In the year or so since implementation of the CQC star rating system, there has been a significant level of media coverage relating to this method of care benchmarking. This has predominantly surrounded the relevant legal issues, nationwide consistency and overall fairness. What coverage to date has failed to show is the impact of the system on service user placements within registered care facilities for the elderly.
The Creation of a Two Tier Market
We are now at a stage where over 95% of elderly care facilities have been graded and the system has been embraced by many providers as a means of improving profile (and perhaps occupancy). There was, at the outset of the original CSCI star rating concept, an undoubted intention that the rating system should positively impact upon the quality of service provision through increasing demand for the higher rated homes. After all, as stated on the CQC website, ‘quality ratings tell you what quality of care a service provides’. Surely, therefore, it can be taken as read that placements have increased within 3* homes to the detriment of 0* and 1* homes? But how has the market reacted? Have the star quality ratings actually impacted upon placement patterns?
Over recent months Healthcare Property Consultants (HPC) has researched the placements of 13,422 elderly persons made by 43 randomly selected local authorities located throughout England. The ensuing analysis has focused upon the homes into which placements were made by local authorities in the first six calendar months of 2009. The split between the relevant grades is detailed below diagrammatically:
The breakdown of placements analysed can be compared directly against the current bed provision across those 43 local authority areas - broken down grade by grade. The law of averages would suggest that, if quality ratings were not impacting on placements, then the pattern of placement would mirror the pattern of provision. So how does placement compare with provision? The following graph details the variance of placement profile when set against the existing provision profile. For ease of reference, a placement level equating to existing bed provision would score 0%, a bias towards placements in a specific grade will be shown as positive, a bias away from placements to a specific grade shown as negative:
- The positive news is that there has been a clear move away from 0* accommodation.
- The placement bias has been towards 1* and 2* homes. With 16.7% of beds in the sample area being categorised as 1*, they attracted 17.6% of service user placements. The corresponding figures for 2* being 58.2% and 60.3% respectively.
- The somewhat surprising (and disappointing) news is that the most significant provision/placement negative differential occurs at 3* level. Whilst 19.5% of beds in the sample area attracted a 3* quality rating, only 15.6% of local authority placements were made to those beds. In other words a service user placement 20% below 3* bed provision.
There are other statistical conclusions to draw from the above research into local authority funded placements. Whilst there are fewer registered beds rated as 0* (Poor) or 1* (Average) combined than there are 3* (Excellent), there are comfortably more placements being made into the two lower grades. But how can this be so? With a current national occupancy level estimated at marginally below 90%, surely the bias should be towards 2* and 3*?
The answer, I believe, is that we are beginning to see a two tier market evolve. The analysis carried out was restricted to information available within the public domain - local authority funded placements. The majority of local authorities continue to pay a flat fee for elderly care, whether provided in a ‘Poor’ or ‘Excellent’ home. Each local authority emphasises that the home choice of the service user is a key part of the placement process. Under normal circumstances, therefore, one would expect home selection/placements to be skewed towards the higher rated homes.
The natural conclusion to draw is that the 3* beds are not being made freely available to local authority funded service users. Care provision is, after all, a business. Care providers investing (both time and money) in high quality care provision deserve to be duly rewarded. Homes achieving a 3* quality rating will undoubtedly be in higher demand than lower grades. Basic economic principles confirm that, with a relatively fixed supply, an increase in demand will lead to an enhanced fee expectation. 3* accommodation is clearly, therefore, becoming the domain of:
- The privately funded service user with the ability to ‘outbid’ a local authority funded client and
- The local authority funded service user with the ability to pay a ‘top up’
So what does the future hold? HPC believe that the above trend will continue and, potentially, grow as operators increasingly see the positive marketing impact of an ‘Excellent’ quality rating. As this trend continues, so will pressure on many local authorities increase to re-assess their fee levels. Questions will undoubtedly be asked as to the morality of a potential two-tier system with 3* rated care service provision being increasingly unavailable to those in society dependent upon financial support. The case for a ‘Fair Price for Care’ is undeniable.
The Use of Quality Premium Payments
In contrast to the positive aspects of the CQC star quality rating system, there have been murmurings from disgruntled operators in some regions that the concept has been abused by certain local authorities. This has generally occurred in instances where the local authority has been offering an incentivised fee basis incorporating Quality Premium Payments linked to the CQC star levels. Such a quality based incentivised fee basis is, prima facie, offered in order to encourage operators to improve the quality of care services as a means of maximising fee income. However, the suggestion from a handful of operators is that some local authorities are utilising the ratcheted fee basis to minimise their outgoings - by placing service users in the lower rated homes attracting the base fee level without quality supplement. So is this fact or fiction?
HPC have carried out a separate piece of work relating to this suggestion. The research covered 28 local authorities of which half paid a set fee and the remainder a quality premium linked to the CQC star rating. The total placement sample size covered was 11,026 placements, once again made during the six month period January - June 2009. By comparing placement pattern to provision spread, we can swiftly establish whether there is any sign of CQC star rating abuse in local authority funded placements. The findings make interesting reading. In stark contrast to the suggestion that councils are placing in lower grades to avoid paying quality premia, the research shows that the placements made by those councils are actually more significantly skewed towards 2* and 3* homes than placements made by councils offering a base fee only. In reality, therefore, the concept of quality premium payments is being utilised positively by local authorities to encourage and reward quality care provision.
CQC star quality ratings - used or abused? The answer at this point appears to be USED.
Nigel Newton TaylorNovember 2010