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LAST UPDATE | 9 Jan 2024
CLOSURES, FUNDING DIFFERENCES and majority for-profit ownership are just some of the many challenges faced by the nursing home sector, the Economic and Social Research Institute (ESRI) has identified.
The ESRI also found that the majority of the sector is now controlled by private, for-profit, large nursing home operators.
Despite controlling the majority of the market, patients in the private the sector receive 55% less funding under the State’s subsidy scheme, compared to patients in the public sector.
The findings were contained in a study named ‘Changes and challenges facing the Irish long-term residential care sector since Covid-19′.
It found that since the Covid-19 pandemic, one in five small, private nursing homes – homes with less than 30 beds – have closed for good, the majority of those in the rural areas. A total of 700 beds have been closed in the public sector.
While the pandemic did act as a catalyst for many of these closures, the ESRI’s data found that a nursing home having a Covid-19 outbreak was not associated with its closure.
The study said: “In most cases the point estimate was negative, and results show that having an outbreak in Wave 3 (between November 2020 and March 2021) may have actually reduced the probability of closure.
“However, this is likely due to a small number of [long-term nursing] homes having effectively closed by November 2020, when Wave 3 began.
It added: “While we do not place any causal inference on these results, they do suggest that having a covid-19 outbreak may not have been a key factor underpinning a [long-term nursing] home’s decision to cease operating.”
Last month, HIQA revealed that fifty nursing homes had closed between 2019 and 2022 – with “burnout” and “financial viability” being cited among the reasons for this.
It’s report also found that these closures were predominantly impacting local areas.
Tadhg Daly, CEO of Nursing Homes Ireland (NHI), said the report showed that the whole nursing home sector was vulnerable.
“Entire models of care are being wiped out and the entire sector is under threat by a failure of the State to recognise the disparities in funding and by failing to provide for rampant inflation in costs,” he sad.
He said that nursing homes representative group have welcomed the report.
He also stressed that the issue cannot be ignored by the Department of Health, adding that the report’s findings validate NHI’s calls for better measures to protect sustainability of the sector.
“This crisis cannot continue without serious consequences for the State and for care of the older person,” he said.
Despite controlling the majority of the market, patients in this portion of the sector receive 55% less funds under the state’s Fair Deal scheme compared to patients in the public sector.
Daly defended the recent increase in investment into the Irish nursing homes sector by suggesting that since the sector is independently regulated by HIQA, all standards and quality of care are the same, irrespective of owners.
The institute’s data reflects that 74% of all beds nationwide are within the private sector. Remarkably, it found that 14 operators control 40% of all beds in Irish nursing homes.
Commenting this morning, People Before Profit TD Mick Barry has said the data should “act as a warning” to government on the dangers of a for-profit care model.
Barry said that nursing homes should be run “in the best interests of those who need them – not in the best interest of a smaller and smaller number of big companies”.
Barry added: “The privatisation of the sector overseen by Fianna Fáil and Fine Gael needs to be put sharply into reverse. Those who advocate for a publicly owned not for profit nursing home sector will be strongly boosted by the release of this new report.”
The Fair Deal scheme pays the balance of the the total cost of nursing home care – residents contribute 80% of their income and 7.5% of their assets towards the cost of care, while the government covers the remaining expenses.
The ESRI has found however that inflation has now outpaced the scheme.
This was raised last year, by private, long-term nursing home Beaumont Residential Care in co Cork, after the management pulled out of the funding scheme in May.
This led to the families protesting outside the Dáil in June, pleading with the government Ministers in Cork to intervene with negotiations between the nursing home – one of 14 operated by CareChoice in turn owned by French investment fund InfraVia Capital Partners – and the HSE.
Minister of State for older people Mary Butler had previously told campaigners that there was no possibility that the state could assist them in their call for increased National Treatment Purchase Fund (NTPF) rates for Fair Deal residents in private nursing homes.
However, the ERSI highlights that the NTPF is also not in the position to negotiate the price of the Fair Deal plan a resident will be on.
The institute found that although a care needs assessment is carried out by a health professional for Fair Deal applicants, the current funding system does not consider the level of dependency of residents.
The assessment only determines whether an individual is eligible (or not) for the scheme.
Today’s report said: “This lack of resident-centred funding may result in inadequate funding for residents with high levels of dependency.”
It added: “This separation between residents’ care needs and financing provided to [long-term nursing] homes is a problematic feature of the current funding system.”
The ESRI said there was “little evidence” found that the Temporary Assistance Payment Scheme (TAPS) for Nursing Homes – a fund set up for private and public homes to purchase essential supplies during the Covid-19 pandemic – assisted in any way with preventing the spread of the virus.
Despite this, the private sector alone was provided with €132 million through the scheme with cleaning, infection control and staffing costs making up the majority of TAPS expenditures.
Daly said that while there has been significant consolidation and investment into the sector, “this has all but ceased given the dramatic increase in operating costs and failure to address the funding crisis”.
Author of the report Dr Brendan Walsh said the pandemic saw large changes in supply, ownership, and financing in the long-term residential nursing home sector.
The sector now “faces a number of challenges as it emerges from the pandemic”, according to Walsh.
“We now have a [long-term nursing home] system increasingly reliant on a small number of profit-driven operators,” he said.
Sinn Féin TD and party spokesperson for health David Cullinane has said the current government has “dragged its feet” when it comes to the provision of beds in the public sector.
Cullinane claimed that the government has no joint-up plan for care for older people.
He said: “This is being taken advantage of by a private market which is becoming dominated by a small number of providers, which are replacing traditional not-for-profit, public, and local private providers at a rapid pace.”
Walsh said: “Policies that harmonise financial incentives for nursing home providers with the primary objective of fulfilling residents’ health and social care demands within a more integrated care environment are required.”
NHI CEO Tadhg Daly echoed these calls, adding that establishing a sustainable long-term care system for older people “remains the priority of the NHI”.
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Those who do not learn from history, are doomed to repeat it!
@Brian Hunt: wasn’t it banks throwing loans at buyers that caused the problem, not developers?
@brian o’leary: let us not forget the so called golden circle who all got off without even a slap on the wrist
@BL Music: let’s not forget what caused the problem, banks giving mortgages to people with no deposit and average jobs.
@brian o’leary: So property crash nothing to do with the developers?
@brian o’leary: Where did the houses they bought come from ? Developers solicitors builders were all in the property game… Developmemt land prices were driven out of all proportion as the competition fuelled by easy bank finance was rampant… coupled with low ECB rates and slack lending to spread the debt burden
@brian o’leary: and wasn’t it the central bank who had the oversight of the banking sector and proved themselves spectacularly incompetent at that job.
@Brian Hunt: very little, banks all around the world and loose regulations in respect to mortgages.
@brian o’leary: In short.. No it wasn’t. Banks and developers worked in tandem to drive the ever increasing and over inflated housing market in this country. Considering the banks were left holding 70bn in developers loans when the siht hit the fan, I’m not sure why you even need to ask this question. Perhaps it was before your time.
@brian o’leary: Bring back the Galway tent
@brian o’leary: banks lending to developers and skullduggery between bank managers who were left with big pensions and not a criminal charge between them
@Brian Hunt: Not a lot, other than them selling houses to people who would have struggled to repay mortgages if their circumstances changed or interest rates rose even marginally. They were selling a product, simple as that. Banks and financially clueless consumers were mostly to blame.
@Tommy Roche: lots of people profited from our credit fueled economic facade of which developers were the poster boys. The ultimate responsibility lies with management, the regulator, the politicians and the people who voted them in, although the opposition weren’t suggesting anything that could have protected us from the international downturn. While I’m sure there was incompetence and corruption, after decades of economic stagnation, there was inexperience at managing a strong/ overheating economy.
@David Murray: we all partied david:)
What possibly could go wrong here with a delusional Taoiseach in charge that said we aren’t heading for a bailout 17 years ago. Wait for it, I suppose we’ll hear next that the Galway tent is back up wining and dining developers and senior bankers.
@Tommy: Said we weren’t heading for a bail out then, and recently said, in actual fact, there was no bailout.
@Tommy: Every race meeting has catering tents. Start building houses and house families and you’re a decent person.
Here’s something interesting I spotted. A massive increase in commencements last year, in 2024, an increase of 110.5% compared to the previous year:
https://i.imgur.com/ecvnQrM.jpeg
However, this is not going to translate into new houses in the near term. It’s not positive news.
This surge in the number of submitted commencements is due to builders exploiting the Development Levy Waiver and Connection Charge Refund
As for the Development Levy Waiver, the exact amount saved varies by local authority and the nature of the development, but e.g. in County Louth, the development levy is €11,600 per unit. As for the Water Connection Charge Refund, the standard connection charges are €2,272 for a water connection and €3,929 for a wastewater connection, totalling €6,201 per unit.
Builders are claiming these refunds by submitting excess commencement notices.
They received hundreds of millions of Euros last year. Yes, they will eventually have to pay back the money for houses that are not built, for example they might submit 200 commencements but build 100. They will have to pay back the difference eventually, in 4 or 5 or 6 years time. This is effectively a 0% interest loan that has to be paid back, that does not incentive building houses, but may delay building.
@David Jordan: After I spotted the massive increase in commencement notices, which I was initially excited about, “yay more houses at last”, someone burst my bubble by showing me this:
someone sent me this kink: https://www.irishtimes.com/ireland/housing-planning/2025/02/21/doubt-cast-over-accuracy-of-commencement-notices-as-guide-to-housing-delivery-says-department-of-finance/
@David Jordan: Who would have thought it, jiggery pokery from property developers, and loop-holes supplied by the authorities?
Shows you the arrogance these school teachers , solicitors college graduates have for us
When it all goes tits up , they have no worries ,as their salaries & pensions are always insulated
@Chris: Oh, but this is where you’re wrong. I would recommend to read up on the EU’s plans to requisite private savings and “turn them into investments” – UvdL’s words, not mine.
Just for fun, do a search on SUI on the EU website.
FFG governments have lobbied for developers . Remember the corruption of the so called Golden Circle . They even set up NAMA to park the dodgy loans .. some of these loans were of the €3 billion mark
We do not want a government in bed with developers.. and that is what is been proposed by the government
Fairplay to this bluffer……. he makes Darragh O Brien look competent
@Mary Linton: He makes Darragh O’Brien look intellectual!
Boooommmm! Crash! Have we learnt anything.Once again developers been looked after
@Dave Barrett: booms are caused by credit become to easy for buyers to get, no developers.
@brian o’leary: see above you’re incorrect
@brian o’leary: not correct, about 20% of Nama loans were mortgages, the rest were commercial property, in shopping centers, hotels, etc. More than 50% of Nama were not loans in Ireland at all.
Ban Ire REIT and all the other vultures.
Brace for Impact.
From the mixed messaging I deduce that there is a hidden agenda!
@Padraig O’Brien: which bit are your struggling to understand?
They also need to stop the banks discriminating against self employed people who’s income is ignored by banks when going for mortgages.
@Tony: absolutely. It’s such a backward policy.
True. Another housing boom and surplus housing estates would make it even harder for the leftists to get votes.
More money out that won’t be paid back but to bankruptcy…..
Why won’t the government just repeal rent control laws and abolish single-use zoning? That would solve the housing supply problem almost overnight! Instead they are rehashing old policy positions from the early 2000s that will overheat the market once again. Is the next step a return to the infamous “no-doc” or “liar loans,” where people didn’t even need to prove their income to get a mortgage? We don’t need the government pressuring or incentivising banks to expand lending. Are we also going to see the government to push banks to start offering subprime mortgages again? I’m starting to think that this government doesn’t actually realise that it was the same policies that they are starting to push now that caused the Celtic Tiger property bubble to grow and then eventually burst.
@William Jennings: I know a couple of guys that got 500k loans while on the dole.
@William Jennings: it’s simple. They don’t want to solve the housing crisis.
Rent pressure zones were introduced on account of the housing crisis- so abolishing them is hardly going to solve the crisis overnight.
Already, there are too many investment purchasers completing with private buyers in the second-hand housing market
@brian o’leary: It seems like the property bubble is going to start inflating again. I can’t believe that banks here in Ireland would be this stupid. Did they learn nothing from 2008? I suppose since the government is encouraging this by propping up subprime mortgages with their “Help to Buy” scheme, they have no real but to accept all these people who have no hope of ever paying back their mortgage like the couple you mentioned.
@brian o’leary: you win “lie of the week”
@brian o’leary: sure you do
@Thomas Sheridan: Actually the evidence is in, rent control causes the supply of housing to be choked and the reason we have a housing crisis in this country can be largely attributed to the strict rent control that we have in place. Argentina recently abolished rent control and their housing supply increased by nearly 50%. Profits are what encourage construction companies to build. When profits are high, other construction companies enter the market as well. This creates competition and that’s what creates more housing and lower rents. With rent control in place, landlords can’t charge enough to break even so they either flee the market or allow their properties to go into disrepair because they don’t have the incentive to pay for upkeep because their profits are artificially capped.
@William Jennings: landlords are benefitting from huge rents here, higher than they have ever been in the states history, allowing them charge more won’t increase house supply, it will simply mean there are less houses to buy for owner occupiers. Any landlord who is not able to viably make a descent return in the current market is over borrowed. Rents in Stockholm are 30% cheaper than Dublin despite property being much more expensive to buy in Stockholm. Landlords are not leaving the market in droves as was claimed last year and landlords not only have massive rents but huge property price inflation, huge win win. The only landlords who may be struggling are those who want to put very little into initial purchase and expect their rental income to cover the mortgage plus give them an income and enable them to get out and sell the property in 20 years making them a millionaire.
Think it was in the 90,s when most governments were demolishing aparment blocks as they led to negative societal outcomes for residents of the areas. Most said never again and here we are lessons not learned.
Sure lets ask Bam to build a few social housing estates on government land, couldnt see an issue with this either
have your say