Report on Nursing Home Subventions

Entitlement under Health Acts

The legal position in relation to hospital in-patient services, both in 1990 and at present, was and is relatively straightforward. Everybody resident in the State is eligible to be provided with in-patient services, where necessary, by the relevant health board.1 The service may be provided directly by the health board in one of its own hospitals, or in another publicly funded hospital (e.g. the so-called "voluntary" hospitals), or by way of a contracting out arrangement between the health board and a private institution. Such latter arrangements are provided for at Section 26 of the Health Act, 1970 and are required to be in accordance with such conditions as the Minister for Health and Children may specify.

Where the patient is covered by a medical card, the service is free of charge. Where the patient does not have a medical card there are, potentially, two categories of charges which may arise. The first is a fixed daily charge (currently �25) which applies to the first 10 days of the service and amounts to a maximum charge of �250 in any 12 month period. The second category applies only to patients who do not have a medical card and who do not have dependants; after 30 days hospitalisation such patients may become subject to charges which will continue for the remainder of their hospital stay. This second charge is not expressed as a fixed daily or weekly amount. Rather it is related to the income of the patient and expressed in terms of allowing the patient to retain a prescribed amount per week after the charge has been imposed. Unusually, no upper limit for such charges has been set. The prescribed retention figure is currently �2.50 per week, an amount which has not been increased since 1976. In practice, health boards tend to allow such patients retain a higher amount, frequently up to �12 or �15 per week. But when the patient has accumulated savings of a few thousand pounds (sometimes referred to as "burial money") the amount of income allowed to the patient is generally reduced to nearer the statutory amount of �2.50. What is significant here is that this second category of charge is determined by reference to the income of the patient only; there is no statutory provision to have regard to the income of other members of the family.

In the preceding paragraphs the term "in-patient services" has been used as this is the wording used in the Health Acts. The definition of "in-patient services" as provided at Section 51 of the Health Act, 1970 is given on the previous page. As well as covering acute hospital stays, the term self-evidently includes wider categories of service such as the long-stay care of elderly or disabled people. To this extent, the term "in-patient services" includes the type of service generally made available to elderly people in nursing homes. Put another way, any elderly person who needs long-stay nursing home type care - which typically includes nursing care, supervision, assistance with daily activities such as feeding and dressing and which may also include services such as physiotherapy or occupational therapy - is eligible to have this service provided by the relevant health board as an aspect of in-patient services. The question of what constitutes in-patient services was clarified in a 1976 Supreme Court judgement (see opposite) in a case in which the Eastern Health Board had argued, unsuccessfully, that the services provided to an elderly, long-stay patient at St. Brigid's Home, Crooksling did not amount to in-patient services.

One important feature of entitlement to in-patient services was the option, under Section 54 of the Health Act, 1970, to forego one's entitlement to the service in a public hospital and to avail instead of the same service "in any (private) hospital or home approved of by the Minister for the purposes of this section". This provision - repealed by the Act of 1990 - allowed patients to choose between receiving in-patient services either under the public system or from an approved private hospital or home. In the latter case, the patient would receive a subvention towards (but not the full costs of) the fees of the private institution. It is worth mentioning that the Voluntary Health Insurance Board does not cover long-term nursing care.

Section 51 of Health Act, 1970

Actual Situation Regarding In-Patient Services

In the period prior to September 1993, when the Act of 1990 was commenced, the actual situation regarding the provision of in-patient services was quite different from the legal situation described above. More particularly, the position in much of the country regarding long-stay or nursing home type care fell considerably short of the legal entitlement. Most of the health boards, and the Eastern and Southern Health Boards in particular, did not have sufficient long-stay beds of their own. They would have needed to either "buy in" beds from the private nursing homes (under Section 26) or allow their long-stay patients to opt for care in approved private homes in return for a subvention (under Section 54). In the event, health boards made quite limited use of Section 26 and the option of Section 54 was very considerably curtailed, as explained below. The consequence was that in the period prior to September 1993 there was something of a crisis in the provision of in-patient services for long-stay patients in much of Ireland.

Section 54

At a meeting with Ombudsman staff in December 1992 the Department gave a candid account of difficulties being created by Section 54. In 1979 entitlement to in-patient services was extended to the entire population. Until then approximately 85% of the population had such entitlement. This meant, provided they chose an approved private hospital or home, everybody would now be able to avail of a Section 54 subvention. In particular, the group to which in-patient services was extended in 1979 (the "high income" group) included those most likely to use private services. The Department saw this as an unintended consequence of the extension of entitlement to the full population. Rather than deal with this by asking the Oireachtas to amend the Health Acts, the Department chose a different strategy. Section 54 approval for private hospitals was withdrawn which meant that patients were deprived of the option envisaged by Section 54. Existing approvals for private nursing homes, totalling 87 homes in 1980, were not withdrawn. (In this context, the reference to approved "private" homes includes "voluntary" homes typically operated by religious bodies.) But from 1980 onwards2, no additional private nursing homes or hospitals were given approval under Section 54. As the private nursing home sector expanded, the proportion of "approved" homes declined. By 1988, for example, only one-third of all known nursing homes were approved under Section 54.

For reasons given later in this report, it appears to the Ombudsman that the Department was aware that this strategy in relation to Section 54 was likely to be legally unsound. The Minister for Health subsequently acknowledged (see Minister's Dáil statement of 9 November 1989 in page 13) that the scope of Section 54 had been "curbed ... due to constraints on the financial resources in the health services ...". By the early 1990s there was considerable pressure being brought to bear by the private nursing home sector and a number of High Court actions were threatened. The Department's legal advice at the time was that its position was extremely weak and that a well thought out court challenge would be likely to succeed. Nevertheless, this is the situation which persisted until Section 54 was eventually repealed in September 1993.3

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Consequences

This effective "freezing" of the number of Section 54 approved nursing home beds had significant consequences. Perhaps the main consequence was that, in a context where demand for long-stay beds was growing (the numbers of elderly people, and more particularly of those over 85 years, was growing significantly) and where there was no significant increase in the number of publicly funded beds, many elderly patients in need of long-stay care were effectively left to fend for themselves. This conclusion is supported by the experience at that time of Ombudsman staff both in dealing with complaints and in contacts from families which did not result in formal complaints. This conclusion would have been widely shared by social workers, as well as by the staff of information and advice services, dealing with the elderly. What typically happened in such cases was that an elderly patient in immediate need of long-stay care would be placed on a waiting list for a public bed; if there was no Section 54 approved bed available, then the only option was to avail of a place in a private home without a subvention of any kind. Indeed, even those with a subvention would still have to meet a substantial balance of fees. When Section 54 was repealed in 1993, the level of subvention under the Section amounted to �52 per week while private nursing home fees were typically in the range �150 - �200 per week.

Another consequence of the "freezing" of Section 54 approvals was that there was a geographical imbalance in the distribution of subvented beds. In the North Eastern Health Board area, for example, not even one private home had been approved by 1980; and this remained the position right up to 1993. Other health board areas fared almost as badly - the North-Western Health Board had only three approved homes and the Southern Health Board had only five approved homes.

Because of a particularly acute shortage of public long-stay beds in its area, the Eastern Health Board (EHB) introduced a limited system of non-statutory subventions for certain patients in private nursing homes. This involved a subvention which amounted to �40 per week in 1993. It was payable only in certain cases and was subject to a means test which took account not only of the income of the patient but also of the financial circumstances of the wider family. If this arrangement had applied only in those cases where the patient had specifically opted for private care, then it might have been in some way acceptable even though lacking in statutory authority. In reality, this arrangement applied largely to people who did not choose private care but had it forced upon them because of the non-availability of a public bed. In these circumstances, such an arrangement inevitably provoked deep dissatisfaction among elderly patients and their families.

To add to this already confusing situation, the EHB adopted its own unique approach to Section 54 approved nursing home places. For most of the period 1980 - 1993 the EHB limited the payment of Section 54 nursing home subventions to a maximum of six weeks per patient. Thereafter, a nursing home patient would only receive a subvention on the basis of the non-statutory, means-tested arrangement described above. There was no legal basis for this curtailment of the duration of the Section 54 subvention nor for its replacement with a lower value, means-tested, subvention. In the event, this EHB practice survived for more than a decade without legal challenge.

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Complaints to the Ombudsman

The Ombudsman had always received a trickle of complaints regarding long-stay care of the elderly; but from about 1990 onwards the volume of such complaints increased, particularly in relation to the EHB. In his 1992 Annual Report the Ombudsman reported on these complaints in considerable detail. The Ombudsman pointed out that the service being sought by these patients was "in-patient services", something which the health boards had a statutory obligation to provide. The Ombudsman noted that the health boards appeared to be directing such patients and their families towards private care without in any way acknowledging the boards' own responsibilities in the area.

In the course of establishing the legal and practical positions in relation to these complaints, Ombudsman staff had a number of detailed contacts with the Department during the period 1991 - 1993. In the course of these contacts, the Department accepted that the position in relation to the public provision of long-stay care for the elderly - as required by the Health Acts - was deeply unsatisfactory. The Department acknowledged that funding of this sector had been inadequate for years and that the situation was now critical. The Department was hopeful that the 1990 Act, when commenced, would improve this situation significantly.

The Department explained that the 1990 Act would establish a new system of subventing patients in private nursing homes which would apply in a uniform manner across the entire country, based on standard criteria and paying standard levels of subvention. Above all, the new system would apply to all registered nursing homes and not just to the one third (or so) of homes which happened to have been approved under the old Section 54 arrangement. It was difficult, however, to share the Department's optimism in this regard given that the 1990 Act, in so far as it provides for subventions, deals with patients who opt for private nursing home care. The Act, which undoubtedly represents major progress as regards registration and standards of care in private nursing homes, has no apparent impact on the issue of meeting elderly patients' statutory entitlements to publicly funded nursing home care.

It appeared, in the light of these discussions with the Ombudsman's Office, that the Department had been under a misapprehension in its preparation of the Health (Nursing Homes) Bill. It appears that, in drafting the Bill, the Department had not understood that nursing home type care equated to "in-patient services" under the Health Acts. In effect, the Department appears not to have realised that any person in need of nursing home type care already had a statutory right to be provided with this service by the health board. It is hard to credit that the Department could have been unaware of such a fundamental feature of its own legislation. The definition of "in-patient services" is reasonably straightforward and, in any event, its precise meaning had been clearly interpreted in a Supreme Court judgement of 1976. (See also Dáil Debates extract opposite.)

The Department indicated that it would need to have Section 51 of the Health Act, 1970, which defines "in-patient services", amended so as to exclude nursing home care from the entitlement. Pending an amendment of the Act by the Oireachtas, the Department said it would look seriously at the possibility of amending Section 51 by way of regulation. Ombudsman staff pointed out that any such attempt to restrict an existing entitlement by way of a regulation would most likely be invalid (ultra vires the Act).

In the event, the Department did not seek to amend Section 51; rather, it introduced a new charging regime in those cases in which a health board opted to provide in-patient services by placing a patient in a private nursing home registered under the 1990 Act. This was provided for in the Health (In-Patient Services) Regulations, 1993 (SI No. 224 of 1993) which, in effect, seem to place a public patient, entitled to in-patient services, in the same financial position as a person who has opted consciously for private nursing home care, i.e. the same subvention is payable to a person placed by a health board in a private home as is paid to a person who has chosen to forego Health Act entitlement and enter a private nursing home. (The question of the validity of this regulation is discussed in some detail in Chapter Seven.) Section 51 itself remains unamended to this day.

It is against this rather complex background, then, that the subvention arrangements provided for in the 1990 Act fall to be considered.

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Notes

(1) In commenting on a draft of this report, the Department disputed the view that the Health Acts confer a legally enforceable entitlement to hospital in-patient services. The Department argues that the Health Act, 1970 distinguishes between the terms "eligibility" and "entitlement" and that the former, in the context of the Health Act, provides for eligible people to avail of services. However, as the Health Act does not define the manner in which, or the extent to which, in-patient services should be provided, the Department argues that the extent of any health board's legal obligation in this regard is unclear. The Ombudsman does not accept that there is any doubt as to the obligation on health boards to provide in-patient services for eligible people. This is clearly established by Section 52(1) of the Health Act, 1970. The Ombudsman is not aware that the issue of entitlement to in-patient services has been considered by the Courts. However, the issue of entitlement to services under Section 62 of the Health Act, 1970 - which provides for medical and midwifery care for mothers - has been considered by the Supreme Court in Spruyt and Wates v Southern Health Board (1988). The structure of Section 62 is virtually identical with Section 52. What was at issue in Spruyt was whether the Southern Health Board should provide domiciliary midwifery services through a general practitioner or through a midwife. That there was a statutory obligation under Section 62 to provide the service was not in dispute and this obligation was restated by the Court.

(2) In commenting on a draft of this report, the Department noted:

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