1. Reviewing the Lancashire cost model for Residential Care Ann Mylie LCC Paul Simic LCA

2. Introduction The County Council’s decision on setting fee levels within its 2011/12 budget included a commitment to review the existing fee banding scheme for care homes during 2011/12 Officers of the Council have been working closely with provider representatives from the SCP to develop proposals

3. Background LCC currently funds around 37% of care home placements Total number of placements not funded by the Council is 63% There is an average of 11% vacancies across the county In Residential care it is estimated 40% -45% are self funders In Nursing care it is estimated 30% -35% are self funders Other placements are funded by either other LA’s or Health ( Res Care is 7% and Nursing is 17%) There is a ‘turnover’ rate of around 40% funded placements per year 15% of care homes in Lancashire meet the environmental standards that the L &B model fair price for compliant homes assumes.

4. Background There has been 1 home closure in the last 12 months (Nov 2011) There are 4 residential care homes in administration but the intention is to sell these as a going concern if possible. There are a number of homes that have changed ownership in the last 12 months eg Southern Cross (under 5 in a year)

5. Impact on providers Some wider context on the impact on care homes: We have completed an analysis of the change in top-ups since April to see what impact the fee decisions have had. Between February 2011 and August 2011, there has been a slight increase in both the number of top-ups in place (from just over 15% to just over 16%) across both residential and nursing care and to the average value in nursing care (from £36 to £38). The average value in residential care has remained constant at around £39. There are, however, significant variations across localities.

6. Feedback from Providers Feedback from providers about the impact of the budget proposals include: Increased costs eg wages, food, fuel, utility bills Reduced number of referrals More complex and dependent people Regulator requirements (CQC, LCC, PCT) Ongoing need to refurbish

7. The main options that have been considered so far are: Moving to a purer version of the ‘Laing & Buisson’ model Moving away from operating a banding scheme and instead setting a range of standard fees linked to need which apply across the county Moving to setting fees based on room size ie two sets of rates – one for rooms that meet the ‘fully compliant’ standards set out in the L & B model & one for placements for rooms that are not compliant

8. Laing & Buisson Model The variant in this option would entail the Council retaining 4 Bands: Fully compliant – care homes that fully meet the environmental standards applicable to new build homes since 2002 (100% of rooms single, en-suite all with 12msq floor space excluding the en-suite) Mainly compliant – care homes that mainly meet the post 2002 standards (a minimum of ?% rooms would need to meet the standard) Partially Compliant – care homes that partially meet the standards (a minimum of ?% rooms would need to meet the standard. Non –compliant – care homes that do not meet any of the above

9. Fee based on Need This option would essentially involve the Council moving away from operating a banding scheme to a position of setting fixed rates, linked to levels of assessed need which it would pay to all the care homes whether or not they have met the post 2002 environmental standards.

10. Individual room sizes The broad concept of this model would be for the Council to set two sets of rates one which it would fund for people in fully compliant rooms (ie single, en-suite and 12m sq) and one for people in rooms that were not compliant

11. Next Steps Three Area Provider Forums in January 2012 L & B have been asked to review our current L & B model based on their ‘fair price for care’ model IPC from Oxford University are going to assist us in developing better market intelligence/management Workshop with a small group of providers Feb/March 2012 Further Consultation on the different models in April – June 2012

12. Any Questions/comments Thank you for Attending