Dr. Leonid Shapiro, Managing Partner, Dr. Michelle Tempest, Partner, and Phil Carrivick, Director, at Candesic compare how different European countries approach care for people with intellectual disabilities (PWID) and explore whether an increase in market share of independent provision in Ireland will raise policy issues around the commercialization of care. Or will the focus remain on improving clinical standards, regardless of operator ownership?
England and the Netherlands have set up independent businesses (charitable and for-profit) to care for people with intellectual disabilities (PWID) and Ireland is following suit.
Ireland’s rich history
When talking about care for PWID, it is always helpful to remember the social fabric of the country. Irish communities take great pride in caring for the most vulnerable in their society. Local religious organizations were once responsible for how care was provided, and Catholic nuns created establishments such as the Daughters of Charity (1922) and the Sisters of Charity of Saint Vincent de Paul (1926) to treat PWIDs.
But by the middle of the 20th century, there was an acute shortage of religious care personnel. One paper (The Problem of the Mentally Handicapped, 1960, Dept. for Health), concluded that the number of care places for PWIDs needed to double from 3,200 to 7,000. care facilities were converted into smaller community units, although this did not resolve the shortage of care staff.
In some respects the Irish policy was ahead of the famous 2014 Bubb Report. certain number of locations. The Church refused to expand the offer because it was understaffed, and the state encouraged the voluntary and private sector to develop new services. Over the past twenty-five years there have been many policy developments to evolve the framework of care for PWID, the most recent being the National Disability Inclusion Strategy in 2017. Ireland now has fees for individual needs assessments and earmarked funding for acute cases.
The HSE, the Irish body responsible for delivering health and social services, has an annual budget of around €16 billion (pre-Covid), which is about the same as England per capita. Ireland also appears to be on the same statutory trajectory as England. Both regulators (HIQA in Ireland and CQC in England) encourage more community care environments. In Ireland, around 4,000 PWIDs are expected to move from congregate institutions to scattered accommodation, around double the number in England, which has been pushing this scheme since the Bubb report.
When we interviewed Sir Stephen Bubb, director of Charity Futures and the Oxford Institute of Charity, he said: “Ireland’s recognition that small-scale community delivery is the best approach is significant. It is a call to providers to ensure high quality and highly personalized services to citizens so often marginalized and sadly mistreated.
Growing need for more housing
Figure 1 compares the European model of care for PWID, illustrating a trend for PWID to be cared for in specialist units, tailored to individual care needs. Some countries are lagging behind others, but the trend is clear: to develop more small specialist units where staff are 100% trained in “positive behavior support” and other care techniques. Obviously, this evolution of specialization can only be accompanied by investments.
The good news for operators in Ireland is that the average spend on residential ID care is around €127,000 per person per year, equivalent to £106,000, higher than in England where the average is around £75,000 a year. However, there is a need for investment in this sector before it can meet demand. The NIDD (National Developmental Disability Database) and HSE have published reports calling for more provisions for ID living places. In 2019, the National Service Plan in Ireland called for an additional 400 residential places per year (5% CAGR). But who will build and operate these facilities?
The rise of the independents
Candesic suggests that there is an opportunity for independent providers to bridge the gap between supply and demand for PWIDs. The current offer is very fragmented. For the historical reasons explained above, approximately 80% of identity care is provided by non-profit organizations such as Brothers of Charity Services CLG and Avista CLG, see Figure 2.
There is a need for more independent vendors to enter this industry. To do this, they must invest in top-quality care, become a trusted provider with commissioners, and have access to the capital needed to establish a meaningful presence in the country.
Nua Healthcare is one such provider – in 2015 Dublin-based investment firm Ion Equity took a majority stake. In January 2020, it was acquired by iCON Infrastructure and expanded to approximately 50 homes nationwide. Its homes are among the top 10% ranked by HIQA in residential services for people with disabilities in Ireland.
Talbot, a medium-sized provider, has homes focused on areas north of Dublin. Since its acquisition in January 2000 by Care4U Invest (a Belgian investment vehicle), it has expanded its portfolio from 20 to 25 homes. Each typically houses 5-6 residents and provides round-the-clock care.
Candesic believes that Ireland, alongside other European countries, will continue to move care facilities away from religious leadership towards clinical outcomes-driven commissioning. A pan-European operator may emerge as a global expert in specialist community care for PWID. But the inflationary and staffing pressures of the global economy will need to be considered in any investment thesis.
As the PWID industry becomes more professional, old-fashioned “mom and pop” operators may well struggle to evolve their governance structures to have scrutiny and results-based metrics. In summary, there is a one-time opportunity in Ireland for existing players to grow rapidly and for investors to buy or build new platform assets and emerge strong – there are plenty of opportunities to deploy among small operators.
The aim is for Ireland to maintain its proud history of caring for the most vulnerable and the outcome should be a win-win for PWIDs, voters, politicians, businesses and investors.