Social care: catching the investor’s eye

By Eleanore Robinson

We are used to hearing about the challenges care home operators are facing in terms of frozen local authority fee rates, the recruitment crisis and lack of long-term Government strategy. But earlier this year sector experts revealed that market trading in social care had returned the same levels as before the recession in 2008.

This new narrative is backed by the fact that UK care homes accounted for 60 per cent of all healthcare deals last year. Furthermore, a flurry of long-term investors have entered the market, led by Australian infrastructure fund AMP Capital.

But is everyone enjoying the benefits of this recovery? And where does the truth lie: that the market is failing or flourishing?

One provider that is performing well is Barchester Healthcare. Supporting more than 11,000 residents in over 200 care homes, this operator’s residents are a mix of both local authority and private paying clients. CEO Dr Pete Calveley (pictured) said: “Our experience has been one of improved year-on-year trading for several years, with trading now significantly better than pre-recession.”

However, he warns that there is a  widening gap between care home operators which rely mainly on local authority placements and those where self-paying clients make up most of their customer-base. Dr Calveley said:  “I do believe [the market] is becoming more polarised, certainly in terms of capacity change to meet increasing demand over the foreseeable future: capacity is diminishing in the local authority markets and increasing in private pay markets. This is unsustainable if we, as a society, wish to deliver the same outcomes for the population as a whole.”

Peter Jennings, director of healthcare corporate finance at accountancy firm Grant Thornton, agrees that there is a big gap between the fortunes of those providers who rely on local authority and NHS placements for their incomes and those whose clients are mainly self-paying.

He told CHM Online: “I think it is still massively polarised but it is getting a bit more blurred. Impact REIT (real estate investment trust) and The Carlyle Group are investor-focused on the local authority market. There is definite investment interest in developing groups that are not private-pay.

That said, though, declining profits in the authority-funded sector are driving providers towards services for private clients, Jennings believes. “All providers are trying convert as much as possible as they can: there are quite a lot of challenges around National Living Wage and other issues. We think [social care] is a good place to invest but we recognise there are short-term issues, Those with a good business models, low staff churn and good weekly fees are doing well although some are still not at 2008 levels.”

Market faith
One investor demonstrating faith in the UK care homes market is Target Healthcare, a REIT that in September announced it had acquired a care home in Powys, Wales and a development site in West Yorkshire for a total of £17.1m. This takes its portfolio to 52 operational care homes and seven developments, leased to 21 tenants and with a combined value of around £385million.

Chief executive Kenneth MacKenzie said that, in terms of value, yields are back to they were years ago due to interest from long-income funds. He said: “They are investing into services rather than just real estate.” He added that there was a “little bit of a herd mentality” with more investors flocking after one or two had proved successful with this strategy.

“If you try to see it from the operator’s position – they are in a more difficult position. There’s been no recovery for operators in nursing homes and older facilities.”

And not everyone was taking a positive view on the care homes market. MacKenzie cautions that banks will now only lend up to 65 per cent LTV (loan to value) and there was still a mood of “investor beware”.

Despite this, Dr Calveley believes that the future for care homes looks good. “For high quality, efficient providers that invest in their workforce and their facilities, the outlook for the care home market is very positive”, he said.



Opening doors for LGBT

By Eleanore Robinson

Imagine entering a care home and being unable reveal your sexuality, talk about past relationships, and be scared of the prejudices of staff and fellow residents.

This is often the experience of people from the lesbian, gay, bisexual and transgender (LBGT) community, who can find themselves forced back ‘into the closet’ when entering care for fear of being bullied or harassed. But initiatives are emerging to ensure that care homes are a place that members of this community feel comfortable being themselves.

Up to 6 per cent of the population identifies as being lesbian, gay, bisexual or other: statistically, this means most care homes will have at least one LGBT resident.  

Raising standards

In June, Opening Doors London, which campaigns for LGBT rights, launched its Pride in Care quality standard. Care homes participating in the scheme can expect to achieve the required standard within a year at a cost of £2,000, and can display the Pride in Care kitemark for three years.

The kitemark is being piloted with three organisations: a care home group with 5,000+ beds, a mid-size operator and a small domiciliary care agency.  

The process includes reviewing all policies and procedures and staff carrying out an online survey to flag-up any concerns. Jim Glennon, who helped develop the standard, says: “The online training is to help people understand what it is like to be 80 years old and gay. It gives us a sense of if they have read the material they have been given. The final step is to visit a home and talk to three staff members and at least a few clients”.

LGBT policy development

Feeling safe and secure is a top priority for the LGBT people, according to Glennon. And, best practice involves ensuring anti-harassment policies for staff and residents are clearly displayed. “Things need to be concrete”, he said, noting that high staff turnover in care homes can create gaps in LGBT policy induction or training. 

Speaking at the launch of the Pride in Care standard, Care England chief executive Martin Green said: “When people get old, other people forget there is a life and identity behind them. We have got to move towards a personalised approach to care. That is central to delivering high quality care.” 

Already some operators have grasped the commercial potential of personalised LGBT care. Sanjay Dhrona, managing director at The Close Care Home in Abingdon, Oxfordshire, is developing a LGBT-friendly care home. He expects the purpose-built home to open in Didcot at the end of next year, where everything, including the suppliers, will be chosen for their LGBT values.

Dhrona, who is gay himself, said: “A lot of people want to make diverse and inclusive homes but care homes can be scary places for LGBT people.

“We want to create a space where it is a very diverse community. It all depends on the culture of the business. We would like to have an open culture. It’s a home that can accommodate residents who can identify anywhere along the spectrum. It is about the awareness in the training. We do not sell bedrooms, we sell care that focuses on the individual.”

He believes that a gay man at the head of the care home group will set the tone but great leadership notwithstanding – the Close Care Home has won multiple awards, including a 2018 Care Home Award – there will be challenges in the day-to-day running. For example, dementia may cause an otherwise liberal person to adopt conservative attitudes from a previous time, for example, when being gay was illegal.

Unlike other LGBT exclusive developments – Tonic Housing is planning an LGBT care village in London and Manchester City Council has announced plans to develop an extra care scheme exclusively for LGBT residents – the new Close care home will be a mix of members from the LGBT community and heterosexual residents. Dhrona believes that LGBT-friendly homes should not be seen as niche as homes, for example, for Jewish people. He says: “I think the LGBT community is integrated into everyday life. I would not want to go into a home that was niche. We are going to make sure we explain that we are offering support and training for the community. It is saying it is normal. We want people to buy into what a great community looks like.” 



The robots spearheading a care home technology revolution

By Eleanore Robinson

It may sound like science fiction but it is increasingly becoming science fact – robots are now an integral part of the care home environment. 

As the ‘Alexa’ Amazon Echo technology is being trialled for social care by several councils, mechanised arms are being developed to lift patients without human assistance and Southend-on-Sea borough council has brought in its own robotic recruit – Pepper. 

Council director of adult social care at the council Sharon Houlden said: “Robotics is not coming, it’s here. It is ground-breaking and it is interesting and not really spoken about in social care.”

Pepper costs £50k to buy but the council purchased it under academic licence for £17k as they are using him for research. Ms Houlden said that compared to, for example, buying a bariatric bed, it’s not that much money.

Pepper is a regular visitor to Priory House care home, Southend-on-Sea, which caters for older and frail residents. 

Ms Houlden explains: “He acts as a master of ceremonies and question master during reminiscence sessions, and has an iPad to play videos and ‘Name that tune’. People then talk about what they saw and share memories. Care home staff can be as much a part of that as they want. 

“Some people engage with Pepper as a person. It has generated a lot more ideas about what we can do. From a staff satisfaction point of view, it has brought the excitement back. We are in a very different place since we got him out of the box.” 

Pepper is the latest in a not-so-long line of social robots being used in care. Perhaps, the most well-known is Paro the harp seal, developed in Japan to help people with dementia.

A study by the University of Brighton over the past three and a half years has found the furry robot has a calming effect on patients and provokes an emotional response that helps people socialise. The team are currently examining how Paro can be used without posing an infection risk (as he cannot be cleaned in a traditional way) and this autumn a new study will start into the robot’s role in reducing the need for medication. 

Researcher Dr Kathy Martyn explained: “Paro can be used at any time of day or night. He does have the capacity to elicit human responses. He is the same size as a baby and has baby-like eyes. He makes a mewing noise when agitated. Most people do genderise them and give them names. People are rarely fearful.”

Dr Martyn also explained that Paro takes the form of a harp seal as very few people would ever have encountered one so the risk of a bad memory is much reduced compared with a cat or a dog.

She added: “They are several thousands of pounds, so a large initial outlay, but the benefit is, unlike real animals, he never has an off day.”

Robotic pets at Care South

Care home group Care South introduced robotic pets at two of its care homes six months ago.  The animatronic pets at Kenwith Castle in Abbotsham, near Bideford, and Templeman House in Bournemouth respond to touch and speech from residents. 

Robotic dogs KC and Biscuit (pictured, top) and pony Keno have been a hit among residents, according to Graham Brittain, director of residential care, providing stimulation, comfort and companionship. He said: “The residents love having the pets close at hand, so they can stroke them and give them lots of cuddles. Their engaging nature encourages the residents to interact with them and they have certainly become a talking point for our staff, residents and their families.

“Residents can often be found petting the robotic pets and reminiscing with one another about animals they owned previously and in childhood. Since their introduction to the homes, staff have seen improvements in some residents’ social interactions, particularly for those living with dementia. The robotic pets have also proved beneficial to residents in end-of-life care, who have taken comfort from the chance to touch and stroke the dogs, with carers noting the soothing effect they have and the pleasure displayed on their faces.”

While Care South’s new robotic residents were acquired second-hand, there are many similar models now on the market costing as little as £100, and the care home operator now plans to roll them out to its other care homes that look after people with dementia.

Care home management: May 2018