Mr. Tadhg Daly:

I thank the committee for its invitation to appear. The committee has received my opening statement and the associated appendices, so I do not propose to read it in its entirety in the interest of time.

As an organisation, Nursing Homes Ireland has previously provided this committee with evidence of gross inequity that has been applied by the State in the utilisation of the fair deal scheme budget. We have had previous correspondence with the committee. We also made a submission in March 2017. The budget amounts to almost €1 billion of health spending per annum. The way the State spends that budget effectively means that HSE nursing homes are being paid fees that are, on average, 60% higher than those payable in respect of residents in the private and voluntary sector. In some instances, the fees in respect of residents in HSE nursing homes are four times those provided for residents in the private and voluntary sector. That is outlined in detail in appendix 1. In excess of 70% of private and voluntary nursing homes are small family-run, owner-operated business with fewer than 60 beds. Independent analysis provided to the Department of Health described the scheme as operating in an ad hocmanner, lacking rationale, consistency and fairness, only applying to the private sector and in the long run being unsustainable.

The NTPF is abusing its dominance as a monopoly purchaser, threatening the viability of the private and voluntary nursing home sector. Last week, HIQA, the independent regulator, informed of the voluntary closure of five nursing homes during 2017 due to financial concerns. Its report states: "There are examples of certain smaller nursing homes – which provide a more homely environment – closing voluntarily due to concerns over the financial viability of running such services."

Private and voluntary nursing homes provide care in a home from home to more than 23,000 residents throughout the country. Nursing homes are an essential part of our health service, providing care in the community in line with Government and cross-party support, as presented in the Sláintecare report. Four in ten applications for the fair deal scheme are from persons in acute hospitals. Each year, almost 9,000 people, which is an average of 800 per month, avail of transitional care in private and voluntary nursing homes. Without our sector, acute hospitals would grind to a halt.

HIQA's report last week stated, "nursing home providers are committed to excellence and striving continuously to improve the quality of their services". Furthermore, the regulator stated, "inspectors met and spoke with many people who use services and found that they were well looked after by competent and caring staff".

Our members are tasked with providing care under the fair deal scheme for fees that are, on average, 60% less than those payable to HSE counterparts. It is a fact that one third of the fair deal budget is allocated to State nursing homes that provide 20% of capacity. The fees in respect of HSE nursing homes are not subject to independent scrutiny. There is no negotiation process, no scrutiny of expenditure and no transparency, and there is long delayed and infrequent publication of those fees.

Another anomaly I bring to the attention of the committee is the myriad costs, including but not limited to capital costs and commercial rates, that are not included in the publicly published fees. Appendix 2 contains the statutory instrument, which was laid before the Houses of the Oireachtas on the commencement of the scheme. The HSE, as administrator of the scheme, in effect pays the nursing homes under its control whatever fee it deems appropriate.

The most recent publication of HSE fees in February this year revealed the disparity in fees between HSE and private nursing homes has increased from 53% to 60%. Over the 16 month period from October 2016 to February 2018, the fees in the HSE or State sector increased by an average of 11%. Over the corresponding period, the increase in private and voluntary nursing homes was on average 3.9%. Analysis of the most recent data informs the extent of this disparity. Appendix 1 outlines the examples of County Westmeath, where the fee differential is 163%, County Laois where it is 122% and County Longford where it is 115%.

There has been some admission by the State that the cost of care in public nursing homes requires deeper analysis. The review of the fair deal scheme, published in July 2015 and commissioned by the Department of Health, recommended a value for money review be undertaken by the Department with regard to public nursing home costs. The review recommended actions and timelines to address any cost distorting factors that cannot be attributed to inherent differences between the public and the private sectors. That was in 2015, more than three years ago. Speaking to the committee in March last year, representatives of the HSE committed to the review being undertaken in 2017. It remains outstanding. In April 2018, the Minister for Health informed the Dáil of the value for money analysis and stated the Department would work on the analysis throughout 2018. We highlight that accountability and transparency remain outstanding with the continued delay of the value for money review.

The gross inequity in the funding of nursing home care is threatening the viability of the private sector and I mentioned the five nursing homes that closed last year. The Department of Health's DKM Economic Consultants report, published in 2015, stated the fair deal pricing model "operates in an ad hocmanner, lacks rationale, consistency and fairness, only applies to the private sector, and in the long run is unsustainable". This is the pricing model set by the NTPF, whose representatives will appear before the committee after this session. Of stark concern, the report warns: "It is untenable that the State quality regulator can assess differentiated dependency levels and in doing so impose costs on nursing homes, while the State price regulator (NTPF) claims it is unable to reflect the same factor in its pricing decisions".

When the fair deal scheme commenced in 2009, a commitment was made that it would be reviewed after three years. The review was published six years later, in 2015. It pointed to the NTPF in its methodology used historical prices and, on many occasions, geographical location to set fees. It stated there was a requirement for a review of the system to be undertaken within an 18 month period. Thirty-three months on from this recommendation, and nine years after the introduction of the fair deal scheme, this pricing review of the scheme remains outstanding. This is evidence of prevarication by the NTPF, inexcusable delays and a lack of transparency from what is, in essence, a public body.

To say our members are frustrated would be an understatement. We reiterate our call for the publication by the NTPF and the Department of Health of the pricing review. In Appendix 5 of our submission we have outlined what we argue are some pertinent questions the committee may consider appropriate for the NTPF in the afternoon session. Our members are under sustained pressure to sustain services. It is unsustainable and untenable that the State tasks private and voluntary nursing homes with providing this specialist care for such low fees, which are, on average, 60% below those applied by their HSE counterparts. The inequity in the fair deal scheme is compounded by the fact there is no independent appeals process in the NTPF. This effectively means the NTPF, acting on behalf of the State, can adopt a take it or leave it approach with regard to fees to provide care regardless of the consequences.

The fair deal scheme is explicit and definitive in defining the goods and services covered. It explicitly excludes a range of services, therapies, specialised wheelchairs, transport and social activities that are essential to support the health, well-being and day-to-day living of nursing home residents. In Appendix 3 of our submission we have included the extract from the NTPF deed of agreement which our members are required to sign to be party to the scheme. Nursing homes are obliged to provide certain services that are explicitly outside the definition of long-term residential care services. Accordingly, it is appropriate for nursing homes to charge for services provided that are outside the definition. All charges for services excluded under the fair deal scheme are detailed in the contract for care and agreed with the individual resident on admission to the nursing home, as required by regulations. The regulatory requirements stipulate registered providers must ensure that contracts of care are clear, unambiguous and contain full details of the services to be provided and any charges. Our guiding principles as an organisation commit our members to clarity, openness and transparency with regard to all fees and charges.

It is also a fact that there is discriminatory or limited access to medical card services for residents in private and voluntary nursing homes. When people cross the threshold of a private nursing home the services they would ordinarily hold on to in their community are no longer available. This is discrimination of older people on the basis of where they reside, which is, in essence, their home.

The NTPF, as a monopoly purchaser, adopts a take it or leave it approach to negotiations. The Department of Health review informed that pricing is set on historical and geographical determinants and, as I stated, there is no independent appeals process. We acknowledge and respect the role fulfilled by the HSE in nursing home care and the dedicated staff in the public service. However, very serious questions arise surrounding transparency, accountability and fair allocation of funds for the provision of care in HSE nursing homes.

That the Government committed to a review of the system for pricing is an acknowledgement that the current pricing system is not fit for purpose. Appendix 4 of our submission sets out the terms of reference for the pricing review. The committee will note that according to one of the terms of reference, the deadline for completion was 1 June 2017, which is more than one year ago.

The minutes of the meeting of the working group to oversee the recommendations confirm that Deloitte and Prospectus provided a draft pricing report to the Department in June 2017. The minutes further confirm that the NTPF requested a revised draft to be produced, and confirm that the revised draft has been received by the NTPF and is being considered by it. This draft report has not been published. We are concerned about the delay in publishing the report.

The harsh reality is that the State wants to fund care for residents in the private and voluntary nursing home sector for fees that are significantly less than what it costs the State to provide such care. Critically, policymakers need to ensure the system strikes a balance between value for money and acknowledging the costs and ensuring the sustainability of the private and voluntary sector. While the private and voluntary sector is characterised by committed and resilient providers and staff, it is undoubtedly the case that failure to acknowledge the true cost of care threatens the sustainability of current provision. Transparency must be applied to HSE expenditure. We welcome the committee's examination of NTPF and wish it well with its work.