Analysis is becoming ever more important for the care sector, as providers seek to maximise their offering and improve services on stretched budgets.
With so much analysis of the UK homecare sector based on qualitative surveys, we wanted to tap into real-world data and find out how providers are operating and the scale of the challenges they face.
Using anonymised data from more than 4,700 registered locations, which account for around a third of the sector, captured over four weeks in March this year, our Hidden Dynamics of Homecare report looks at standards in three key areas, as well as what it takes to be an Outstanding provider in a difficult climate.
Sadly, while revealing some exceptional practice, our findings lay bare all-too-familiar challenges – a result of chronic under-funding and increasing demands of an aging population, particularly from those who do not have family support to fall back on.
It remains to be seen whether or not Boris Johnson’s government can deliver on its pledge to ‘fix’ the social care crisis, although the timing of his announcement in his first speech as Prime Minister was certainly significant. What is clear is that a focus on supporting the homecare market will need to be an essential part of his plan. We have reached the point where care organisations, and workers on the front line, must be questioning how they can meet safety and quality standards with so few resources.
Pay and profitability
It is reassuring to see that, despite funding shortages, providers are maintaining minimum wage compliance, with care workers paid £8.81 on average per hour of state-funded homecare contact time, excluding travel time and pay. That’s above the minimum wage which was set at £7.83 at the time. While the average invoice for state-funded homecare has risen in the past year, from £16.35 per hour to £16.88, it is still well below the £18.01 recommended by the United Kingdom Homecare Association (UKHCA).
Looking at the most frequent type of state-funded visit – one that lasts 30 minutes – providers make an average margin of just over £1.20 each time before operating costs. Included in these costs are pension and National Insurance contributions, as well as holiday and sick pay, but not other overheads, such as training, rents and administration.
When all operating costs are included, it is estimated that homecare providers are in fact losing £1.68 per hour on state-funded care. An Opus Restructuring LLP and Company Watch report, which studied more than 2,700 companies, found they made a pre-tax loss of £4,000, with losses across the sector totalling £10.5m.
While it would appear admirable that these firms are plugging a shortfall in local authority funding, it is clearly not sustainable over the long term. Operating costs are only going to increase in line with demand for services and if they are inadequately funded, these providers will simply go out of business or hand back local authority contracts. Where there is a gap in homecare provision, people using services could be forced prematurely into residential care, rely on their families more or be unable to return home after a hospital stay.
An obvious solution would be to rely less on the notoriously low rates from commissioning authorities and it is worth noting that Outstanding providers typically deliver 70% private-funded visits.
Of course, this is not an option for some, usually those operating in areas of high deprivation, where the problem of profitability is even more pronounced. Outstanding providers in these areas with 60% or more state-funded visits tend to pay staff more (£9.32 compared to the overall average of £8.81), resulting in a meagre 65p margin on a 30-minute visit before operating costs. Where they do benefit, perhaps unsurprisingly, is from better retention rates of three years’ service compared to the two years seen in non-Outstanding firms.
Counting the cost of high vacancy rates
Care work tends to rank among the lowest-paid professions, something which is, according to the National Audit Office, contributing to a vacancy rate of 7.7% and turnover of almost 34%. Like most professions, there seems to be a direct correlation between pay and retention, as well as the extent to which providers invest in staff development and offer flexible working.
Drilling down into our figures further, the average age of a homecare worker was 43 and it is also notable that there is a link between age and length of service. Where the average workforce age was 40 or above, providers saw higher retention rates, at 2.9 years compared to 1.6 years, while those using services stayed with the same provider for 1.7 years rather than 1.4. Mature care workers also command higher pay than their younger counterparts – £4.53 for 40 to 45 year olds on a 30-minute state-funded visit, rising to £5.29 for 50 to 55 year olds. In contrast, under-35s receive just £4.09 on average.
Looking at attitudes of those using services and their families, it is interesting to note that they overwhelmingly associated the age of a care worker with experience and longevity.
Whether or not these beliefs are well-founded, it could explain why a higher average age and length of service could contribute to a CQC Outstanding rating. Client interviews (qualitative research) and continuity of care form part of the regulator’s assessment, so it follows that these providers would perform well. Equally though, it could be that providers who have already developed a positive working culture, and invested in resources and technology, can attract more experienced, and generally older, care workers.
Longer visits drive up standard
One of the biggest challenges for care workers is that they simply do not have adequate time to spend with clients, particularly as visits during the week are also less frequent than at weekends.
Since 2015, there has been a minimum recommendation that staff spend at least 30 minutes with each person – and it is heartening to see that providers and local authorities acknowledge this, with most making this their standard length of visit. However, this still isn’t sufficient time to deliver quality care. Of all the Outstanding providers included in our data, just 28% of private-funded visits were 30 minutes or less, rising to 45% among non-Outstanding.
Looking at state-funded care alone, there seemed to be no significant difference across the sector, with Outstanding companies reporting that 74% of visits lasted longer than 30 minutes, compared to non-Outstanding ones at 73%.
Our figures also reveal that almost 47% of state-funded visits lasted an hour for Outstanding providers, while 17% were 30 minutes and a little over 6% were 45 minutes. Indeed, those who delivered the highest proportion of 60-minute visits were more likely to receive the top rating.
Across the board, however, many local authorities may have little choice but to commission 30-minute care visits. Worryingly, our data suggests this type is actually the norm, rather than a minimum requirement. There is no question that more funding is needed to ensure there are enough care workers available in a local area and that they are not rushing from one house to the next.
Whatever changes we see in the health and social care sector over the coming years, homecare will play an even greater role in delivering vital services. Given the high costs of residential care, let alone hospital admissions, it makes sense to support people to stay in their homes for as long as possible.
But we cannot continue to rely on the goodwill of providers to cover the rising cost of care. Like any business, they need adequate funds in order to pay competitive wages that attract and retain staff and, most importantly, guarantee the highest quality of care.
More providers will, I’m sure, also see value in technology that reduces their operational costs, enabling them to meet demand in a sustainable way and put more resources into the frontline of care, but government funding is desperately needed to enable providers to focus on developing their business, rather than just keeping it afloat. CMM
Where does your business fit into these figures? What are the biggest pressures for you and how have you overcome them? Share your experiences, feed-back on this article in the comments below.