Nursing Homes - Cost model, September 1995

Introduction

Over the past six years public care provision for elderly people has fallen by one-third, accounting for only 28%, instead of 44%, of the available stock. Private care provision has taken up the slack, rising 150% over the same period, and will have to expand still further over the coming decade as Britain’s population becomes older.

It is expected that the number of people over the age of 85 will increase from 1 million to 1.25 million by the end of the decade. With 20% of over 85s suffering from dementia, such as Alzheimer’s disease, a futher 50,000 bed spaces will be needed over the next five years for elderly mental injury patients alone.

The Registered Homes Act of 1984 set out new ground rules for the building, operation and inspection of residential care homes - controlled by the Department of Social Services - and nursing homes - controlled by the Department of Health. They were well timely, appearing just as the number of local authority elderly care homes and NHS hospitals dedicated to long term care began to fall.

In 1990 the NHS and Community Care Act was passed. This introduced the concept that, rather than enter institutional care, elderly people should have the choice of being sustained in their own homes for as long as possible. Whether patients should be cared for at home or in residential or nursing homes now depends on local assessment. This is a new procedure in which general practitioners and healthcare and social workers decide on the suitability of the different care options for patients.When people can no longer be sustained at home they move either into residential care or, if they are more dependant, into nursing care.

Nursing homes differ from residential homes because full time nursing care and supervision is required in the former. Initial registration is with the local health authority which, under their auspices of the 1984 act, lays down rules for the construction of the home, defines the categories of patients that may be received, establishes staff levels and carries out regular inspections once the facility is operational.

There are two main groups of homes for elderly people - those that cater for frail or physically disabled people and those that deal with mentally infirm people. There is inadequate provision for people suffering from dementia. Managing dementia sufferers requires a high staff to resident ratio. So, homes for elderly, mentally infirm (EMI) people are more expensive to run and less profitable than those for elderly, frail and disabled (EFD) individuals. Commercial companies, such as Tamarisk, Ashbourne Homes and Takecare therefore bias their provision towards the EFD patients.

One of the leading charities involved in the care of dementia sufferers is the Royal Surgical Aid Society.* Through donations to a national appeal constructed a 48-bed combined EFD and EMI home at a site provided by Surrey County Council in Shepperton. While the home serves to help fill a national and local shortfall in care, it also has a research facility. The RSAS’s aim is not only to improve the management and quality of life for dementia-suffering residents, but also to find means to build and sustain staff morale in this stressful nursing area.

Private healthcare companies can raise capital for their projects on the Stock Exchange This course is not open to charities, such as the RSAS, which runs its homes on a non-profit-making basis and relies on fund raising and appeals. Raising money by appeal can be time consuming and can result in protracted projects.

*Royal Surgical Aid Society, 47 Great Russell Street, London WC1B 3PA

Nursing home registration

Before a nursing home can open, it must register with the local district health authority. The registration procedure involves gaining approval from statutory authorities such as Health & Safety inspectors and the district pharmacist. Potential nursing-home operators must identify a local need for the facility. Their proposals must comply with minimum space, constructional and equipment standards, and meet rules on the control of hazardous substances. Management must provide qualified staff, and nurses to established scales. They must initiate nursing procedures, staff training and paient records, and provide the appropriate facilities and services.

Design/area parameters

The design used for the model has been based on experience gained from a number of earlier schemes and offers:

• Single storey accommodation with no stairs or steps.
• Clusters of 10 to 12 single bedroom units per wing around landscaped courtyards.
• Full access for wheelchair users
• Easy-to-clean-and-maintain surface finishes
• Low-level window sills to meet seated sight-lines, carpets or cushioned flooring to soften falls; hand-and-grab-rails
• Nurse call, telephone, and television points in each room.
• Assisted baths, showers and WCs for communal use. A sluice in each group living area. Individual en-suite toilets for EFD patients (with nurse call).
• Laundry, kitchen and staff facilities etc.
• Staff training room, physiotherapy and medical consulting room, nursing offices.
• Special security for dementia patients including centrally monitored door alarms, window locks and limited access via discrete, but secure, fencing.
• Area/facility provision for various schemes will depend on the number of beds, the building configuration, and defined staffing levels. An area breakdown of the model scheme is provided in the table to the the left.

Procurement

This cost model is based on an award winning nursing home that, with the encouragement and support of Surrey County Council, the RSAS developed to include both additional provision for dementia and physical infirmity nursing. The RSAS was also able to improve the quality of the design and achieve a lower overall cost.

Design-and-build contractor for the scheme was Lacey Simmons. The company has built a number of similar schemes and contributed positively to the design/cost targets. DL&E was employed as the employer’s agent and helped the RSAS negotiate the contract.

This procurement benefited from the input of a client experienced in operating and a contractor well versed in constructing nursing homes. The main advantages of using a design-and-build contract are one-point responsibility, a firm price (provided few variations are issued), better co-ordination of design and specialist systems, and speedier on-site production because of greater integration of design and construction methods.

These factors, combined with the use of factory-built components, give a geater likelihood of completion on time. Critics of D&B express their concern that less care is taken to identify clients’ precise requirement, resulting in lower specification standards and poorer detailing than with other procurement routes. They also believe that quality control is often ignored and that little thought is given to operating and life-cycle costs.

This project was let using the JCT standard form of Bulding Contract with Contractors Design 1981 and can claim success in achieving all of its design, time and cost targets. Not all design-and-build projects are so successful, but this scheme provides a good example of how partnering for building contracts can work successfully when:

• the client and his agent know their business very well and actively involve themselves in planning the ubilding and selecting suitable fittings, equipment etc
• The contractor has previous experience of the particular building type and can bring this to the current project
• A common purpose and close co-operation is maintained between all parties at all times

Costs and the cost model

Generally residential care homes cost £500-800/m2 and nursing homes cost, exclusive of external works (often adding 10-20% to costs) and furniture and fittings (typically adding 8-16% to costs). Cost per bed space fo rhtese home is £23-55 000, with an average of £33 000.

The cost for this schem is £710/m2 (£26 000 per bed space). It comprises a 1740 m2 single-storey cluster building around four internal courtyards and contains two dementia wings and two elderly, frail and disable wings, each of 12 bedrooms, together with common living areas, reception, adminstration areas and a hotel services wing.

The costs exclude any allowance for contingencies, VAT and furniture and equipment costs (which have been updated to £235 600 for this scheme). Adjustments should be made to the figures for schemes at other locations with alternative procurement routes, specification standards, sizes, site constraints and local conditions.