Ivor Callely (Dublin North Central, Fianna Fail)
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The Deputy is referring to the decision by the Eastern Regional Health Authority to change its policy regarding the funding of what were formerly known as contract beds in private nursing homes from September 2003. The main reasons behind the authority's decision to change its policy were to bring a measure of equity to the system, to ensure value for money and to allow funding to be distributed more appropriately and effectively with the appropriate type of care given to those in most need.

As the Deputy will be aware, the term contract beds was used to describe private nursing home beds which were fully subvented and where the payment was made directly to the proprietor of the nursing home on behalf of the patient. Contract beds were funded by the authority through the area health boards under section 22.3 of the Nursing Homes (Subvention) Regulations 1993. While the use of contract beds was seen as a short term solution to the shortage of public long stay beds in the system, over the years the number of private nursing home beds had increased to a level where approximately 1,400 such beds were contracted in 2003.

Although referred to as contract beds, the fact is that no contract existed between the area health boards or authority and the nursing home proprietor, but rather that patients were accommodated in such beds at a fixed price. The cost of such beds had risen over the years to the point where contract beds in the authority's area were some of the most expensive beds in the country. Furthermore, because there was no legislation covering the contracting out of beds, people who were allocated these beds did not have to satisfy a means test. This had led to inequity in the system where two patients in a private nursing home could be accommodated next to each other, with one paying the full cost for the bed, while the other paid nothing towards the cost of the bed, irrespective of their ability to pay.

Because of the escalating costs of nursing home beds and the increasing number of patients in contract beds, the authority decided to cap the maximum enhanced subvention payable at €680, inclusive of the old age pension. The authority's decision to discontinue the practice of contracting beds with private nursing home proprietors has ensured that equity has been restored to the system and that resources are being targeted at those in most need.