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					                                                                 WARDS AFFECTED: ALL

       REPORT OF THE STRATEGIC DIRECTOR OF SOCIAL CARE AND HEALTH

TO THE CABINET MEMBER FOR SOCIAL CARE AND HEALTH

                                                                               29 April 2004

NON-KEY DECISION

UPLIFT OF OLDER PEOPLE CARE HOMES AND CARE HOMES WITH NURSING

1.      SUBJECT AND BRIEF SUMMARY OF PROPOSALS

1.1     This report sets out the recommendations concerning the uplift of fees for Older
        People‟s care homes and care homes with nursing Contracts.

1.2     The current fee structure for Birmingham and “Near Birmingham” and for outside of
        Birmingham care homes and care homes with nursing was agreed by Cabinet on
        10th March 2003. For Birmingham and “Near Birmingham” care homes the fee rates
        are £298 for a single room and £283 for a shared room. Birmingham and “Near
        Birmingham” care homes with nursing attract the contract fee of £319 for a single
        room and £304 for a shared room,

1.3     The above fee levels for care homes with nursing do not include the registered
        nursing care contribution as the Council can no longer purchase nursing care on
        behalf of service users.

1.4     The current fee structure for Birmingham and “Near Birmingham” homes also
        include a Quality Assurance (QA) Premium of £12 per person per week and a £12
        En-suite Premium for single rooms.

1.5     The fee levels for outside of Birmingham care homes were set at £298 for a single
        room and £283 for a shared room. The fee rate for care home with nursing was set
        at £298 for a shared room and £313 for a single room. Outside of Birmingham
        homes do not attract the two Premiums.

1.6     Small care homes (less than three beds) attract a fee of £244.

1.7     The current fee structure was the outcome of consultation with homeowners and
        was set within the Council‟s longer-term strategic aim of investment within the care
        home and care home with nursing sector. Cabinet agreed a £7.5 million five-year
        investment strategy for Older People‟s care homes and care homes with nursing
        sector. This strategy involved the investment of the £7.5 million in fees over and
        above inflation of which £3.5 million was front loaded into the first year with £1
        million to be invested in the subsequent four years.

1.8     Homeowner representatives were presented with five options with respect to the
        investment of this £1 million pounds. Officers examined the impact of these options
        on the budget and their recommendations are contained within this report. The
        Cabinet Member is requested to approve these recommendations.


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2.      RECOMMENDATIONS:

        The Cabinet Member is asked to :

            Agree to uplift the base fee levels for Birmingham and “Near Birmingham” care
             homes including small care homes by 3.5%

            Agree to uplift the base fee levels for Birmingham and “Near Birmingham” care
             homes with nursing by 5%.

            Approve the increase of the En–suite Premium for single rooms from £12 to £14
             and the increase of the QA Premium from £12 to £22 per person per week.

            Agree to uplift the fee level for existing residents and new residents in outside of
             Birmingham care homes and care homes with nursing by 3.5%.


3.      BACKGROUND

3.1     The existing fee structure for Older People‟s care homes and care homes with
        nursing was agreed by Cabinet on 10th March 2003. The current fee structure for
        Birmingham and “Near Birmingham” homes is as follows: -

        Care Homes: –

        Single Room - £298
        Shared Room - £283

        Care Homes with Nursing: -

        Single Room – £319
        Shared Room - £304

        Small Care Homes (less than 3 beds) - £244

3.2     The care home with nursing fees do not include the Registered Nursing Care
        Contribution as the Council can no longer purchase nursing care. However the
        Council has single payment arrangements with all four Birmingham and three other
        “Near Birmingham” Primary Care Trusts (P.T.C.s) to pay this nursing care
        contribution on their behalf by acting as their agents.




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3.3     The above fee rates are also subject to two Premium rates as follows: -

        Quality Assurance Premium - £12 per person per week subject to verification by
        the Council‟s approved verifier.

        En-suite Premium                   - £12 per person per week

        Small Care Homes do not attract either of the two Premiums.

3.4     This structure was applied to existing and new Social Care and Health funded
        Residents in Birmingham and “Near Birmingham” Homes. These “Near Birmingham
        Homes” which are outside of the City‟s boundaries have a special relationship with
        the Directorate which provides them with the opportunity to apply for the Premium
        for single en–suite rooms and the Quality Assurance (QA) Premium.

3.5     The current fee structure for Care Homes and Care Homes with Nursing outside of
        the City‟s boundaries for those residents placed after the 1st April 2003 are as
        follows: -

        Care Homes

        Single Room – £298

        Shared Room - £283

        Care homes with Nursing

        Single Rooms - £313

        Shared Rooms - £298

3.6     Outside of Birmingham homes do not attract the two Premiums. The Care Home
        with nursing fee rate only includes the care price, as the Council does not have
        single payment arrangements with their relevant P.C.T.s.

3.7     The current fee structure was an outcome of consultation with homeowner
        representatives and set within the Council‟s longer term strategic aim of investment
        within the sector to ensure sufficient numbers of care home and care home with
        nursing places to meet the needs of the people of Birmingham. This strategy also
        includes the development in partnership of the Council‟s Older Peoples Homes and
        in the meantime, a continuing year on year reduction in unit costs of the Council‟s
        own homes for Older People.

3.8     Cabinet also agreed on 10th March 2003 a five-year investment strategy for the
        Older People‟s care homes and care homes with nursing sector. It was agreed to
        invest a total of £7.5 million pounds in fees over and above inflation of which £3.5
        million was to be front-loaded into the first year with £1 million to be invested in the
        subsequent four years.




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3.9     During consultation with homeowners‟ representatives Officers presented five
        options with respect to the investment of £1 million pounds plus an uplift of 3.5 % on
        current base fee levels. These options ranged from investment of the £1 million into
        the care home nursing sector only, an increase of the Q. Premium to £37 per
        person per week to a fifth option from owners themselves.

3.10 Officers modelled the outcomes on the budget of all five options and recommend;

                A 3.5% uplift on base fees for care homes including small care homes
                A 5% uplift on base fee levels for care homes with nursing.
                An increase in the QA Premium from £12 to £22
                An increase in the En-Suite Premium from £12 to £14

3.11 The uplift for care homes with nursing reflects the cost pressures these homes face
     from employing nursing staff.

3.12    The increase in the QA Premium would continue to encourage homeowners to
        better standards of provision within the sector and builds upon previous investment
        in encouraging homeowners to implement and maintain a Council approved Quality
        Assurance system. The increase in the En-suite Premium would continue to reward
        homeowners who have en-suite facilities in single rooms and encourage other
        homeowners to introduce them.

3.13    Care homes with nursing and care homes including small care homes outside of the
        City‟s boundaries attract an uplift of 3.5% on their base fee levels for new and
        existing service users.

3.14    These proposals would be implemented from the 12th April 2004.


4.      MATTERS FOR DECISION

        That the Cabinet Member considers and approves the recommendations that base
        fees for care homes and small care homes are uplifted by 3.5%, nursing homes
        base fees are uplifted by £5%, and that the Q.A. Premium is increased from £12 to
        £22 and the En – Suite Premium is increased from £12 to £14.


5.      EVALUATION OF ALTERNATIVE OPTIONS

5.1     The options presented to homeowners were as follows: -

        Option 1 –The additional £1 million to be invested evenly across all homes in
        addition to the 3.5% increase in base fee levels. This option would have resulted in
        an approximate fee increase of 5.7% for all placements. Officers were of the view
        that Option 1 would fail to offer any reward for additional quality (QA systems and
        en–suite facilities.) Some care homes with nursing homeowners had the view that
        this option failed to take into account their nursing staff costs.

        Option 2 – This option required the £1 million to be invested evenly across all
        homes as a flat rate increase (£4 per person per week). In practice as there was
        little difference between options 1 and 2 and this option received little support from
        homeowners. Officers do not recommend this option.
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        Option 3 – This option concerned the investment of the additional £1 million into the
        nursing sector, which would have received a total uplift of 7%. All other fee
        increases would be limited to 3.5% with no increase to the Q.A. and En–suite
        Premiums. This option was supported by some care home with nursing owners but
        not by the other homeowners. Officers were also of the view that other options
        could be explored, which further rewarded homeowners in terms of the quality of
        the service.

        Option 4 – The additional £1 million to be invested entirely either on the Q.A. or the
        En–suite Premiums which would give an extra £25 per person per week to those
        homes which have a verified QA system which meets the Council‟s standards or
        £11 per person per week increase to homes with en–suite facilities in single rooms.
        This option was supported by homeowners who currently have the QA and En-suite
        Premiums but rejected by those homes which do not have these Premiums.

        Option 5 – This option is set out in the recommendations contained within this
        report in paragraphs 3.10 – 3.14 inclusive. Officers recommend this option as a
        workable compromise given the disparate views of the homeowners. It does
        incorporate recognition of all the elements raised with Officers during the
        consultation process. Option 5 can be viewed as the option presented to the
        Directorate from homeowners themselves. Officers have undertaken detailed
        modelling work to ensure that this option is affordable within the £1 million
        additional resources accounting for the anticipated investment in Q.A. and en–suite
        facilities.


6.      CABINET MEMBER CONSULTATION

        Councillor Susanna McCorry, Cabinet Member for Social Care and Health
        consulted during the preparation of this report.


7.      WHAT CONSULTATION (if any) HAS TAKEN PLACE

        Homeowners as stakeholders were consulted on all four options and were
        requested to submit a fifth option.


8.      WHAT REPRESENTATIONS (IF ANY) HAVE BEEN RECEIVED E.G. IN
        RESPONSE TO THE INCLUSION OF THIS DECISION IN THE FORWARD PLAN

        There have been no representations to the inclusion of this decision in the Forward
        Plan.




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9.      LEGAL POWERS AND IMPLICATIONS FOR RESOURCES
        (INCLUDE FINANCE, PEOPLE, PROPERTY AND IT CONSIDERATIONS)

9.1     The Council under the terms of the care home and care home with nursing
        Contracts has an obligation to conduct a review of contract fees before the 1st April
        in each relevant year.

9.2     The proposals outlined in this report can be contained within the overall budget for
        2004/05 for independent sector Older People care homes and care homes with
        nursing fees. The 2004/05 Budget for these fees was uplifted by 3.5% for inflation
        and the specific proposals in relation to above inflation increases for nursing homes
        and increases in premium allowances for QA and en–suite facilities add in total
        around £1 million above inflation to fee levels for this sector. This is in line with the
        Council‟s policy to increase the independent sector‟s fees over a five-year period to
        stabilise the availability of provision and to improve the standard and quality of
        accommodation available to Older People placed in the care homes and care
        homes with nursing sector.


10.      IMPLICATIONS FOR POLICY PRIORITIES

         The implications for Corporate Policy Priorities are to assist in the development of a
         safer and healthier City. The implications for Specific Service priorities will be to
         assist in the improvement of services for Older People resident in care homes and
         care homes with nursing.


11.     ARE THE RECOMMENDATIONS IN THIS REPORT CONSISTENT WITH ANY
        APPROVED "POLICY FRAMEWORK" PLAN OR STRATEGY/OR THE
        APPROVED BUDGET

        The recommendations are consistent with the Council‟s longer term strategic aim of
        investment within the independent care homes and care homes with nursing sector
        to ensure the availability of nursing bed places to meet the needs of the people of
        Birmingham. This strategy also incorporates the development in partnership of the
        Council‟s Older People s Homes and in the meantime a continuing year on year
        reduction in unit costs of the Council‟s own homes for Older People.


12.     REASON FOR RECOMMENDATIONS

        Approval from the Cabinet Member for Social Care and Health is required to grant
        the percentage uplift and the proposals to invest the £1 million pounds over and
        above inflation as outlined in this report.




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        BACKGROUND DOCUMENTS

        Report to Cabinet „Award of Contracts for the Provision of Care Home and Care
        Home with Nursing Services for Older Adults 1st April 2003 – 31st March 2006‟
        10th March 2003




        ……………………………………..

        Peter Hay
        Strategic Director of Social Care and Health

        Contact Officers

        Steve Wise
        Assistant Director Finance
        Tel: 303 2367
        Fax: 303 4383
        e-mail: steve.wise@birmingham.gov.uk

        Jon Caan
        Acting Service Contracts Manager (Adults)
        Tel: 303 4455
        Fax: 303 4881
        e-mail: jon.caan@birmingham.gov.uk




              UPLIFT OF OLDER PEOPLE CARE HOMES AND CARE HOMES
              WITH NURSING
              My decision is to adopt the recommendation(s) set out in this
              report.




                                .....................................................
                                          CABINET MEMBER



                              DATE: ..............................................



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