Features: July 2nd, 2010

By Iain MacBeath

The public sector is faced with its greatest challenge of maintaining quality, but cutting budgets by 25 per cent. The challenge of caring for the elderly is particularly acute because the nation’s ageing demographic adds further strain on adult support services and care workers. The author describes Hertfordshire County council’s venture to improve financial efficiencies and tailored care packages for its adult residents with complex needs.

£100 million of our adult care services budget is currently tied up in care home placements; it was therefore paramount that we investigated this substantial sum of money and how we could reform our financial outlay. We needed to review our high-cost care services in depth in an attempt to reach our budget saving targets.

The following contributory factors were identified:

1) Heightened demand on our support services
Hertfordshire County Council is known to support over 3,500 residents with complex learning disabilities; one of the highest prevalence rates in the country. With such large numbers of dependents residing in the county, the demand on our support services and care workers is extremely high.

2) Price of land
Situated close to London, Hertfordshire incurs one of the highest rates of care package fees across the UK. Ever increasing daily living costs and prices of land contribute to the elevated fees.

3) Long stay hospitals
In the 1900s a large quantity of long stay hospitals opened around the M25 corridor. Families of the hospital residents moved into Hertfordshire to live close to their loved ones. This therefore resulted in our dependent population growing disproportionately.

Closure of these long stay hospitals in the 1980s and 90s instigated a huge growth in the cost of alternative care. Immediate action was required as hundreds of people needed homes that offered specialist care. The best fitting service at the time was judged to be out-of-county residential placements; here, the residents could receive personalised care. Residential care costs now range from £600 – £4,000 per week per resident; a rate that our budget can ill afford. Remedial action was paramount.

4) The nation’s ageing demographic
Funds for our adult care services experience further strain from the nation’s ageing population. With life expectancies increasing by approximately 20 years in the past decade, care placements have had to be extended, adding further pressure on our budget.

Empowering fulfilled lives
In an attempt to take care of our dependent population and further streamline efficiencies, we concentrated our efforts on returning out-of-county placements to their own tenancy within the county and designing personalised social care packages. Potentially, this could save the county an astounding £50,000 per person, per year (the average annual cost of specialist care outside of the county is £125,000 per person).

Our attempts did not end there. Seeking value for money was at the forefront of the project, and so, we collaborated with OLM Financial Management, a professional service team within OLM Group. Through a consultancy service named My CareCosts, we can review our current high cost care packages. Renegotiating the care packages, we are able to establish a fair price for the care that service users receive.

A three year project was scheduled comprising of 1,050 care package reviews; a number of factors were considered; how many carers might it take to feed or dress an individual? How costly were the day care, food and utility bills? What were the profit margins of the care provider? Commencing in 2008, 50 care packages were reviewed; a further 500 were renegotiated in year two (2009-10) and a further 500 are planned in the third and final year of the project (20010-11).

Value for money

The first year of the project achieved savings of £345,000 per annum. The second financial year reviewed a further 500 cases, returning £2 million to Hertfordshire’s budget. During our final year of renegotiations we plan to review another 500 cases. Equating to £30 million per year, we hope that from these care packages a 10 per cent saving will be found. £3 million will therefore be available for alternative use within the department. Target savings of £7,345,000 are therefore proposed every subsequent year.

The recent dramatic advances in IT have also allowed us to fully exploit technological comparison systems. Utilising a solution known as CareCompare, we can take further steps towards our key objective; seeking value for money. The system works in parallel with our renegotiating process; linked to Google maps, the system highlights care home availability and fees paid nationwide.

An array of benefits can be reaped from comparative technologies; we can access a detailed breakdown of the true cost of care. It also provides our staff with the ability to search on location, care type, care facilities and fee rates.

Mounting monetary pressures and our ageing demographics are testing local authorities across the country to consider innovative methods to seek value for money. Here at Hertfordshire, we have been successful in generating an array of savings and therefore returning a proportion of money to our budget. However, we must be mindful of one key agenda; exceptional standards of care must remain at the forefront of our care provision.

Iain MacBeath is the assistant director, performance and business support adult care services of Hertfordshire County Council. For more information, please visit www.olmgroup.com

OLM Financial Management
OLM Financial Management, a professional service team within OLM Group is at the forefront of obtaining value for money in purchased care.