ResPublica recently launched their investigation into the state of the residential care sector and its future financial viability.
Using deliberately provocative and controversial language, their report, ‘The Care Collapse’’ painted a grim picture of the residential care sector. They said the sector is in crisis, claiming care home residents will end up in hospital as a result of its collapse, costing the NHS £3 billion.
The report’s authors also highlight a £1.1 billion funding gap, with a third – £382 million – attributed to the introduction of the National Living Wage.
Reading the report, you would assume that care sector providers have no control over how their business responds. Everything is being ‘’done to them’’ – there’s a funding gap, the National Living Wage introduction, an ageing population with increasingly ‘’acute and chronic’ conditions and a squeeze on fees paid by local councils.
At no point does the report question whether care home models need to adapt to a changing marketplace, instead angling for a funding increase. This is not entirely surprising when you discover the sponsors of the report include care behemoths HC-One and Four Seasons.
But we don’t believe the Government should prop up ailing care homes.
They are out-dated models, offering a product that no consumer wants to buy – who wants to be ‘’put into a care home’’?
In any other market, they would be allowed to fall by the wayside and be replaced by stronger competitors who meet consumer demand – just look at how the retail and hospitality sectors respond to market challenges and evolve their businesses accordingly. It’s natural selection but in the business world.
So why don’t we support innovative start-ups, like Evermore, that are being built without Government funds? Nor are we backed by a private equity fund whose CEO is a tax exile.
By the way, we’re also already paying the National Living Wage and we can do this because we’ve re-arranged the organisational structure to focus on the frontline, not a bulky and costly middle management.
Innovation, change, disruption. This is what needs to happen. Not more money for old rope.
Evermore Founder and Market Innovation Director
Follow Sara on Twitter @SaraMcKeeFRSA