Increasing reliance on 'profit-driven' nursing home operators could lead to rural shortage

The Irish nursing home sector is increasingly reliant on a small number of profit-driven international operators, according to a new report carried out by the Economic and Social Research Institute (ERSI).

This reliance on private operators who are more likely to open nursing homes in more densely populated, "high demand" areas could lead to a shortage of rural nursing home beds.

The report, which examines developments in the nursing home sector since the pandemic, shows that 38% of nursing home beds are now operated by 15 private operators, 14 of which are funded by private equity firms.

These larger operators have moved from "passive price acceptors to strong negotiators, potentially driving up prices", and now "dominate" the supply of long-term residential care (LTRC) beds.

The ERSI report has called for more stringent oversight on private equity ownership of nursing homes, and warned that it could bring about "regional inequalities".

It noted that there were 336 nursing home beds available in Ireland following the pandemic, down to 31,728 beds in December 2022, from 32,064 in February 2020.

The majority of these beds were lost in rural areas, while Dublin and satellite counties saw an increase in bed numbers.

The decline was "partly due to the closure of smaller private LTRC homes in rural areas" and "the closure of 693 beds" in public care homes.

However Dublin, Kildare, Louth, Meath and Waterford saw bed numbers increase "driven by the opening of large (>150 beds) LTRC homes by private equity funded owners and operators".

"Driven by profit motives, private providers are likely to establish homes in high-demand areas and where NHSS (Nursing Home Support Scheme) payments are highest, thereby exacerbating existing inequalities in LTRC supply," the report said.

The report indicates that "regional inequalities are likely to increase further", and that by the end of 2024 "private equity funded owners and operators are set to open several other large facilities", all in counties that already boast a relatively high supply.

Despite a proposed shift by the 2021-2030 National Development plan from a 20:80 public-private split in the LTRC provision, "the dominance of private provision has increased to 83%".

"530 beds that will be built will help increase public supply" and planned community nursing units will "fail to turn the tide from private provision", according to the report.

Minister for Mental Health and Older People Mary Butler has welcomed the report, and a spokesperson for the minister said that "the Government is committed to seeing greater public sector involvement in the residential care of older people in Ireland and to move over time towards a needs-based model of funding and pricing for the nursing home sector."