Following a recent report by the Sheffield City Council Communities Commissioning Service, ‘Fees and Market Analysis: Care Homes 2015/16′, of which you can find details here, residential care home and nursing home fees in Sheffield are set to rise by more than 2% for the contract year 2015/16.
The care home fees have been frozen for the past two years, but as staffing and other non-payroll costs have continued to rise, the Sheffield Council’s cabinet have recommended a rise of 2.33% in residential care home fees and a rise of 2.45% in nursing home fees.
Although wage inflation in the UK is currently only running at 1.1%, as many of the staff who work within care & nursing homes are working at the National Minimum Wage level the increases to staffing costs have been more significant, as the below table shows. With National Minimum Wage set to rise again this year, following a 3% increase in October 2014, the council say the increase is needed.
Source: Sheffield City Council Communities Commissioning Service, ‘Fees and Market Analysis: Care Homes 2015/16′
There have been five care home closures in Sheffield in the past year alone, with three of those unplanned.
The report reveals that the maximum fee for residential care homes in Sheffield is currently £391 a week – but is set to rise to £400.11 a week when the fee increase of 2.33% goes ahead. For nursing homes, with a planned rise of 2.45%, the maximum fee is set to increase from £507.89 to £517.62.
The increases would still, however, leave residential fees in Sheffield amongst the lowest in the region (including Doncaster and Rotherham) and, indeed, amongst the lowest in the UK.
A recent report by the Sheffield City Council Communities Commissioning Service, ‘Fees and Market Analysis: Care Homes 2015/16’, highlights some interesting statistics that all regional care owners need to be aware of.
The report sets out key demographics and performance-related indicators for Sheffield region homes. Linking to research from leading market analysts, Laing & Buisson, the document also sets out key demographics and performance-related indicators for care homes across the UK.
The numbers of older people living in Sheffield is projected to increase year on year.
Occupancy levels in Sheffield have generally risen as a result of the reduction in supply (5 care home closed last year – the closures this year have cancelled out increases from the previous three years)
There has been no increase in the care home fees for the last two years; the main cost increases are staffing (minimum wage rose in October 2014 and is set to rise again later this year)
“We” should therefore raise the fees by at least the impact of wage and CPI inflation
In summary (The national picture):
The number of people aged 74-84 in the UK is projected to grow by over 800,000 and the over-85s by 400,000 between now and 2021.
Over the last 18 months capacity in the market rose by 3,600 beds to an estimated 487,800 residential beds nationally. However, demand over the same period rose by 10,000 to an estimated 432,000 beds.
Average fee levels are approximately 4.8% down in real terms over the last 3 years.
The big four national care providers account for 18.4% of the national market and in localised areas this can be more than 25% of the market.
Single or widowed women over 85 are most likely to become residents in homes. However, as residents are entering care homes at an older age, the average length of stay is falling.
In more detail
The report revealed that average occupancy in Sheffield remains on a similar level to other regions. The overall trend has risen from 88.3% to 88.57% since 2012/13.
In the consultation with providers, it was noted that the impact of low occupancy is experienced differently by different sized homes. As high levels of occupancy remain a key challenge for smaller care homes, who need a consistently high level to survive, many are considering taking residents with increased care needs. Although this is likely to have a positive impact on occupancy levels, the home must also take into account the potential impact on increased staffing costs and the risks associated with residents with increased care needs.
Medium and larger homes, on the other hand, are proportionally more secure and are often better equipped to manage reduced occupancy levels.
Both staff and non-staff costs are rising for care homes in line with national levels of inflation.
Non-payroll costs have risen in all care variants, with continued increases in utility and food costs being key factors in the reported rises.
Payroll costs for nursing care continue to remain largely unchanged, with a marginal decrease to 56% from 56.3%. Going forward we expect another increase in the National Minimum Wage to increase (effective from 1 October 2015) to impact on a high number of operators, together with additional pension costs following the implementation of Auto Enrolment.
Although wage inflation in the UK is currently only running at 1.1%, as many of the staff who work within care & nursing homes are working at the National Minimum Wage level the increases to staffing costs have been more significant.
Source: Sheffield City Council Communities Commissioning Service, ‘Fees and Market Analysis: Care Homes 2015/16’
As the tables below show, residential fees in Sheffield are amongst the lowest in the region and in comparison with other core cities in the UK. Nursing fee levels compare more favourably, however.
Source: Sheffield City Council Communities Commissioning Service, ‘Fees and Market Analysis: Care Homes 2015/16’
Source:Sheffield City Council Communities Commissioning Service, ‘Fees and Market Analysis: Care Homes 2015/16’
In fact, when looking at Sheffield care fees on a nationwide basis, Sheffield again falls amongst the lowest in the UK.
The below table excludes London and only shows the bottom quartile.
Following the report, there is a draft recommendation for a rise in residential care home fees.
“There has been a ‘freeze’ in Care Home fees for the last two years, during this time we know that costs and, in particular, staff costs for care homes have continued to rise. Inflation and the National Minimum Wage rise have a direct impact on care home staffing costs. This year inflation has risen by 1.2% and the National Minimum Wage by 3%. Together these would equate to an estimated 2.33% cost increase for Providers.
“In previous years we were confident that the Market was continuing to develop and that there was no need to increase our fee level. This year though has seen some unplanned closures. Following consultation with providers it was acknowledged that Nursing home staffing costs were a particular issue for this sector.”
The report concluded: “Therefore the recommendation this year is for a fees rise of 2.33 % to recognise the impact on inflation and minimum wage costs for all providers with an additional 0.18% (2.45%) to recognise the increased staffing costs for Nursing Home Providers.”
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Amid greater flexibility in the pensions market, with new freedoms introduced on 6th April 2015, savers are planning to withdraw large sums from their retirement fund this year, a study has found.
A study commissioned by financial and technology services firm True Potential has found that savers plan to take an average £27,000 from their funds in the 2015/16 tax year.
The new freedoms mean restrictions on access to funds has been lifted and savers aged 55 and over can now take their whole fund in one go, take smaller Uncrystallised Fund Pension Lump Sums when required or take up to 25% tax free and a regular taxable income from the rest.
True Potential’s independent survey (of over 2,000 people) also found that:
Only 8 percent of savers plan to withdraw their entire pension in one lump sum following the changes.
Of those savers who plan to change the way they access their pension as a result of the changes, 53% say they have no plans for any withdrawals this tax year.
True Potential Managing Partner David Harrison said: “With pension freedoms now in place, many savers look set to take advantage of them. Our research shows that on average, savers will take almost £27,000 from their total pension fund this year.
“For some people that will be a tax free lump sum while for others it will mean drawdown from the remainder. Giving people the option to decide when they drawdown from their pension and by how much is a positive step as long as they are aware of the effects on the overall fund.
“There have been many scare stories about people exhausting all of their savings in one go. These figures show that this is unlikely to happen. Instead people can approach retirement with new options and aspirations versus the constraints of a fixed, usually poor-performing, annuity.”
The NHS Employers and the General Practitioners Committee of the BMA have announced changes to the GMS contract in England for 2015/16, but what do the GP contract changes mean for you and your practice?
The main changes are the introduction of a named GP for all patients, the publication of GPs’ average net earnings and a commitment to expand and improve the provision of online services.
From 1 April 2015, the following changes come into effect for practices in England under the GMS contract:
A named GP for all patients
A named, accountable GP for all patients – including children, who will take lead responsibility for the ‘co-ordination of all appropriate services required under the contract’. This follows this year’s introduction of a named GP for all elderly patients.
By 31 March 2016, practices must state on their website that all patients now have a named GP.
Publication of GP earnings
Practices are expected to publish details of GPs’ net earnings. This includes average net earnings (partner and salaried GPs) relating to 2014/15, as well as the number of full and part time GPs associated with the published figure.
Expansion of online access
There is a further commitment to expand and improve the provision of online services for patients. This includes extending online access to more detailed information from medical records and the increasingly availability of online appointments.
Changes to the Quality and Outcomes Framework (QOF): adjustment of point value for 2015/16 taking account of population growth and relative changes in practice list size for one year from 1 January 2014 to 1 January 2015; deferment for one year of changes in thresholds planned for April 2015. Discussions around any clinical changes to QOF within the current QOF envelope will continue.
The patient participation and alcohol enhanced services will end and associated funding will be reinvested into global sum. From 1 April 2015, it will be a contractual requirement for all practices to have a patient participation group (PPG) and to make reasonable efforts for this to be representative of the practice population. It will also be a contractual requirement for all practices to identify newly registered patients aged 16 or over who are drinking alcohol at increased or higher risk levels.
The avoiding unplanned admissions (AUA) enhanced service will continue for a further year from 1 April 2015. There will be a number of changes, however; including revisions to the reporting process and changes to the payment structure.
The extended hours and learning disabilities enhanced services will be extended and unchanged for a further year.
Maternity and paternity cover
Reimbursement to practices for the cost of maternity and paternity leave will become an automatic right and cover both external locums and extra hours provided by existing GPs who do not already work full-time.
NHS England said the change would see all practices entitled to ‘reimbursement of the actual cost of locum cover for maternity, paternity or adoption leave of £1,113.74 for the first two weeks and £1,734.18 thereafter, or the actual costs, whichever is the lower’.
Other contract changes
NHS England and GPC will work together on workforce issues affecting practices, including the flexible careers scheme and recruitment problems.
GPC, NHS England and NHS Employers will work together to develop more consistent guidance for the provision of enhanced minor surgery services.
As agreed in 2014/15, there will be a 15% reduction in seniority payments.
NHS England and GPC will re-examine the Carr-Hill formula, with the aim of adapting the formula to better reflect deprivation.
Correction factor funding moving into global sum will be reinvested, with no out of hours deduction applying.
This article has covered the main elements and changes to the new GP contract for 2015/16, as announced by the NHS Employers and the General Practitioners Committee of the BMA.