Self-funding: the gift that keeps on giving
Last month MPs lambasted providers for “mercilessly” ripping off customers “when they are not looking”. Okay, they weren’t talking about care homes. But they could have been. These providers exploit self-funders by way of what a relative called “hidden and dishonest” subsidies – the neglected story behind the underfunding headlines.
LaingBuisson is convinced the sector is being kept afloat by cross-subsidies from unsuspecting self-funders. The industry’s injured innocents, meanwhile, prefer an alternative reality: self-funders pay the “real costs” of care and providers absorb the shortfall in council prices. Unfortunately for the deniers, there’s ample evidence that the pollutant of underhand cross-subsidy is “endemic”, with private fees not only considerably higher than authority rates, but often soaring above even LaingBuisson’s benchmarks.
Without a breakdown of costs – advertised fees are all tip and no iceberg – self-funders can never know their money is being diverted in this way. Let’s be clear, nothing – no, not even underfunding – can justify this toxic practice. Yet one of the sector’s biggest hitters has been hyperventilating at the very suggestion of transparency.
Those who preach financial sustainability as a “moral” duty, while simultaneously bleeding self-funders dry, don’t just kill irony stone dead, they raise the spectre of the unacceptable becoming normalised. The Competition and Markets Authority – currently studying whether the care home market is working for residents – could be decisive, if only by ensuring the information imbalance is redressed.
Looking ahead, it is expected that as government funding increases, self-funders’ premiums will reduce, before eventually disappearing. But is it likely that an industry in which rapacity has effectively been licensed by austerity will voluntarily relinquish its “super-profits”? Feet may have to be held to the fire, say, on investment returns. “Rogue landlords” have to submit to compulsion, why not recalcitrant care home operators?
- The CT Blog is written in a personal capacity – comments and opinions expressed are not necessarily endorsed or supported by Caring Times.