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Care homes turning hospital patients away due to COVID insurance premium hikes: should taxpayers or site owners pay the price?

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Care homes in the UK are getting hit with extortionate insurance premium rate hikes, some as high as 60% or more, albeit with COVID liability less coverage, as insurers look to avoid costly litigation should an outbreak occur onsite. The end result is some care homes having no choice but to turn patients arriving from hospitals away, even if they have shown a negative COVID virus result.

The Treasury, and by default taxpayers, may have to fork out not only for Care Home insurance support but also the supply of NHS staff to care homes should they be transformed into community beds as NHS hospitals become overcrowded with COVID patients.

However, for those care homes owned by institutional investors – pension funds, private equity or infrastructure funds with deep pockets – should taxpayers be shouldering the insurance bill?

The predicament comes at a time when England’s chief medical officer has warned the coming weeks are going “to be the worst weeks” of the coronavirus pandemic for the NHS.

Whitty said that on Sunday there were over 30,000 beds occupied by patients with the disease compared to 18,000 during the April peak last year.

How it all began

A government policy to discharge Covid-19-infected residents into care homes at the beginning of the UK pandemic, many of which struggled to access sufficient protective equipment for staff, helped to fuel the spread of the virus, the FT has reported.

Beds in many care homes are lying empty, but many care providers are refusing to accept residents where there is a risk of introducing covid-19 and fear of repeating the disaster of the spring in the sector, according to healthcare management site, HSJ.

“Part of the problem is some care providers which would otherwise become covid-designated homes say they are not insured for the risk of doing so,” said HSJ.

According to HSJ national officials in the NHS and government are now considering options to try to alleviate the problem, amid urgent requests from local NHS leaders, including paying for the additional insurance cost.

“Where care homes have managed to get liability insurance, premiums have more than doubled recently. The insurance is required in the event they are sued by families of residents or staff if there is an outbreak onsite,” according to the FT.

Scotland care home group, Renaissance Care, which runs 15 care homes, told the FT that it had approached 28 insurers that previously provided cover to the sector and all had declined. “Although his existing insurer, Aviva, had extended cover, his annual premium had risen by 61 per cent in December and the cover was substantially reduced so that he is now entitled to a total of £25,000 on all Covid-19 claims,” said the report.

The NHS’ take

In December, NHS England told local NHS leaders to “strengthen leadership and oversight” of hospital discharge, and to make full use of funded capacity in hospices and NHS community hospitals for covid patients.

The NHS said in a statement, “The NHS should use all available hospice capacity, including re-purposing existing provision either in beds or home services, for both COVID and non-COVID patients.”

Hospices are required to submit data on their hospice beds and community capacity onto the National Capacity Tracker daily, including weekends and bank holidays, with non-compliance affecting funding.

Up to £125m extra funding has been made available for the period 1 November 2020 until 31 March 2021.

Payments will be made by NHS England and NHS Improvement nationally, working with Hospice UK, on the basis of capacity used.

“CCGs should honour existing agreements and continue to pay any funding agreed with hospices – including business-as-usual and local agreements for COVID-19, both of which will be funded from resources already allocated to local systems,” said the NHS.

When it comes to designated facilities for people who are COVID+ being discharged from hospital into a care home, some systems have yet to agree designated care settings, said the NHS.

“Where that remains the case, we are asking local NHS leaders to engage with the Director of Adult Social Services (DASS) in the Local Authority and care provider organisations to explore whether NHS community hospital sites could provide a solution for that area. It would, of course, need to meet the infection prevention and control standards stipulated by the CQC.”

What are the possible solutions?

NHS Providers chief executive Chris Hopson said: “The government needs to provide appropriate financial incentives to make these [social care] beds available on an emergency basis and to cover costs such as higher insurance premiums.

“The NHS needs to recognise the higher level of need any rapidly discharged patients are likely to have and treat these beds as extensions of community capacity, in particular providing prompt and regular access to high quality therapies.”

Other options under consideration include the NHS block booking care homes, and somehow contracting providers to accept patients even where they perceive there is a small risk of covid infection. Some are said to be rejecting those who have tested negative but have previously been in contact with people with covid, for example.

The solutions are likely to involve the need to send some NHS staff in to homes to provide additional health support, to help care providers manage infection risk, and because the patients may require additional step-down care

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