Kathleen Lynch (Cork North Central, Labour)

I thank the Cathaoirleach and Senators for giving me the opportunity to make a statement on the fair deal nursing home support scheme. I acknowledge that the events of the past few weeks have been very worrying for older people and their families owing to the uncertainty surrounding the funding of the scheme. As I am sure Senators are aware, the HSE recommenced issuing approvals last Monday for financial support under the scheme. It will work through the applications which have been processed to final stage in the past few weeks in chronological order. The Minister for Health, Deputy James Reilly, has also identified savings in other non-service related spending areas which will be used to facilitate the payment of financial support to an additional 1,700 applicants between now and the end of the year. On this basis, it is estimated that the total number who will be in receipt of financial support by the end of the year should be almost 24,000.

For those Senators not familiar with the scheme, it is a system of financial support for individuals in public, voluntary and approved private nursing homes. The scheme is available to anyone who has been assessed as needing long-term nursing home care, including dementia-specific nursing home care. The introduction of the scheme brought about a fundamental change in the way in which long-term nursing home care was funded. It supports individuals in need of long-term nursing home care, not the facility providing such care. This means the money follows the patient, regardless of whether he or she chooses a public, private or voluntary nursing home. This ensures facilities are not being funded for empty beds.

Under the scheme, individuals contribute up to 80% of their assessable income and a maximum of 5% of the value of any assets per annum towards the cost of their care. The first €36,000 of an individual's assets, or €72,000 in the case of a couple, is not counted in the financial assessment. An individual's principal residence is only included in the financial assessment for the first three years of his or her time in care. This is known as the 15% or three year cap. It means individuals pay a 5% contribution based on their principal residence for a maximum of three years, regardless of the length of time they spend in nursing home care. After three years, even if an individual is still in long-term nursing home care, he or she will not pay further contributions based on his or her principal residence. The three year cap applies, regardless of whether an individual chooses to opt for a loan. The intention of the cap is to protect the family home. In the case of a couple, the financial assistance is based on half their combined income and assets.

Under the scheme, the cost in each public nursing home is determined using the definition of "long-term residential care service", underpinned by an agreed set of cost components which has been laid before the Houses of the Oireachtas. The cost of care is reviewed on an annual basis. When the review was carried out in 2010, the cost of care reduced in approximately 80% of nursing homes. The 2011 review is under way. The National Treatment Purchase Fund has statutory responsibility for the negotiation of prices in nursing homes, including voluntary nursing homes. It is independent in the performance of this function. It may examine the records and accounts of nursing homes and has a particular responsibility to ensure value for money for the individual and the State.

The Nursing Home Support Scheme Act 2009 defines long-term residential care services as maintenance, health and personal care services. The services which fall within the scope of long-term residential care are nursing and personal care appropriate to the level of care needs of a person; basic needs and appliances necessary to assist a person with the activities of daily living; bed and board; and laundry services. The scheme does not cover therapies because a person's eligibility for other schemes such as the medical card or drugs payment scheme is unaffected by the nursing home support scheme. In other words, a person can continue to receive goods and services in accordance with the terms of other schemes, regardless of whether he or she is in a nursing home or elsewhere.

In determining the services covered by the scheme, it was considered very important that care recipients and taxpayers be protected and not end up paying for the same service twice. For this reason, goods and services already prescribed for individuals under an existing scheme are not included in the services covered by the scheme because it would involve paying twice for the same items or services.

Budget 2011 provided €1.011 billion for long-term residential care services. This was effectively the budget for the nursing home support scheme, albeit that transitional arrangements must also be facilitated from within the subhead, for example, people in contract beds, those who choose to remain in receipt of subvention and saver cases in public nursing homes.

In May this year the Minister became aware of a potential serious shortfall in the 2011 budget for the scheme. He requested that his officials, in conjunction with the HSE, carry out a full examination of the funding position and the sustainability of the scheme. Following that examination, it is clear that a number of factors were putting pressure on the overall budget for 2011. These included an unexpected and unexplained increase in the average length of stay for nursing home patients; the resultant higher net demand for nursing home places; the increase in nursing home costs; and payments for ancillary services for residents in nursing homes, for example, therapies and drugs which were not intended to be funded from the subhead. I understand this amounts to €48 million, not €100 million as originally indicated.

As stated, the HSE has recommenced issuing approvals for financial support under the scheme. The Minister has informed the HSE that the only items which can be posted to the long-term residential care subhead are those covered by the cost components in respect of the care services of public nursing homes. Documents have been laid before the Houses of the Oireachtas in respect of public nursing homes and the costs agreed with the National Treatment Purchase Fund for private nursing homes. The Minister has asked the HSE to put in place additional and more rigorous governance and reporting measures which his officials will monitor more closely in the remainder of the year. The fact that the scheme is relatively new means there is a lack of historical statistical data on which to base definitive conclusions or forecasts. The HSE has been asked to prioritise the full roll-out of its ICT and management systems to address the information deficit.

The Minister is anxious to try to identify the reasons behind the unforeseen increase in the number of applications and the average length of stay in nursing homes. He has, therefore, requested the HSE to undertake a clinical audit of the appropriateness of care and admissions. The HSE has commenced its review of the cost of public beds. It is anticipated that the review will show a reduction in the cost of care through skills reconfiguration and the driving of efficiencies.

The Minister has instructed the National Treatment Purchase Fund to renegotiate with private and voluntary nursing homes with a view to achieving price decreases because the increases agreed in recent months are not sustainable. The programme for Government commits us to a review of the system of financing nursing home care with a view to developing a secure and equitable system of financing community and long-term care. This commitment will be carried through.

In addition, the nursing home support scheme is due for formal review, commencing in 2012, at which time it will have been three years in operation. The reason for allowing this period to elapse is to ensure established and validated trends and statistics will be available. It is still intended to proceed with the review which will examine the ongoing sustainability of the scheme, the relative cost of public versus private provision and the balance of funding between residential and community care.

I very much regret the anxiety that was caused to older people and their families as a result of the uncertainty over the nursing home support scheme. I know what a worrying time it can be when individuals and their families have to make the decision to move into a nursing home. We moved as quickly as possible to re-establish certainty and clarity on the scheme's future. I will ensure that the scheme continues in a fair, transparent and sustainable manner.