Domiciliary care funding – and how it directly impacts on hospital bed occupancy


Posted on 13 February 2015 (Permalink)

I finished my last blog with the phrase “it’s a lot more complicated …”, so I thought I had better give some examples of what I meant. Last time I focused on the size and scale of the social care workforce and organisations. In this article, I will try to highlight how domiciliary social care is funded and how this is directly impacting on hospital bed occupancy.

As a society, we have decided that healthcare should be “free at the point of need”.

However, as a society we have not done the same with social care, though collectively we frequently don’t realise this. This is understandable; as recently as twenty years ago, only 5% of publicly funded social care was delivered by private providers, now this is almost 90%.

A common misconception is that though the provision of care is a private business, it is commissioned and paid for by local authorities.

The majority of care hours are commissioned by local government social services departments, but the amount of hours that are actually paid for by those authorities is rapidly decreasing. Self- funding now accounts for at least half of all care payments.

One of the reasons for this is means testing. Should a person be assessed as having an income, or could have an income if their benefits and investments were maximised, of more than approximately £23500 a year,  then they will have to fund the whole cost of their care. Should the income fall roughly between £23500 and £14250, there is a sliding scale of contribution. Only when a person’s income is assessed as being less than £14250 will the state pick up the whole bill.

Social services budgets have suffered large reductions over recent years, with the Association of Directors of Adult Social Services saying that, in real terms, the funding has been reduced by almost 30% since 2010. This has led to much stricter definitions of what care can be provided even to those who qualify for state support.

There has long been general agreement about the broad definition of care needs. Social workers will assess a person as having “low, moderate, substantial, or critical” needs. However, in these times of austerity there are not many local authorities who can afford to support clients assessed with anything less than substantial needs. This may provide a clue as to why some elderly patients are stuck in hospital beds long after they are assessed as medically fit for discharge.

They are well enough to leave hospital, but too frail to be alone, yet not ill enough to receive support to pay for the care that they need to go home.

The situation is further exacerbated by the way that care is commissioned by social services departments. A local authority will often have a panel of “preferred providers”, which can be a mere handful of the number of providers that actually exist in the area. However, these providers are the ones who won the open tendering process and social workers are often restricted to using only those companies. Their prices are agreed and fixed for the term of the contract, and naturally the local authority looks for those who can offer the best value for money. Unfortunately, in practice no matter how the thing is spun, this is usually the companies who offer the lowest price.

Over recent years, as  contracts have come up for renewal, local authorities have often reduced the amount they are prepared to pay by as much as 10%, leading to local rates as low as £12 an hour, or even less in many parts of the country. The UK Home Care Association has produced a model which shows that the MINIMUM price that a provider can safely deliver care for is £15.74 an hour.

Around 70% of care calls commissioned by local government are for 30 minutes or less, making the hourly rate basically meaningless. Typically a 15 minute call will cost in the region of £7. Therefore, a client who has four 15 minute calls in a day will cost the local authority £28. Yet a chronological hour of care will almost always cost significantly less than this and, I would argue, will deliver a more meaningful service to the client.

Due to this situation many companies, including my own employer, simply do not enter into contract negotiations with local government at all. Increasingly, providers rely on individually contracted private clients preferring to rely on quality rather than volume to build their businesses.

This means that locally there will almost inevitably be the capacity to provide care which would remove a patient from hospital, but social workers are unable to access it due to the financial and contractual restrictions they have to work within.

There is also reluctance within the public sector to refer to what are considered to be “private providers” who are not on “The List”; leading to the absurd, but all too  frequent, situation of elderly patients with the means and desire to pay for care themselves being left in hospital beds for extended periods because no one will tell them about what is actually available due, in my opinion, to misguided points of principle or simple ignorance.

Here is an example where integration can work. More knowledge, and imagination, not more money, can significantly reduce the number of elderly “bed blockers”, but the discharge process will have to change to positively engage with ALL the local providers.

We can help to reduce the pressure you are under, but you will have to talk to us to do it.

Nick Smith

Nick Smith is National Training Manager at Home Instead Senior Care