When Harry Whitebloom moved into Mill View Care Home in Sussex in 2012, it was a huge relief for all the family that he would be in good hands.
The brand-new Care UK residence in East Grinstead claimed to have specialists to help with Harry’s dementia and boasted a hairdressers, coffee shop and even a cinema. Harry’s daughter, Sarah, 52, picked out an en-suite room looking onto the garden.
She knew the fees were expensive, with the family forced to find £20,000 a year on top of the funding they could secure from the local authority. But Mill View seemed the perfect antidote to Harry’s troubles at his previous nursing home, where the 91-year-old had been in decline and targeted by thieves.
Wind the clock forwards four years and Sarah now feels badly misled into believing those huge costs meant better care.
Harry died at the home in March, aged 94, in circumstances being investigated by West Sussex Social Services at the request of the national care homes regulator, the Care Quality Commission (CQC).
‘Usually when I visited, we would have a cup of tea and play pontoon while he saw how many biscuits he could eat at one time,’ says Sarah.
‘We would laugh and talk about his imminent 95th birthday, when he wanted to watch Laurel And Hardy all day and eat chocolate. But when I visited just before Easter this year, Dad was unresponsive and, worse, the staff had not noticed. I asked for action and voiced concern.’
The next morning, she was told on the phone he was ‘fine’, but at teatime, Sarah found him in a wheelchair in front of the television. ‘His head was down, his arms were hanging limply by his sides,’ she says. ‘He could not eat or even raise a cup to his lips.
‘I wheeled him urgently to see the nurse and told her I thought he had kidney failure — it had happened before. I was frantic, but they put him to bed, promising tests would be done and he would see the doctor.’
Sarah called the next morning and the same nurse told her Harry was much better. Feeling relieved, she made arrangements to visit him the next day, allowing time for him to get treatment. But the visit never took place.
‘At six the following morning, there was a phone call: Dad was dead,’ says Sarah. ‘I arrived to find him gone. The now tearful nurse told me he had not seen a doctor and there had been no tests.’
Sarah is deeply unhappy over how her father was treated in the final days and hours of his life, and at the overall standards in his high-priced care home.
Care UK, the private equity-backed company that runs the Mill View nursing home where Harry lived, says it is extremely sympathetic, but denies it has been at fault.
It said the cause of Harry’s death was established by his GP as ‘frailty from old age’ and that there is no suggestion from the doctor, the regulator or the local authority of any shortcomings in care.
A full life: Harry Whitebloom in his younger years as a young father
But now, Sarah has been sent a highly critical draft report by West Sussex County Council, which she believes raises concerns over Harry’s care.
Sarah and Care UK disagree fundamentally about what happened at the end of Harry’s life. But her story offers a window into the struggles that have hit Britain’s biggest care homes.
A place at a residential care home costs £600 to £800 a week on average, depending on whether you need nursing attention. And the fees are rising at a rate of up to 10 per cent a year, according to analysts LaingBuisson. Now, many cost more than £1,000 a week.
For example, at Harry’s Mill View home, residential care starts at £1,160 per week and a full nursing place costs upwards of £1,260 – some residents are paying £1,400 a week, when the daily food budget per head is just over £5 a day.
In England, if your total assets including your house are worth less than £23,250 (£23,750 in Wales and £25,250 in Scotland), the state steps in to pay some of the costs. Your local council will conduct a financial assessment before it offers support.
At Harry’s Mill View home, residential care starts at £1,160 per week
However, local authorities only have to offer ‘affordable’ care home places. This typically means they contribute an average of £522 a week, says LaingBuisson. A family that wants a place at a more expensive home must pay the difference.
Yet, despite its gigantic fees, Mill View is the subject of a critical inspection by regulator the CQC. The report — which is not related directly to Harry’s case —reveals that the home fell short of required standards across the board, including the safety of residents.
Hard-pressed staff are described as ‘too busy’ to spend time with people
The 26-page document paints a distressing picture. Hard-pressed staff are described as ‘too busy’ to spend time with people. Residents were not helped to eat or drink, and were being parked for long periods in front of the TV.
Heartbreakingly, one employee told the inspectors: ‘We try to keep the residents safe . . . but it’s not easy because there aren’t enough of us.’
The dry language of official reports does not begin to capture the emotional impact on families such as Harry’s who are desperately concerned about the well-being of their loved ones.
Care UK isn’t the only big operator of dementia homes failing to live up to its price tag. Just before Harry Whitebloom passed away, his daughter Sarah was investigating care homes for this paper.
She trawled through almost 4,000 reports of inspections into care homes offering dementia services dating from the introduction of the new rating regime in October 2014 to February 2016.
Fewer than half of homes owned by the biggest five operators were judged to be ‘good’, which is itself considered an unflattering rating by experts.
Some 45 per cent were given a ‘requires improvement’ verdict. Just one out of 400 dementia homes run by the biggest five were deemed outstanding.
Many people will be mystified as to why, when residents and families are charged such large fees, many operators still sink below the care benchmark.
The truth is that the industry is embroiled in a financial crisis. Some of the largest operators are laden with vast debts and millions drain out of their coffers in interest bills each year.
The first portent of major fault-lines in the care home sector was in 2011, when Southern Cross, the largest group at the time, with 30,000 residents, imploded under multi-million-pound debts.
It is only a matter of time before another big operator hits the rocks
Now, senior industry figures and independent experts warn it is only a matter of time before another big operator hits the rocks. So could slipping standards be the early warning signs of a disaster waiting around the corner?
‘There is a definite danger of a Southern Cross episode happening again if you look at the debt profile of the big operators,’ says Nick Hood, a risk analyst at Opus Business Services. Senior figures in the industry claim it has been hit by cuts in local authority funding, shortages of qualified nursing staff and the new National Living Wage in April.
The latter, which increases the minimum hourly pay rate for over-25s to £7.20, will cost £1 billion in the first year.
‘We want to pay our employees more for doing a difficult job, but it is a huge expense,’ says a director of one of the biggest care groups.
Mr Hood also expects the National Living Wage to wreak havoc. ‘If my predictions are correct, there’ll be a sharp increase in insolvencies,’ he says.
Another factor is that the fees paid by local authorities for elderly care have plunged in real terms. As a consequence, the care homes say they are making a loss on each publicly-funded resident.
Executives claim some local authorities are paying £330 per week for each resident for round-the-clock care. That equates to just under £2 an hour to cover care provision, accommodation, meals, heating, lighting and laundry. Most local authorities have raised a 2 pc levy on council taxes for social care (one of several measures in the Autumn Statement), but it is not clear how much will be passed on to the elderly sector.
You can’t under-fund the industry indefinitely without consequences
Privately, executives admit that, if the financial pressures persist, lack of money will inevitably affect standards of care provided to frail old people. ‘You can’t under-fund the industry indefinitely without consequences,’ said one.
Four Seasons is the largest remaining operator after the downfall of Southern Cross. The group, owned by private equity baron Guy Hands through his Guernsey-based investment company Terra Firma, is running at a heavy loss and groaning under more than £500 million of debt. Its finances were branded ‘unsustainable’ in May by credit agency Moody’s.
Mr Hands bought Four Seasons, which has 20,000 residents in 450 homes, for £825 million in 2012 and is understood to have put in more than £300 million.
Executives admit its finances need to be re-organised to secure its long-term future, though they insist it has enough money for the medium term.
It ran up a loss of almost £320 million last year, including interest costs of £55 million a year. This also includes a one-off £224 million write down in the value of its care homes.
Four Seasons is not the only operator facing a debt crunch. Opus Business Services recently compiled figures for BBC Radio 4 suggesting around a quarter of all care homes are in danger of going bust within three years. Debts across the sector add up to £4 billion.
Care UK, which manages 112 care homes including the Mill View premises where Harry lived, was bought by private equity firm Bridgepoint in 2010 in a £414 million deal. Its care homes division made a £37 million loss in the year to September 2015 and its debt was recently downgraded by Moody’s.
Net debt has risen to £253 million from £216 million when Bridgepoint took over — the firm says this is because of investment in the business.
Barchester, another major player with 12,000 beds in 200 care homes, made a profit of £15.3 million in 2014, according to corporate data group DueDil, but was listed as having £95 million of debt. A spokesperson declined to explain why borrowings are so high.
The debt mountains that threaten care homes that look after our elderly
Analysts fear the debt mountain will inevitably result in more closures. ‘A significant number of the major operators have private equity-style business models, which means minimal capital and a lot of debt,’ says Mr Hood. ‘That is not great in a sector where it is a struggle to make a profit at all.’
Dr Chai Patel, who took on many of the homes affected in the Southern Cross collapse through a company called HC-One, claims his business is well-resourced, but warns the sector is in poor shape.
‘The Government urgently needs to address the funding crisis threatening to close thousands of care homes, and putting some of the most vulnerable people in our society at risk,’ he said.
But experts such as Mr Hood say the private equity business model — loading companies with debt and seeking a profitable exit within three to five years — is not suitable for care homes.
The number of care homes going bust has increased for the past five years, leaving local authorities and relatives finding residents new accommodation.
So far, it has mainly been smaller operators that have been hit, but experts say there could be severe difficulties in coping if another large group hit the rocks.
‘The danger is that people who cannot afford private care may be left with nowhere to go,’ says Chris Stevens, an expert with financial troubleshooters FRP Advisory. ‘Will there be a repeat of Southern Cross? Yes, it could happen. We ignore this at our peril because this is our parents and grandparents — and one day, it will be us.’
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