PHYSICIANS FOR A NATIONAL HEALTH PLAN (PNHP). Mark Almberg, PNHP communications director, told his American audience what is being hidden from UK citizens, that For-profit home care agencies are bleeding the Adult Social Care budget dry. Here is PNHP’s summary of how the free-market, private-sector managed home care model has failed in America:

For-profit home health agencies are far costlier for Medicare than nonprofit agencies, according to a nationwide study published today [Monday, Aug. 4, 2014] in the August issue of the journal Health Affairs. Overall cost per patient was $1,215 higher at for-profits, with operating costs accounting for $752 of the difference and excess profits for $463. Yet the quality of care was actually worse at for-profit agencies, and more of their patients required repeat hospitalizations.

Researchers at the City University of New York School of Public Health analyzed detailed Cost Reports filed with Medicare by 7,165 home health agencies in 2010-2011, as well as data for 22 quality measures from Medicare’s Home Health Compare database covering 9,128 agencies.

Compared to nonprofits, operating costs at for-profit agencies were 18 percent higher, with excess administration (at $476 per patient) accounting for nearly two-thirds of the $752 difference in operating costs. For-profits also did many more speech, physical and occupational therapy visits, which are often highly profitable under the complex Medicare payment formula. In addition, profits at for-profit agencies added 15 percent on top of operating costs vs. a 6.4 percent surplus at nonprofit agencies.

Despite their higher costs, for-profit agencies delivered slightly lower-quality care. On average, for-profits met each quality standard only 77.2 percent of the time, vs. 78.7 percent for nonprofits. Rehospitalizations, widely viewed as an important quality measure, were more frequent among for-profit agencies’ patients: 28.4 percent vs. 26.5 percent at nonprofit agencies.

For-profit home care agencies are bleeding Medicare; they raise costs by $3.3 billion each year and lower the quality of care for frail seniors,” said Dr. Steffie Woolhandler, professor of public health at CUNY’s Hunter College, lecturer at Harvard Medical School and senior author of the study. “Letting for-profit companies into Medicare was a huge mistake that Congress needs to correct.”

Lead author William Cabin, assistant professor of social work at Temple University, said: “While our study is the first to show that profit-making has trumped patient care in Medicare’s home health program, that’s no surprise. A large body of research on hospitals, nursing homes, dialysis facilities, and HMOs has shown that for-profits deliver inferior care at inflated prices.”

Cabin continued: “Our findings show once again that the free-market, private-sector managed care model has failed.”

Professor Cabin, who has decades of experience in the home care industry, undertook the research as part of his doctoral studies at the CUNY School of Public Health.

For-Profit Medicare Home Health Agencies’ Costs Appear Higher And Quality Lower When Compared To Nonprofit Agencies,” William Cabin, J.D., Ph.D., David U. Himmelstein, M.D., Michael L. Siman, Ph.D., Steffie Woolhandler, M.D., M.P.H. Health Affairs, August 2014.

Figures by UK Home Care Association (UKHCA) show that there are currently (March 2015) 7,121 Home Care Agencies in the UK, and 372 larger Home Care Groups. A BBC report (March 4, 2015) quoted a UKHCA ‘poll of more than 200 councils (which) found 28 paid a “minimum price” of £15.74 an hour. This is the price the body, which represents the agencies that provide the home care for councils, believes reflects the national minimum wage. The UKHA warned if the squeeze on fees continued, the care sector would become “unsustainable”. The “minimum price” has been calculated by using the national minimum wage and then adding to that the costs of running the service, including travel costs for staff and pension contributions’.

What this propaganda does not mention is the fact that, as in America, these agencies add 15 percent or so on top of operating costs, which are the excess profits (£2.36 per hour per worker taken out of council payments before operating costs are added), made by the business owners of these services.  It could be more than £2.36, or less, because the home care market is saturated with those attempting to keep their fingers in the Adult Social Care Budget pie.

It is a case of ‘dog-eat-dog’. UKHCA inform us (March 2015) that the CQC has now been given a role as a business analyst (hasn’t it got enough to do?), which will work hand-in-glove with the private sector to assess likely business failures in the home care market: ‘The Care Quality Commission has published draft guidance for adult social care providers in England on how its Market Oversight regime will operate when it starts in April (2015). The purpose of the scheme is to provide early warning where a “difficult-to-replace” residential or domiciliary care provider might run into financial difficulty, and to support continuity of care for the people using the service. UKHCA has helped CQC design the scheme, with other representative groups and stakeholders’ … The Orwellian ‘market speak continues: ‘UKHCA’s Policy Director, Colin Angel, said: “Government has given CQC additional powers in the event of a significant market failure. Designing a robust regime to protect the public, and which does not precipitate the very failure it seeks to guard against, is extremely important, a point we have made strongly to CQC’. (Naturally).

Every hour in every day in the UK over 7,000 businesses are leaching from the Adult Social Care Budget approximately £2.36 per hour for each home visit made by their combined workforce of 220,000, who may be working for less than the minimum wage, and on zero-hour contracts, and, as they speed between each client like racing drivers between short-as-possible pit stops, are likely to be repeating the standards of care meted out in America.

10 July 2014.Public Accounts Committee publishes report into Adult social care in England, HC 518 as Sixth Report of Session 2014-15. The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, today said: “We are facing a great adult social care squeeze, with need for care growing while public funding is falling. The Government’s agenda to change and improve adult social care, most notably through the Care Act, is rightly ambitious. However, it simply does not know whether the care system has the capacity to become more efficient and spend less while continuing to absorb this increasing need for care. There has been an 8% real terms cut in spending on adult social care between 2010/11 and 2012/13, despite the growth in the number of elderly and disabled people, the groups most likely to be reliant on care. Care and support has been cut, as with less money to spend local authorities have had to focus on those with the most severe needs. We are particularly concerned that local authorities have cut costs, partly by paying lower fees to providers of care, which has led to very low pay for care workers, low skill levels within the workforce, and inevitably poorer levels of service for users. Safeguarding referrals recorded by local authorities have risen 13% in the two years from 2011. It is appalling that up to 220,000 people working in the care system earn less than the minimum wage. In some areas, whilst local authorities might pay private providers £13 an hour, the worker only earns the minimum wage of around £6 per hour. It is also unacceptable that around one third of the workforce are on zero-hours contracts. (i.e. the Public Accounts Committee report that privatised home care services in the UK mirror those of America, where the same privatisation experiment has been shown to be less efficient and more costly than a public service).

Yes, the government coalition’s ‘free-market’ scams have introduced appalling conditions for a wide-range of UK citizens, but one of their biggest disgraces is to allow thousands of businesses to feed from the Adult Social Care Budget like mushrooms on a dung heap. Their profits should be going to council workers, employed on a living wage, whose standards of work could be scrutinised by cameras, and whose time spent with the vulnerable would be sufficient to meet their needs as human beings.

Why does the UK repeat American ‘free-market’ experiments which have been shown to have failed in terms of efficiency and cost? – because although there is no real belief in the experiment, there is profit to be made by ‘friends of government‘.

How many M.P’s have commercial links to Adult Social Care providers?

Ditch for-profits parasites.

Ditch the QCC and all other quasi-government agencies.

Demand to live as one tribe of human beings, not as exploiters and exploited.


lenin nightingale 2015




  2. Great links Rosemary. In simple terms- investors are guaranteed a set amount of return or profit a year. This comes out of all payments before any costs- ie before care is paid for whether the service is failing or not. Guaranteed profit. I can understand it. Can nobody else? Thanks LN for your research.

  3. Pingback: Private Care Home Profit Made Simple | NURSE BLOG INTERNATIONAL

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