1. Annual Private Nursing Home Survey 2009/2010 Brian McEnery Partner Horwath Bastow Charleton

2. 2 Introduction Sixth Annual Private Nursing Home Survey compiled by Horwath Bastow Charleton Purpose of the Survey  To report comprehensively on the state of the industry  To analyse key industry indicators and trends  To report on matters of concern to nursing home operators

3. 3 Appreciation  Survey co-sponsors  The nursing home operators that participated in the Survey.

4. 4 Survey Methodology Undertaken in early 2010 Comprehensive questionnaire issued to all private nursing homes in the country Findings relate to the year to end of April 2010 Results are presented based on the ten HSE areas that existed prior to the introduction of the new structures in 2005  Facilitates more meaningful regional analysis - critically important Averages – individual homes will of course vary

5. 5 Overview – 2009/2010 2009 – Landmark year in the private nursing home sector  National Quality Standards for Residential Care Settings for Older People in Ireland – July 2009  Nursing Home Support Scheme – ‘The Fair Deal’ – October 2009 Year to April 2010 – challenging for the industry  Upward pressure on costs  Fall in average occupancies

6. 6 Supply in the Sector 447 registered private nursing homes 20,590 private beds Increase in supply of private beds  9% since 2007  38% since 2003 Public & private supply in 2007 was 28,558 and this increased to 30,223

7. 7 Demographics Ireland has an ageing population Growing demand for care facilities for the older person Population aged 65 and over  Census 2006 – 467,926  CSO estimate 2009 – c.495,000  CSO longer term forecast – 1.3m to 1.4m by 2041 Shows a clear need to encourage continuing investment into the industry

8. 8 Prospective Demand Useful to analyse bed numbers in the context of the total population aged 65 and over Nationally there is one private nursing home bed for every 22. 7 persons aged 65 and over For public & private - 1 bed per 15.5 persons (2007 – 16.4 persons) CSO 2006 Using CSO estimates of population for 2009 its 16.4 persons per bed

9. 9 Profile of Facilities Survey Findings  Single en-suite bedrooms – most common type of accommodation available  Majority of facilities purpose built  Average length of time established – 17.5 years  21% of facilities incorporated a specialised dementia unit (average 19 bed units)  20% of facilities provided day-care facilities  53% of facilities contracted beds to the HSE

10. 10 Trends in Recently Developed Facilities Survey Findings – Facilities developed in the last five years  86% provided accommodation for 40 residents or more  30% incorporated specialised dementia care units  30% provided day-care facilities  19% were part of a retirement village  48% had contracted bed to the HSE

11. 11 Profile of Residents Survey Findings  48% aged 85 or over  Over half of all residents in the highest category of dependency  38% of all residents diagnosed with dementia  Long stay residents – 96%  Average length of stay – 3.6 years

12. 12 Average Occupancy

13. 13 Average Occupancy National average occupancy 2009/2010 – 86.4% Decrease of 4.8% since 2007 Highest average occupancy – North- Eastern Area - 91.3% Lowest average occupancy –North- Western Area – 79.7%

14. 14 Weekly Rates – The Fair Deal The Nursing Home Support Scheme (‘The Fair Deal’) National Average Weekly Rates*  Private Nursing Home Single Room - €850  Private Nursing Home Shared Room - €844  Public Nursing Home Average Weekly Rate - €1,245 Average rate increase since the last survey of 8.9% *Source: www.hse.ie July 2010www.hse.ie

15. 15 Staffing Survey Findings  Staff costs – 61.5% of turnover  Staff cost per registered bed - €22,919  Increase of 10% since 2007 (only 1% variation due to rate increases)  Predominately due to staffing level increases

16. 16 Food Costs Survey Findings  Food costs – 5.2% of turnover  Average annual food cost per resident - €2,194  11.8% increase since 2007  Significantly higher increases in some Areas South-Western Area Western Area South-Eastern Area  Largely due to increased HIQA requirements around menu options for residents

17. 17 HIQA Compliance Costs HIQA Quality Standards – operational since July 2009 Specific physical environment regulations Revisions to staffing levels, rotas and roles Onerous cost of compliance Number of facilities have already closed due to inability to absorb compliance cost Snapshot of costs incurred to date by operators at time of Survey completion – c. €78,000

18. 18 Outlook Challenge of increasing costs  Operational costs – rates, energy costs are rising  HIQA compliance costs The Fair Deal  More certainty – but lack of fair scientific approach is worrying  Public and private sector rates disparity Impact of termination of capital allowance  Reduced level of new nursing home developments in future Best locations Strongest business case promoted by financially sound and committed operators