‘True Cost of Care’
About East Riding of Yorkshire Council
East Riding of Yorkshire Council is the local authority or East Riding, a district of Yorkshire in England. As with any county council, they provide an invaluable service to their community in many capacities, including critical health and social care responsibilities.
Client challenges
In August 2019, the council wanted to establish the true cost of care in the East Riding of Yorkshire, which focused on care homes for older people within the council’s boundaries. LaingBuisson was approached to undertake this exercise, which provided valuable and accurate third-party intelligence. This project was designed to give the Council, and local social care providers, a clearer understanding of the financial landscape within the region’s elderly care homes setting.
How LaingBuisson helped
The project comprised the following elements:
- An engagement meeting with the council and the Care Association to raise engagement levels with local care homes and answer their questions and concerns about the exercise to be undertaken.
- A secure online survey was sent to each care home. Prior to the survey being sent, our senior researcher checked all relevant contact details to ensure we would be sending the survey to the most appropriate person within each home. She remained engaged with the potential respondents throughout the process, answering questions and chasing responses.
- The results of the survey were combined with established benchmarks for profit mark-up, corporate overhead and return on capital to calculate ‘true costs’. The outcomes of the survey were also used to inform the East Riding of Yorkshire Council of other features of the care home business which may have a bearing on fee rates required to sustain the local market in the short to long term.
- The true cost of care calculated as part of this project was also compared with the cost model used by the council. This highlighted a disparity in results.
The response rate among residential homes was sufficient – 45% of homes and 44% of capacity – to calculate ‘true costs’ within reasonable confidence limits. The survey also revealed that several nursing homes which were registered for nursing care claimed not to have any nursing care residents and had become de facto residential homes.
The final report also highlighted that unless demand for care home places could be held at contemporary levels, the most likely scenario was that the state would be forced at some stage in the future to pay the full true cost of new care home assets in order to continue to make local placements. Should such a scenario occur, the likely consequence would be a capacity shortage, triggering a sharp rise in fee rates to incentivise investment in new assets, so shifting the balance of market power from commissioners to providers.
How we can help you
LaingBuisson has a team of over 40 consultants, and a large network of opinion leaders, with a broad range of expertise. We provide knowledgeable, fact-based insight and both design and implement strategies that will make your business more successful. LaingBuisson provides the expertise you need to make informed decisions.
