In conversation with CHP at Orchard Care’s flagship Lofthouse Grange & Lodge care home in Leeds, CEO Paul Mancey calls for central government control of adult social care, including the creation of a national tariff to ensure that everyone has access to good quality care.
CHP: Can you tell me about the history of Orchard?
PM: Orchard has had three stages of growth. From 2003 we had a very strong new home opening programme, launching around 25 new homes offering residential and residential dementia care in the north of England.
Care margins were squeezed following the austerity programme in 2011 so we diversified into management contracts across the UK stretching into Scotland and Northern Ireland.
In 2015 we were acquired by Alchemy who brought a portfolio of around 40 additional freeholds homes into the group. Alchemy has a strong track record in the sector. Going forwards our focus will be on acquiring new freeholds rather than management contracts.
CHP: Will you be focusing on any parts of the country with your acquisitions?
PM: We will focus on our existing core areas in the Midlands and the North. What we have learned is that it makes a real difference having a cluster of homes close together. It’s partly about being able to support the homes more efficiently but it’s also very important to be able to offer our people a future. It’s much easier to deliver development opportunities if you have several homes close to each other. Although we have grown to be one of the larger providers, our approach is to have a local focus and our vision is to be at the heart of the local community.
CHP: Could you tell us about your background?
PM: I have been with Orchard for 14 years. I started my career in FMCG (fast moving consumer goods) marketing with brands like Pepsi and Colgate before going into retail where I had a number of commercial, new business and general management roles with Tesco and Asda. Retail was a really exciting place to be in the 1990s. There was lots of scope for new ventures. I set up Tesco home shopping and launched Asda’s financial services.
I got into care almost by chance. I had accepted a board role at a major business in Australia but then I was approached with an offer to take an equity stake in a Yorkshire based care home operations and construction business. For some time I had wanted to run a business so I couldn’t refuse this opportunity.
CHP: Do you see any parallels between the care sector and retail?
PM: More than you might think. At the heart of it it’s about customer service, quality standards and people. Both sectors are quite heavily regulated as well.
CHP: Is branding as important in care as in retail?
PM: Certainly not from the point of view of advertising to encourage customers to try your service. National branding may not be as important in care but local reputation is everything. Recommendation plays an important role in choosing a care home so we need to ensure that our families, team and healthcare professionals understand our values and what we stand for. There is certainly an ‘Orchard way’.
CHP: How would you describe the typical Orchard home?
PM: I would like the answer to be with happy residents and our team enjoying life. In terms of type of home, our original Orchard properties are typically about 60 beds, split between residential and dementia care. The homes we acquired more recently are probably nearer to 50 beds with about a third of these offering nursing care. There’s a minimum amount of beds for a home to be viable and that is probably around 40 or so. 40-60 beds is a really good number to offer high quality care but we also deliver excellent care in an 80-90 bed home. We’re in a home that’s 87 beds and the care is very person centred. To say that it’s an 87-bed home is maybe misleading. It’s really five small communities, each with a homely supportive feel.
All of our homes are purpose-built. It’s hard to believe that ten years ago there were still a large number of homes with double rooms. Increasingly now residents are looking for en suite wet rooms. Over time people’s expectations will continue to rise.
CHP: How are your homes split between local authority and privately funded?
PM: We will always be open to everyone. Our primary focus is delivering high quality care but in our mature homes it’s about a third private pay and the rest local authority provided. In the homes we picked up a few years ago the percentage of private payers is lower but as we refurbish the homes I expect that to go up in the course of this year. Over time our private pay participation will grow but it’s not the priority currently. Every provider has to cross subsidise between private pay and local authority fee payers. There is such a wide range of local authority fees. In some areas we are getting less than £450 per week which equates to £2.68 an hour. In other areas we receive over £500 a week. In some locations, without private pay fees the homes would be losing money.
CHP: What is the true cost of care?
PM: It varies by location and type of care. The level of acuity is rising. If it’s a home with residents with higher care needs then you will need higher staffing levels and will need higher fees. As a guide a sustainable figure is over £600 a week which is still just £3.57 an hour.
CHP: How is your nursing care business performing?
PM: The chronic shortage of nurses in care homes and the NHS has been an issue for years. The recent Mazars FNC agency review reported nurse turnover at 47% and one in four care home nurse positions vacant. We are seeing many nursing homes close, particularly in rural areas where it’s sometimes virtually impossible to recruit competent nurses. Several of our competitors have withdrawn from nursing entirely. For us it’s clear that the need for nursing care will rise and we are committed to investing in it with the expectation that fee levels must increase. We are recruiting a director of nursing and investing in our nursing capability and clinical governance. We are introducing a care practitioner role and looking at some more innovative approaches, including our version of district nurses who can support more than one home.
CHP: Is nursing recruitment a difficulty for you?
PM: It’s difficult for all of us. There’s only so far we can go in terms of introducing care practitioners to reduce the workload of nurses. Clearly as a country we need to either train more nurses or bring more from overseas. There’s a critical role for central government here.
Recruitment is not just a nurse issue. It is good news for the country that unemployment has fallen by 40% in the last five years but it is increasingly difficult to recruit and retain carers. We are competing with lots of other industries and if there is any further fall in unemployment, it’s going to affect us.
The manager role is vital because we all know that a good manager equals a good home. We support the increase in regulation but there is growing evidence that the extra pressure on managers is resulting in people leaving the sector or stepping down and it is more difficult to bring new talent through. There is a shortage of good managers and many of our best managers are receiving calls from head hunters every week. At Orchard we have an established management development programme and we are now looking to fast track talented leaders with the right attitude from other industries.
CHP: What would you like to see in the government’s Green Paper?
PM: It must be helpful that the government recognises the interdependency of the NHS and social care. The NHS can only work if social care is working. Of course social care needs more funding but I hope the debate will include the commissioning of care. We have had the report on social care from the Institute of Fiscal Studies (IFS). We also have the ongoing investigation by the CMA. My reading of the IFS report is that it supports the move from local authority to central government funding and this is something I would welcome.
I hope the CMA will shine a light on how the local authority monopsony is denying good choice for local authority funded residents because more and more homes with local authority residents are closing and many others cannot afford to invest. The post code lottery of local authority fees and quality frameworks can’t be right.
I believe we need national tariffs for residential care based on objective care needs assessments supported by a standard dependency tool. If we moved to central government funding there would also be an opportunity to widen the brief of the CQC to take on the role of contracts monitoring. It seems confusing and wasteful to see the CQC and local authorities doing similar audits. So many different local authority quality frameworks add to complexity for providers.
The additional funding required for social care is significant. It requires a significant decrease in other public spending or a significant increase in public sector borrowing and tax or a significantly higher contribution from the individual who receives the care. As a provider we are mainly concerned about the level of funding rather than the source of funding, however, there seems to be increasing support for mandatory insurance schemes along the lines of the German model. I would be in favour of new schemes that give residents more choice but any compulsory scheme sounds like a tax to me. I don’t really understand why people who can afford to pay shouldn’t pay. What’s wrong about spending your money so you can live in comfort and security? If I need around the clock care and can afford to pay for it why should other people pay higher taxes so I can leave more money for my children?
The Chancellor’s additional funding in the Spring Budget has been very helpful on one level as it has legitimised our concern about the crisis in social care funding for when we meet local authority commissioners. Clearly any new money has got to be good news but there is still a lot of confusion about how and where it will be spent. I met with a local authority commissioner recently who is receiving a further £12.5m this year and he doesn’t know what strings will be attached. He told me that he has to agree where the money goes with the CCG but they haven’t even met yet.
CHP: Would you say you were working more closely as a rule with the NHS?
PM: One of our strategic priorities is to develop our partnerships with the NHS but it is more on a local NHS Trust basis than on a national basis. We have been actively involved in supporting the Airedale Trust in its vanguard initiative and have successful ‘step up-step down’ programmes with three other Trusts. I have found the Trusts to be very open and co-operative in developing specifications for new models of care. It’s not just about cost saving for the NHS, reenablement in a care home setting will deliver much better outcomes for patients. The patients have their own room and they are able rebuild their life skills with the company and support of others.
I would like to see social care fully integrated with health care. I would like to see step up-step down care established as the norm. Maybe even we could offer local services for the community such as health screening. We screen our residents for hearing loss and diabetes so why not do it for others?
CHP: How important is technology in delivering good care?
PM: Good quality care is paramount to us. We would like to think we are at the forefront of care management systems and technology. We have an established new learning programme for all of our staff called the Orchard World of Learning which has helped to step change training compliance in new homes we acquire. We are halfway through rolling out electronic medication and are also trialling care plans with two providers. I am convinced that e-care plans will transform person centred care compliance. These care plans are capturing dozens and dozens of data points about each resident each day that are enriching the way we care for the individual. I also believe in the potential of e-care plans to improve job satisfaction by freeing up time from writing. All of our homes are wifi enabled and our activities team use tablets. Tablets are being used to capture compliance data but I would also like to use technology more to capture feedback from residents and staff.
CHP: How do you motivate your workforce to provide the best possible care?
PM: The front line team is the most important and we have a culture of ‘catching people doing a good job’ supported by lots of recognition programmes. We hold a national bake-off competition. Our winners won the Care Establishment of the Year at the NACC awards. We have a chef of the year competition supported by Unilever and an activity co-ordinator of the month. It’s a good way to champion good ideas and get them around the business.