The bankruptcy of the nursing home operator Convivo caused a stir at the beginning of the year. A lack of staff and rising costs are putting home operators under pressure. But there are also reasons for which they themselves are responsible.
The situation is catastrophic, warns Bernd Meurer, President of the Federal Association of Private Providers of Social Services and himself the operator of several nursing homes. More than two thirds of the member companies of the association were worried about the existence of their companies in view of the financial situation. One of the main reasons is that nursing home operators can hardly find any more staff.
Empty rooms despite high demand
A lack of staff leads to the paradoxical situation that rooms in more and more nursing homes have to remain empty, even though the demand is high. The reason is the prescribed lower limit for the staff: The homes are only allowed to take in as many residents as they can provide with nursing staff according to the requirements. If there is no staff, rooms have to remain empty – nursing homes quickly get into financial difficulties.
Good management and leadership needed
Many care home operators complain about the rigid negotiation course of the care and health insurance companies about the level of care rates. The health insurers, in turn, refer to their statutory mandate to keep costs reasonable.
The margins in the care sector are actually rather narrow, according to Carsten Brinkmann, Chairman of the Terranus Supervisory Board. The nationwide consulting company from Cologne accompanies investors and operators in the market for social and health real estate: “But in contrast to hospitals, the operation of nursing homes, in which residents are cared for on a long-term basis, is a very stable and continuous business field that is easy to calculate and manage leaves.”
Aren’t rising wages alone enough?
With the Basic Supply Further Development Act, the obligation to pay collective agreements for employees in old people’s homes and outpatient care services was introduced on September 1, 2022. The minimum wage will also be increased twice this year, which will then be EUR 18.25 from December 2023. For a 40-hour week, this means a monthly basic wage of 3,174 euros, according to a calculation by the ver.di union.
But increasing wages alone will not solve the staffing problem in geriatric care, ver.di trade union secretary Matthias Gruss warns: “The sickness rates in geriatric care are among the highest compared to other sectors. In addition to wages, work organization and working conditions need to be improved in many homes .”
On average, a good 2400 euros own contribution
As of January 1, 2023, according to data from the Association of Substitute Health Insurance Funds, in the first year in the home a nationwide average of 2411 euros per month had to be paid, 278 euros more than at the beginning of 2022. The totals include the personal contribution for pure care and support . Unlike health insurance, long-term care insurance only pays part of the costs. For residents of the home, there are also costs for accommodation, meals and also for investments in the facilities.
Profits from high real estate expenses
According to Gruß, the operators and investors make their profits from these real estate costs. Many nursing home operators do not own the houses and buildings, but only rent them. The costs for leases and rents that a nursing home incurs due to the property can in turn be passed on to the residents on a one-to-one basis.
It is increasingly being observed that real estate is being leased at inflated prices, says Gruss. Many care companies are associated with real estate companies. “The real money is not drawn from the operative care business, but from the real estate.”
non-profit as a way out?
The legislature must intervene here, demands Alexander Schraml, chairman of the Federal Association of Municipal Senior Citizens’ Facilities. For example, private nursing home operators should only be approved if they work on a non-profit basis: “The nursing homes are financed to a large extent from compulsory contributions by the nursing care insurance. And it cannot be that profits are deducted from compulsory contributions that do not in turn benefit the nursing homes. ”
The health economist and nursing researcher Heinz Rothgang from the University of Bremen also sees several adjustment screws to reform the system. “The path must be to regulate the private carriers so that they behave like non-profit-oriented carriers,” says Rothgang.
Pressure in the care system will increase
The number of people in need of care in Germany is increasing – and will continue to increase. The Federal Statistical Office states that at the end of 2021 five million people were being cared for in Germany. The Federal Office estimates that this number will rise to 6.8 million by 2055. In the coming years, more and more people in need of care will have to be financed. The care system is already at the limit.