Care costs increase pressure on already delicate industry

The cost of caring for the elderly could treble by 2050, according to a report by the Organisation for Economic Cooperation and Development. With an ever increasing elderly population, and growing numbers of people with dementia requiring support, governmental funding cuts to social care couldn’t come at a worse time.

The chair of the industry body, the UK Home Care Association, Mike Padgham feels that comparatively little fuss is being made about such cuts compared with the cutting of student tuition fees, because the social care sector is poorly understood and older age issues attract little attention from both the public and politicians. Mr Padgham comments “If you don’t fund social care properly, then you put more pressure on the NHS and it costs more in the long term.”

The problem is that there are many variables which influence the amount of money available to social care including, but not limited to, property rental, salaries and other big overheads, such as energy, heating and food costs, which have all been rising steadily in recent years.

In the long term, new funding solutions for social care are clearly needed and it is to be hoped that the invaluable services this sector provide will be recognised when new funding solutions are developed as a result of The Commission on Funding of Care and Support (Dilnot Commission) due to report in July 2011.

Outside of the regulatory reforms this report will likely recommend, there is still scope for Care Home Providers at a local level to reduce the costs of care for both local authorities and private sector clients. Effective cost management can be achieved without reducing quality if the relevant expertise, time and effort are put into it, examples include:

1. Create a cost conscious culture and celebrate cost reductions by highlighting good practice to staff.

2. Minimise the number of suppliers in use across the group for each overhead to aggregate spend with a few rather than spread over many.

3. Consider the whole range of overheads for review and include both consumable items e.g., janitorial and medical supplies as well as key services such as waste and utilities.

4. Create more central control over purchasing rather than leave it to individual homes to negotiate ‘good deals’ fro products and services.

5. Adopt new technologies where appropriate, as innovative products and services can often result in real long-term savings.

6. Standardise and rationalise the range of products used to reduce clinical risks and improve scope for monitoring.

7. Trust your colleagues within the group. If a product/service has successfully been used in one home, then endorsement from staff using it should enable roll out across the rest of the group.

8. Monitor whether buying decisions made are actually implemented. Savings are not realised at the point of the buying decision but only when the purchase is made.

9. Don’t rely on your suppliers for information on market prices and practices. Enhance your knowledge of the supplier marketplace to identify cost cutting strategies that will generate savings without affecting or disrupting standards of service through changing suppliers.

10. Potential savings are great, but they don’t mean anything unless they are realised.

After implementing a culture of cost consciousness, appoint cost champions to drive the programme forward.

This article was featured in the July 2011 Profit News. Download a free copy by clicking here.