Home care provision is a lucrative business in Ireland. Not so much for carers but most definitely for their employers.
A major franchise operator in the UK advises prospective franchisees that with a typical turnover of about €2,000,000, owners can expect profit margins of up to 20% or in money terms €400,000.
In addition, franchisees pay a fee to the master franchisor of 6.5% or €260,000.
So out of an amount of €2,000,000, 33% or €660,000 leaks away from directly funding care delivery.
It is well known that the Irish home care market is significantly more profitable than their counterparts in the UK which means that in a similar Irish scenario, could it be 40% or 45%, between €800,000 and €900,000, leaking away from carers to non-core care activities?
As an example, recently published accounts of a for profit provider shows profits of €2.5M on an estimated turnover of about €6M. That doesn’t take into account directors’ salaries or pension payments!
Disingenuously, with the recent launch of a new home care tender, corporate providers of late have being calling on the HSE and government to ensure higher prices for them so that they can increase wages to carers. Existing accounts for these corporate providers show no new price increases are needed as home care provision presently, is a hugely lucrative business and existing margins give them the ability to already significantly increase wages if they wanted. Indeed, the HSE would do well to remember that around 40-50% of any price increase intended to address the sector’s capacity issues, won’t find its way to frontline carers.
The reason for these corporate providers being able to make such profits in Ireland is that they have a monopoly on home care package funding which means families have to use them whether they want to or not or whether they deliver a good service or not.
What’s needed is a new commissioning system that encourages more choice and in turn more funding to get to carer’s pockets rather than owner’s pockets.
We have to start trusting people and realising that in many cases, they are experts in their own care and are well capable of managing their own care budget. It is a huge waste of resources for the HSE to insist on excessive hand holding around governance even where people have the capacity to self-manage their own care and budget.
The present status quo is causing a huge capacity crisis, driving down the quality of care and holding the home care sector back from playing a much more influential role in our health sector. It’s time for change. True personal budgets are that change.