Fortune Favours The Brave
A regular podcast for business leaders exploring how businesses can harness risks and use them to their advantage. In each episode Howden Insurance Brokers will discuss a topical challenge or issue and what business leaders can do to overcome it.
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Fortune Favours The Brave
Care Homes in Crisis: Financial Challenges and Future Viability
Care providers in the UK are facing more and more challenges to remain a commercially viable business. Understand the steps they should take to address these challenges while avoiding the risk of underinsurance. Hosted by Richard Lawson, Senior Account Executive at Howden Health & Care.
With the expertise of Nadra Ahmed, Executive Co-Chairman of the National Care Association, and David Taylor, Executive Director, Head of Howden UK Health & Care. We provide an overview of the impacts of the workforce and funding issues that care businesses face and the effect it has on a wide-ranging sector facing various risks.
We discuss the work that the National Care Association does to support an industry battling with the erosion of appeal for its workforce and how the different services and levels of support that they offer helps to ensure no provider feels alone. We then discuss the proactive steps providers can take to ensure they have adequate insurance.
Finally, the discussion moves onto what the future holds for the care sector and how care providers need to continue to evolve to meet the changing needs of our population.
Welcome to Howden's podcast Fortune Favors the Brave. We all take risks in our everyday life, and business is no different. In this podcast, we're speaking to the experts about a topical challenge or issue and what business leaders can do to overcome it.
Speaker 2:Hello and welcome to this episode of Fortune Favors the Brave. My name is Richard Lawson and I'm one of the senior execs here at Howden Health and Care, and in this episode we'll be discussing the commercial viability of care homes moving forward. I'm joined by guests today. First of all, david Taylor, executive Director at Howden Health and Care. Hello David, hello Richard, and we're also pleased to have the pleasure of Nadra Ahmed join us, the Chair of the National Care Association. How are we, nadra? I'm very well, thank you, wonderful, wonderful. Now, nadra, I wondered if we could start by you introducing yourself, telling people that may not know and I doubt there's many that don't know you what you do and what the National Care Association does.
Speaker 3:Yes, so I have the privilege of being the chairman of National Care Association, which is the association that looks after small to medium-sized care providers across the country. I came into the sector in 1981 as a care provider and was the registered manager of a couple of homes over a period of about 24 years and then entered the kind of representative role quite by chance, having spoken at an event where there was the then Secretary of State, who then asked me to sit on some of the groups and committees that he was running at that time. So that was quite some time ago. So the role is one that encompasses many facets. It has become a more executive role over the last 10 years, so we run two offices. We merged with what was the Registered Nursing Homes Association not very long ago, about two years ago, and so now that makes us the largest national body of individual providers.
Speaker 2:Wonderful. Thank you, and it is tradition here on this podcast, Nadja, that I ask you a question about when you last took a risk or was brave and it paid off. Now that can be in your personal life or in work life.
Speaker 3:So I guess probably the best example of that was in November of last year in 2024, when I wrote a letter which referenced some challenges that the sector would face and put them out to politicians, and the letter was seen by some other people who then said, well, we'd like to co-sign it, and so we ended up with about 125 co-signatures on it.
Speaker 3:What that evolved into was a sector that came in behind that and decided that they wanted to be represented in this way because they felt so strongly about the impact on our sector. At the time, I took the challenge on and decided that we would encourage this to happen, and it formed a movement which is the Providers Unite movement and the movement. Then we started to get people saying what they wanted to do to have their voices heard, and I actually agreed to a march into London which is unprecedented, never heard of, and we did that in February. So there were some risky moments in there. There were some challenging moments. You don't kind of realise how much it takes to organise the whole thing as well, but the reward was absolutely brilliant in that we had 3,500 care providers from all around the country coming into Westminster just to have a bit of a picnic but also say what they felt and it raised the profile quite a lot of our sector.
Speaker 2:Fantastic, fantastic. So obviously you introduced the National Care Association. Could you give us a brief overview of its sort of structure and what it does for those individual providers?
Speaker 3:Yes, so the National Care Association is the oldest of all the national bodies that are around and it was formed in 1981. It was set up by four individual providers who felt like they needed a voice to be stronger and of course then it's grown from there and originally it was formed by local associations being part of the board and it has evolved and we kind of at one time I think we were about 48 people on the board we now the criteria is that they need to be care providers themselves or have run a provision quite recently. We also have a couple of advisors on the board and the advisors are very specific. One is a barrister, one is somebody who works very close in the learning disability sector. And the purpose of it we've kept it very, very simple. The purpose is really that we represent individual providers.
Speaker 3:So this is not about the sort of corporate structures, this is not about private equity. This is about the individual who has either taken out loans or they've got mortgages on their services, and that's the bit that really makes it what it is. So the purpose of National Care Association is that nobody should feel that they're alone, and that's the piece that really matters to us and within that we provide DBS services. We've got advice lines. We've got solicitors who support us. We've got people like accountants who support us for insurance support and all of those kinds of things. We've got banks that work with us and different services who are our partners. So we've created a partnership structure that then enhances the offer to the individual providers so they can go to somebody for help if they need it. They can also call into the office if they've got a specific problem. We'll find the right person. We've got a compliance director who works on all matters CQC. We have a policy advisor who supports me.
Speaker 2:And I mean do you have any examples of when the National Care Association has helped a specific care business that you're proud of that you can go into at this point?
Speaker 3:Well, I think there are so many different things and what matters to one may not matter to another, and I think that's the challenge. The calls we generally get, which are really hard, will be around the regulator. And just recently we had quite a large provider who is actually a very is somebody who can speak for himself really quite articulate, and he rang me and said he'd had a home that had been built with 40 beds and he said I just cannot get it registered. You know, we're waiting for registration. I'm losing money. It's been, you know, four months and we're still waiting for the registration and I just don't know what to do Because, of course, when you build a home, you've got costs to pay. You've got to kind of get that working for you. So I said, well, just leave it with me for a minute. And I got on to our compliance director and said we need to help this member out because it's, um, uh, it's obviously a challenge for him. Uh, within a week that home was registered.
Speaker 2:I mean, what are the key challenges are facing the care businesses at this point in time?
Speaker 3:well, I think the key, the key issues remain and have been over the last decade and a half. A workforce is one of them and the other one is always going to be that funding issue and I suppose, if I take those in order, that the workforce. You know, we can't do anything unless we have a workforce. So there's no, the sector doesn't exist if we can't deliver the service. And there's been a kind of an erosion of the image of social care and there has been an erosion of people wanting to come into the sector, partly because of the pay but partly also because of that image that people don't think of it as a career, there isn't a career pathway. So we are, we're constantly battling that and then we make a few steps forward.
Speaker 3:And I always remember when the visa system was set up it was on Christmas Eve in 21, I think it was that somebody from the Home Office rang me and said I'm sorry to ring you at this time, but just to let you know that all this thing you've been fighting about getting senior people on the list, you've got it, you've done it and we will, by February, be doing that. So we thought that was a bit of a solution a short-term solution. We don't want it to be a long-term solution. So international recruits were coming in and we've got about 70,000 people who have come in, you know, to support us, because we just we have this sort of over 120,000 vacancies and that changes on a daily basis. So that is an enormous challenge and you know there isn't a career pathway. We keep talking about a career pathway. You know where do people go. So when something like the COVID jabs came in no jab, no job sort of thing came in we lost about 40,000 to the NHS because they didn't fall into that category. So that sort of remains as a bit of an issue and I talk about it all the time and we spend a lot of time in meetings around this about how we encourage people to see it as a career, people to see it as a career.
Speaker 3:But the other bit, which is the funding piece, is a challenge that is really now going to hit because we are at a situation where the deficit for the social care sector as a whole is about between 8 and 10 billion and we've got another 2 billion that is going to take impact as of this month. So providers are having to provide social care, you know, at £600, £700 a week potentially you know the people that we support which works out about £4 an hour. And it's just now. The resilience in the sector is gone. People are beginning to think I can't do this anymore, and they will be the people who've got a passion for the sector. They will be the people who really, you know, have been in it for a little while and thinking, you know, do I carry on? And I think that's an enormous problem and I think by June of this year, june, july of this year, we will start to see what that impact's going to be.
Speaker 2:Wow, I mean, david, given the challenges that Nadja has touched on there. What sort of impact do you imagine it will have on the insurance market and is there a way that the businesses can mitigate these impacts, and is there a way that insurance companies can help businesses mitigate these impacts?
Speaker 4:Gosh. Well, it's a challenge for the market and listening to Nadra, you know in terms of the actual recruitment side there's not a great deal on the insurance sector side that can be done. Culture, you know, ethos of a business is important in terms of attracting people, retaining people, and there are elements in terms of employee benefits and other things that we could help with in that sort of context to sort of provide a wraparound that that provides some attraction to stay. But I guess the cost issue is the big one and that viability question and since obviously COVID sort of came and largely went, the market is softening. So when I say softening of the market, what I mean there really is that insurers are taking a much more active approach to wanting your insurance. So pricing comes with that. But from our perspective as brokers, we're still obviously very keen to represent prospects, clients, as best we can and in that context, you know it's a question of trying to highlight the good things about risks. You know what are you doing that maybe stands you out? Or you know, is there exceptional training or other things that you know make you a risk above your next door neighbor? That helps in a negotiation sense for us because you know a softening of the market helps but at the end of the day it's our representation of that prospect, that client and the negotiations we have that affect that sort of cost line on somebody's accounts and that's a cost that is inevitable. It's important.
Speaker 4:I think particularly Nadia mentioned there that providers are struggling to see the future in some instances and how they will afford it. I would strongly advocate, you know, not under-insuring. You know you will have no resilience in your P&L, your accounts if you encounter a claim where you haven't got adequate insurance. So it's critical in that sense that you insure adequately because if the worst happens you won't have the backing necessarily or full backing to have a claim settled which could be disastrous.
Speaker 4:So I think that's an important facet. But if you are trimming the sales in terms of what resource, what costs, what revenues you have, look at those things. Insurance policies are based on revenues and wage rolls and if those have rescinded in some respects, get those updated figures to your broker because you know that's a basis of your calculations. So I think make sure it's right, make sure it's accurate, keep it up to date and certainly your broker then should be able to do the best for you based on that, the type of provider you are and, hopefully, any outstanding elements that can be presented. It's a challenging environment. I think we understand that.
Speaker 2:Absolutely Now, nigel, I mean as a care leader. What steps should you be considering or even taking at this moment in time to make sure that the business is commercially viable, moving forwards.
Speaker 3:I think that's a really interesting question, because the one thing that we need to fully understand is that every provider out there is autonomous in the way that they operate, and so business plans need to be updated on a regular basis, and I think one of the things that's really key to this is that be honest with yourself about the building that you're in, what limitations there might be, and also the client group that you're looking after. Be absolutely clear that. Are you going to be able to take on people with challenging behaviour if they've come out of hospital and they've got something like Delirium? Have you got the right structures in place to be looking after somebody like that? What is the impact on the rest of your business? So we have got a stock of care provision where we've got older buildings, and then you've got the brand new spanking building which people will go to because it feels like a hotel, and it's about marketing yourself at the right level, and what component is most important? The component of compassion. The component of care is the thing that people some people will be looking for that, but, but some people will be looking for the shiny tap. So get your USBs right, but, over and above that, remember that every member of staff in your building, remember that every family member and every resident is the ambassador to your building, to your service, and engage them, keep them informed, make sure that you are looking after your workforce in the way that they need to be.
Speaker 3:Retaining is really important. Recruitment, of course, is a challenge, but retention is the other piece that we really need to be clear about and one of the things that, as David was talking, I was just thinking through. We are being told that there will be more and more health care tasks, so making sure that your staff feel comfortable, confident and competent to deliver those. So keep up your training. But also, you know, keeping that insurance piece alive that if you, if you are thinking that you're taking on healthcare tasks which may not be fully covered, you know make sure they are and then let your staff know. The reason that you're saying don't do this is because if anything goes wrong and that's the sort of conversations that you need to have to make them part of the team, not you in an office and them doing things.
Speaker 3:So I think that is a really important component of making sure that you evolve, and I think, as a sector, we are an amazingly agile sector. We have innovated and we've moved. The only reason the sector is as robust and as good as it is is because providers have invested in it. We don't get the kind of funding elsewhere. It is providers themselves. So making sure that you're agile is by moving with the times. If you are not getting the residence that the home down the road is able to attract because of some other USB, then look at the type of residence you can and then move towards that.
Speaker 3:You know, keep moving forward and I always I use this as an example on a regular basis. But when I first, you know, we opened our first care home, we didn't take anybody who was incontinent or confused or, you know, had dementia. That was just not done in those days. By the time I left the sector, about 25 years later, we'd moved to the pathway where we did do all of that. You know, happily confused people. And now when you walk into a care setting, what you'll see is that there are mini health bases that are running little mini hospitals, almost cottage hospitals, which we didn't have. People don't imagine that's what social care is. So I think every provider should take the time out of these really hectic schedules and these really challenging times, to give themselves and their senior teams and their staff a couple of days to do that thinking. Once you've agreed it, you actually make it a much stronger unit and then you can go forward with a full agreement of everybody.
Speaker 2:Yes, I mean, David. It's obvious that care providers are facing huge challenges. It's obvious that care providers are facing huge challenges. Now, from an insurer's point of view, what does the future look like, especially for these businesses, if they're?
Speaker 4:not proactive in reacting to the challenges that they're facing. Well, I think I would encourage them to be. I mean to be proactive Nard has touched on quite a few points there and the social care sector is a spectrum. There's not one type of risk. These providers are quite varied, both in the type of service users they have, what facilities they offer, etc. So this is not a templated risk and I think it's important for providers perhaps and I understand they've got a myriad of responsibilities, challenges, actions, you know, that sit in their respective laps.
Speaker 4:But when the time comes to consider insurance, example, just spend that time thinking about what is it I want to happen and actually have that conversation with your insurance broker, and I think by that you know. I would certainly advocate that you talk to an insurance broker that is a specialist in the care sector. Howden, obviously, is one of those, but there are, there are others, but that specialism is quite important in the understanding that you'll get from a broker familiar with the sector you know. Explain where your head is at, explain why you know what you're looking for out of it. You would hope that your broker will be transparent back in terms of what is achievable.
Speaker 4:I go back to the point I made slightly earlier, which is let's get everything up to date, make sure it's accurate, because you know that's then you're buying insurance that is going to work and that's important. So I think don't treat it just as a transactional cost. You know it can be a negotiation. Treat it like a negotiation, give it the time. But talk to your insurance broker and explain what you want out of it. Make sure they understand what it is you're doing, what you do, and help them present that in the best light. I think if you do just treat it as a transactional action and just ask for terms, you're not going to get the best result. You know there's a little bit of investment needed in time to make sure what you get back is the right insurance risk for you, and that would be my strongest sort of recommendation.
Speaker 2:And Nadra, does the NCA, or the National Care Association, have any sort of insights from all of your members where you share into the care community and how to help them moving forward?
Speaker 3:What's the sort of Health? But it will be the Home Office, it will be DWP. So you know, things like the welfare bill will affect us. We've got the finance bill going through and the Home Office obviously we work with on international recruits, so we get quite a lot of stuff that comes through. We make sure that our members are given all that information on a regular basis and we do like to spread some good news as well, so we do try and get people to send us things that actually are showing us, as you look at the trajectory, and more 100 birthdays being celebrated than ever before, you know, so that I mean that is quite interesting in the light of all of that. But over and above that, we do run webinars for our members and we work with our partners to make those webinars, you know. So it could be on GDPR, it can be on insurance, it can be on some legal issue that's coming up, so we try and make sure that that's also communicated.
Speaker 3:I also do coffee and chat with all my members. They have an open invitation to attend that on a regular basis and they talk to me directly and we have a great conversation with them on that and we follow that through with the Providers Unite as well, where I do get about 200 people on there, whereas the Coffee and Chats is a few less than that. But you know it is quite. It's really good because people you know people are talking to each other, they're not feeling alone, and that bit is really important. Over and above that, we do regional events. We've got masterclasses going out that are planned for this year which will look at all the different changes that are going to impact providers. So that will happen in the next couple of months. My co-chair, ian Turner, will be running those on behalf of National Care Association. And then we do tend to have a national conference once a year and we try and get people to come along to that.
Speaker 3:I think since COVID it has become less and less appealing for people to actually come out. It's starting to pick up again. But I think generally people are much happier with the kind of Teams calls and that comms in that way. But I'm always available and it is interesting, I take all the calls out of hours. So people, they will come to me and that's how I want it.
Speaker 3:It's not because I have to, it's how I want it because I want to. I have to. It's how I want it because I know what I want to know what's going on in the ground, on the ground. But also every time we support somebody who breathes a sigh of relief, that makes a difference in my view, and I learned this through Covid, where people were calling us at 11 o'clock at night and saying I've got 15 members of staff who've just tested positive. What do I do, you know? And then trying to get to other people to say can we just exchange some staff for that particular night, or whatever. So bringing this community together which is why Providers United has been so, so important to me and it was one of the challenges of bringing it together and keeping it together is the other challenge, but it is about the unity of the sector because together we will be stronger.
Speaker 2:Well, it also sounds like. As much as the future has its challenges, you've got to share the wins as well, because otherwise it's nothing but negativity.
Speaker 3:Yes, absolutely, and I think the wind you know to have I can't actually, unless you were there three and a half thousand people in London, in Westminster, and at the time a debate was going on about social care and we won that debate, interestingly enough, as social care, as social care. But I had people who I know, who are inside the Palace of Westminster, who said to me we could hear you, we could hear you shouting, and it's the first time that's ever happened. So what I think we've done is we've empowered people to actually believe in themselves, to come together and know they're not alone. And we've seen a lot more activity which is political activity, completely apolitically. Whoever your MP is, write to them and tell them what the challenges are, because a lot of people don't know. There's a lot of people within the decision making arm who don't know. We're doing the same with the local council, so we can just get people to feel that they are getting their voices heard.
Speaker 3:We've had a really good response from a lot of members of parliament who've invited us to come back in and talk to them, and this is just like education really, more than anything else, because going in as an elected member, that may not be your strength. You, you know, and that's what we're trying to get is to get people to just understand health. Everybody knows about. They're great, you know what, what goes on in the health. We all want the nhs to survive. We all want it to thrive, because at the point any one of us needs it, we want it to be there. Social care isn't seen in the same light, but we are getting that message out and every time somebody gets a letter back now they're actually sending it to us and saying this is my response. So they're feeling they're actually part of that machine.
Speaker 2:And I mean you touched on it through all of the answers, I think, today. But what do you feel the future holds for care? You know the businesses, the staff that work day to day to support the most vulnerable among us. What's the future?
Speaker 3:Well, I think the one thing to bear in mind and hold we're all going to get old, if we're lucky, you know. That's the thing to hold in your head. And so investing in social care and the future of social care is everybody's responsibility, it's not just the responsibility of those who work in social care. So I think that and it happens to people at different times I saw both my parents go through that system. It happens to people at different times. I saw both my parents go through that system. Fortunately they didn't have to rely on the state, but actually my father found it quite difficult that he'd have to pay for it because he felt that he would be looked after. So you know all of those myths that are around we've got to talk about. So, bearing that in mind, we also know that demographics are very clear that there'll be more people needing care, not less, as we live longer, which is the good news story. With very complex health care conditions, we are going to cost the state a bit more because of the medication and all of that's keeping us alive. So there will always be a need for social care, but it will be a need in different ways. Need for social care, but it will be a need in different ways. So, from what I was saying earlier about when I started to where it is now, we will keep evolving, and the reason that we keep evolving is because we are so successful.
Speaker 3:Social care isn't broken. It's everything around it that's broken. It's the nhs that's broken. It's the gp surgeries, you know, and and the far all of that's broken. It's the NHS that's broken. It's the GP surgeries, you know, and all of that is broken. It's that pathways that will lead into social care.
Speaker 3:But the one thing that every person working in social care can hold their head up high is that we are delivering. Despite all the challenges, we continue to deliver. Which is why our partnerships are so important to us is that we continue to deliver. Which is why our partnerships are so important to us is that we continue to deliver. So the future for social care will you know, if you'd looked back 40 years ago and told me that care homes would be looking after people catheter care or, you know, would be looking after people end of life, all of that I would have thought no way. That's nursing. So what does the future hold? The future holds more and more healthcare tasks, potentially, but what we as a sector need to do is to now say we can do it, but it's going to cost X and we need to be proud, you know, shout loud, shout proud about what we're doing, and that's the piece that we need to take social care forward in.
Speaker 2:Brilliant. I mean, unfortunately we're running out of time and that's all we've got time for, but I think everyone would agree we could continue that conversation forever. It's been a pleasure listening to both of you, your thoughts and feelings on everything. Thank you ever so much, nadra. Is there a way or a way for people to contact you? Do you have LinkedIn or other social medias that people can follow you on, and would you like to share that today?
Speaker 3:yes, I am on LinkedIn so I can be followed on LinkedIn. We also have Twitter accounts and we have an office, so you can ring in at any time if you think you want some support. We do get people ringing in, but we have a Facebook page as well. So you know we welcome any thoughts, any comments, anything that can bring us. You know, if we're not doing something, tell us about it. If we're doing something, well, tell us about it.
Speaker 2:And I'd also like to thank you, david, for joining us today. Great insight, as always, and I'd also like to thank all of the listeners and until next time. That's been Fortune Favors the Brave.
Speaker 1:Thank you for listening to this episode of Fortune Favors the Brave from Howden. To hear more episodes and subscribe to our channel, search Fortune Favors the Brave on your favourite podcast app.