Competition and Markets Authority's 'Care homes market study, final report'

30 November 2017

On 30 November 2017, the Competition and Markets Authority (CMA) published the final report of its market study into residential and nursing care homes for older people.

The UK-wide study, launched in December 2016, considered how the care homes market was working for both self-funders and individuals whose care was funded by the state.

In the report, the CMA identified two broad areas of problems with the market:

  • 'those requiring care need greater support in choosing a care home and greater protections when they are residents'
  • 'the current model of service provision cannot be sustained without additional public funding; the parts of the industry that supply primarily local authority (LA)-funded residents are unlikely to be sustainable at the current rates LAs pay. Significant reforms are needed to enable the sector to grow to meet the expected substantial increase in care needs.'

The CMA made 20 recommendations to government, sector regulators, local authorities, and the social care sector. They grouped the recommendations as follows:

  • capacity: to improve capacity planning to meet future need
  • consumer protection: to improve compliance with consumer protection law among care homes to better protect consumer choice and quality of care for residents
  • consumer information: to improve the way in which people interact with care homes and better support decision-making.

Cross-subsidisation

The CMA’s key findings included that self-funders on average paid 41% more than local authority-funded residents for the same care (known as ‘cross-subsidisation’). The CMA did not recommend a limit on differential pricing. Instead, it stated that additional government funding for social care would enable local authorities to increase the fees they paid to care homes, thereby reducing financial pressures on care homes to charge higher rates to self-funders.

Enforcement action

The CMA found evidence of practices among care home providers which it considered to breach consumer law. The report said the CMA was already taking enforcement action to address two priority concerns: the charging of unfair or non-transparent, large upfront fees and of fees charged after the death of a resident.

Government response

In March 2018, the Department of Health and Social Care responded to the report accepting or accepting ‘in principle’ all the CMA’s recommendations.

In the response, the government announced a package of immediate action on consumer protection to:

  • support the Care Quality Commission to better hold providers to account
  • work with industry to develop model contracts and explore an accreditation scheme to embed good practice.
  • look to strengthen regulations where necessary.

On ‘Next steps,’ the response reaffirmed the commitment to publishing a social care green paper ‘by summer 2018’ and stated that ‘the CMA’s report has provided an important evidence base and recommendations for improvement that will feed in to the Green Paper.’ The green paper was not published by summer 2018.

Source(s)

Competition & Markets Authority.
Care homes market study: Final report.
Competition & Markets Authority; 2017.

Department of Health and Social Care.
Government Response to the Competition and Markets Authority's 'Care homes market study, final report'.
Department of Health and Social Care; 2018.