Reigate Grange, a luxurious care home in Surrey where Ann King was assaulted, has a spa, a movie theatre, and a wood-paneled hall. The grittier reality of dementia and the end of life is given a cruise-ship polish by luxury care, which is driven by international investors’ desire to profit from elderly people’s real estate holdings.
Investors can easily understand the logic. According to the Resolution Foundation, people 65 and older now own 51% of the country’s wealth, up from 42% in 2008, the year of the financial crisis. A sizable fraction of elderly people has homes worth significantly more than they need and can afford care facility expenses exceeding £100,000 annually. If a resident of a care facility lived in a $1 million house for an average two years, they would still leave £800,000 in their will.
David Reuben said he was investing “at the verge of the extraordinary growth of the UK seniors population” when Welltower, a US real estate investment trust, unveiled a deal with the real estate billionaire Reuben brothers last summer to co-own the UK luxury chain Avery Healthcare. It was referred to as a “multi-year growth opportunity” in a joint press statement.
Indeed, according to the Alzheimer’s Society, there will be 1.6 million people living with dementia in the UK by 2040, an enormous “market” given the country’s present healthcare system, in which the NHS frequently does not pay for dementia treatment.
According to the annual LaingBuisson report into UK social care, underlying profits for a luxury chain like Barchester, owned by the Jersey-based Grove Ltd, are running at about 30% of revenue. In the past year, it has been reported that three Irish billionaires, Dermot Desmond, John Magnier, and JP McManus, were among Grove Ltd’s owners. The report’s author, industry expert William Laing, asserted that “there is enough of money there and it will continue for a few decades.”
The King paid £2,000 a week at Reigate Grange, according to Laing, but care businesses could easily boost fees over that amount and still fill beds. He projected a rise in care facility inhabitants of 27,000 over the next ten years, necessitating the construction of 400 additional facilities, many of which are expected to be luxurious. Recent legislative amendments capping care expenditures at £86,000 per person won’t have much of an impact on the elite market because “hotel costs,” which can make up 70% of prices, are excluded from the cap.
But can you get better treatment with more money? Higher costs ought should, and in some circumstances do, enable operators to hire more caregivers and to better compensate and train them. There is no connection between how much you pay and the treatment you receive, though, according to Laing.
Staff members are reportedly paid above average wages at Signature Senior Lifestyle, and training is required of everyone. According to his research, facilities that are operated for profit generally do worse than homes that are operated without profit (86% good or excellent) during inspections by the Care Quality Commission regulator.
The CQC ratings for Avery Healthcare are currently 80% good or outstanding and 20% requiring improvement, which is the same as the national average for all care facilities in England.
82.7% of Barchester’s residences were given good or outstanding ratings by regulators, the company claimed, demonstrating its “commitment to delivering the greatest quality care.” Avery was asked for a response.
CQC “scores our homes substantially above the sector average; 97% of our homes are certified as good or outstanding, of which 14% are rated as outstanding – placing them in the top 5% of care facilities throughout the country,” according to Signature.
It added that its staffing level was higher than that of an average care facility and that it divided fees “between providing opulent housing and attending to the specific care needs of the people who choose to live with us.” It also claimed to have “a far higher level of clinical expertise than average, with dedicated nursing and dementia managers.”
Meanwhile, data released last week revealed a severe staffing shortage across the entire care industry. By the middle of the next decade, 500,000 more employees will be required to meet the growing demand, but last year’s employment decreased by 50,000, leaving 165,000 open positions in England alone.
Although luxury care companies frequently pay more, the average hourly wage for the sector is £9.50. Considered to be in or on the verge of poverty are one in five caregivers. “Lives and dignity are at stake,” have warned organizations representing care facility residents.