Operators struggling with fees and dated buildings
The ageing population of Northern Ireland coupled with yesterday's announcement of the closure of seven care homes gives cause for concern in the care home sector.
Having worked in this industry for some 10 years, mainly with local and national care home operators, I am more than aware of the issues involved.
Set aside for one moment the emotional attachment that one might have of a loved one being looked after in a care home and look at the infrastructure.
Today's care home industry has many dated buildings in need of refurbishment and upgrading. Due to regulatory requirements, they may be deemed not fit for purpose.
Older care homes are constrained by their physical features, which impact on the efficient operation of the home.
The number of older people in Northern Ireland is predicted to grow dramatically during the next decade with those aged 65 and over projected to increase by a quarter, to 344,000, by 2022.
The numbers of the oldest bracket, aged 85 and over, are expected to rise by 50%, from 33,000 to 48,000.
Therefore, demand exists for elderly people to be accommodated in care homes and for the requirement for new-build care homes and extensions of care homes in many locations.
It is of note that some private care home providers are operating successfully, but they are doing it where there is high demand for places coupled with the availability of trained nursing staff.
The rationalisation of supply and demand may be the key issue. Many operators are trading successfully with an occupancy level in excess of 90%. Those with occupancy levels lower than 80% may struggle to remain viable, due to the level of fees payable by the trusts, as well as staff costs associated with the operation of a home.
The closure of these care homes, which may see an outcry in their communities, may well become a recurring theme.
Mark O'Kane is director of O'Kane Commercial, which provides a range of advisory services to the healthcare property sector.