Care home fees. Why does it cost £1000+ per week?

[flashbac]

Why does it cost so much and how much money is being made?

A big standard hospital bed is around £400 per day, an ITU bed around £1400 per day. Lots of things can add to his.

Specialist care homes can be £4000 per week.

Staff, equipment, food, utilities, etc, the running costs are huge.

Some specialists beds/mattresses can cost over 10k.

My grandmother’s is around £2,000 a week, and they put it up every year in excess of inflation and with very flimsy reasoning. I think they’re taking advantage of the fact she would find it distressing to be moved now she’s settled.

I thought it was like many children nurseries - many don't make huge profits and just get by as there are huge staffing costs involved despite most workers being on min wage or just above - just there are many more hours of work needed in carehome plus training, equipment and premises costs, food all need to be added on.

@blueberryporridge

I would like to know the average gross profit margin in a private care home. A few years ago I heard that it was about 35%. 35% of £1200 is quite a lot.

Judging by the number of care homes that go bust I'm not sure it's anything like that high.

But to answer the question:

• rising standards meant that lots of older buildings became unsuitable so most care homes have to be purpose built

-high staff costs for 24/hr care, plus often some level of medical cover -high utility costs

• and yes huge cross subsidisation of local authority clients by paying clients

£1,000 is not even that expensive. When I was looking for my dad the homes that I'd consider putting him in (ie that were 1 step above absolutely grim ) started at £1,300

My dads one wasn't too bad. He paid for it all , they genuinely did their best by him. I couldn't care for a dementia patient as they did with my dad for 15 months.
My mil was in a different place for a very short time and it was awful ( she didn't have to pay for it though ) she ended up in hospital and died shortly afterwards.
Both were around 1 k a week.
The costs are only going to go up and up : I am genuinely dreading getting old as I can't see how any of this will be sustainable plus people do live longer.
Years ago children cared for their elderly or had them live with them. I honestly believe we may go back to those days one day. Not that I think this is a good idea at all , as I couldn't have cared for my own dad in my own tiny home.
I'm not sure what the answers are though :(

@blueberryporridge

I would like to know the average gross profit margin in a private care home. A few years ago I heard that it was about 35%. 35% of £1200 is quite a lot.

www.hallidays.co.uk/views-and-insight/sector-report/care-home-industry

A profitability analysis on the sector from a pool of 1,500 leading UK-based Care Home companies revealed the following points:
The most profitable 668 companies made an average profit margin of 16.4%
The least profitable 832 made an average profit margin of 0.0%; the industry average is 8.4%

It's from 2019 - and many homes need to be completely full to make profits and covid did interferer with that plus there are staffing shortages across the sector which may lead to wage inflation - plus N.I increases will also hit that sector as well.

Some large companies make profits but my care home certainly doesn’t. When you pay staff more than minimum wage, staff the home properly, provide decent food, standard of cleanliness, entertainment, there not a lot left. That’s not too mention the normal costs of running a building plus buying specialist equipment, competing with neighbouring care homes for staff especially nurses and then paying for agency staff so that the home has safe staffing levels. No change left!

Yep, Alot of private equity firms buy nursing homes and they are vultures, they asset strip everything.
For £1000 a week they give you beans on jacket potatoes for every meal. I've know elderly independent folk move into a hotel as it's cheaper and better.
One care home manager I heard about embezzled a sh*t load from her home .
It's disgusting, care homes should be non profit.

www.theguardian.com/society/2019/nov/07/care-home-operators-accused-of-extracting-disguised-profits

This is quite interesting.

@lunar1

A big standard hospital bed is around £400 per day, an ITU bed around £1400 per day. Lots of things can add to his.

Specialist care homes can be £4000 per week.

Staff, equipment, food, utilities, etc, the running costs are huge.

Some specialists beds/mattresses can cost over 10k.

My dad's care was £6000 per month. He had Huntington's disease and had to be in a specialist home, as HD patients are notoriously difficult to deal with and homes that accept them are few and far between.

Adult social care eventually funded a fair bit of it, but my parents were extremely lucky they had a large amount in savings.

I used to be the bank manager for care homes. It's a long time ago and I think funding has changed since, but it was surprisingly difficult to make them pay, to the extent that the bank pulled out of the sector because there were so many business failures, especially among smaller privately owned care homes.

I mean.. A semi decent hotel with breakfast where I live is £600 a week.

Wage per full time staff £400 a week
Bills probably £200 a week
Food
Insurance
HR
it all adds up and the running of a care home would be much more than £1000 a week that just about pays for 2 staff members wages let alone the people in the back.

Or you can think of it like this. In someone's life
Someone's rent : £180 a week
Bills without transport or insurance £80 a week
Food and household £80 a week
Leisure £30 a week
Total: about £400
Then you got to factor in care witch is usually £10 per hour so if you need help with just mornings every morning for an hour that's £70 making it £500 a week
More if you need lunch, dinner or transport calls. Need a prescription? Either pay the bus fare or pay the carer £10 per hour

Just paying a carer to do breakfast lunch and dinner for an hour is £210 per week

The probelm is there are good homes like Allnightlong2016 and really bad ones - it's finding the ones that are good and affordable.

I remember 20 years ago it was a huge task that fell on my parents along with all the other admin a PP mentioned on top of their jobs and parenting.

If private equity firms have enterered the carehome market it's not going to lead to more good options.

Some homes are better than others obviously as some want good profit but some of the normal care homes are often only on a little bit of profit

@endofthelinefinally

A big chunk of that £1000 is subsidising a state funded resident because the local authority can't afford the full cost.

Absolutely - my Dad who had dementia was paying 35% more than the Council funded patients. I had no problem with him having to pay but I did not want to pay 1/3 for the guy in the room next door.

My dad wasn't entitled to any help with costs either. There are many around the same.
If you have dementia diagnoses your pretty much treated as a second class citizen , sadly

@endofthelinefinally

A big chunk of that £1000 is subsidising a state funded resident because the local authority can't afford the full cost.

^This! Care homes charge self-funders more, to cover the funding shortfalls from council-funded clients.

I visited a care home a couple of weeks ago, where the weekly fees are £1,520. That particular home doesn't accept any council-funded residents. The manager told me that the council pays just over £600 per person, per week for residential care, so they would be receiving less than half of the fees.

In that particular home, as in the vast majority, there is a shortage of permanent employed carers, so the home uses agency staff to fill the gaps. Obviously, agency staff cost a lot more than employees, so that means the fees are higher than they might be if the home had a full complement of employed staff.

If you think about it, a hotel will cost you £100 a night (ish depending on where you go), that's £700 a week. Add to that the costs for nurses, food, uniforms, specialist beds and equipment etc etc, plus profit on each and every item. No wonder it costs that

@blueberryporridge

www.theguardian.com/society/2019/nov/07/care-home-operators-accused-of-extracting-disguised-profits

This is quite interesting.

Interesting, not surprising as someone who's worked in care, but interesting none the less.

My mum was in a unit which was £1400 a week. She had to be in a secure unit due to her dementia, but needed help and supervision with every aspect of her life, day and night. She also needed nursing care due to her insulin injections and other health problems. So it was pretty much 1:1 care for her which probably equates to 2 staff per resident in waking hours. Then specific food to try and get her to safely eat, cleaning (a lot, incontinent and a smearer), laundry and so on and so on and tbh that cost starts looking pretty good

24/7 care

My MiL is a nurse in a care home. The staff are paid a pittance and the food is cheap quality - although it is prepared by an excellent chef. The owners of the home are all on six figures, own multiple properties and have a new car every year. That's where your £1000+ a week is going.

It seems a lot but 1k actually isn't at all bad given that it's 24/7 care with meals activities etc
On the other end of the spectrum private childcare costs much more for only Monday-Friday daytime hours.

@Lipsandlashes

My MiL is a nurse in a care home. The staff are paid a pittance and the food is cheap quality - although it is prepared by an excellent chef. The owners of the home are all on six figures, own multiple properties and have a new car every year. That's where your £1000+ a week is going.

I'm sure there are many like that around :(

On the other end of the spectrum private childcare costs much more for only Monday-Friday daytime hours

Private childcare is not £1k per week.