of having to find extra money at some point in the future.
Worse, perhaps, there is the risk of having to move.
Since the financial crisis the number of care homes in Britain has fallen by around 2,000. If they are to survive, the biggest firms which run the care homes are saying they need to close more.
They face a wall of financial pressures including rising wage costs, increasing regulation and – for many providers the most crippling factor of all – costly debts.
The other growing financial nightmare is the fact that local authorities, where they are responsible for paying for residents, aren’t paying enough. The care homes then have to squeeze the shortfall out of the “self-funders” – those well-off and moderately welloff people who fail the care meanstest and have to foot their own bill.
But families won’t see these things when they come to visit a home along with a parent or other elderly relative who’s thinking of moving in (and likely surrendering a fortune to do so).
They will be looking at the size and cleanliness of the rooms, and the facilities, and activities; and they will spend time meeting some of the staff. Will this be a suitable place for a much-loved parent? This, after all, is where they might spend their last days. Or that is probably the hope. It may not be the reality.
The biggest operator of care homes in Britain, Four Seasons Health Care, has sold or closed more than 50 homes in the past two years. It makes a loss on its remaining 370 homes, and is likely to undergo a financial restructuring this year to help relieve the burden of more than £500m debt.
Its financial situation is stabilising, it says. Certainly, the firm has adequate cash at hand – over £50m according to results published late last year – but even so, its accounts do not make reassuring reading.
Ongoing problem: protesters lobby Parliament in 2001 about the need for sustainable care funding