Abstract

Over the past 40 years, the UK has undergone rapid transformation of the care home industry from predominately public sector ownership to predominately private sector ownership. In 1970 30% (84,100 beds) of beds were non public owned; by 2014 this had risen to 93% (453,000 beds). Following rapid expansion of the private industry, the last 15 years has seen increasing consolidation of the private sector with the emergence of large care home providers. We track the expansion of the current 5 largest providers of long-term care.

Objective: We aim to: (1) Describe and examine the method of growth of the 5 current largest providers of long-term care; (2) Describe and examine company structures, finances and strategy; and (3) Examine the transparency and quality of care provided by the five largest providers.

Data and methods: We collate and examine publically available data from a range of sources including: companies’ accounts, government inspection data and published financial articles.

Results: Currently, the top five largest providers of residential beds in the UK: Four Seasons Health Care, Bupa Care Homes, HC-One Ltd, Barchester Healthcare and Care UK; account for 20% of available residential beds. All except BUPA Care Homes are private limited companies responsible to shareholders, ultimately controlled and owned by private investment and equity groups registered in Jersey or Cayman Islands. All demonstrate complex ownership with multiple subsidiaries and separation of operating and property components; resulting in limited financial transparency. Prior to 2008, expansion was driven by mergers and acquisitions funded by debt; with private equity groups attracted by stable government funded income, increasing property prices of homes and advantageous demographic changes. Post 2008 global financial crisis, with a fall in property prices and poor income, focus has been on diversification and restructuring – separating operations and property ownership, and selling of less profitable care homes and development of new care homes in more affluent areas. Multiple concerns regarding the quality of care homes owned by corporate chains have arisen in the media. We will additionally report on the quality of care homes owned by private sector using data from government inspection.

Policy implications: The UK care home industry is in crisis and needs urgent reform. The purposeful build up of large debt to fund growth has resulted in unsustainable debt repayment. Complex structures and lack of financial transparency hinder accountability. Despite the failure of marketization in long term care, currently government policy does not attempt to limit further marketization, and more widely introduces marketization in healthcare.