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Evening clouds
Sunshine and Clouds

Sunday, 27 March 2011

Creaking care market

I've seen a report today that says the UK's leading residential care provider is having to restructure its finances, Southern Cross Healthcare. Refinancing is a fashionable thing to do - Ireland and Portugal spring to mind. Not surprisingly the Department of Health are said to be watching the situation and are concerned that standards of safety and quality are maintained in the care the residents receive. I suspect too they are concerned at how a potential market leader collapsing would look for the current health care reforms.
I have had a look at the Southern Cross website http://www.schealthcare.co.uk/News-and-Events/2011/Message-from-Jamie-Buchan-Chief-Executive-of-Southern-Cross-Healthcare/ and the message from their CEO; it is the closeness of SCH to Local Authorities and their finances that is the real problem. If Southern Cross are struggling who else is? Are we going to see more care providers struggling and those without sufficient critical business mass go under? Where will residents end up? At the end of the day what would happen if there was no local capacity in the sector - is the UK ready to have residents shipped about the country as there is nowhere locally to house them?
Is this the kind of result the government expected from market reforms? Markets have to allow for failure - are we prepared to accept this kind of failure in the care sector? Failure here is not an option - not if we are to avoid a return to a workhouse scenario.
It sounds like Southern Cross have a plan; indeed have been working on their plan for some time and I wish them well; not just for those with a financial stake in the company (I wonder what my bank has lent them?) but mainly for their people - the staff and residents and their families who will need to have faith that the system will sustain them.

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