Annex B Care Homes - Hounslow Cost of Care Exercise

Confidence in data

There remain specific concerns in the data received and the completion of the exercise that led Hounslow to conclude that the median rate submitted cannot be wholly relied upon and must be used in the context of the known issues and further supported by additional benchmarking and other statistical data.

Providers were clear that they were not always sure where to allocate costs and that some figures were rounded up or estimates over the year. Providers were also not always clear as to what the exercise would achieve, and this heavily influenced how they completed the template. 

Whilst the tool provided the majority of the data fields needed it did not provide enough information on the levels of need which may have explained some of the variations in costings. Councils may have benefits from understanding the different charge rates for local authority and self-funded packages. 

Validation of the data was useful to reduce the errors. However, concerns remain:

  • Some providers allocated profits line by line as opposed to allocating them in one line which is harder to compare and distorts line data and subsequent analysis. 
  • Additional income either as grants or self-funder rates could not be isolated in the data and were prevalent at the time of the exercise.  Providers were asked in the tool not to include costs covered by Covid grants during the 2021/22 financial year. However, it may be that providers included personal protective equipment costs (PPE) when PPE was made available for free through the national portal.  
  • The data submitted included a small sample for both residential enhanced and nursing enhanced leading to lower costs for enhanced care than standard residential.  We know from market data that these categories of care are not at a lower cost and believe the data to not accurately represent costs for this reason.  Guidance was followed and included one level of cost for both residential and residential enhanced which is based on the standard rates.  These rates were chosen they reflected a higher rate of providers (3 for residential versus 2 for residential enhanced and 6 for nursing, versus 5 for nursing enhanced)
  • The data submitted included a small sample for nursing dementia leading to a lower cost than standard nursing. Because of this we have followed the DHSC Guidance and included one level of cost for both nursing and nursing dementia   
  • Care Homes submitted data based on 2021/22 when occupancy was lower due to the Covid pandemic, potentially overstating weekly rates. Hounslow has access to local market data through capacity tracker, indicating care homes are operating close to full occupancy. The IESE Tool does not allow the data to be manipulated to take account of the impact increased occupancy has on the original data. Furthermore, local market conditions suggest high levels of occupancy will continue.
  • Similarly, the IESE Tool does not allow manipulation of the data for different levels of ROO or ROC to be modelled.
  • There was no specific guidance in the cost of care exercise regarding staffing. Hounslow passported the two DHSC Adult Social Care Workforce Grants to care providers during the Covid pandemic.  Hounslow also passported the infection control and prevention fund grants. Providers grant returns demonstrated that workforce support was a significant part of the expenditure including support for staff who were absent from work due to Covid restrictions, and we were unable to disaggregate the impact of this.   
  • Provider data was not evidenced and therefore a margin of error is included in the data used to complete this exercise. 
  • For the reason above it has not be possible to determine if submissions were reflective of aspirational rates or actual rates incurred. 
  • Costs can vary significantly from provider to provider, impacted by factors that include the size of the organisation, variations in staff pay rates and use of agency staff. There is also significant variation in Return on Operations costs submitted by home care providers 
  • Due diligence has been carried out on the data provided, however, there was insufficient time to comprehensively review cost data with providers and there is no practical way of scrutinising central overheads.
  • The median calculation method produced results that do not reliably reflect market costs. 
  • DHSC guidance did not provide clear criteria for moderation (e.g., adjusting for ROO).
  • DHSC guidance recommends querying outliers with providers, however there is no clear line between a cost being inefficient or an outlier.
  • Rising inflation, living and running costs mean that the data submitted through this exercise at a point in time may no longer be accurate.
  • The cost is derived from a sample of the care market that chose to provide data, so risks not being fully representative of the cost of care. 
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