News

Jill Manthorpe looks at the implications for supply and demand of the growth of monopolies in the care home market.

At local level many social workers may have noticed the growth of large commercial companies in the residential and nursing home market. New research¹ shows that a concentration of long-term care by large companies, some of them international, is occurring throughout the country. Some of this process is through merger, some through take-overs. It is taking place in nursing homes particularly. The concentration of places in homes run by large companies is accompanied by closure of homes with small numbers of places that are finding it difficult to operate profitably for a variety of reasons.

Holden sets out the context for such changes and notes that although there may be pressures on the residential sector as a whole it is the larger companies that are better placed to survive. They may have greater financial flexibility and can benefit from economies of scale. In contrast, smaller homes may be finding it difficult to meet new standards. The closure of some of these homes may lead to further concentration among larger companies. Holden predicts that surplus capacity of beds can turn to under-supply quickly. This may also result in near monopolies in some areas and possibly increased fees.

In addition to regulation changes, the drive to concentration of ownership in long-term care is also being prompted by labour market factors. Holden identifies the national minimum wage as having an impact, particularly in the north of England where wages are lower. The European working time directive has also led to increases in employment costs and benefits such as holidays.

What do these changes mean for social workers and service users? First, increased movement between providers of long-term care may mean a lack of staff continuity and problems with morale. Both impact on residents. Their lives can be further disrupted by changes in the home's practices and systems. Some homes may not seem worth running and can close.

Second, there may be increasing standardisation across homes leading to reduced choices for residents. Homes run by one company generally have to conform to its ways of doing things. Staff may have less flexibility.

Third, Holden raises the possibility of a decline in quality of care. Concentration or monopoly provision can mean systems rely on regulation to ensure standards, but this may be undertaken at a low-level and thus miss important elements.

The author concludes by setting out the difficulty of running a social care market when there seems to be a powerful move to concentration of providers. A "hands-off" approach may lead to monopolies but there are problems in managing the market, particularly if providers are becoming less tied to areas.

In light of these changes, Woolham's article² outlining good practice when a residential home closes may be useful. It draws together some of the elements which appear to help residents at this difficult time. Some of the advice is derived from international sources for there is little research from the UK. Some of the lessons are drawn from hospital closures studies.

Nonetheless, the article offers a series of constructive suggestions for reducing stress among residents and staff. Preparation is important, if there is time, and this needs to include talking to residents and staff. Moving to a new home needs to be handled sensitively; it needs planning and knowledge of individual residents' abilities and needs. Residents and staff may benefit from help during the adjustment process.

¹C Holden, "British government policy and the concentration of ownership in long-term care provision", Ageing and Society 22 (1), 2002

²JWoolham,"Good practice in the involuntary relocation of people living in residential care", Practice 13 (4), 2002

Jill Manthorpe is reader in community care at the University of Hull.