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Council reviews payments for older people’s residential and nursing home care

Herefordshire Council is considering proposals to change the price it pays to some providers for older people’s residential and nursing home care.  In addition, the council wishes to introduce a new set of quality standards which all providers who receive money from the council will have to meet from January 2014.

Every year the council pays privately and voluntary-run residential and nursing homes to provide care for older people.   At the moment, the council uses a number of bands or rates to pay providers with. The proposal is to change this to two rates: one for residential care and one for nursing care.  For some providers this will result in an increase whilst those currently receiving some of the higher payments will see a reduction.

Prices vary, but a review has identified that Herefordshire pays much higher fees for these services than its neighbours in the West Midlands and in other similar authorities.  For example nursing care for older people in Herefordshire costs an average of £572 a week, whereas the average rate for 15 similar authorities is £429.

In July last year providers of residential and nursing home care were invited to participate in a review lead by the council which focused on identifying the true costs of providing care.  During this review, 22 providers out of a total of 45, shared the costs of running their business with the council. This has helped the council determine what would be a fair and reasonable price to pay, allowing for providers to cover their costs and still make a profit. 

As well as paying a fair price for services, the council wants to make sure the quality of services residents receive is good.  Therefore, when it meets on 20th June, the council’s cabinet will be asked to agree to the development of a new quality contract as well as to consider proposals to alter the prices paid to providers.  
Helen Coombes, assistant director at Herefordshire Council, said: “Benchmarking has highlighted there is a significant discrepancy between what is paid across a number of authorities and what is paid in Herefordshire.  Working with local providers, we have come up with what we believe is a fair rate for everyone. 

“Furthermore, having a consistent approach to quality will help the public know what they can expect. This means in Herefordshire the public can be confident that we have a good quality older people’s residential and nursing home market.

“We accept that local providers need to make a profit, but we have to make sure it is reasonable.  The prices we are proposing are still more generous than other authorities and allow full cost recovery and a five per cent profit (BUPA works on a four per cent profit).”

If approved, the changes will come into effect from 1st January 2014 and save the council £467k a year.