Four Seasons, Private Equity and the Care Sector

Money Talks - Do you listen?

Both the Guardian and the Financial Times report on the possible imminent buy out of Four Seasons by ‘Terra Firma’ – a private equity company. Guy Hands, who chairs the company is described by the Guardian as

the tax exile and private-equity baron best known for his disastrous debt-fuelled takeover of EMI

Comforting.

Four Seasons Healthcare is a large provider of nursing and residential care homes in across the UK. As it says on the front page of their website

We are the leading independent healthcare provider in the UK. We own and operate over 500 care centres and nursing homes, employing around 30,000 people. Our care homes and nursing homes are unique and we’re proud to offer consistently high standards of service and care.

Seems like a perfect investment opportunity for a.. er.. private equity company, right?

Maybe I’m being a little disingenuous. Having an A level in Economics doesn’t give me a significant understanding in financial models of support however what is blatantly obvious is that the sector as a whole (and we’ll push Southern Cross into the mix here as well) have over borrowed on assets which haven’t produced the intended profits.

The further link with Southern Cross is the irony (or maybe it isn’t) that Four Seasons took over a number of Southern Cross homes when they went under.

The Financial Times explains that Four Seasons is looking to refinance a £780 million debt and is ‘likely to raise £525 million of new debt’.

These kinds of fantasy figures have little in the way of substance to me. But that’s a lot of money and I do wonder at the amounts of money knocking around in these health and social care sectors.

Last month Terra Firma bought a Gardening Centre group for over £200 million.

The type of business is of little interest to the company putting the money in. It is purely and simply a business opportunity. This is one of the reasons I shudder at the leaking of health and social care into the private markets. The reality of financing, refinancing and profit making can be cut throat but for the people who live in these nursing homes it’s worth remembering that they are possibly the last years of the lives of people at stake rather than lilies and tomato plants.

Four Seasons has a deadline of September 2012 to refinance the debt it has. It is currently owned by a consortium of banks. A private equity company will be no worse nor better than what exists now unless it is able to offer the company more financial security (which I presume it is) but the interesting part, for me, as an outsider to the world of equity and financing is that this is not the first very large healthcare company to be switching hands and talking in terms of millions regarding profit in health care.

The Matlock Mercury (in the East Midlands) has a story which raises concerns by the GMB union when Southern Cross staff were transferred to Four Seasons and they asked for a response from the CQC. They write

Recently the Care Quality Commission said as follows: “The large health and care organisations are not overseen financially by anyone.

“The Care Quality Commission (CQC) require that a provider is financially stable, but it is outside of our remit to carry out financial audits or financially background checking of any service provider.

I can appreciate that. The CQC is pushed but isn’t it worrying that there is no-one at all overseeing whether service providers are ‘financially viable’? It doesn’t need to be the CQC – but perhaps – as we move towards a situation where more and more health care services are moving into private hands – it should be someone..

This is the future of the NHS. It is already here. Profits will be pushed to shareholders and companies are accountable to those shareholders rather than the people who use and need the services provided.

Tomorrow, this will be the hospitals.

picture by w4nd3rl0st at Flickr

Panorama and Ash Court – Towards Improvements

I watched Panorama last night. The programme, as explained yesterday, focused on the abuse by care workers at Ash Court of an older woman with dementia whose daughter filmed her secretly on a hidden camera in the home.

The footage of the abuse was sickening and involved both physical and psychological (neglectful) abuse by those employed to care for her. Most indicative was the lack of regard that the care workers had for Mrs Jane Worroll as a human being as we saw the treatment dehumanising her.

It was clearly uncomfortable viewing and links are being made with Winterbourne View but there are vast differences and this time, although I almost surprise myself, I think it’s important to defend the role of the Care Quality Commission in this case.

With the Winterbourne View Panorama expose there were whistle blowers and the regulator should have taken action as a result. With the situation at Ash Court, there was a hidden camera and while some of the cultures could have been known to exist within the home itself, it’s clear that the regulator did not have a way of knowing what was happening before it happened.

As they say in the statement that they make on the programme that what they (the CQC)

cannot do is to identify and stamp out deliberately concealed abuse. By its very nature, concealed abuse takes place away from the eyes of managers and inspectors and can even take place, as in this case, in a well run care home. Abuse of vulnerable people is a criminal matter, and is rightly handled by the police and the courts.

That’s the big difference between Ash Court and Winterbourne View. The disappointment in Panorama is that it tried to merge the agendas of both and while there is a common narrative to both programmes about abuse of those who have power of those who do not, the solutions and causes are different.

I mentioned on Twitter during the programme about the discrepancies of procedures and powers for adult safeguarding and safeguarding of children.

Personally I see ‘safeguarding’ and ‘abuse’ as the use of power by someone against another person who has no power. That might be as a result of physical ability, mental capacity or understanding or just some of the institutional structures in place. Whether the person who is abused is 6, 65 or 85 shouldn’t have any sway within the processes. What I’d like to see is a unified process that deals with the effects of abuse and the power differentials – rather than provide so many more hoops to jump through and weaker processes when the person to whom the abuse happens is over 18.

The effects may be different according to the stage in the life cycle but they may not be. The criminal act is around the abuse of power and the abuse within the relationship that takes place along with the eventual effect.

I’m sure those with more knowledge than me will come back to attack my somewhat simplistic judgements and thoughts on this but it’s frustrating working within an adult safeguarding process that lacks so many of the potential teeth when we see some of the abuses that take place and see so few taken to court due to unreliable witnesses or lack of scope for action.

Another disappointment of Panorama (although unsurprising as they wanted to squeeze out all the ‘abuse’ footage for shock value and only had 30 minutes) was the lack of attention to some of the systemic problems that have led to warehousing of older adults in institutions when they need residential care. The pay of the staff was mentioned but pay is not the only consideration.

I worked quite happily at a very low wage as a care worker myself for a number of years but what matters as much as pay (although pay helps) is the value placed on the members of staff. Staff who are not respected and who are treated as expendable and with little respect are more likely to pass that feeling of powerlessness on to others. It isn’t an inevitable link – you get good staff in bad homes and bad staff in good homes – but it’s more likely that if staff feel linked to and attached to those whom they care for and those for whom they work – they are more likely not only to pass on that feeling of respect but to feel vested in the organisation for whom they work.

Too often care work is seen as ‘easy’ and care workers are seen as ‘replaceable’. Organisations like Forest Care (and many others I know) bring staff over from the Philippines en masse to carry out these roles or put staff on zero hour contracts and push out unionisation. Organisations have to regard staff better – and pay is one of those aspects but not the only one – in order to create cultures of care and compassion. The other aspects are good and robust supervision, including peer supervision and giving staff responsibilities and a stake or voice into the organisation they are working for. Whistleblowing has to be easier and better regarded. Complaints improve care and processes and they should not be feared.

Local authorities and the government needs to be willing to pay more for care and for monitoring inspections which don’t need to simply come from the Care Quality Commission. If LAs push prices down to rock bottom quality will suffer. Some people do need 24 hour residential or nursing care and it shouldn’t be accepted as being ‘sub-standard’ as default. It doesn’t have to be.

Panorama didn’t shock me, unfortunately. It saddened me. I hope it doesn’t become just another blip in the process of change. I want the processes and structures to be pushed to positive change. Blaming the CQC won’t do that – changing the expectations and systems might.

As for hidden cameras in residential care homes and in people’s own homes – I see it increasing and have a sense of discomfort about some of the rights to privacy that are impeded however finding and challenging abuse is important. Would Mrs Worroll’s abuse have been discovered without them? Unlikely unless one of the care staff attending her raised concerns with their own manager. I may be tempted to use hidden cameras myself if I had a family member in a similar position but that’s the key – it’s only those people who have family members who will have recourse to such action – what we need to do is find the reasons these abuses happen institutionally and act on them.

Of Hidden Cameras, Care and Panorama

Tonight’s  Panorama is focusing on care of the elderly or rather, lack of care. Maria Worroll was placed by her mother in a care home in Camden which had an ‘excellent’ rating by the CQC (Care Quality Commission).

Jane Worroll, Maria’s daughter, noticing something amiss and perhaps having concerns, set up a hidden camera in her mother’s room to observe how her mother’s treatment. Mistreatment and abuse were filmed and it led to a conviction by a care worker, Jonathan Aquino, under the provisions of the Mental Capacity Act (2005) and a jail term of 18 months.

There are a few key points to take into this and to note. Prior to June 2011 (when the filming took place), the previous assessment and inspection by the CQC was in 2009. It was an unannounced inspection and as described above, the outcome found the home was excellent.

There were a couple of ‘compliance’ visits after the incidents films came to light but the important thing to note is that an excellent care home can provide appalling care if there is one abusive care worker. Similarly a care home which may have a poor inspection report can provide excellent care if there are caring and good quality care staff. Historical reports of care by regulators actually tell us little about the quality of the care today, at this moment, as staff in these care homes tend to be transient and low paid.

There is an issue about management culture of course. I have seen a switch in manager making both a very positive and very negative effect on residents in these homes. While more regular ‘spot’ inspections – perhaps by lay visitors as well as official regulatory bodies – may be one answer, it may not root out the individually abusive members of staff. A much better way to do that is to firm up whistleblowing procedures and supervision procedures for care workers – perhaps more peer discussion and supervision as well as managerial supervision.

As for the effects I see, I am no longer surprised by the increase in surveillance by family members which is a definite increased trend that I’m seeing. While there may be issues of privacy, the concerns of families are very real.

Until our care systems can provide better qualities of regulating and monitoring care – and not only from the CQC but from commissioners – whether they be local authorities or privately funded – there will always be these questions that linger at the back of the mind.

I expect I’ll be watching tonight, if I am able. I think I know what I’ll see but it is important that these incidents come to light so that changes in the systems can be made. This is one incident but it is very far from isolated. Our society needs to deliver the type of care and the methods of monitoring of care and the financial provisions for care that are not age-dependent. Until we do so, I can only infer that the systems of social care in this country are inherently ageist.

The case for health and care privatisation

Yesterday, the Health and Social Care Bill finished its passage through Parliament. Today is the budget speech.

Saturday’s Guardian had a piece entitled ‘What will the 2012 Budget mean for you?‘. It was not about the NHS, nor privatisation, just about how the budget affects the lives of ordinary people. But one of the ordinary people – acknowledgedly ‘the high earner’ – caught my attention, because he works in the field of social care. His name is Tony Stein.

According to the article,

Tony Stein is founder and director of Canterbury Care, which operates 11 care homes across the UK. Last year his earnings “just about touched” the £150,000 level…

Although Tony signed a letter in the Telegraph last month arguing that the 50p tax rate “puts wealth creators like us in an awkward position”, he is an ordinary guy:

It’s not as if I’m earning millions. Actually, what has me shouting at the telly is the executives of big banks who earn millions but aren’t putting their own money at risk.

Is Tony making out a persuasive case for private enterprise running social care, the case for privatisation? Let me make clear, I don’t know him personally, nor do I have any dealings with his company. Nor, frankly, have I done much by way of research, though I have done a little digging.

A little digging revealed that Canterbury Care is headquartered in Worcestershire, where a local Green Party member in 2010 criticized the Council’s Chief Executive for not taking a pay cut:

Mrs Haines is contracted on a salary band ranging from £167,977 to £183,725 a year.

Worcestershire County Council’s accounts suggest it is rather a larger affair than Canterbury Care with its 11 care homes; its Chief Executive gets paid more, but hardly in proportion to the size of the enterprise. Among the information I extracted from Worcestershire’s balance sheet are that it has long term assets of £1.695 billion and long term liabilities of £1.056 billion. I went looking for that figure to compare it with Tony Stein who says Canterbury Care has “£14 million in borrowing”.

I venture to suggest it is pretty plain that Tony Stein has a salary chasing that of the Council’s Chief Executive, for a far smaller venture. Measured by debt, the Council’s financial headache seems to be about seventy five times the size.

At this point, I start to speculate that it might be 75 times cheaper to have debt presided over by a local authority than a private enterprise, and that Tony Stein really hasn’t made out a persuasive case for privatisation of social care.

But, to be fair, it isn’t just the size of the financial headache that Tony relies on to convince us. It’s the fact that

…We employ 455 people, but we have £14m in borrowing, and a big mortgage on my home. At the end of the day I have my neck on the line. Yes, I earn £150,000 or so, but it’s me who has sleepless nights over the borrowings and operations of the business, and it’s me who works all weekend.

So he can shout at the bankers on the telly like the rest of us, because of the fact that his pay is justified because his own money is at risk in his enterprise. And he works all weekend – though I am presuming his residential care homes are staffed all weekend also.

I’m sorry, Mr Stein, but I’m afraid you have actually made out a case to be relieved of that risk and that income. I’m just not getting what is the benefit to the public of the liabilities and risks being borne by wealth creators like you instead of the taxpayer. If residential care were run by local authorities, no individual would have to have sleepless nights because of their personal investment and risk. No individual would therefore need to be paid £150,000 to preside over just 11 residential care homes. The tax payer wouldn’t need to worry about where the money came from and whether there might be a Southern Cross-like disaster. The case for privatisation is not made out.

And I haven’t even begun to explore the market arguments about quality, efficiency, competition and the like. This commentary is just about the apparently extraordinary cost of privatising capital and investment risk.

Did I mention, yesterday the Health and Social Care Bill cleared its passage through Parliament?

Allan Norman (@CelticKnotTweet) is a registered social worker and a solicitor at Celtic Knot – Solicitors and Social Workers.

Direct Payments, Fraud and Safeguarding

Yesterday, I was engaged in a (very brief) discussion on Twitter about this article in the Guardian on Wednesday which highlights a case where direct payments were used fraudulently with tragic consequences.

The thrust of the discussion was that while there will always be isolated incidences of potential abuse and criminal actions, highlighting the method of delivery of the service (through direct payments) was unhelpful at best when there is so much abuse in the delivery of ‘standard’ care packages especially with the follow up article here about ‘how to prevent fraud in direct payments’ which itself states that

There is as yet no evidence that having more people on personal budgets in Enfield has increased the amount of fraud. In fact, of all the fraud cases identified in the area in the past year, only one was related to personal budgets.

Having been involved in the provision and delivery of direct payments since they were first established (Community Care (Direct Payments) Act 1996)   I’ve never personally  come across an instance of them being misused intentionally.

My gut feeling is that the man in the first article who was killed by his son – after receiving a direct payment for a couple of years – may not have experienced a different outcome if the means of delivery of the care had been different.
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CareAdvisor

Yesterday, it was announced that the government was going to set up a website, the details of which would be unveiled  in the Spring White Paper on Adult Social Care which could bring a kind of ‘Trip Advisor’ model of rating and commenting to providers of care homes and nursing homes.

Sounds good so far. I certainly welcome more open and accessible information for those who are choosing care homes but there are some real and obvious differences that need to be highlighted between the choices that are available to those who are picking hotels in New York City and those who are choosing care homes for Granny in Wallsend.

On a positive note, Burstow claims that these plans came from user-led discussion groups which shows that he is listening but there are some important points that have to be taken into consideration, lest this is seen as a way of trying to provide regulation on-the-cheap because the actual regulatory body – the CQC – is unable to carry out its function.
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CQC – the insiders’ views

The Inquiry into the failings in the Mid-Staffordshire NHS Foundation Trust has been going on for a while now but yesterday there was some hefty evidence from two CQC (Care Quality Commission) ‘insiders’ which blasted open the so-called regulator and lifted the lid on the poor practice that some of us have suspected for a while.

I would urge anyone in health and social care who serves are regulated by this body, take a look at some of the evidence presented yesterday. I did and I hate to say that I wasn’t surprised but let’s just say it confirmed some of my suspicions.

The two witnesses who provided the evidence were Amanda Pollard – an inspector with the CQC and Kay Sheldon – a non-executive director at the CQC.

I want to look at some of the statements that they made in the hope that these issues are picked up on by a wider audience.  Both Amanda Pollard and Kay Sheldon are ‘whistleblowers’ in the finest tradition and should be heartily applauded for the stance they have taken. Continue reading

Is the CQC fit for purpose?

There was an interesting article in the Guardian yesterday about the Care Quality Commission which was set up as a new regulatory body for health and social care in 2009.

The CQC is headed by Cynthia Bower at a salary of £195,000 pa who was previously the Chief Executive of the West Midlands Strategic Health Authority – responsible for Stafford Hospital at the time it was found to have been providing substandard care.

How she was able to take post at the CQC is quite staggering to me, as an outsider but there she is, responsible for the regulation of health and adult social care services. You’d think it was the opening of a black comedy. Maybe it is.

There are some chilling facts that the Guardian have uncovered and they deserve repeating – over and over again – because the CQC is responsible for the regulation – not only of hospitals but of every care home and domiciliary care agency in England.
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What is a Deprivation of Liberty? – Thoughts on Cheshire West and Chester Council v P

I accept that this post is about something of a niche in the corner of health and social care but it’s an area I have some interest in as I’m a Best Interests Assessor. This is going to be a long haul of a post so I’ll start this time with a glossary.

Deprivation of Liberty Safeguards – particular additions to the Mental Capacity Act which were supposed to fix a ‘gap’ (known as the Bournewood Gap – see below) in UK legislation where people without capacity could be ‘deprived of their liberty’ in a hospital or care home without leave to appeal.

Bournewood Gap – while it sounds like the name of a service station, it resulted from the HL v Bournewood case which was taken to the European Court of Human Rights and determined at a man (HL) with learning disabilities had been detained unlawfully in Bournewood Hospital. This case meant the UK needed to change its law to be compatible with the Human Rights Act.

Mental Capacity Act – broad legislation introduced in 2005 which included (on amendment of the 2007 Mental Health Act) these Deprivation of Liberty Safeguards

Best Interest Assessor – one of the minimum of two people involved in assessing whether a deprivation of liberty should be authorised or not. Usually a social worker, nurse or  occupational therapist – could also be a clinical psychologist (unusual). They will assess both whether there is a deprivation of liberty and whether it is in the person’s best interest.

Mental Health Assessor – the other person who would be involved in assessing whether a deprivation of liberty should be authorised. They will be a specially trained doctor. They assess, well, the Mental Health.

So back to the start again and ‘What is a deprivation of liberty?’ in this context? Considering I’m a Best Interests Assessor and one of my roles is to actually assess whether a deprivation of liberty is taking place or not, you’d think that I would have a great answer to add to my ‘summing up’ glossary above.

You’d be wrong. The definition of ‘deprivation of liberty’ is fuzzy and continues to get fuzzier.
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Opening Secret Courts

As it happens, I work a lot around issues of Mental Capacity in my day to day work so I have more than a passing interest in the dealings of the Court of Protection. The Court of Protection, you see, has a hand in many of the issues that might relate to decisions that are made in relation to people who lack capacity.

The Court of Protection is generally closed. The reasons being (and I make no judgement of the rightness or wrongness of this) is to protect those whose personal business arises in the court. As it relates to people who lack capacity in general, they are not able to make a decision about the reporting, or not, of their personal lives as they unfurl in the court and usually have not personally taken the active decision to go to court so should not (the argument goes, I suppose) deal with the publicity that surrounds it.

This is what is mean by ‘closed’ justice and ‘hidden’ courts that some newspapers, the Independent notably, campaign against.
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