Jeremy Huband, Head of Healthcare, UK Corporate Banking, HSBC UK Bank Plc
I first heard of COVID-19 in January and my thoughts then were that care staff are familiar with infection control and are trained each year to keep the seasonal flu and similar disease out of their homes. We then saw the NHS hospitals clearing wards to cope with the expected impact of COVID-19 transferring patients from hospitals to the care homes they knew. Limited COVID-19 testing was available, which saw NHS patients moved from Green wards straight into care homes. Block contracts were agreed between local authorities and care homes, fee rates increased to reflect urgency and occupancy levels improved. We noticed an improved interaction between social care and the NHS.
In mid-April new guidance from PHE (Public Health England) stated that all care workers, in all homes, must wear PPE at all times. The announcement saw a sudden spike in demand as operators tried to get hold of supplies overnight. Unsurprisingly PPE costs spiked and a number of new retailers spotted an opportunity and entered the market. Later we saw in England government funding to help PPE costs, overseen by the 343 Local Authorities all with their own approach on how to pay care homes.
COVID-19 got into some homes and we heard of some difficult circumstances. What we did see was a very low incidence of COVID-19 in our child care, working age adult and elderly private pay homes. The main impact appeared to be in homes which had taken NHS referrals. Where our customers have been impacted the bank will have looked to support by way of an interest only periods (on loans) or through a government backed loan.
During lockdown at HSBC UK we talked to our customers with Zoom, a video conferencing system. What we commonly heard was that “we locked our home down prior to the official lockdown” and “we bought a stock of PPE early”. In April care homes hit the news with negative news reflecting deaths in homes from COVID-19. Our Zoom calls showed us that that childrens and working age care homes had few incidences of COVID-19 and were under greater pressure by the shortage of PPE which threatened their compliance to the new rules and staff shortages from some staff self-isolating. With our elderly home providers, they saw the asymptomatic nature of the disease a particular worry.. Few of our customers saw the deaths implied by the press, one comment which resonates was that “Covid took the weak early, those who would have passed away in the next three months”.
The negative press and lockdown saw fewer people visiting care homes in March and April. Occupancy reduced and is probably 3-5% down on prior year. As some homes are being paid for block booked beds and receiving higher fee rates we are not seeing the distress the press commentary may have implied. In fact, we have seen remarkably few customer request funds backed by the Government Coronavirus Business Interruption Loan Scheme (CBILS).
People who need full time care will naturally gravitate to home care and then as needs progress to care homes. This is a needs based business model which typically serves the local area. New potential residents will be self-isolating waiting to get comfortable that the press commentary has passed and care homes safe to visit.
The new norm of operating a care home will involve greater use of innovative communication systems (with staff and residents with their loved ones), greater control on visits, CQC asking about infection control plans, business continuity plans and appropriate PPE. We saw some homes split their staff teams to cover different parts of the home, now referred to as staff team bubble. Some homes have greater available space to self-isolate and may use these facilities to handle COVID-19 positive residents, with their own staff group. The availability of testing quickly, cheaply with a waiting time of minutes will help homes open up again. The use of rooms split by a glass screen is a clever measure but I hope via testing or vaccine(s) these screens can be removed.
Marketing will highlight staff training and hygiene controls alongside the traditional luxury living and quality care. Design of new homes may reflect more hand washing stations, easy clean surfaces, the ability to split the home and WiFi fit to support Skype.
The owners we speak to are upbeat about the future but there will be those who will trade through this pandemic and then sell to the many new entrants who see this as an exciting opportunity to get involved in a caring business model.