Nursing home closures: effects on capacity and reasons for closure.

Objectives: to identify the rate of closure of nursing homes for older people, the types of homes closing and the reasons for closure.

Design: mixed method study including a census and telephone survey of registration and inspection units and interviews with independent providers.

Participants: 81 of 96 health authority and joint registration and inspection unit managers in England completed the census and 39 managers participated in a further telephone survey. Twenty-five independent providers were interviewed.

Results: closures resulted in a net loss of 6% of nursing homes and 4.9% of nursing places during 2000-2001. Smaller homes were more likely to close and were increasingly seen as unviable. The majority of closed homes were reported to have provided good quality care. Shortages of nursing staff were of widespread concern. The dominant combination of factors identified by providers was low fees and concerns about the cost implications of the new care standards. Changes in demand were reflected in the placement of high dependency residents in residential rather than nursing homes.

Conclusions: in the absence of policy interventions capacity will continue to reduce, with smaller homes most likely to disappear. There is an urgent need to address the supply and efficient use of nursing staff skills in care homes. While fee levels are the primary concern the effect of the proposed care standards was clearly having an effect. Even with subsequent amendment to these standards, unless authorities use capacity funding to raise fees and improve expectations, providers are likely to continue to exit the market.