Bupa calls for 'urgent' action over care home crisis

Bupa says there could be a shortfall of 100,000 care home places within 10 years

Ray King, chief executive of medical group Bupa, has called for a "chronic underfunding" of the care homes system to be addressed "urgently".

He warned that the NHS may face a "bed blocking" crisis unless fees paid to care home operators such as Bupa rise.

Mr King said the number of care home places in the UK will fall unless operators get "fairer fees".

His comments came as he unveiled a sharp rise in Bupa's overall global profits, but a fall in the UK division.

About 70% of Bupa's 18,000 care residents, in its more than 300 homes, are paid for by local authorities.

And local authorities pay for well over half of England's 390,000 care home residents.

But Mr King said operators are seeing a real terms fall in fees as authorities' budgets come under pressure.

Bupa said the average local authority fee increase for the financial year 2010-11 was 0.7%, and is currently 0.3% for 2011-12.

This is while inflation is running at 4.2%, which Mr King said equates to a real term reduction, especially as operators' costs for wages, fuel, and food are all rising fast.

Last month, Southern Cross, the UK's biggest operator, said it would close down after landlords owning all 752 of its care homes said they wanted to leave the group. Southern Cross had said it was unable to pay the rent on the homes.

Bupa believes there could be a 100,000 care home bed shortfall within 10 years, if investment in the sector is not increased and current funds are not ring fenced.

This could put pressure on the NHS to take in people who would normally go into care homes.

Profit up

On Wednesday, Bupa, which is a provident company with no shareholders, said its global care services division lifted revenues by 1% to £589m and profits by 2% to £67.7m in the half year to June.

But the UK care arm saw a "marginal" fall in profits and occupancy, a situation that could worsen.

Mr King said: "We are calling for the chronic underfunding of the social care system to be urgently addressed.

"At the absolute minimum, there must be a real terms increase in funding for local authority purchased care home places over 2012-15."

Bupa's group profits were sharply up, from £162.1m to £244.1m following good growth in Australia, Asia and its expat health insurance business.

Sanitas, its Spanish insurance healthcare business, also did well despite the economic problems affecting the country with results boosted by good demand in its dental arm.

Group revenues rose by 6% to £3.93bn.