county care market reportUnder the Care Act 2014 local authorities have an obligation to ensure that there continues to be a viable market for the provision of social care in their area, both for self-funders and for those clients who are supported by the state.

This is a demanding challenge, not only because the sustainability of social care markets is under significant threat given increasing under-funding, but also because ‘market shaping’ is difficult given the complexity of relationships between fee levels, care home profitability, and the closure and construction of new care home facilities.

Healthcare market intelligence provider LaingBuisson has worked with the County Councils Network (CCN) on a major study,County Care Markets: Market Sustainability & The Care Act, which comprehensively addressed these challenges in detail – a summary report of the findings can be downloaded here, and the full report and can be purchased here.

As part of this work, we have analysed capacity in the care home market for older people in each council, and in doing so have also developed innovative Dynamic Market Models which can be used to predict the impact of a wide range of changes on market sustainability locally.

Work included assessing the financial risks faced by councils, resulting in highlighting the excessive extent to which markets are sustained by payment of cross-subsidies by self-funders which make up the shortfall in local authority fees. LaingBuisson has also modelled the impact of Care Act Part 2 financial provisions relating to increasing wealth thresholds; market equalisation (of self-funder and local authority fees, through councils arranging care for self-funders, at their ‘usual cost of care’) and introduction of the care cap.

As a direct result of this work, and the presentation of tangible evidence of the scale of additional financial burdens set to hit councils, in combination with the lobbying from a wide range of representative bodies including the CCN and the Local Government Association, the Department of Health has announced its decision to defer introduction of Care Act Part 2 until 2020.

However, the challenge of achieving sustainability has not gone away.

Indeed, with the proposed introduction of the living wage in April 2016, provider costs and pressures on state fee rates are set to swamp the headlines for some time to come.

On the basis of the work undertaken to date, LaingBuisson is now able to provide a unique service to other local authorities wishing to better analyse their own care home markets and the risks to sustainability. This includes identifying the extent to which the Usual Cost fees paid fall short of the full cost of care and estimating the shortfall in funding needed to bridge this care home fee gap. It also includes the facility to define and evaluate the potential impact on market sustainability and care home capacity shortages of a council’s own future fee strategies and policies – such as in relation to increased community support, the provision of extra care housing; and roll out of homecare policies.

Our downloadable overview paper summarises how LaingBuisson’s extensive care home market database and results of regular market surveys, combined with use of our recently developed, ground-breaking Dynamic Market Models can help local authorities to fulfil their market shaping and market management responsibilities in residential and nursing home based social care.

Watch our summary video below for more details and click on the links beneath that to learn even more about the various aspects of this new, unique service from LaingBuisson.

If you would like to set up a meeting to discuss the service further please call LaingBuisson on 020 7833 9123 or email us now.