Barchester CEO Dr Pete Calveley tells CHP how he stays on top of the UK’s third largest care provider in order to ensure that it provides the highest standards of care.
CHP: Can you tell me a bit about Barchester?
Pete Calveley: Barchester was founded 25 years ago by my predecessor Mike Parsons with a home called Moreton Hill in Gloucestershire. It then acquired Westminster Healthcare, which was part of Pat Carter’s original concept. On top of that, the group has built around 30 new homes over the last 10 years to reach its current size of around 200 homes, representing around 12,500 beds.
Our care homes and independent hospitals care for people with a range of different needs, from residential care to nursing care, specialised dementia care, hospital-based rehabilitative mental health care and care for people in very specialised areas like neuro-rehabilitation.
CHP: How did you join Barchester?
PC: I was a GP for many years in Lincoln. For the last 10 years of my time as a GP I also held part time management roles with the NHS. I was the Medical Director of the Health Authority before it became a Primary Care Trust. I was also Chair of the Executive Committee of a Primary Care Trust. On top of this, I worked part-time for a think-tank reporting to the Department of Health Strategy unit and I was on the General Medical Council Fitness to Practice panel for a few years.
In 2005, I was asked to join Four Seasons Healthcare. I had become frustrated with the constraints of working in commissioning and service redesign. I joined Four Seasons as a Medical Director on a part time basis.
Because of the work I did to help drive change and improve quality standards, I was invited to join the business full time as Chief Operating Officer. After much soul searching I agreed to give up my GP work to take up the role in 2007. In March 2008, the CEO left and I was appointed to the position. Following that there was a financial restructuring to stabilise the company’s capital structure and, ultimately in 2012, the company was bought by Terra Firma and after a year I decided that wasn’t for me. Around the same time Mike Parsons of Barchester had decided to retire so I came here in June 2014.
CHP: What attracted to you to Barchester?
PC: One attraction was that it was more focused on the private pay market. It wasn’t an experience I had had a lot of at Four Seasons. At the same time they were at the tail end of a new build programme which also interested me as I was keen to be part of a company committed to development and growth.
CHP: What level is your current private fee payer business?
PC: Between 40 and 45%. We are trying to grow our private pay proportion. It’s gone from the mid-30s in percentage terms since I’ve joined the business. We are investing huge amounts in our facilities to make them fit for the future and to make them comfortable places to stay and enjoy a great lifestyle experience. We need to focus on attracting clients who are able to pay the cost of care – and, increasingly, these are private clients.
CHP: Do you see your private fee payers as cross subsidising your local authority fee payers?
PC: In some homes we have a 50:50 split. You could argue it’s cross subsidisation but I don’t think it is. We have core clients who are self-payers and who are paying the cost for that service in that part of the country and then we have clients who are publically funded by bodies who sometime will pay that cost of care and other times expect us to take residents at a lower rate. We believe in sometimes accommodating a marginal element of that as it increases our occupancy. In other areas that are predominantly publically funded the fees that we receive are not sufficient and in some of our facilities we operate at a trading loss. We are managing that balance across the group but it’s not that we are asking the private payers to subsidise: they are paying the true cost of care – in other areas we are being underfunded to deliver that service.
CHP: I presume you have much higher proportion of private fee payers in your services in the South?
PC: It is very geographically specific across the country. Certainly as you move towards the South East the customer base becomes increasingly self-paying. But there are big pockets of the South East where we operate where there’s a very low proportion of self-paying. Equally, if you go further North in some areas there’s a very high percentage of public pay but there’s also pockets of the North – and Scotland and the Midlands – where we have a very high private pay percentage.
CHP: Are you charging a lot more for the same service in the South?
PC: It’s very much home by home. In some of our homes in the South there isn’t a big differential between the self-pay and the publically funded or the self-pay in the South and the North. It very much depends on the affluence of a geographically specific location. We set an absolute standard in the quality of care that we deliver in terms of dining experience and the investment we have put in the home. Inevitably where a home is making very small margins or in some cases no margin at all the opportunity to invest in the lifestyle and fabric of the building becomes more limited. Yet on the whole we are trying to harmonise all our homes to deliver the same experience.
CHP: Do you have many homes in that territory?
PC: In the last two years we have closed two care homes that were operating at full occupancy for the first time ever. Both of them were in the Stockport area of Cheshire. They were 40-bedded homes with local authority residents paying £480 a week. They were trading – before any account for capital expenditure, rent or interest – at a loss. We could not make an operating profit let alone invest in capital. To be expected to operate a full care home for £70 per resident a day, when you can’t get a room at a Premier Inn for less than a £100 a night for just room and breakfast, never mind care, is simply madness.
We went to the commissioner and said we are operating these homes at a loss and there’s urgent refurbishment work at one of the homes we need to do that will cost £150,000 and one of the homes needs a new lift for £30,000. At the moment that will come straight out of our pocket because we are not getting anything from you that would contribute towards it. If you met the true cost of care then we would be able to continue operating and start investing in the building. They simply said that’s not our model. It’s not our fee structure. We said we cannot carry on providing a service at that rate because it’s not commercially sustainable.
It’s a terrible outcome because everyone knows that the impact on residents can often be devastating. LAs are not, in many cases, fulfilling their responsibilities under the Care Act, to commission sustainable services. We closed one and the LA made placements in the area -including to our sister homes – at £700 a week so all that movement for the sake of not meeting our cost of care just didn’t seem to make sense. We had to close the other one a year later and again they made placements of £700 around the area rather than keep the residents in a place where they were well cared for with staff they knew.
CHP: Is this becoming an increasing problem? Will you have to close more homes?
PC: We are building 10 new homes a year. Our plan is to add around 600 beds every year to our portfolio. To do this we need to have a sustainable fee that makes sense. All of our new builds are in areas where we expect a high proportion of privately funded residents. Nationally, 6,000 beds deregistered last year and 3,000 new beds were built which means a net 3,000 loss of beds. Most, if not all, of the 3,000 new beds are in self-pay, affluent areas and the 6,000 beds that went out of the market are largely in areas of low affluence where the demand is just as great but where the care sector is losing capacity continuously, with no prospect of that changing.
At the height of the financial crisis one local authority came to us with a proposal to cut our existing fee by 22%. These facilities are supposed to be there for at least 30 years. You can’t make an investment for this period when you strongly suspect that commissioners may change their mind, cut fees and are not going to match the cost of care. It would be irresponsible on a number of levels. If you can’t make placements, more people are going to have to stay in hospital because there is no capacity for transfer of care or placements in the community. More people are going to be kept at home even if their needs are higher than can be met at home. Because there’s no capacity in the local market these decisions and options become much more proscribed.
CHP: So we end up with a two-tier system.
PC: Which is wrong. Everyone should be entitled to a facility that can care for them if they are not able to be cared for in their own home. They should not be required to stay in hospital for long periods of time when they don’t need to be there. We end up with a two-tier system where the commissioning system has just not worked in some areas. Who is going to hold local authorities to account for this?
CHP: Have you seen much shift in terms of fees this year as a result of the extra money being put into the sector?
PC: No. This is against a backdrop of cost pressures against us from government initiatives such as the National Living Wage, which has put 7% per year on our pay costs. At the same time the government has introduced an Apprenticeship Levy which will cost us around £1.2m each year. Energy prices are going up. Food prices are going up. There’s inflation across the board. We have to find good nurses for our care homes. Nurse pay inflation is very significant. And in some cases we can’t get a nurse and have to employ an agency nurse at double the cost. In response last year to our cost pressures of over 6%, we got an average settlement from the public purse of about 4%. This year, despite our cost pressures being similar at around 6%, we are getting settlements between 2 and 3%. Some areas are higher but some areas have offered us no increase at all – even in areas that have raised the Social Care Precept.
CHP: What percentage will private pay be in your new builds?
PC: We expect around 80% of residents in our new builds to be self funders and 20% to be publically funded.
CHP: Where are those homes being targeted?
PC: All over. Places like Edinburgh, Ayr, York, Litchfield, Solihull, Herne Bay and Bath.
CHP: How do you evaluate the current recruitment climate?
PC: For nursing it’s probably the toughest it’s been. There was a reduction in nursing school places several years ago along with the restriction from overseas nursing recruitment that was put in place with our EU membership. Recruits from India, the Philippines and South Africa have been very much reduced in the last five or 10 years. Nurses from the EU can move around freely and they often go for a job in the NHS or a more popular location once they have gained quality experience within the private care sector. It’s a real challenge to recruit and retain great nurses, especially in areas that are more remote.
In response to that we have significantly improved our rewards package, including benefits and salaries. We launched our profit share scheme last year. If we meet our commercial and regulatory targets everyone benefits. Our nurses also get their nursing pin number qualification paid for. Around 6,000 of our staff received a bonus last year, which is about half our staff. The bonuses average around £200, though some got more. We have introduced Care Practitioners in areas where we struggle to recruit nurses – in fact in any home where there is interest. They are senior carers who can take on some of the tasks traditionally carried out by nurses with extra training and accreditation. That’s been a great success. We have 200 Care Practitioners working in our homes. We have 100 more due to start over the next six months.
PC: Will Brexit have much of an impact on your recruitment?
PC: Around 13% (around 1,800) of our staff are from the EU and it is a concern that some may leave. Our nurse applications from the EU dropped significantly after Brexit was announced. That shows there was a nervousness about applying for jobs in the UK. Conversely, Brexit may mean that we can open the doors again to Filipino, South African and Indian nurses.
CHP: Is it becoming more difficult to maintain a high level of care?
PC: Regulation of the sector has become significantly more robust in the last three or four years with the new inspection regime. Meeting regulatory requirements and exceeding them has become more of a challenge but all the sector has risen to that challenge. We are top amongst the large providers in terms of ‘Good’ and ‘Outstanding’ ratings and the fewest ’Inadequate’ – we only have one and hopefully we will soon have none, which would make us the only large provider with no ‘Inadequate’ ratings. I am totally in favour of a more robust regime. But the costs have been tough to manage. We have invested a huge amount in our training and in our quality inspection regime. We have got our own regulation team who carry out internal audits. We have invested hugely in our dementia team. We have eight people rolling out our new dementia programme.
CHP: is it a challenge for you personally to keep on top of quality issue as the head of such a large business?
PC: We have put in place a central action plan. If our quality or health and safety inspection team visit a home and it comes out with issues which need to be addressed, whether it’s about care plans or staffing or medication, then they will enter it in the action plan with the agreement of the manager, including what the issue is; what needs to be done; and by when. I can look at all 200 action plans from my office. More importantly, when the deadline has been missed by a week an email goes to our regulation team and the regional manager responsible for that home to alert them. If it’s still missed a week later it will go to the divisional director and if it’s not signed off three weeks later it will come to me.
We can see any issues that have escalated when our senior team meets every Monday. We will see all the results of our internal inspections. I also read the draft reports of any CQC inspections. We produce a regular report on all quality and incidents that have happened. Every three months in each of our four divisions I go out with my senior team in each area and go through every single home to look at any health and safety concerns, any incidents and any complaints, so we know every home’s commercial and quality performance. At the same meetings we go through slips, trips and falls, choking incidents and pressure sore stats for every service and come up with action plans if required. After the meeting I go out and see four or five facilities. If any issues happen on an ad hoc basis they come to the senior team. There’s a very quick visibility of issues and proactive oversight of all of our homes. We have got very good insight and put a lot of detailed attention into all of our facilities. It’s my personal responsibility and that of my team to get out into our homes and have this proactive oversight regime.
CHP: Big providers have a poor reputation for the take-up of new technology. How do you rate Barchester?
PC: We are the same. Our systems are functional rather than cutting edge. They work. We have rolled out a Wifi programme over the last two years so by the end of this year all our homes will have this for residents, staff and the public. We are investing in a whole series of electronic systems that are being put in place over the next 12 months ranging from e-recruitment to electronic care plans and electronic rostering. We are in the business of choosing a partner to work with us to implement all of the systems because it’s a massive changeover. We have already procured our e-recruitment system which will be rolling out in September. It’s a massive programme of modernisation, including the elimination of our paper based records.
We have a conference with each of our four divisions twice a year. At the last of my conferences I asked everyone about the new technology we were planning to introduce. All of those who had worked with electronic care plans, electronic rostering and time attendance – as well as our Care Practitioner programme – said they were happy with their introduction. The response was a lot more mixed for electronic medication. Only half of those who had used it said they would use it again so we are pushing that back in our priorities.
CHP: What were the issues with e-medication?
PC: We have been running three different pilots with three different providers and two years later they are still going. In some cases it’s the time it takes to do the round that has been the problem. Sometimes it’s accuracy. Sometimes there are pharmacy errors and the scanning is incorrect. People can trust the technology too much because it’s supposed to be right.
CHP: You are reknowned as being a leader in dementia care innovation. Where are you focusing your attention here?
PC: We have Memory Lane Communities in 130 of our homes, which are specialised environments for people living with dementia. In order to bring these in line with current best practice and ensure that they are providing the best possible dementia care services, we augmented our dementia team with six more dementia care specialists and introduced a new programme called ‘10-60-06’. This programme is being led by our Director of Dementia Care, Caroline Baker, who is a renowned expert in her field. There are many elements to it, including training modules for staff, improvements to care environments, new tools for pain and distress management, and interventions to improve people’s day-to-day lifestyle and well-being. The results in terms of staff satisfaction, engagement and resident outcomes as well as wellbeing scores, a reduction in falls, weight gain and decreased pain killer and anti-depressant use have been fantastic. Staff turnover has also gone down. We now have 34 homes that are ‘10-60-06’ accredited and we believe it’s the best dementia programme in the UK.
CHP: How do you see Barchester changing over the next 10 years?
PC: We are investing hugely in our estate to make sure it’s an excellent place to work and live. We will have invested £22m in the major refurbishment of 67 homes by the end of this year. We are investing in training and dementia care. Our aspiration is to be the number one provider of high quality services for the people we care for. We want to focus more on delivering an exceptional customer experience for all our residents and their relatives.
We are recruiting a customer experience marketing director who will hopefully bring uniqueness to how we make customer experience special. Our ambition is to be the employer of choice and to exceed our employee expectations as an employer. Valuing our employees is top of my list. In addition I want to have 100% ‘Good’ or ‘Outstanding’ regulatory ratings. I want to develop other services that stand-out compared to what other providers are offering – like the 10-60-06 programme – to deliver outcomes that are measurably better than standard care across the sector.